Congressional Record, Volume 140 Issue 141 (Monday, October 3, 1994)

[Congressional Record Volume 140, Number 141 (Monday, October 3, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[Congressional Record: October 3, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

GOVERNMENT MANAGEMENT REFORM ACT OF 1994

Mr. SYNAR. Mr. Speaker, I move to suspend the rules and pass the
Senate bill (S. 2170) to provide a more effective, efficient, and
responsive Government.
The Clerk read as follows:

S. 2170

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Government
Management Reform Act of 1994''.
(b) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title and table of contents.

TITLE I--LIMITATION ON PAY

Sec. 101. Limitation on certain annual pay adjustments.

TITLE II--HUMAN RESOURCE MANAGEMENT

Sec. 201. SES annual leave accumulation.

TITLE III--STREAMLINING MANAGEMENT CONTROL

Sec. 301. Authority to increase efficiency in reporting to Congress.

TITLE IV--FINANCIAL MANAGEMENT

Sec. 401. Short title.
Sec. 402. Electronic payments.
Sec. 403. Franchise fund pilot programs.
Sec. 404. Simplification of management reporting process.
Sec. 405. Annual financial reports.
TITLE I--LIMITATION ON PAY

SEC. 101. LIMITATION ON CERTAIN ANNUAL PAY ADJUSTMENTS.

Effective as of December 31, 1994--
(1) section 601(a)(2) of the Legislative Reorganization Act
of 1946 (2 U.S.C. 31(2)) is amended--
(A) by striking out ``(2) Effective'' and inserting in lieu
thereof ``(2)(A) Subject to subparagraph (B), effective'';
and
(B) by adding at the end thereof the following:
``(B) In no event shall the percentage adjustment taking
effect under subparagraph (A) in any calendar year (before
rounding), in any rate of pay, exceed the percentage
adjustment taking effect in such calendar year under section
5303 of title 5, United States Code, in the rates of pay
under the General Schedule.'';
(2) section 104 of title 3, United States Code, is
amended--
(A) in the first sentence by inserting ``(a)'' before
``The'';
(B) in the second sentence by striking out ``Effective''
and inserting in lieu thereof ``Subject to subsection (b),
effective''; and
(C) by adding at the end thereof the following:
``(b) In no event shall the percentage adjustment taking
effect under the second and third sentences of subsection (a)
in any calendar year (before rounding) exceed the percentage
adjustment taking effect in such calendar year under section
5303 of title 5 in the rates of pay under the General
Schedule.'';
(3) section 5318 of title 5, United States Code, is
amended--
(A) in the first sentence by striking out ``Effective'' and
inserting in lieu thereof ``(a) Subject to subsection (b),
effective''; and
(B) by adding at the end thereof the following:
``(b) In no event shall the percentage adjustment taking
effect under subsection (a) in any calendar year (before
rounding), in any rate of pay, exceed the percentage
adjustment taking effect in such calendar year under section
5303 in the rates of pay under the General Schedule.''; and
(4) section 461(a) of title 28, United States Code, is
amended--
(A) by striking out ``(a) Effective'' and inserting in lieu
thereof ``(a)(1) Subject to paragraph (2), effective''; and
(B) by adding at the end thereof the following:
``(2) In no event shall the percentage adjustment taking
effect under paragraph (1) in any calendar year (before
rounding), in any salary rate, exceed the percentage
adjustment taking effect in such calendar year under section
5303 of title 5 in the rates of pay under the General
Schedule.''.
TITLE II--HUMAN RESOURCE MANAGEMENT

SEC. 201. SES ANNUAL LEAVE ACCUMULATION.

(a) In General.--Effective on the first day of the first
applicable pay period beginning after the date of the
enactment of this Act, subsection (f) of section 6304 of
title 5, United States Code, is amended to read as follows:
``(f)(1) This subsection applies with respect to annual
leave accrued by an individual while serving in a position
in--
``(A) the Senior Executive Service;
``(B) the Senior Foreign Service;
``(C) the Defense Intelligence Senior Executive Service;
``(D) the Senior Cryptologic Executive Service; or
``(E) the Federal Bureau of Investigation and Drug
Enforcement Administration Senior Executive Service.
``(2) For purposes of applying any limitation on
accumulation under this section with respect to any annual
leave described in paragraph (1)--
``(A) `30 days' in subsection (a) shall be deemed to read
`90 days'; and
``(B) `45 days' in subsection (b) shall be deemed to read
`90 days'.''.
(b) Use of Excess Leave.--Notwithstanding the amendment
made by subsection (a), in the case of an employee who, on
the effective date of subsection (a), is subject to
subsection (f) of section 6304 of title 5, United States
Code, and who has to such employee's credit annual leave in
excess of the maximum accumulation otherwise permitted by
subsection (a) or (b) of section 6304 (determined applying
the amendment made by subsection (a)), such excess annual
leave shall remain to the credit of the employee and be
subject to reduction, in the same manner as provided in
subsection (c) of section 6304.
TITLE III--STREAMLINING MANAGEMENT CONTROL

SEC. 301. AUTHORITY TO INCREASE EFFICIENCY IN REPORTING TO
CONGRESS.

(a) Purpose.--The purpose of this title is to improve the
efficiency of executive branch performance in implementing
statutory requirements for reports to Congress and committees
of Congress such as the elimination or consolidation of
duplicative or obsolete reporting requirements and
adjustments to deadlines that shall provide for more
efficient workload distribution or improve the quality of
reports.
(b) Authority of the Director.--The Director of the Office
of Management and Budget may publish annually in the budget
submitted by the President to the Congress, recommendations
for consolidation, elimination, or adjustments in frequency
and due dates of statutorily required periodic reports to the
Congress or committees of Congress. For each recommendation,
the Director shall provide an individualized statement of the
reasons that support the recommendation. In addition, for
each report for which a recommendation is made, the Director
shall state with specificity the exact consolidation,
elimination, or adjustment in frequency or due date that is
recommended.
(c) Recommendations.--The Director's recommendations shall
be consistent with the purpose stated in subsection (a).
(d) Consultation.--Before the publication of the
recommendations under subsection (b), the Director or his
designee shall consult with the appropriate congressional
committees concerning the recommendations.
TITLE IV--FINANCIAL MANAGEMENT

SEC. 401. SHORT TITLE.

This title may be cited as the ``Federal Financial
Management Act of 1994''.

SEC. 402. ELECTRONIC PAYMENTS.

(a) In General.--Section 3332 of title 31, United States
Code, is amended to read as follows:

``Sec. 3332. Required direct deposit

``(a)(1) Notwithstanding any other provision of law, all
Federal wage, salary, and retirement payments shall be paid
to recipients of such payments by electronic funds transfer,
unless another method has been determined by the Secretary of
the Treasury to be appropriate.
``(2) Each recipient of Federal wage, salary, or retirement
payments shall designate one or more financial institutions
or other authorized payment agents and provide the payment
certifying or authorizing agency information necessary for
the recipient to receive electronic funds transfer payments
through each institution so designated.
``(b)(1) The head of each agency shall waive the
requirements of subsection (a) of this section for a
recipient of Federal wage, salary, or retirement payments
authorized or certified by the agency upon written request by
such recipient.
``(2) Federal wage, salary, or retirement payments shall be
paid to any recipient granted a waiver under paragraph (1) of
this subsection by any method determined appropriate by the
Secretary of the Treasury.
``(c)(1) The Secretary of the Treasury may waive the
requirements of subsection (a) of this section for any group
of recipients upon request by the head of an agency under
standards prescribed by the Secretary of the Treasury.
``(2) Federal wage, salary, or retirement payments shall be
paid to any member of a group granted a waiver under
paragraph (1) of this subsection by any method determined
appropriate by the Secretary of the Treasury.
``(d) This section shall apply only to recipients of
Federal wage or salary payments who begin to receive such
payments on or after January 1, 1995, and recipients of
Federal retirement payments who begin to receive such
payments on or after January 1, 1995.
``(e) The crediting of the amount of a payment to the
appropriate account on the books of a financial institution
or other authorized payment agent designated by a payment
recipient under this section shall constitute a full
acquittance to the United States for the amount of the
payment.''.
(b) Technical and Conforming Amendment.--The table of
sections for chapter 33 of title 31, United States Code, is
amended by amending the item for section 3332 to read:

``3332. Required direct deposit.''.

SEC. 403. FRANCHISE FUND PILOT PROGRAMS.

(a) Establishment.--There is authorized to be established
on a pilot program basis in each of six executive agencies a
franchise fund. The Director of the Office of Management and
Budget, after consultation with the chairman and ranking
members of the Committees on Appropriations and Governmental
Affairs of the Senate, and the Committees on Appropriations
and Government Operations of the House of Representatives,
shall designate the agencies.
(b) Uses.--Each such fund may provide, consistent with
guidelines established by the Director of the Office of
Management and Budget, such common administrative support
services to the agency and to other agencies as the head of
such agency, with the concurrence of the Director, determines
can be provided more efficiently through such a fund than by
other means. To provide such services, each such fund is
authorized to acquire the capital equipment, automated data
processing systems, and financial management and management
information systems needed. Services shall be provided by
such funds on a competitive basis.
(c) Funding.--(1) There are authorized to be appropriated
to the franchise fund of each agency designated under
subsection (a) such funds as are necessary to carry out the
purposes of the fund, to remain available until expended. To
the extent that unexpended balances remain available in other
accounts for the purposes to be carried out by the fund, the
head of the agency may transfer such balances to the fund.
(2) Fees for services shall be established by the head of
the agency at a level to cover the total estimated costs of
providing such services. Such fees shall be deposited in the
agency's fund to remain available until expended, and may be
used to carry out the purposes of the fund.
(3) Existing inventories, including inventories on order,
equipment, and other assets or liabilities pertaining to the
purposes of the fund may be transferred to the fund.
(d) Report on Pilot Programs.--Within 6 months after the
end of fiscal year 1997, the Director of the Office of
Management and Budget shall forward a report on the results
of the pilot programs to the Committees on Appropriations of
the Senate and of the House of Representatives, and to the
Committee on Governmental Affairs of the Senate and the
Committee on Government Operations of the House of
Representatives. The report shall contain the financial and
program performance results of the pilot programs, including
recommendations for--
(1) the structure of the fund;
(2) the composition of the funding mechanism;
(3) the capacity of the fund to promote competition; and
(4) the desirability of extending the application and
implementation of franchise funds to other Federal agencies.
(e) Procurement.--Nothing in this section shall be
construed as relieving any agency of any duty under
applicable procurement laws.
(f) Termination.--The provisions of this section shall
expire on October 1, 1999.

SEC. 404. SIMPLIFICATION OF MANAGEMENT REPORTING PROCESS.

(a) In General.--To improve the efficiency of executive
branch performance in implementing statutory requirements for
financial management reporting to the Congress and its
committees, the Director of the Office of Management and
Budget may adjust the frequency and due dates of or
consolidate any statutorily required reports of agencies to
the Office of Management and Budget or the President and of
agencies or the Office of Management and Budget to the
Congress under any laws for which the Office of Management
and Budget has financial management responsibility,
including--
(1) chapters 5, 9, 11, 33, 35, 37, 39, 75, and 91 of title
31, United States Code;
(2) the Federal Civil Penalties Inflation Adjustment Act of
1990 (28 U.S.C. 2461 note; Public Law 101-410; 104 Stat.
890).
(b) Application.--The authority provided in subsection (a)
shall apply only to reports of agencies to the Office of
Management and Budget or the President and of agencies or the
Office of Management and Budget to the Congress required by
statute to be submitted between January 1, 1995, and
September 30, 1997.
(c) Adjustments in Reporting.--The Director may consolidate
or adjust the frequency and due dates of any statutorily
required reports under subsections (a) and (b) only after--
(1) consultation with the Chairman of the Senate Committee
on Governmental Affairs and the Chairman of the House of
Representatives Committee on Government Operations; and
(2) written notification to the Congress, no later than
February 8 of each fiscal year covered under subsection (b)
for those reports required to be submitted during that fiscal
year.

SEC. 405. ANNUAL FINANCIAL REPORTS.

(a) Financial Statements.--Section 3515 of title 31, United
States Code, is amended to read as follows:

``Sec. 3515. Financial statements of agencies

``(a) Not later than March 1 of 1997 and each year
thereafter, the head of each executive agency identified in
section 901(b) of this title shall prepare and submit to the
Director of the Office of Management and Budget an audited
financial statement for the preceding fiscal year, covering
all accounts and associated activities of each office,
bureau, and activity of the agency.
``(b) Each audited financial statement of an executive
agency under this section shall reflect--
``(1) the overall financial position of the offices,
bureaus, and activities covered by the statement, including
assets and liabilities thereof; and
``(2) results of operations of those offices, bureaus, and
activities.
``(c) The Director of the Office of Management and Budget
shall identify components of executive agencies that shall be
required to have audited financial statements meeting the
requirements of subsection (b).
``(d) The Director of the Office of Management and Budget
shall prescribe the form and content of the financial
statements of executive agencies under this section,
consistent with applicable accounting and financial reporting
principles, standards, and requirements.
``(e) The Director of the Office of Management and Budget
may waive the application of all or part of subsection (a)
for financial statements required for fiscal years 1996 and
1997.
``(f) Not later than March 1 of 1995 and 1996, the head of
each executive agency identified in section 901(b) of this
title and designated by the Director of the Office of
Management and Budget shall prepare and submit to the
Director of the Office of Management and Budget an audited
financial statement for the preceding fiscal year, covering
all accounts and associated activities of each office,
bureau, and activity of the agency.
``(g) Not later than March 31 of 1995 and 1996, for
executive agencies not designated by the Director of the
Office of Management and Budget under subsection (f), the
head of each executive agency identified in section 901(b) of
this title shall prepare and submit to the Director of the
Office of Management and Budget a financial statement for the
preceding fiscal year, covering--
``(1) each revolving fund and trust fund of the agency; and
``(2) to the extent practicable, the accounts of each
office, bureau, and activity of the agency which performed
substantial commercial functions during the preceding fiscal
year.
``(h) For purposes of subsection (g), the term `commercial
functions' includes buying and leasing of real estate,
providing insurance, making loans and loan guarantees, and
other credit programs and any activity involving the
provision of a service or thing for which a fee, royalty,
rent, or other charge is imposed by an agency for services
and things of value it provides.''.
(b) Audits by Agencies.--Subsection 3521(f) of title 31,
United States Code, is amended to read as follows:
``(f)(1) For each audited financial statement required
under subsections (a) and (f) of section 3515 of this title,
the person who audits the statement for purpose of subsection
(e) of this section shall submit a report on the audit to the
head of the agency. A report under this subsection shall be
prepared in accordance with generally accepted government
auditing standards.
``(2) Not later than June 30 following the fiscal year for
which a financial statement is submitted under subsection (g)
of section 3515 of this title, the person who audits the
statement for purpose of subsection (e) of this section shall
submit a report on the audit to the head of the agency. A
report under this subsection shall be prepared in accordance
with generally accepted government auditing standards.''.
(c) Governmentwide Financial Statement.--Section 331 of
title 31, United States Code, is amended by adding the
following new subsection:
``(e)(1) Not later than March 31 of 1998 and each year
thereafter, the Secretary of the Treasury, in coordination
with the Director of the Office of Management and Budget,
shall annually prepare and submit to the President and the
Congress an audited financial statement for the preceding
fiscal year, covering all accounts and associated activities
of the executive branch of the United States Government. The
financial statement shall reflect the overall financial
position, including assets and liabilities, and results of
operations of the executive branch of the United States
Government, and shall be prepared in accordance with the form
and content requirements set forth by the Director of the
Office of Management and Budget.
``(2) The Comptroller General of the United States shall
audit the financial statement required by this section.''.

The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Oklahoma [Mr. Synar] will be recognized for 20 minutes, and the
gentleman from Pennsylvania [Mr. Clinger], will be recognized for 20
minutes.
The Chair recognizes the gentleman from Oklahoma [Mr. Synar].
Mr. SYNAR. Mr. Speaker, I yield myself such time as I may consume.
(Mr. SYNAR asked and was given permission to revise and extend his
remarks.)
Mr. SYNAR. Mr. Speaker, S. 2170 enacts financial management reforms
and brings the Federal Government one-step closer to realizing the
goals of National Performance Review. The reforms in this legislation
were recommended by the Vice President's Review, and bring common sense
and good government management to Federal programs. They enjoy
bipartisan support, and closely resemble those passed by the House last
year in H.R. 3400.
Let me briefly summarize the legislation:
First, the bill authorizes agencies to recommend to Congress
reporting requirements that should be either eliminated or
consolidated. Every year, thousands of reports are sent to Congress by
the executive branch, many of them outdated and ineffective. These
reports continue to place an enormous paperwork burden on executive
branch departments and agencies. This provision is the first step
towards relieving that unnecessary burden.
Second, beginning in 1995, this legislation will require all new
Federal employees and retirees to move into the high-technology era by
receiving their checks electronically. Millions of dollars can be saved
by the Federal Government by requiring electronic payments. However, if
an employee or retiree does not want direct deposit, or does not have
access to a bank, the requirement can be waived.
Third, the bill creates six pilot programs for what are known as
franchise funds. These will allow agencies to share common
administrative support services. These franchise funds would be similar
to the National Finance Center, which provides payroll services for
several Federal agencies. This service eliminates duplicative efforts
and thus saves taxpayer dollars.
Next, the act expands the Chief Financial Officers Act, passed in
1990, to require all agencies to prepare and submit audited financial
statements. The CFO Act limited that requirement 4 years ago pending
the success of its pilot programs. Now, with support from the General
Accounting Office, the Office of Management and Budget, the Federal
agencies, and CFO oversight committees in the Senate and House, all
agencies will have to meet these requirements.
The legislation also requires a Government-wide financial statement.
Beginning in 1998, OMB will prepare and submit to the President and
Congress an audited financial statement covering all accounts and
associated activities of the executive branch of the U.S. Government.
For the first time, the American people will have a document that will
reflect the overall financial position of their Government.
Finally, this act requires that any annual automatic adjustments, or
COLAs, to the salaries of Members of Congress, the Executive Schedule,
or the judiciary not exceed those given to General Schedule Federal
employees. Furthermore, it establishes a limitation for members of the
Senior Executive Service [SES] to accrue up to 90 days of annual leave.
These personnel reforms bring fairness to the Federal pay and leave
scale, and have been cleared by the chairman of the Post Office and
Civil Service Committee, Mr. Clay.
I want to thank the administration for its leadership in this reform
legislation, and Mr. Clinger, for his bi-partisan support and efforts
in helping us to get this legislation to the floor. I urge my
colleagues to pass this bill.
Mr. Speaker, I reserve the balance of my time.
Mr. CLINGER. Mr. Speaker, I yield myself such time as I may consume.
(Mr. CLINGER asked and was given permission to revise and extend his
remarks.)
Mr. CLINGER. Mr. Speaker, I rise with subcommittee Chairman Synar in
support of S. 2170, the Government Management Reform Act of 1994.
Designed to implement some of the good reform ideas that have been
around for the last several years, this bill takes the Government a few
steps further toward the goal of reliable and efficient management.
Subcommittee Chairman Synar provided the House with a good summary of
this bill so I will limit my remarks to a couple of the more important
issues.
First, S. 2170 includes the requirement for agencywide audited
financial statements for the Government's 23 CFO Act agencies beginning
in 1997. By the next year, in 1998, we go one step further and require
an audited governmentwide financial report that provides a consolidated
picture of the entire Federal Government's financial condition.
In recent testimony before the Government Operations Committee, the
General Accounting Office reminded us that the Federal Government is
the world's largest financial operation. Yet, it operates without ever
knowing its total financial picture. This is a situation that would be
short-lived in either the State and local government environment or in
the private sector.
We first heard the call for agencywide audited financial statements
when Congress enacted the Chief Financial Officers' Act in 1990. At
that time, however, we mandated annual financial statements only for
trust funds and commercial operations of the 23 covered agencies. In
addition, we established a pilot program to test the viability of
preparing and auditing financial statements for the entire operations
of a few organizations.
The results of these pilot protects are in and the benefits are
simply outstanding. From throughout Government, CFOs, inspectors
generals, GAO auditors and agency heads have all sung the praises of
audited financial statements. Now that the pilot projects have expired
and the benefits are clear, it is time that we expand the requirements
for financial statements to all Government activities. This bill does
just that.
I also want to speak in support of the provision to require the use
of electronic funds transfer for all new Government employee and
retiree payments. EFT payments are more regularly known as direct
deposit--a practice that the private sector has championed for years.
Whether you call them EFT payments or direct deposit, the result is the
same--savings to the Government.
According to the Department of Treasury, it costs the Federal
Government 6 times more to produce a check payment as compared with an
EFT disbursement. That's 36 cents for a check payment versus only 6
cents for direct deposit. Considering that about 400 million check
payments are made each year, complete conversion to EFT would result in
annual savings of roughly $130 million.
In fiscal year 1993, only 49 percent of the 962 million Federal
disbursements were made electronically. That percentage is expected to
grow at a sluggish rate over the coming years without enactment of this
legislation. While I would support legislation to mandate direct
deposit for all Government payments, I believe that this bill
represents another good step into the age of information technology.
Presumed EFT payments are important because they help both payment
recipients and U.S. taxpayers.
One other important step that the Clinton administration could take
to further the strengthen the Federal Government's financial management
practices is to nominate an appointee for the position of controller as
required in the CFO's Act. Unfortunately, that position has been vacant
for well over a year and for over one-half of President Clinton's
administration. That vital position has been vacant for far too long
and must be filled now.
The CFO's Act, as strengthened by our actions today and coupled with
the more recent Government performance and results act, provide the
legislative foundation for developing accurate and reliable cost
information and performance data. Such information is essential if the
executive branch and the Congress are to make informed decisions and
move successfully toward a smaller more efficient Government that
focuses on accountability and managing for results. Such a goal was
merely a pipe dream as recently as a decade ago. Yet today, we are on
the verge of making that goal a reality.
I am pleased to be part of that process and pleased to support the
Government Management Reform Act.
Mr. Speaker, I reserve the balance of my time.

general leave

Mr. SYNAR. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days to revise and extend their remarks on S. 2170,
the Senate bill now under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Oklahoma?
There was no objection.
Mr. SYNAR. Mr. Speaker, I have no further requests for time, and I
yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Oklahoma [Mr. Synar] that the House suspend the rules
and pass the Senate bill, S. 2170.
The question was taken.
Mr. CLINGER. Mr. Speaker, I object to the vote on the ground that a
quorum is not present and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Pursuant to clause 5 of rule I and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
The point of no quorum is considered withdrawn.

____________________