National Weather Service: Events Surrounding Fiscal Year 1997 Budget
(Letter Report, 03/04/98, GAO/AIMD-98-69).
Pursuant to a congressional request, GAO reviewed the key events related
to the fiscal year (FY) 1997 budget shortfall of the National Weather
Service (NWS), focusing on: (1) the formulation and execution of the
NWS' FY 1997 budget; and (2) key events regarding NWS' FY 1997 budget
shortfall and efforts to address it.
GAO noted that: (1) based on guidance provided by the Department of the
Office of Management and Budget (OMB), the National Oceanic and
Atmospheric Administration (NOAA) prepared a FY 1997 budget proposal for
each of its components--including NWS; (2) the Department of Commerce
reviewed this proposal and asked OMB to include $693 million for NWS in
the President's budget; (3) based on OMB's direction regarding NOAA-wide
and NWS-specific reductions, this request was revised to the $671
million that appeared in the President's budget submission to Congress;
(4) Congress further reduced this amount, enacting appropriations that
included $638 million in FY 1997; (5) although NWS believed it had a
budget shortfall because of the reductions that OMB and Congress made to
its FY 1997 budget request, as well as inflationary and other cost
increases, NOAA and NWS reported varying amounts to Congress about the
size of this shortfall; (6) according to NOAA and NWS officials, the
information provided to Congress responded to specific questions asked
at particular points in time and did not necessarily include all known
elements of the shortfall; (7) NWS ultimately succeeded in staying
within its FY 1997 budget level by implementing a number of temporary
and permanent actions; (8) other events associated with the shortfall
raised concerns among department officials and Congress; (9) the first
event centered on a NWS reprogramming request to NOAA and NWS' intention
to start filling critical field vacancies prior to receiving NOAA
authorization; (10) NWS assumed that the reprogramming request would be
approved by Commerce and funds would be available to fill these
vacancies; (11) NOAA informed NWS that the vacancies could not be filled
because the reprogramming request had not yet been approved; (12) the
second event involved NWS' effort to obtain certification approval from
NOAA to consolidate, automate, and close weather service offices; (13)
upon learning that NWS would not be able to fill critical field
vacancies, NWS recommended to NOAA that selected certification packages
be held back because, according to NWS, this would have resulted in a
degradation of weather services at locations; (14) however, Commerce
noted that the certification packages, as submitted by NWS on April 22,
1997, did not indicate that there were vacancies in these offices that
would preclude proceeding with certification; and (15) no link was made
during this time between the ability to proceed with certification and
the need for reprogramming approval by Congress.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: AIMD-98-69
TITLE: National Weather Service: Events Surrounding Fiscal Year
1997 Budget
DATE: 03/04/98
SUBJECT: Budget administration
Internal controls
Budget cuts
Reprogramming of appropriated funds
Deficit reduction
Personnel recruiting
Budget deficit
Presidential budgets
Meteorological research
Weather forecasting
IDENTIFIER: NWS Advanced Weather Interactive Processing System
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Cover
================================================================ COVER
Report to the Committee on Science, House of Representatives
March 1998
NATIONAL WEATHER SERVICE - EVENTS
SURROUNDING FISCAL YEAR 1997
BUDGET
GAO/AIMD-98-69
National Weather Service
(511430)
Abbreviations
=============================================================== ABBREV
NOAA - National Oceanic and Atmospheric Administration
NWS - National Weather Service
OMB - Office of Management and Budget
Letter
=============================================================== LETTER
B-277958
March 4, 1998
The Honorable F. James Sensenbrenner, Jr.
Chairman
The Honorable George E. Brown, Jr.
Ranking Minority Member
Committee on Science
House of Representatives
This report responds to your request that we review key events
related to the fiscal year 1997 budget "shortfall" of the National
Weather Service (NWS), a component of the National Oceanic and
Atmospheric Administration (NOAA) within the Department of Commerce.
Although NWS was able to operate within its appropriated level in
fiscal year 1997, it had to operate with a smaller budget than 1996
and absorb increased costs. NWS referred to this difference in
available funds as a budget "shortfall." The objectives of our
review, based on subsequent discussions with your offices, were to
(1) describe the formulation and execution of the NWS fiscal year
1997 budget and (2) identify key events regarding NWS' fiscal year
1997 budget "shortfall" and efforts to address it. We did not assess
the impact of NWS' reduced budget on NWS' ability to meet its mission
effectively.
RESULTS IN BRIEF
------------------------------------------------------------ Letter :1
Based on guidance provided by the department and the Office of
Management and Budget (OMB), NOAA prepared a fiscal year 1997 budget
proposal for each of its components--including NWS. The Department
of Commerce reviewed this proposal and asked OMB to include $693
million for NWS in the President's budget. Based on OMB's direction
regarding NOAA-wide and NWS-specific reductions, this request was
revised to the $671 million that appeared in the President's budget
submission to the Congress. The Congress further reduced this
amount, enacting appropriations that included $638 million in fiscal
year 1997.
Although NWS believed it had a budget "shortfall" because of the
reductions that OMB and the Congress made to its fiscal 1997 budget
request, as well as inflationary and other cost increases, NOAA and
NWS reported varying amounts to the Congress about the size of this
"shortfall." Consequently, some Members of Congress were confused by
the varying amounts of the reported "shortfall." According to NOAA
and NWS officials, the information provided to the Congress responded
to specific questions asked at particular points in time and did not
necessarily include all known elements of the "shortfall." NWS
ultimately succeeded in staying within its fiscal year 1997 budget
level by implementing a number of temporary and permanent actions.
Other events associated with the "shortfall" raised concerns among
department officials and the Congress. The first event centered on
an NWS reprogramming request to NOAA and NWS' intention to start
filling critical field vacancies prior to receiving NOAA
authorization. NWS assumed that the reprogramming request would be
approved by Commerce and funds would be available to fill these
vacancies. NOAA, however, informed NWS that the vacancies could not
be filled because the reprogramming request had not yet been
approved.
The second event involved NWS' effort to obtain certification
approval from NOAA to consolidate, automate, and/or close weather
service offices. Upon learning that NWS would not be able to fill
critical field vacancies, NWS recommended to NOAA that selected
certification packages be held back because, according to NWS, this
would have resulted in a degradation of weather services at certain
locations. NWS had assumed that these vacancies would be filled when
the certification packages were forwarded to NOAA for approval.
However, in commenting on a draft of this report, the Department of
Commerce noted that the certification packages, as submitted by NWS
on April 22, 1997, did not indicate that there were vacancies in
these offices that would preclude proceeding with certification.
Likewise, no link was made during this time between the ability to
proceed with certification and the need for reprogramming approval by
the Congress. NOAA subsequently did not take action on any of the
certification packages NWS sent to it in 1997.
BACKGROUND
------------------------------------------------------------ Letter :2
The primary mission of NWS is to help protect life and property by
providing weather and flood warnings, public forecasts, and
advisories for all of the United States, adjacent waters, and ocean
areas. NWS operations also support other agencies' missions and the
nation's commercial interests. For example, NWS provides weather
forecasts and warnings to support aviation and marine safety.
To fulfill its mission, NWS uses a variety of systems and manual
processes in collecting, processing, and disseminating weather data
to and among its network of field offices and regional and national
centers. Many of these systems and processes are outdated. NWS
began a nationwide modernization program in the 1980s to upgrade
observing systems, such as satellites and radars, and design and
develop advanced computer workstations for weather forecasters. The
goals of the modernization are to achieve more uniform weather
services across the nation, improve forecasts, provide better
detection and prediction of severe weather and flooding, permit more
cost-effective operations through staff and office reductions, and
achieve higher productivity.
In conjunction with its modernization, NWS plans to restructure its
field offices, reducing their number from 256 to 119. However,
delays in implementing the Advanced Weather Interactive Processing
System have slowed progress in office restructuring. NWS now expects
the modernization to be completed before the end of fiscal year 1999.
In the past, we and others have identified several weaknesses in NWS'
actions to modernize its operations and manage its information
technology resources. In February 1995, we designated the NWS
modernization as an area of high risk due to its cost, complexity,
past problems, and criticality to the NWS mission.\1
Because of continuing concerns over cost increases and schedule
delays associated with the modernization, it remains in the high-risk
category today.\2
NOAA has also been plagued by financial management problems. For
example, Commerce's Office of the Inspector General noted in February
1997 that NOAA could not provide all the financial information
required by the Chief Financial Officers Act of 1990, as expanded by
the Government Management Reform Act of 1994, or ensure the accuracy
of certain components of financial information in its consolidated
financial statements. The independent certified public accounting
firm auditing NOAA's fiscal year 1996 financial statements was unable
to express an opinion on these statements due to inadequacies in
NOAA's accounting records and internal controls. The auditors
identified 11 material weaknesses in NOAA's internal controls,
including budgetary execution transactions that were not supported or
reconciled. The auditors recommended that NOAA focus on
communicating the importance of financial management and fiscal
responsibility to its program offices.
--------------------
\1 High-Risk Series: Overview (GAO/HR-95-1, February 1995).
\2 High-Risk Series: Information Management and Technology
(GAO/HR-97-9, February 1997).
SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :3
To describe key events related to the formulation and execution of
NWS' fiscal year 1997 budget, we examined guidance developed by OMB,
including the communication of budget requests and apportionments, as
well as congressional guidance provided in appropriation acts and
accompanying congressional committee reports on the execution of NWS'
budget. We also obtained and reviewed relevant budget documents for
NWS, including its budget request and its requests for the
reprogramming of funds.
To identify key events regarding NWS' fiscal year 1997 budget
"shortfall" and efforts to address it, we examined records of
communication among NWS, NOAA, and Commerce, as well as
communications to the Congress. This included memoranda, briefings,
electronic messages, and statements to the Congress.
We interviewed Commerce, NOAA, and NWS budget and program officials
to identify key events related to the NWS budget for fiscal year
1997. We also examined relevant reports, such as An Assessment of
the Fiscal Requirements to Operate the Modernized National Weather
Service During Fiscal Years 1998 and 1999.\3 We also reviewed the
audit report prepared by the Department of Commerce's Office of
Inspector General and an independent certified public accounting firm
on NOAA's fiscal year 1996 financial statements, dated February 26,
1997.\4
We performed our work at NOAA headquarters in Washington, D.C., and
at NWS headquarters in Silver Spring, Maryland, from July 1997
through January 1998. Our work was performed in accordance with
generally accepted government auditing standards. We requested
comments on a draft of this report from the Secretary of Commerce or
his designee. The Secretary provided written comments, which are
discussed in the "Agency Comments" section and are reprinted in
appendix I.
--------------------
\3 Brigadier General (Retired) John J. Kelly, Jr., October 14, 1997.
\4 National Oceanic and Atmospheric Administration: Financial
Statements, Fiscal Year 1996 (Audit Report No. FSC-8841-7-0001,
February 26, 1997).
NOAA'S BUDGET FORMULATION AND
EXECUTION PROCESS
------------------------------------------------------------ Letter :4
In developing their internal budget preparation instructions and
formulating budget requests, executive agencies follow guidance
contained in OMB Circular A-11, Preparation and Submission of Budget
Estimates. This circular provides detailed guidance on the form and
content of budget requests and the basis for making budget estimates.
At NOAA, this guidance is supplemented by a budget handbook that
reinforces many of the circular's principles.
According to the NOAA handbook, the NOAA Comptroller with input from
the NOAA components--the National Weather Service; National Ocean
Service; National Marine Fisheries Service; Oceanic and Atmospheric
Research; and National Environmental Satellite, Data, and Information
Service--prepares a draft budget request for departmental review and
approval. NOAA's fiscal year 1997 budget request contained several
appropriation accounts, including operations, research and
facilities; construction; and fleet modernization, shipbuilding and
conversion. The operations, research and facilities account, the
largest appropriation, includes separate estimates for each of NOAA's
components and provides the majority of their funding. This account
contains no-year funding authority--that is, its appropriation
remains available for obligation for an indefinite period of time.
There is no appropriation account specific to NWS.
Table 1 provides a snapshot of the development of the NWS fiscal year
1997 budget. This process began when the department submitted a
fiscal year 1997 budget request of nearly $2 billion to OMB for NOAA
operations, research, and facilities, including a request of $693
million for NWS.
Table 1
Development of NWS' Fiscal Year 1997
Budget
(Dollars of budget authority in
millions)
Fiscal year
OMB Request in 1997
Organizati Request to passback\a President's Congressiona appropriatio
on OMB cut budget l reductions ns
---------- ------------ ------------ ------------ ------------ ------------
NOAA $1,988.0 $16.8 $1971.2 $117.1 $1854.1
NWS $693.0 $22.3 $670.7 $32.7 $638.0
-- $494.0 $22.3 $471.7 $10.9\b $460.8
operations
--systems $199.0 $0 $199.0 $21.8 $177.2
--------------------------------------------------------------------------------
Note: Dollar amounts for NOAA and NWS refer only to NOAA's
operations, research, and facilities appropriation. This
appropriation contains the majority of NWS' funding.
\a Amounts in this column represent the cumulative result of the
passback process and include spending increases for some items and
spending reductions for others. Although NOAA's passback amount
includes NWS' passback, its cumulative reduction is smaller overall
than NWS' total passback amount because increases and reductions for
NOAA's other components are also included.
\b NWS included $10.5 million of this reduction as part of its budget
"shortfall" and reported to the Congress in February 1997 on how it
would address this reduction.
Sources: NOAA's fiscal year 1997 budget request, congressional
committee report accompanying NOAA's fiscal year 1997 appropriations,
and internal NWS documents.
OMB reviews each department and agency budget request based on
presidential priorities and other factors and makes an initial
proposal on how resources will be allocated. Departments and
agencies are notified of OMB's initial resource allocation decisions
about 2 months after making their initial budget submissions. This
notification is commonly referred to as a "passback." Agencies may
appeal their passbacks.
The OMB passback to the Department of Commerce resulted in overall
reductions for NOAA as well as a specific reduction of about $22
million for NWS' portion of NOAA's operations, research, and
facilities request. As required by OMB Circular A-11, NOAA revised
its budget request to bring it into accord with these decisions.
Both OMB and NOAA budget preparation guidance instruct staff to
support the ultimate request in the President's budget. In response
to the passback, NWS revised its fiscal year 1997 budget to about
$671 million, the amount contained in the President's budget request
to the Congress.
The final step in the budget formulation process is congressional
review of the agency's budget and the enactment of appropriations.
After holding hearings and deliberating on NOAA's budget request, the
Congress reduced the amount for NOAA's operations, research, and
facilities request by about $117 million and specified that NWS
absorb about $33 million\5 of the cut, resulting in a fiscal year
1997 budget for NWS of $638 million.
After an agency's appropriation is enacted, the agency receives an
apportionment\6 from OMB. Apportionment and subsequent allotments\7
within the agency are established, often by calendar quarter and by
program or major activity, to prevent obligations in a manner or at a
pace that would result in the agency exceeding appropriated levels.
As an agency executes its budget, it may feel changes from planned
spending levels are needed. To allow for efficient and effective
execution of agency budgets while still maintaining appropriate
oversight of executive actions, the Congress has provided
reprogramming guidelines that define when changes from planned
spending levels require congressional notification. Reprogramming is
the shifting of funds within an appropriation for purposes other than
those contemplated at the time of appropriation. For example, to
help address its budget "shortfall," NWS requested a $7.9 million
reprogramming of NOAA funds in April 1997.
There are no governmentwide reprogramming guidelines; guidance varies
among appropriation subcommittees. For example, the annual Commerce,
Justice, State, the Judiciary and Related Agencies Appropriations Act
typically provides that no funds are available for a reprogramming
which results in, among other things, the creation of a new program;
elimination of a program, project, or activity; or relocation of an
office or employees unless the Appropriations Committees of both
Houses of Congress are notified 15 days in advance of the
reprogramming.\8
Appendix II contains a chronology describing the key events related
to the formulation and execution of the NWS fiscal year 1997 budget.
--------------------
\5 Of the $33 million cut, $10.5 million was based on a
recommendation in a report by the Department of Commerce's Office of
Inspector General (National Weather Service Should Streamline Its
Headquarters and Support Operations, Audit Report No.
NOA-6979-6-0001, February 29, 1996) to eliminate nonessential NWS
headquarters functions and positions.
\6 The action by which OMB distributes amounts available for
obligation, including budgetary reserves established pursuant to law,
in an appropriation or fund account.
\7 An authorization by either the agency head or another authorized
employee to incur obligations within a specified amount. The amount
allotted by an agency cannot exceed the amount apportioned by OMB.
\8 Public Law 104-208, 605(a), 110 Stat. 3009, 3009-64 (1996).
KEY EVENTS ASSOCIATED WITH NWS'
BUDGET "SHORTFALL" AND EFFORTS
TO ADDRESS IT
------------------------------------------------------------ Letter :5
Due to the reductions that OMB and, subsequently, the Congress made
to NWS' fiscal year 1997 budget request, as well as inflation and
other cost increases, NWS believed it had a budget "shortfall." NWS
officials felt that NWS' fiscal year 1997 budget was not sufficient
to provide desired levels of services. NWS appeared to define its
"shortfall" generally as the gap between its final 1997 budget (less
a one-time program increase of $14 million for modernization and
associated restructuring demonstration and implementation) and its
1996 budget adjusted for inflationary and other increased costs, such
as pay raises.
VARYING AMOUNTS OF BUDGET
"SHORTFALL" WERE REPORTED TO
THE CONGRESS
---------------------------------------------------------- Letter :5.1
NOAA and NWS reported varying amounts to the Congress about the size
of NWS' estimated budget "shortfall."\9 For example, after receiving
its fiscal year 1997 appropriations, NOAA and NWS officials noted
spending reductions of $27.5 million in a February 14, 1997, briefing
to congressional staff. Two months later, in an April 4, 1997,
briefing to congressional staff, NOAA noted spending reductions of
$42.2 million. By May 1997, the reported "shortfall" had increased
to $47.4 million. Table 2 shows the varying estimates of "shortfall"
reported to the Congress and the changing components associated with
each estimate.
Table 2
Budget "Shortfall" Amounts Reported to
the Congress
February April May 1997
1997 1997 testimon
Element briefing briefing y
-------------------------------------- ---------- -------- --------
Proposed reductions arising from
--streamlining the certification $7.4 $7.4\a $7.4
procedures for closing weather
offices
--personnel and administrative 7.0 7.0\a 7.0
streamlining reductions
--privatization of specialized weather 2.6 2.6\a 2.6
services
Congressional reduction to NWS' base 10.5 10.5\a 10.5
operations budget\b
Inflation increases for salaries and 9.7 9.7
other expenses
Increase in NWS' contribution for 5.9
NOAA-wide support services
Costs associated with personnel 5.0 5.0
separations
Reprogramming of funds to restore (0.7)
proposed cuts to the National Centers
for Environmental Prediction
======================================================================
Total $27.5\c $42.2 $47.4\d
----------------------------------------------------------------------
\a In the April 1997 briefing, NOAA and NWS presented these
"shortfall" amounts as part of the $27.5 million reduction in base
operations.
\b The conference committee report accompanying NWS' appropriations
bill specified that NWS should apply the reduction to the operations
and staffing levels in NWS central headquarters activities in the
national capital area. According to the Department of Commerce,
there were also staffing reductions in centralized operations
activities located in the national capital area.
\c The briefing stated that this $27.5 million figure represents the
difference between NWS' fiscal year 1996 appropriations and the
fiscal year 1997 base operations budget.
\d The Assistant Administrator for Weather Services testified that
this figure represented NWS' fiscal year 1997 total budget
"shortfall."
Sources: February 14, 1997, and April 4, 1997, briefings to House
and Senate Appropriations Subcommittees and May 15, 1997, testimony
before the Subcommittee on Science, Technology and Space, Senate
Committee on Commerce, Science, and Transportation.
In a May 15, 1997, hearing before the Subcommittee on Science, Space
and Technology, Senate Committee on Commerce, Science and
Transportation, some Members of Congress indicated that they were
confused by the varying amounts of reported budget "shortfall."
According to NOAA and NWS officials, the varying amounts provided to
the Congress responded to specific questions asked at particular
points in time and did not necessarily include all known elements of
the "shortfall." For example, although a January 3, 1997, NWS
memorandum to NOAA mentioned the withholding of inflationary
increases and a March 18, 1997, NWS memorandum to NOAA mentioned the
increased NWS contribution for NOAA-wide support services, these
elements of the "shortfall" were not provided to the Congress in the
February 1997 and April 1997 briefings, respectively.
--------------------
\9 The budget "shortfall" estimate relates to NWS' operations only.
A VARIETY OF MEASURES WERE
PLANNED TO ADDRESS THE
"SHORTFALL"
------------------------------------------------------------ Letter :6
To address its budget "shortfall," NWS planned a number of measures,
both temporary and permanent. Table 3 describes a set of planned
actions to address the "shortfall" reported in May 1997.
Table 3
Planned Actions to Address Budget
"Shortfall" as of May 7, 1997
(Dollars in millions)
Action Amount Subtotal
-------------------------------------------------- -------- --------
Permanent reductions in the national capital area
======================================================================
Subtotal $10.5
Agencywide permanent and one-time reductions
Accelerate transition program staffing activities $7.3
Accelerate transition program office close-outs 4.7
Consolidate mainland regions-southern region 1.1
Other 2.4\a
======================================================================
Subtotal 15.5
Temporary reductions not sustainable through
fiscal year 1998
Reduce centralized logistics quantities 2.2
Reduce operational supplies and stock levels 1.3
Defer maintenance for central communications 1.0
network
Reduce field staff training 1.0
Freeze operational equipment replacement 1.0
======================================================================
Subtotal 6.5
Other actions taken to fund inflationary costs
Deobligate prior-year PCS\b costs (one-time) 4.2
Reduce regions and NCEP\c across the board 3.3
(temporary)
Other 2.2\c
======================================================================
Subtotal 9.7
Other one-time and temporary actions taken to
offset additional NOAA withholdings
Reduce all organizations across the board 3.9
Deobligate prior-year PCS costs 2.0
======================================================================
Subtotal 5.9
Reprogramming offsets and associated permanent (.7)
costs
======================================================================
Total Reductions $47.4
----------------------------------------------------------------------
\a This amount was rounded upward.
\b Permanent change of station
\c National Centers for Environmental Prediction
Source: National Weather Service
NWS ultimately succeeded in staying within its fiscal year 1997
budget level by implementing a number of actions. According to a
December 1997 NWS analysis, NWS reduced (1) contracts and services by
$15.2 million, (2) rent, communications, and utilities by $9.4
million, (3) salaries and benefits by $4.4 million, (4) employee
relocations by $3.6 million, and (5) travel by $3 million. It also
deobligated\10 prior year funds, primarily permanent change of
station costs, by $6.6 million. In commenting on a draft of this
report, the Department of Commerce stated that NWS did not fill field
office operational vacancies as they occurred throughout fiscal year
1997. This was done to enable NWS to place employees in available
positions, thereby mitigating the negative impact of a planned major
reduction-in-force. It further stated, however, that the longer
these operational vacancies remained unfilled, the more critical the
need to fill the positions became. As we will discuss in the next
section, NWS also received congressional concurrence on a
reprogramming request to NOAA, giving NWS $5.4 million\11 that
enabled it to restore funding to maintain its operational equipment
and fund some personnel separation costs.
--------------------
\10 Deobligation is an agency's cancellation or downward adjustment
of a previously recorded obligation.
\11 The $5.4 million involved reprogramming $3.6 million from NOAA's
National Environmental Satellite, Data, and Information Service
satellite programs, and $1.8 million from NOAA's Economic Development
Revolving Fund.
REPROGRAMMING REQUEST AND
CERTIFICATION PROCESS
CONTRIBUTED TO CONFUSION ON
"SHORTFALL"
---------------------------------------------------------- Letter :6.1
Two key events to address the NWS budget "shortfall" appeared to
cause confusion among department officials. The first event centers
on an NWS reprogramming request to NOAA. According to an April 18,
1997, NWS schedule, NWS requested a reprogramming of $7.9 million\12
to address its "shortfall." This request was forwarded to the
Department's Acting Chief Financial Officer by the NOAA Under
Secretary on May 29, 1997.
Our review of e-mail correspondence between the Counselor to the NOAA
Under Secretary and an NWS Budget Analyst showed that there were
several inquiries made about the status of the reprogramming request
between May 6, 1997 to June 6, 1997, but there was no official
communication that the request had been approved. However, the NWS
Deputy Assistant Administrator for Operations assumed that the
reprogramming request would be approved by Commerce and that funds
were available to hire personnel to fill vacancies in the field that
had been deferred because of the "shortfall." This official told NOAA
officials on June 13, 1997, that NWS intended to start filling
critical field vacancies.
On June 16, 1997, the NOAA Deputy Under Secretary informed the NWS
Deputy Assistant Administrator for Operations that NWS could not fill
the vacancies because it had a "deficit on the books." This was
primarily because the reprogramming request had not yet been
approved, which meant that funds NWS believed were available for new
hires would need to be retained to pay for possible personnel
separations. Indeed, the department's Acting Chief Financial Officer
did not notify the Congress of the reprogramming request until July
3, 1997, nearly 3 months after the original request. By this time,
the request for $7.9 million had been revised to $5.4 million\13
because the department, based on input from NWS, determined that less
money was needed to address personnel reductions associated with the
streamlining of NWS. The Subcommittee on the Departments of
Commerce, Justice, and State, the Judiciary and Related Agencies,
House Committee on Appropriations, informed the department on July
16, 1997, that it had no objections to the reprogramming proposal.
The second event involves NWS' effort to obtain certification
approval from NOAA to consolidate, automate, and/or close weather
service offices. On April 22, 1997, 4 days after NWS submitted the
reprogramming request for $7.9 million, NWS forwarded 83
certification packages to the NOAA Under Secretary for approval.
Section 706(b) of Public Law 102-567 specifies that the Secretary of
Commerce must certify that consolidating, automating, and/or closing
of field offices will not result in any degradation of service to the
affected service areas. The NWS Deputy Assistant Administrator for
Modernization told us that he briefed the Secretary of Commerce on
this certification process on June 10, 1997.
Upon learning that NWS would not be able to fill vacancies in the
field because the aforementioned reprogramming request had not yet
been approved, the NWS Deputy Assistant Administrator for
Modernization recommended to the NOAA Deputy Under Secretary on June
20, 1997, that 27 of the 83 certification packages be held back.
This was because the packages included about 27 affected areas whose
responsible weather field offices contained vacancies. The NWS
Deputy Assistant Administrator for Modernization stated that the
vacancies, if left unfilled, would result in a degradation of
services for the area served by that weather field office. The NWS
Deputy Assistant Administrator for Modernization told us that he had
assumed all along that these vacancies would be filled when the
certification packages were forwarded to the NOAA Under Secretary for
approval.
Subsequent to the NWS Deputy Assistant Administrator for
Modernization's recommendation, the NOAA Under Secretary did not take
action on the 83 certification packages sent to him in 1997. The NWS
Deputy Assistant Administrator for Modernization told us that NWS
plans to forward about 80 certification packages for consolidation,
automation, and/or closure of offices in 1998.
--------------------
\12 Of the $7.9 million reprogramming request, $4.3 million was to
pay for the one-time cost associated with personnel reductions, $3.1
million for maintenance of operational equipment, and $0.5 million
for training.
\13 Of the $5.4 million reprogramming request, $3.6 million was to
pay for deferred maintenance of operational equipment, $1.6 million
for the one-time costs associated with personnel reductions, and $0.2
million to maintain the current staffing level (approximately 45
positions) at NWS' southern regional headquarters.
ADDITIONAL DEVELOPMENTS
RELATING TO THE "SHORTFALL"
---------------------------------------------------------- Letter :6.2
Only 5 days after the NWS Deputy Assistant Administrator for
Modernization recommended that the 27 certification packages be held
back, the NOAA Under Secretary announced on June 25, 1997, the
reassignment of the Assistant Administrator for Weather Services.
The NOAA Under Secretary claimed that NOAA had been receiving
conflicting information from NWS on how it would provide essential
weather services while recognizing that the public expects government
agencies to reduce their costs. At the same time, the Under
Secretary announced his intention to appoint an outside Special
Advisor on Weather Services to conduct a rigorous evaluation of the
NWS budget and operations.
According to the Special Advisor's subsequent October 14, 1997,
report to the Secretary of Commerce,\14 Commerce and NOAA financial
management information systems, coupled with NWS' complex budget
structure, budget formulation/execution policies and management
processes, limit visibility of operational and overhead costs and the
traceability of these costs to products and services. The Secretary
of Commerce later announced on October 23, 1997, that he plans to
hire a chief financial officer for NWS to address the need for
management and budget reforms. NOAA's Chief of Audit and Internal
Control told us that the department is currently reviewing the
position description for the NWS Chief Financial Officer and intends
to advertise for it soon.
Lastly, the Special Advisor felt that the fiscal year 1998 proposed
budget and the 1999 department submission to OMB contained inadequate
base funding. He recommended to the Secretary that the fiscal year
1998 budget for NWS be $680 million to provide essential public
services and complete modernization activities.\15 The Congress
enacted appropriations that provided about $668 million in November
1997.\16
--------------------
\14 See footnote 3.
\15 Of the $680 million, $473 million would be for base operations
and modernization and associated restructuring demonstration and
implementation, and $207 million, for systems acquisition and
construction.
\16 This appropriation includes about $520 million for NWS
operations, research, and facilities, and about $148 million for NWS
capital asset acquisition.
AGENCY COMMENTS
------------------------------------------------------------ Letter :7
In commenting on a draft of this report, the Department of Commerce
stated that the report accurately reflected the events surrounding
the fiscal year 1997 budget and acknowledged that we had conducted
thorough work in researching and documenting the complex events and
issues included in the report. For additional clarity in the report,
the department provided several technical comments and changes that
have been incorporated into the report as appropriate.
---------------------------------------------------------- Letter :7.1
As agreed with your offices, unless you publicly announce the
contents of this report earlier, we plan no further distribution
until 15 days from the date of the report. At that time, we will
send copies to the Chairmen and Ranking Minority Members of the
Senate Committee on Commerce, Science, and Transportation; the Senate
and House Committees on Appropriations; the Senate Committee on
Governmental Affairs; and the House Committee on Government Reform
and Oversight; and the Director, Office of Management and Budget. We
will also send copies to the Secretary of Commerce and to the
Administrator of the National Oceanic and Atmospheric Administration.
Copies will also be made available to other parties upon request.
Please contact me at (202) 512-6253, or by e-mail at
[email protected], if you have any questions concerning this
report. Major contributors to this report are listed in appendix
III.
Joel C. Willemssen
Director, Civil Agencies Information Systems
(See figure in printed edition.)Appendix I
COMMENTS FROM THE DEPARTMENT OF
COMMERCE
============================================================== Letter
(See figure in printed edition.)
The following are GAO's comments on the Department of Commerce's
letter dated February 20, 1998.
GAO'S COMMENTS
1. Report has been modified to reflect agency comments.
2. The Department of Commerce noted that the $27.5 million figure
should include $5 million in personnel separation costs, which would
bring the total to $32.5 million. We did not change the table
because the $32.5 million figure is not contained in the February
1997 briefing.
CHRONOLOGY OF KEY EVENTS RELATED
TO THE FORMULATION AND EXECUTION
OF THE NWS FISCAL YEAR 1997 BUDGET
========================================================== Appendix II
Date Description
---------- ----------------------------------------------------------
11/95 Department of Commerce's fiscal year 1997 budget request
submitted to OMB included $2 billion for NOAA's
operations, research, and facilities which included $693
million for NWS.
11/95-1/ OMB passback and subsequent discussions resulted in
96 reductions of $16.8 and $22.3 million to NOAA and NWS
budgets, respectively.
2/5/96 President's budget for fiscal year 1997 submitted to
Congress included about $2 billion request for NOAA's
operations, research, and facilities. The President's
backup book included about $670.7 million for NWS--about
$471.7 million for operations and research and $199
million for systems acquisition.\ It also showed that the
request included increases in the operations, research and
facilities over fiscal year 1996 for pay raise and within-
grade step increases.
4/30/96 House and Senate Appropriations Subcommittees on Commerce,
and 5/14/ Justice, and State, the Judiciary, and Related Agencies
96 held hearings on Commerce's budget request. In testimony,
NOAA's Under Secretary noted that NWS' fiscal year 1997
request for operations and research funds to provide
public weather and flood warnings and forecasts and
applied research in support of the weather service
modernization was reduced by $18.2 million from the base.
9/30/96 The Omnibus Consolidated Appropriations Act for fiscal
year 1997 appropriated $1.85 billion for NOAA operations,
research and facilities. The Conference Report provided
$638 million for NWS of which $460.8 million was for
operations and research. The appropriations represented a
reduction of $117.1 million for NOAA and $32.7 million for
NWS. Of NWS' reductions, $10.9 million was cut from NWS'
operations and research request and $21.8 million was cut
from NWS' systems request.
1/3/97 Memorandum from NWS' Director of Management and Budget
Office to NOAA Chief Financial Officer mentioning a $36.3
million NWS base deficit for fiscal year 1997 and
expressing deep concern over NOAA's withholding of within
grade adjustments of $1.9 million.
2/14/97 Congressional briefing by NOAA and NWS officials,
including the NOAA Deputy Under Secretary, the Assistant
Administrator for Weather Services, and the NWS Deputy
Assistant Administrator for Operations, noting that fiscal
year 1997 Base Operations Budget showed reductions of
$27.5 million based on the fiscal year 1997 enacted
appropriation versus the fiscal year 1996 appropriation
and planned actions of $27.5 million to address the
reductions.
3/18/97 The Modernization Transition Committee recommended that
the Assistant Administrator for Weather Services approve
over 80 certifications for consolidation, automation and/
or closure of weather service offices.
3/18/97 Memorandum from Assistant Administrator for Weather
Services to NOAA Deputy Under Secretary stating that the
"operational deficit" facing NWS in fiscal year 1997 is
$36.3 million rather than $27.5 million. The memo also
cites another $6.8 million in withheld adjustments to base
which raises the "operating deficit" to $43.1 million.
3/21/97 Department of Commerce press release on NWS' plans to
restructure operations to meet lower budget allocations
discusses recommended actions, which include (1)
accelerating planned reductions in staffing and operations
at headquarters, regional offices, central operations and
field offices and (2) reengineering certain programs,
including accelerating plans for up to 200 reduction-in-
force actions and closing the southern region headquarters
office.
4/1/97 Analysis of NWS "deficit" showing $42.2 million "deficit"
and $42.2 million in actions to meet "deficit," including
$15.5 million in permanent and one-time reductions, $6.5
million in temporary reductions, and $9.7 million of
reductions to absorb inflationary costs.
4/4/97 Congressional briefing by NOAA and NWS officials on Base
Operations-Fiscal Year 1998 Funding Restoration showing
reductions of $42.2 million, composed of $27.5 reduction
plus $9.7 million in inflationary costs plus $5 million in
estimated personnel separation costs. The briefing also
lists $42.2 million in actions taken to meet the
reductions.
4/8/97 Hearings before the House Committee on Appropriations
Subcommittee on Commerce, Justice, and State, the
Judiciary, and Related Agencies indicate the NOAA Under
Secretary said NWS could fulfill its public safety mission
with fiscal year 1997 funding. Assistant Administrator for
Weather Services referred to components comprising a $27.5
million reduction and noted that NWS and all agencies must
absorb 3-percent pay raises. The Assistant Administrator
for Weather Services further noted that in an operational
organization such as the weather service, ongoing
degradation as a result of that ongoing absorption of pay
raises will eventually lead to a much smaller weather
service.
4/17/97 Notification to House Appropriations Subcommittee on
Commerce, Justice and State for $0.7 million reprogramming
to NWS for the National Hurricane Center.
4/18/97 NWS schedule on $7.9 million reprogramming request for
fiscal year 1997 operations and research.
4/22/97 Assistant Administrator for Weather Services forwarded
over 80 certifications for consolidation, automation, and/
or closure of weather service offices to NOAA Under
Secretary for approval.
5/6/97 E-mail message from Counselor to the NOAA Under Secretary
to NWS Budget Analyst noting that the NWS reprogramming
request for $7.9 million for fiscal year 1997 has not been
acted upon yet by NOAA.
5/15/97 NOAA Under Secretary and the Assistant Administrator for
Weather Services testify before the Senate Subcommittee on
Science, Technology and Space on the components of the
$47.4 million "shortfall," including NWS funding
reductions and increased costs, such as pay-related costs
and the cost of NOAA support and centralized services.
5/16/97 E-mail message from Counselor to NOAA Under Secretary to
NWS Senior Budget Analyst stating that the reprogramming
package is with NOAA Deputy Under Secretary and is on its
way to NOAA Under Secretary for signature.
5/22/97 Memorandum from NOAA Chief Financial Officer to NOAA Under
Secretary requesting a reprogramming for NWS of $7.9
million.
5/29/97 Memorandum from NOAA Under Secretary to Department of
Commerce Acting Chief Financial Officer requesting a
reprogramming of $7.9 million for NWS.
6/6/97 E-mail message to NWS Senior Budget Analyst stating that
the NOAA reprogramming is under review and that hopefully
there will be a Department of Commerce decision late the
next week.
6/19/97 E-mail from NWS Deputy Assistant Administrator for
Operations to NOAA Deputy Under Secretary asking for
guidance on how to proceed with vacancies. E-mail notes
that on June 16 NOAA Deputy Under Secretary indicated that
NWS would not be able to fill the vacancies because NWS
still had a deficit on the books. E-mail notes that this
was a surprise to NWS because of NOAA's previous
commitment to pay the separation costs.
6/20/97 NWS Deputy Assistant Administrator for Modernization
recommended in an e-mail to NOAA Deputy Under Secretary
that the certification packages for approximately 27
offices be held back because of staffing vacancies.
6/25/97 E-mail message from NWS' Management and Budget Office
Director to NWS Senior Budget Analysts stating that the
Department has requested that the NOAA fiscal year 1997
reprogramming request be submitted 6/25/97.
6/25/97 Department of Commerce press release notes that the
Assistant Administrator for Weather Services is reassigned
to other duties within NOAA.
7/3/97 Reprogramming Notification from the Department of Commerce
Acting Chief Financial Officer to the Congress on a $5.4
million reprogramming for NWS operations and research.
7/16/97 House Committee on Appropriations, Subcommittee on
Commerce, Justice, and State, the Judiciary, and Related
Agencies, responded to Department of Commerce Acting Chief
Financial Officer on the $5.4 million reprogramming
notification for NWS that it has no objection to
reprogramming $3.6 million from satellite programs for
deferred maintenance and related activities, but directs
the department to transfer the additional $1.8 million
from the Economic Development Fund.
7/21/97 E-mail message forwarded by Counselor to NOAA Under
Secretary to NWS Senior Budget Analyst stating that the
House and Senate have officially concurred with the $5.4
million reprogramming for NWS.
----------------------------------------------------------------------
MAJOR CONTRIBUTORS TO THIS REPORT
========================================================= Appendix III
ACCOUNTING AND INFORMATION
MANAGEMENT DIVISION, WASHINGTON,
D.C.
Helen Lew, Assistant Director
Michael J. Curro, Assistant Director
Joan B. Hawkins, Assistant Director
James C. Houtz, Information Systems Analyst-in-Charge
Laura E. Castro, Senior Evaluator
David R. Fisher, Senior Auditor
Paul F. Foderaro, Senior Auditor
*** End of document. ***