PRIVATIZATION IMPACT Mr. FAULKNER. An example of the reductions is the House Folding Room privatization effective August 31, 1995, which reduced 119 FTEs and represents an estimated annual savings of a million dollars. In addition, we privatized the House postal operations, resulting in FTE reduction of 131 positions. The House will realize annual savings from this initiative of $1.5 million. The CAO provided outplacement services to staff affected by both of these meas ures. Mr. PACKARD. Before you go further, let's have a little discussion. But, before I do, I want to welcome Vic Fazio, the Ranking Minority Member. We gave you accolades earlier, Vic. Mr. FAZIO. I wondered why my ears had heated up on me. Mr. PACKARD. We recognized the significant work under your chairmanship of downsizing and starting this whole process that we are still in the process of doing, and we are grateful that you could be here today. Mr. FAZIO. Thank you, Mr. Chairman. DISCUSSION ON FY '97 COST OF LIVING ADJUSTMENT USED Mr. PACKARD. For your benefit, we are on page 26 in the notebook. We have proceeded to that point. All agencies, the record will remain open for questions so that if Vic or any other member of the committee wishes to ask questions, we hope that you will respond. I would like to ask at this point, Mr. Faulkner, what cost-of-living adjustment figures you have used and did you-have you made recommendations to other offices relative to the figures that you have used? Mr. ANFINSON. We have used a cost of living of 2.325 percent, which was given to us by OMB. The same number is applied consistently throughout. Mr. PACKARD. And other agencies are using the same figure? Mr. PACKARD. So all budget estimations and assumptions are based upon that percentage? Mr. ANFINSON. That is correct. OVERTIME DISCUSSION-CAO ESTIMATED FY '97 COSTS Mr. PACKARD. What about overtime? How have you addressed overtime in your agency? Mr. ANFINSON. The only overtime that we have in our existing budget for the CAO is 198,000 for employees. This is a number that is based on the expenditures in prior years. Mr. FAULKNER. Primarily this is anticipating the furniture moves and other preparation that needs to happen for the 105th Congress, based on what occurred with the 104th. Mr. PACKARD. And this reflects do I understand, reflects a reduction in FTEs? Mr. FAULKNER. Yes, indeed, 13. SERVICE TO MEMBERS Mr. DIXON. Just one comment. I realize that when there is a changeover, things may not go particularly well or there may be some clogs. I noticed in your prepared statement that the downsizing has gone without any interruption in service to Members. And that has not been my personal experience, and—in particular, the Office of Finance and the delays I don't know if I am the exception that have occurred; and so I am wondering if you can comment on some of those kinds of things that understandably have happened. Mr. FAULKNER. First of all, we do some fairly extensive customer surveys. We have an Office of Customer Liaison which has gone around to every office twice in the last calendar year to talk to office managers and assistant administrators and other office staff, and we also conduct ongoing focus groups. When we say at this point in the testimony "relating to services," we are looking at such as the cut-over on February 13th at midnight to Pitney Bowe's management services that delivered mailthe scheduled mail delivery was not degraded-other cut-overs to use contract personnel in the recording studio and other places that we have not found, at least in any of our indicators, that there was a service disruption. In the areas that you are specifically speaking to, which is the slowdown of payment of vouchers and processing of purchase orders, there was as we started into a fairly major cut-over to new automated systems which started this last fall, in October, there was a combination of factors—a dramatic increase in the volume of vouchers in October and November, and having to double-enter into two systems, the automated system and the old system. There was a dramatic increase in the cycle time required to do vouchering. In fact, it went up to about 16 days on the average, given some vouchers-there were some that were as old as four weeks that had not been paid. That was a bulge in our indicators; that happened in October and early November. Since then, it has gone back to normal cycle times. In fact, it has moved into even more efficient handling-if I recall, Tom, it is like two to three days. VOCHER TURNAROUND TIME Mr. ANFINSON. Two to three days for expedited vouchers and travel and five to six for all other vouchers. Mr. FAULKNER. Which is where we were targeting to get all processing of Member requests. Again, the October-November period reflected a disruption in a sense, but that was not a downsizing disruption; that was bringing on line parallel systems and double-entry that occurred in that period. Mr. DIXON. So that I can go back and tell my folks, you are telling me at the outside the check will be back to members six days from the time that it arrives in your office? Mr. ANFINSON. That is our current turnaround time, and we have been there since the middle of December. Mr. PACKARD. I think I can express the same frustration that we have had in our office, but I have sensed some improvement in the difficulties with the transition, at least we hope so. Mr. DIXON. And understandably. Six days? Mr. PACKARD. You are going to hold them to it? Mr. DIXON. Say, seven working days from the time it arrives in your office, the check will be returned to us. Mr. FAULKNER. We do daily tracking of the volume and also of the aging of vouchers. In some cases, this is again an average, there might be one where our counselors who handle the vouchers may have to go back for more documentation. That sometimes happens when a new office manager comes on board. But again I think our oldest voucher, as of today, is less than a week old. Mr. DIXON. Okay. I am not challenging it. Mr. FAULKNER. Again, we certainly would like to say phone lines are open and operators are standing by. Any time that there are any flags that show that things are happening not as our statistics are tracking, we certainly want to know about it and see, number one, why our system is not tracking that as an old voucher; and two, that it shouldn't happen in the first place. IMPACT ON MEMBERS FROM CLOSING THE FOLDING ROOM Mr. DIXON. You cited the folding room as an example. I am wondering if you have surveyed Members as it relates to their satisfaction with the “uninterruption of services," as you put it, and whether they are satisfied, or are some bellyaching? Mr. FAULKNER. There was certainly, during the month of August, some concern about what life would be like without the folding room. Literally, it has been here since the 1850s. What we found is that in one of our main sources of information, the systems administrator group, that in particular is involved with the special preparation of mailing lists and mailing labels. And after the cutover occurred in August allowing Members to go out to any vendor, whether in the home district or in the home state or in the D.C. area, that we are still tracking at about $500,000 worth of savings. Again, the net reduction is to the taxpayer, because while originally the folding room was without a central account within the office of CAO and did not appear in any individual Member's representational allowance, that basically reduced our expenditures by about $5 million. But then they are saying, what about Members, they have to absorb that cost within their Member's representational allowance. The net so far has been $500,000 savings to the taxpayer, because Members are able to find that they can go out to cheaper private-sector vendors, one-stop shops where you have electronic transfer, photocopy to a vendor who prints, folds, stuffs and mails all in one place, versus where we had it demarcated into a printer, a folding room, postal operations. So Mr. DIXON. Let me ask, I am just wondering if you could provide that information to Members, because I come from an urban community and it is not my experience that it can be done cheaper. So if you have people in Los Angeles that are doing this cheaper than it was being done here, I would like to know. I am not saying it should continue to be done here, but the experience that you cite is the complete flip side of what I have experienced. Mr. PACKARD. Will the gentleman yield? Two observations th we have from personal experience in our office. Before we p chased a piece of equipment, we did contract it out for the l three or four years, all of our folding, and did not do it in the fo ing room. We did it deliberately because we found that we co save money by contracting out and our experience justified that. Secondly, I think I mentioned before the committee last year t we had demonstrated in our office at that time a piece of equ ment, small piece of equipment that would fold all of our needs. have since purchased that and used it this past year, and it d all of our folding needs. We do it right up in the Annex room, a it is more than adequate for our needs. Mr. DIXON. Mr. Chairman, you have a small print shop a packaging? Mr. PACKARD. It is available on the market, and I don't reme ber the cost, but it is a nominal amount compared to what would spend for contracting out. There are those two options. MEMBER RESPONSES TO PRIVATIZATION I have the same question. If you have been getting complai and concerns, I would be interested if leadership on both the publican and Democratic side of the Oversight Committee has b getting response from the post office and the folding room closu Mr. FAZIO. There is no point in going through the finance of discussion again; we did that in Oversight. But I did want to to on the question of how we process our mass mailings. And we h done a survey of the Democratic Caucus and find that 72 per of Members indicated that they had experienced some difficul in processing mass mailings since the folding room closed; 28 they had not. Some of the comments were: Costs too much money to use an outside vendor; The new system is less efficient; Too much staff time is now required to do mass mail; The cost has gone up while the service and convenience has down. I am sure there is always going to be a period of adjustm where people have to change the way they are doing things. just the fact that we used to have in the building access to printers, I am sure to some people is a measure of convenience. I think the real issue here is, is there or is there not a signifi cost savings? There is clearly a shift-and I know it was intended-from general accounts of the House of Representatives to the indivi Members; and to that extent, it might be a market force tryin restrain less than efficient or maybe overly expensive involver with a system that obviously could be improved upon. But I think this committee indicated last year that we prob would be shifting some $12,000 to $15,000 of costs that the sy itself would have picked up to individual Member accounts. not sure that will translate. We multiplied it by 435 to $5 $6.66 million, somewhere in that range, and Scot is indicating he thinks it is much less than that, $1.2 million. Mr. FAULKNER. That is the net effect. The money obviously has been moved to where the impact is on Members' representational allowances and not on the central account, but the net difference, we have been finding projects out to $1.2 million. Mr. PACKARD. It will be interesting to compare 1996, because we are only halfway through 1996, to 1995 to see if in fact those percentages hold true. In other words, if we do not see our Member account expenditures going up some corresponding amount, then we will either assume that they are absorbing it in a cost-effective way or they are not sending out as much mail. Mr. DIXON. I just want to understand clearly what you are saying. You are saying that after reviewing vouchers, the cost averages ought to be lower? Mr. FAULKNER. Yes. Mr. DIXON. Then mine must be a great exception to the rule. Mr. FAULKNER. Again, we are offering this service to all Member services, that as we track which Members use what, whether it is a D.C. area vendor, home State or region, we can make that kind of information available as to whether somebody is using someone who is cheaper and better than others. And part of it is that everyone is entering a marketplace that they have not had to keep records on or do research in before. On a Member-by-Member basis there may be Mr. DIXON. In the Los Angeles area, you are able to see all the vouchers that come in for payment, and I would appreciate it if you would let me and others know of someone that is providing cheaper services. Mr. FAULKNER. Absolutely. Mr. FAZIO. You would think people would be out there marketing to Members. Mr. FAULKNER. There are some, Washington-based, that are sending fliers. Mr. PACKARD. A year ago I was invited by a large printer in Los Angeles and so I went up and went through the facilities, partly due to this committee; and they were looking for business. We had all of our printing and folding done in the City of San Diego, so it was done out locally in southern California, even when we were doing it by contracting it out. Mr. DIXON. That is nice to know. DISCUSSION ON ADJUSTMENTS TO MEMBERS' ACCOUNTS Mr. FAZIO. Mr. Chairman, maybe this is an appropriate time to ask, is there any adjustment in Members' accounts now that we have consolidated them over in the Oversight Committee, based upon the efficiency that we have had with the additional out-ofpocket costs Members are incurring that used to be picked up by central agencies? Mr. ANFINSON. That has not been. The numbers that we have presented for fully funded MRA use in prior years are based on Oversight Committee numbers. Mr. FAZIO. Factored only by this 2.3 percent, 2.325; and nonpersonnel, 3.1, and carried over the same amount. Is this in part because for the first time when Members had the total amount, I guess except for mail, the flexibility to move their |