minority-owned firms in domestic and foreign markets. The agency commissioned five research projects to examine the low business formation, low growth, and high failure rates among minority-owned businesses. Office of Administration The Assistant Secretary for Administration is the chief administrative officer of the Department and principal adviser to the Secretary on administrative management. To improve internal management and better support priorities such as Reform '88, the Assistant Secretary restructured the office into six functional areas: Management and Information Systems; Finance; Procurement and Federal Assistance; Planning, Budget and Evaluation; Personnel and Civil Rights; and Management Support Operations. To further improve departmental management, a pilot Regional Administrative Support Center (RASC) was established in Seattle, Washington. This Western Administrative Support Center (WASC) improves support to employees in the field, increases efficiency and expands the authorities delegated to program heads and administrative staff. The WASC became operational October 1, 1982. It serves approximately 3,500 Commerce employees at 217 locations in ten western states and the trust territories. WASC provides seven core administrative services: administrative payments, payroll, real property and space management, personal property management, printing and publications, procurement and personnel. Based on the success of the pilot center, three additional RASC's were established. The Mountain ASC opened July 1, 1983, in Boulder, Colorado, to serve employees at 111 locations in nine states. The Central ASC in Kansas City, Missouri, opened July 1, 1983, and serves 4,500 employees at 204 locations in 15 states. A RASC in Norfolk, Virginia, which opened October 1, 1983, serves 3,000 employees at 154 locations in 16 states and Puerto Rico. As part of a special Cabinet Council on Management and Administration (CCMA) project, Commerce led a review and analysis of the delivery of common administrative services for federal field organizations. This study gathered and analyzed performance data for administrative processes across most of the federal sector. The information developed in this study can help the federal government provide more efficient administrative support to its employees in the field. Commerce is active in several Reform '88 projects, one of which is the development of a pilot financial management data base that can serve as a model for other departments. Data is extracted from existing accounting systems and entered into a standardized, accessible, controlled repository through "bridge" software programs. Since most departments have The Department is integrating its five automated payroll systems and five automated personnel systems into central interim systems, saving almost $1 million per year. The next step is to upgrade these consolidated systems and integrate them into a single department-wide one similar to a proven system like that of the Department of Energy. This initiative promises even further savings plus improved service to employees. The Management Service Center, which is responsible for processing the Department's consolidated payroll, can now distribute time and attendance data to the Regional Administrative Support Centers. Remote entry of this data allows editing and correction of time and attendance information to be done in the field, eliminating the need for manual adjustments to be made at headquarters. This reduces the time and cost of payroll processing. Another consolidation effort is the establishment of one administrative payments center instead of the previous 28. The new automated travel system is paying travel vouchers within three days, as opposed to three weeks with the old manual process. Equally important, the Department demonstrated the advantages and the feasibility of taking an existing system, in this case, that of the Department of Agriculture's National Finance Center, and installing it elsewhere. The cash management program has been especially active over the last year. Deposit of collected funds now takes significantly less time because of the attention given to processing practices within each unit. Funds are made available to Treasury several days earlier than they were a year ago. Several units now use the lock-box technique for collections, where payments are mailed directly to a bank collection point for faster deposit. This process significantly reduces the "float" time in crediting payments. The Treasury Financial Communications System (TFCS) is being introduced for vendor payments over $25,000 and for selected letter-of-credit payments under federal assistance programs. All units are now operating under the TFCS for large dollar vendor payments. EDA is undertaking the initial application of the letter-of-credit/TFCS. The TFCS permits a wire transfer of funds on the date payment is due. As a result of these improved cash management practices, monetary goals for interest savings have been set in conjunction with Treasury and OMB at $685,500 for FY 1984, and at $900,000 for FY 1985. Commerce has taken the lead agency role in assessing the costs and benefits of selling agency debt portfolios and in introducing business-like credit approval practices. Current efforts are under way to develop federal policies, standards and procedures for valuing and marketing selected loan portfolios where disposition would be beneficial to government interests. Efforts are also under way to identify the minimum information needs for establishing credit-worthiness for federal loans and credit sales, and to develop standardized procedures and systems for gathering, processing, and using that information in the granting of credit in the federal sector. The Department continued its review of all grants, cooperative agreements, loans and loan guarantees prior to award through the Financial Assistance Review Board (FARB). FARB reviewed 2,774 proposed awards totalling approximately $549 million. Cost avoidances owing to FARB actions totalled more than $3.5 million. Additionally, $4.2 million in cost avoidances accrued as a result of management improvements for three units, ITA, NTIA and MBDA, for which grants administration activities were centralized in the Office of Procurement and Federal Assistance. Under Department leadership, the foundation for a major Scientific Computing Center was laid at the National Bureau of Standards in Gaithersburg, Maryland. The consolidated Center will save the Department approximately $40 million in capital costs alone. As part of a continuing effort to consolidate similar computer operations, Commerce reviewed the facilities at NTIA, EDA, and NOAA and decided to transfer EDA processing to the NOAA computer in Suitland, Maryland, and to replace the obsolete NTIA computer. These actions saved approximately $200,000 per year while providing modern computing capability at the lowest cost. Commerce also installed equipment resources to support ITA's License Applications Reporting System (LARS) at the Departmental Computer Center, transferring the workload in April. This action generated savings in excess of $130,000 per month. The Department is proceeding with plans for an independent telecommunications network in the National Capital Region. Savings are expected to be $18 million during the ten-year life of the system. The Department also has eliminated service excesses and updated its telecommunications management capabilities, saving $150,000 during the past year. In order to develop a cohesive plan for the management of the Herbert C. Hoover Building, the Department negotiated an agreement with GSA to operate the building for five years beginning October 1, 1983. Plans for improvements to upgrade and deliver more responsive building service will be put into effect. The Department's SMART BONUS program, aimed at cost reduction and management improvements, yielded the following savings: from improvement actions by individual managers, savings of $850,000 in the first half of FY 1983; from employee suggestions, savings of $944,605; and from special-focus projects, which this year included incoming subscriptions, telephone and postage costs, first-half savings of $664,000. Work planning The Secretary's strategic planning system, a management-by-objectives system for work planning, monitoring, and evaluation, completed its second full year of operation. The Department required that all major objectives included in the planning system be included in employee performance plans. This requirement ensures that top management's key priorities are communicated to employees. The Department's automated system for tracking and reporting objectives was completed and fully used throughout 1983 to provide rapid status reports and interorganizational comparisons of related work. More than 200 objectives were tracked quarterly by the Department. "Operation Tight Ship" was inaugurated by Personnel to provide assistance to managers and supervisors in improving employee performance and productivity. This program helps managers and supervisors in dealing with inadequate performance or conduct. The Department also conducted the pilot session of its Executive Forum for SES members, which has been developed to communicate departmental and administrative goals to top-level managers. Employee performance appraisal systems were simplified, standardized and strengthened throughout the Department to provide for more consistency and clarity in documenting employee performance. Generic performance standards were implemented and quality was emphasized as the prime measure of performance. One performance appraisal form is now used for all three personnel systems, GS, GM and SES. These changes greatly reduced the paperwork process. Office of the General Counsel The General Counsel is the chief legal adviser to the Secretary of Commerce and the Department, responsible for legal advice and guidance on all matters involving the agencies and programs of the Department except the issuance of patents and the registration of trademarks. The Office supervises the activities of the Assistant General Counsels and all legal offices in the Department's operating units. It is responsible for the development of the Department's annual legislative program, the preparation of Congressional testimony for the Secretary and Deputy Secretary, the review and clearance of all other Congressional testimony unless related solely to appropriations, and the response to all requests for Department views on proposed and pending legislation. The Office of the General Counsel (OGC) interprets and assists in enforcing and implementing the Export Trading Company Act of 1982, the Export Administration Act of 1979 including its antiboycott provisions, the antidumping and countervailing duty laws, the General Agreement on Tariffs and Trade, the Multilateral Trade Negotiations and related Codes, and a variety of tax, antitrust, commercial, and procedural issues affecting international commerce. In addition, it provides legal guidance in a broad range of areas, including (1) productivity, technology, and innovation issues such as the effects of the antitrust laws on the competitiveness of U.S. industries, the transfer of technology, the development of product standards, and the voluntary accrediting of testing laboratories; (2) the interpretation of laws governing the collection and distribution of non-confidential statistical information; (3) the development of initiatives for regulatory analysis and improvement, including preparation of the Department's Semi-Annual Agenda of Regulations; (4) Department-wide activities such as procurement, personnel, equal opportunity, budget and appropriations, property management, and internal organization; (5) application of user fees to Department services; (6) interpretation and enforcement of marine resource laws; (7) advice on commercialization of land and weather satellites; (8) development of U.S. positions on law of the sea and oceans policy; (9) support for programs of economic and minority business development; and (10) development of national and international telecommunications and information policy. During the first session of the 98th Congress, the Office of General Counsel completed the processing of approximately 700 requests for Department comments on legislation, the review and clearance of testimony for more than 170 Congressional hearings, the preparation of Secretarial level testimony for nine Congressional appearances, and the preparation of recommendations for the President on 45 enrolled enactments. To help increase U.S. competitiveness, the office: • Drafted proposed legislation to establish a new Department of International Trade and Industry. This guided supporters of the administration's goal in fashioning an appropriate bill, which was reported by the Senate Governmental Affairs Committee. • Provided substantial legal and policy guidance in developing the administration's views on modifying the Export Administration Act of 1979, as well as the laws governing the imposition of antidumping and countervailing duties. • Prepared for the Federal Register regulations and guidelines necessary to implement Title III of the Export Trading Company Act of 1982, which permitted the Department to begin accepting applications for export trade certificates of review, as scheduled, in June • Served as departmental liaison to the U.S. administration efforts to modify and clarify the application of the Foreign Corrupt Practices Act. • Provided legal advice in some 249 antidumping and countervailing duty investigations and administrative review proceedings, including complex cases on steel products from many countries, softwood lumber from Canada, and textiles from the People's Republic of China. Assisted the Department of Justice in litigating some 119 lawsuits involving antidumping and countervailing duty determinations. • Worked with the Department of State in responding to foreign government comments on the extraterritorial reach of U.S. antiboycott and export control laws, and continued to support the Justice Department intensively in five suits challenging the constitutionality of antiboycott provisions. • Provided legal counsel on the implementation of the U.S./European Communities Arrangements on Steel Products, as well as in U.S. negotiations with other signatories to the Antidumping Code and Subsidies Code in the context of the General Agreement on Tariffs and Trade. • Supported the Department's Office of Metric Programs in encouraging voluntary metric conversion, including drafting metric standardization regulations for use in federal government procurement and a charter for the National Council on State Metrication to be used by state and local governments to coordinate plans for increased use of metrics. Drafted the charter for the President's Commission on Industrial Competitiveness which will review means of increasing the long-term competitiveness of U.S. industries in world markets, with particular emphasis on high technology. To stimulate productivity, economic recovery, and growth, OGC: • Drafted legislation to encourage the formation of joint research and development ventures, and developed a 100-page manual entitled Information and Steps Necessary to Form Research and Development Limited Partnerships. Provided legal analyses of tax problems affecting incentives of business, such as federal tax benefits for research and development, and state use of worldwide unitary apportionment. Contributed to the development of the administration's position of support for the principle of federal legislation to establish uniform standards for product liability, and more recently as lead in studying non-federal alternatives to toxic tort legislation. • Provided analyses of major communications issues and proposals, including legislative proposals to amend the Communications Act of 1934, and issues arising since the settlement of the government's antitrust suit against the American Telephone and Telegraph Company, and the resulting divestiture order. • Assisted in revising many Department regulations to reduce costs and unnecessary • Assisted in preparing for the Federal Register a • Provided legal support in concluding the U.S.-People's Republic of China textile bilateral agreement, including drafting, analysis and legal interpretations with respect to U.S. implementation of the agreement. • Assisted in obtaining federal recognition of the 1992 Chicago/Seville World's Fair and its registration by the Bureau of International Expositions; also contributed as major participant in lease negotiations for the U.S. Pavilion in New Orleans, as well as taking the lead in resolving controversy over demolition of historic structures by the New Orleans Fair Organizer. OGC also assisted in continuing negotiations with the United Kingdom, France, West Germany and Japan to reach an agreement concerning responsibilities and procedures for issuance of deep seabed mining licenses, as a partial basis for designation of a nation as a reciprocating state under the Deep Seabed Hard Mineral Resources Act. It set up compliance mechanisms to encourage foreign nations who fish in U.S. waters to monitor more closely the violations of their vessels, and prosecuted over 500 violations of the marine resource laws and regulations; developed and implemented a plan for amending the Magnuson Fishery Conservation Act, briefing all regional councils on its new procedures to expedite review of fishery management plans; and contributed to development of the President's Proclamation of an Exclusive Economic Zone for the U.S. and the accompanying Oceans Policy Statement. The office supported the Department of Justice in the successful defense of a $25 million contract to operate Landsat ground stations in one of the first actions filed in the U.S. Claims Court under the Courts Improvement Act of 1982. It represented all components of the Department nationwide in 227 administrative and judicial personnel litigation cases, including matters before the Merit Systems Protection Board, Equal Employment Opportunity Commission, and Federal Labor Relations Authority. Internally, the office continued to stress improvement in management of its delivery of legal services, including integration of resources such as those of the Law Library. OGC assumed responsibility for the operation of the Department's Law Library Oct. 1, 1983. The collection is open to the public by individual appointment and through interlibrary loans. Requests for information may be made by writing Law Library, U.S. Department of Commerce, Room 1894, Herbert C. Hoover Building, Washington, D.C. 20230, telephone (202) 377-5517. Office of Inspector The Office of Inspector General (OIG) is responsible for the Department's audit and most investigative activities and continues to play an important role in the effective management of the Department's programs and operations. Its mandate to promote economy and efficiency and to detect fraud and abuse in Department programs and operations coincides with the urgent need to reduce unnecessary federal expenditures. Prevention continues to be a major focus of the OIG. Always seeking new ways to prevent fraud, waste, and abuse, the IG has adopted new techniques. In addition to continued emphasis on prevention during the conduct of audits and investigations, the Inspector General initiated and has expanded the use of inspections as a way to prevent mismanagement and/or abuse or to detect it at an early enough stage to correct it. Following several major management audits, the IG recommended the end of two programs with total annual funding of $14 million. In another program, the IG found that major improvements could be made with little additional cost to accomplish program objectives. Thirty-six management audit reports and 1,391 audit reports on Commerce contracts, grants and loans were issued including those prepared by independent public accountants, state, local, and other federal auditors. Inspector General efforts resulted in $26.8 million of estimated savings and approximately $15.4 million in cost avoidances or deferrals. In addition, many reports contained recommendations for management and program improvements for which savings are not readily determined. Concentration has continued on problem contracts, grants, and loans. A new Automated Information Systems Audit Division-now fully staffed-has several major automated data processing (ADP) projects under way as part of the OIG renewed emphasis on ADP activities. Major audits Extensive review of the National Telecommunications and Information Administration's Public Telecommunication Facilities Program concluded that funding of the program beyond FY 1983 would not be cost effective. Ending the program would save an estimated $12 million annually. Review of the Minority Business Development Agency Technology Commercialization Program found serious problems involving lack of accomplishment, exaggerated performance claims, inappropriate projects, misuse of program funds, and mismanagement by MBDA officials. The IG recommended that the program be ended. An IG review team found that the National Weather Service system used to forecast flash floods, detect lightning and warn the public of both, is inadequate, untimely, inappropriately decentralized, and does not use available state-of-the-art technology and equipment. The IG concluded that NWS, with little additional cost, could alert the public sooner to the possibility of dangerous flash floods by giving central responsibility for the issuance of flash flood watches to the National Severe Storms Forecast Center in Kansas City, Missouri. The IG also recommended that NWS improve its lightning detection capabilities and take the lead in coordinating the use of lightning detection equipment by other federal agencies, to end needless overlap coverage. Serious problems were found with preparations for the 1984 Louisiana World Exposition. Unless immediate corrective actions are taken, the Department may have to pay the pavilion contractor large penalty fees, a major waste of government funds. Auditors also discovered that federal funds were missing from the New Orleans office. After a follow-up investigation, an International Trade Administration (ITA) employee was indicted for alleged embezzlement of $12,700 in government funds. The employee plead guilty and was sentenced to pay back the $12,700. He also resigned. Review of a $2.5 million Economic Development Administration loan to a sand and gravel mining firm revealed that the firm spent more than $2.5 million on equipment to use on a farm that has never made a profit, for a loan to the company's sole stockholder, for a helicopter which was of questionable need to the mining company, and for a lakeside cabin. The IG recommended that the loan be called. Inspections The new inspection program has been extremely successful and the number of inspections has doubled from that originally planned to be conducted in fiscal year 1983. Inspections of 13 Department field offices, three loan recipients, three grantees and two headquarters' units were completed. Inspections covered a wide range of activities: from the Census office in Charlotte, North Carolina, to the International Trade Administration's export enforcement office in San Francisco where several serious problems were uncovered that affected export enforcement efforts. An unannounced inspection visit to ITA's San Francisco Field Office revealed that many improvements had been made in the Department's enforcement of export controls since the IG's first inspection in April 1982. Many serious problems, however, still remain in Commerce's export enforcement effort, which was reorganized and placed under a new Deputy Assistant Secretary in late fiscal year 1982. The IG made a number of recommendations for corrective action to ITA. An unannounced inspection of the National Bureau of Standards' Small Purchases Unit revealed serious management and compliance problems. During the first ten months of 1983, the NBS unit processed 21,000 purchase requests amounting to about $27 million. Of these, 40 percent were for goods and services valued under $100. Recent studies showed that the average cost to the government to process a small purchase order is $75. If NBS used other ways to make small purchases, the government could save hundreds of thousands of dollars. The team also found that program managers had not planned their procurement needs, so they sometimes placed multiple orders for the same item. The IG suggested better management oversight by both program managers who request procurement services and the procurement personnel who handle these requests. NBS responded positively and has started corrective actions. Investigations A major effort was made to redirect investigative resources to the most significant cases, focusing on program fraud and on flagrant examples of misconduct. Allegations of what appear to be minor personnel irregularities, which formerly occupied an amount of IG investigative time out of proportion to their significance, are referred to agency management for review and reply to the IG. If dissatisfied with the adequacy of an agency response, additional data is requested. This policy has permitted concentration of investigative resources on big-ticket items with the likelihood of high-dollar recoveries and prosecutive action. An investigation of a former Economic Development Administration employee resulted in his conviction for violating federal conflict of interest laws during the time he administered a $10 million EDA loan to a major steel manufacturer. As a result of a review by IG agents, auditors, and counsel, the Justice Department has filed a $17.5 |