of 12 positions associated with the phase-down of the community economic program and 10 overhead positions not required in the reorganization. I should point out, Mr. Chairman, that I do not believe reorganization will ever be concluded. It will continue to be a dynamic thing because as we gain more experience in what we have done so far, we may find that we have to make additional changes in our organization, but basically we expect to maintain the priorities expressed here. Mr. FLOOD. When did you come on board as Director? 1979 AUTHORIZATION Mr. FLOOD. Your budget request for 1979 is presently not authorized. Has the administration submitted a proposed extension of the Community Services Act to the Congress? Ms. OLIVAREZ. Yes, sir. Mr. FLOOD. What is the current status of that in both the House and Senate? MS. OLIVAREZ. At this moment the House bill, H.R. 7577, the Economic Opportunity Act Amendments of 1977, was ordered to be reported by the Education and Labor Committee on September 28, 1977; however, the Committee Report has not been filed yet due to further discussion around the Headstart allocation formula which is contained in Title V of the Economic Opportunity Act, the same act which authorized the Community Services Administration and its program. In the Senate, the Human Resources Subcommittee on Employment, Poverty and Migratory Labor has held one day of hearings, on November 21st, 1977 on S. 2090, a bill to reauthorize the Community Services Administration and its programs. An additional two days of hearings are scheduled for March 13 and 14, 1978. Mr. FLOOD. Our concern is, will it be out in time for the appropriation? Mr. ALLISON. You might be a better judge of that yourself, sir. Mr. FLOOD. That is a matter of opinion. What major changes from the present law are contained in the Administration's draft bill? Ms. OLIVAREZ. There are several. First of all, we are asking for a decrease in the nonfederal share to 80-20. We are asking that the program be extended three years, and that the Director be allowed to delegate grant-making to regional directors. Mr. FLOOD. Just the major ones. Ms. OLIVAREZ. The major ones I would say would be the nonfederal share, and in addition to that we have asked that in our summer youth recreation program that community action agencies be permitted to be the prime sponsors. Right now that program uses CETA prime sponsors as the implementors of the program at the local level. We would like to see the community action agencies administering that program at the local level. Mr. FLOOD. I think what you might do in answering the question, you might feel better if you developed that for the record and expanded it for the record in more detail. The information referred to follows:] The Administration transmitted a draft bill reauthorizing the EOA, of 1964, as amended on July 21, 1977. The proposed language would extend the authorization for programs under the Economic Opportunity Act in Titles I, II, III-B, VI, VII, and IX for a period of three years. A change in Section 211(b) of the EOA which would require a minimum of fifteen persons on a Community Action Agency's board of directors. The second change in Section 211 reduces the length of service for community representatives on a CAA board from five to three consecutive years and from ten to seven years total length of service. Section 222 (a)(11) adds the use of CETA workers to our rural housing program. A revision of 222(a)(13), the Summer Recreation program, would modify implementation of the Summer Youth and Recreation Program to provide for sponsorship by community action agencies and establish eligibility standards consistent with other Title II programs. A change in local initiative non-Federal share would restore the prior 80-20 ratio. Section 601(c) was amended in 1974 to prohibit the Director from delegating to regional officials the authority to make grants or contracts or to set policy. While this was intended to force greater review of and control over grants and contracts, it has had the opposite effect. The requirement that final approval over grants and contracts reside in Headquarters office, effective June 1975, has to date necessitated over 8,000 grant reviews and signatures be made by the Headquarters official to whom such authority was delegated. The amendment allows delegation by the Director to regional officials. Consistent with the change in Section 601 (c), removing the prohibition against the Director delegating any authority to those not directly responsible to him/her under the Act, an amendment to 602(d) would allow delegation of specified authority outside the Agency to facilitate interagency cooperative efforts without requiring specific Presidential approval. The first sentence of section 605 (c) of the Economic Opportunity Act of 1964, as amended, is amended by inserting "and ending with the calendar year 1978" before the period at the end thereof. (2) A new sentence is added at the end of the second sentence: "The Advisory Council shall cease to exist 60 days after making the final annual report required by this subsection". This change would abolish the National Advisory Council sixty days after the submission of its March 1978 report to the President. Section 620 of the Economic Opportunity Act of 1964 as amended is amended by striking "The Director and such other agency heads shall submit at least annually to the Congress a joint or combined report describing the actions taken and the progress made under this section". This change would eliminate one of three reports required annually under the Act. We would also eliminate the Section 745 report; however, the Agency would still be required to file its annual report to Congress under Section 608. The information required in this section and Section 745 would be included in that annual report. This proposed change to section 731(a) establishes the eligibility of Community Action Agencies and other community-based organizations for financial assistance under other sections of Title VII, principally the Rural Development Loan Fund. The intergovernmental Advisory Council has never been established as required under the Act. The proposal recognizes that reality. Section 601, subsections (e) (f) (g) (h) were the provisions in the 1974 amendments to the Act that allowed the President, after March 15, 1975, to transfer the Community Services Administration to the Department of Health, Education and Welfare. Special provision was made for transfer of Title VII programs to the Department of Commerce. The President chose not to exercise his authority under these sections and maintained CSA as an independent agency. The reauthorization repeals this specific reorganization mechanism. This proposal repeals section 745, eliminating one of the three reports required under the Act. Along with the elimination of the report in Section 620, it consolidates all reports into one annual, comprehensive report to Congress under Section 608. COMMUNITY ACTION Mr. FLOOD. How many community action agencies do we have in this country? MS. OLIVAREZ. 878. Mr. FLOOD. What portion of the country is covered by CAP agencies? Ms. OLIVAREZ. Out of the almost 3,200 counties, we are covering about 2,200 of the counties, constituting 75% of the country. Mr. FLOOD. As you see it, what is the main purpose of a Community Action Agency? MS. OLIVAREZ. The main purpose is to mobilize the resources at the local level, identification of the problems that exist in that community vis-a-vis the poor people, design of a plan to address those problems, the monitoring of what is going on in terms of programs to serve poor people, and the involvement of the poverty community itself in the development of the plans and the identification of the problems and in the administration of the program. Mr. FLOOD. In fiscal 1978 the Congress gave you an increase of $39 million over the budget for community action? MS. OLIVAREZ. Yes. Mr. FLOOD. How much of the $39 million have you obligated to date? MS. OLIVAREZ. We are in the process right now. We have developed a plan in cooperation with the Mr. FLOOD. Just so we get this right. In fiscal 1978 the Congress gave you an increase of $39 million over the budget for community action. The question is, how much of that $39 million have you obligated to date? MS. OLIVAREZ. $277 million has been allotted. Mr. ROLLIS. Our total 1978 obligations to date are $199 million. Concerning the $39 million, we are still in the planning process; we have not obligated any of that. That was made available in December, I believe. MS. OLIVAREZ. It was tied up in the Labor, HEW appropriation, so we did not get that money until December. Mr. FLOOD. Specifically how will that $39 million be spent? MS. OLIVAREZ. That money will be used for four things. The first is cost of living increases because the community action agencies that had static funding for the last few years were not able to give cost of living increases to their employees. We are also going to use it to strengthen administration of the community action agencies, to reduce the disparity of funding that exists right now, and to encourage innovation among the community action agencies. So the $39 million will go to community action agencies. It will not be used for any other categorical program. Mr. FLOOD. You are asking for a further increase of $12 million in 1979. Tell us how those funds will be used, and also tell us how you arrived at the figure of $12 million. What is sacred about $12? Why wasn't it $122 million or $13 million? MS. OLIVAREZ. I will ask Mr. Rollis, our Controller, to answer. Mr. ROLLIS. The $12 million will be used to increase the smaller community action agencies, that is, basically those below $150,000 annually. That amount is necessary to increase all grantees to that number so they have a basic staff to function with. SENIOR OPPORTUNITIES AND SERVICES Mr. FLOOD. Congress appropriated $10 million in 1978 for the senior opportunities and services program, SOS. Your justification book shows a figure of $10.5 million for 1978. Where did that additional $500,000 come from? Mr. ROLLIS. In 1977 the Senate Appropriations report requested that we transfer half a million dollars from nutrition to the seniors program to fund specific programs. What we are doing now is merely making that transfer within the appropriation. Mr. FLOOD. How do you coordinate the SOS program with all of the HEW programs for the aged-or do you? MS. OLIVAREZ. We do, sir. We have an interagency agreement. I would like to see it redrafted and strengthened a little bit. We have the agreement with AOA for coordination. Right now it is taking place at the national level primarily, and we are trying to get that to take place at the state and local level. That interagency agreement had been signed prior to this administration. In addition to that, we are constantly touching base with other agencies that are serving low-income people. The use of the $10 million is to be sure the lead agency is meeting the needs of poor people. If not, we will do a supplemental thing until we can sensitize the other agencies to the needs of elderly poor. STATE ECONOMIC OPPORTUNITY OFFICES Mr. FLOOD. Tell me, how are the governors responding to your proposal to cut the state economic opportunity offices by $4.5 million? MS. OLIVAREZ. I have not heard anything from the governors yet. Mr. FLOOD. I was going to ask you to repeat that, but I heard that, I think. MS. OLIVAREZ. I have not heard from them directly. Mr. FLOOD. All right. How many state employees are currently being supported by this program? MS. OLIVAREZ. About 700 state SEOO employees. Mr. FLOOD. Do you plan eventually to phase this program out? MS. OLIVAREZ. No, sir. What we plan to do is a thorough evaluation of the SEOO's because our experience so far has been that there are some good ones, some that are halfway good and some still struggling with what their role is. In addition to that, there are some who have key status within the executive branch of government at the state level and others that have been relegated to other divisions and do not have that kind of clout within the governor's administration. COMMUNITY NUTRITION Mr. FLOOD. Why do you propose a reduction of $7.5 million for community food and nutrition? What is the rationale for that? MS. OLIVAREZ. OMB advised us that USDA had asked for an increase in their outreach capability, and as a result of that we |