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Senator BENNETT. I understand that.

Mr. DIMARIO. I think the answer is, in my mind at least, there is not a specific cash reserve for the Department of Labor issue, but we do have sufficient resources in the revolving fund for that obligation.

Senator BENNETT. Well, let me understand it. I do not mean to get into arcane issues of accounting.

Mr. DIMARIO. Well, our accountant

Senator BENNETT. But how big is the amount of cash in your revolving fund?

Mr. GUY. We have a cash balance of about $75 million.

Senator BENNETT. OK. Now, what portion of that is encumbered with requirements like this?

Mr. GUY. I would say that about one-half of that is encumbered, and we feel that it is other people's money, in that sense, and, in fact, GAO told us that some of that cash is not available.

Senator BENNETT. Now, can you use any of that in an emergency, even though it is encumbered, in effect, borrow it?

Mr. DIMARIO. Some we can, and some we cannot. There are moneys that we, as an example, have received from customers against deposit accounts, and have not yet received requisitions for work. That money is not available for us to borrow. It is still the customer's money; it is just on deposit with us.

At a point at which we receive an order the money becomes available to us even though we have not yet paid a contract or expended that money. We would be able to use that money.

Where we have sold subscriptions and have not yet fulfilled the subscriptions, we have those moneys, and some of those may be limited in terms of what we can do, and GAO has spoken to that specific limitation.

Senator BENNETT. Are you earning interest on those balances, even though you cannot touch them?

Mr. DIMARIO. No, sir; they are just accounts against the Treasury of the United States.

YEAR 2000 COMPUTER PROBLEM Senator BENNETT. I see. I see. How much in your current budget do you think is going for the year 2000 problem?

Mr. DIMARIO. For fiscal 1996 it was estimated to cost $328,000; in fiscal 1997, it was $5.9 million; and in fiscal 1998, the current budget, it is $8.2 million. We have scheduled work over a period of time, reflecting what we believe is going into the year 2000 problem. Most of that money is previously allocated money for ongoing programs.

Senator BENNETT. What incremental costs do you have? I understand you are going to solve the year 2000 problem in part with money that you would have spent anyway

Mr. DIMARIO. Yes, sir.

Senator BENNETT (continuing). Only you are dedicating it to the year 2000 problem, but there has to be some incremental money on top of that. Do you have any, and do you know how much it is?

Mr. DIMARIO. In a ball park sense, based on what we have at this point, we believe that we are approaching $19 million in total costs. Of those costs most are for upgrading existing systems. Most

projects have been approved, like the integrated processing system for the Superintendent of Documents sales program. That has already been delivered by the contractor, and is, at this point, being tested. We are training on that. We have approval, as I mentioned in the statement, for a new mainframe. That is about $1.8 million.

So when you get to the incremental costs out of the $19 million in total costs for new hardware and software, not associated with either existing labor costs or ongoing projects, we are talking about $3.5 million. That is our best estimate.

Senator BENNETT. OK
Mr. MANSKER. Senator, if I could backup just a moment.
Senator BENNETT. Sure.

CASH REQUIREMENTS Mr. MANSKER. When you were talking about the revolving fund, I do not want us to leave with the impression that of the $75 million in the revolving fund, we only have categories of restricted funds.

The cash balance in the revolving fund is not readily available where we can just feel free to spend it, because we have also a committed unrestricted amount of funding for other things that we would have to borrow against, as you say, to get readily available cash to operate.

Our last report said, from our comptroller's office, that the uncommitted, unrestricted funds that we have to use for future investment and capital expenditures, and so forth, is actually a negative figure in January. We are borrowing against unrestricted committed funds at this time, and one of the reasons for that, if I might get a little historical, is the $11 million that was

Senator BENNETT. That was going to be my next question.

Mr. MANSKER. That has put a very severe cramp on our availability of funds for future capital expenditures. Right now we are actually in a negative posture. We think that will come around, to show a better situation, when Congress gets in full gear, which they have not been for the first 5 months of our fiscal year; but, we will start getting income to generate that figure up into a positive mode. But

Senator BENNETT. Do you mean Congress will require more services?

Mr. MANSKER. Correct.
Senator BENNETT. OK

Mr. MANSKER. Correct. And we could charge against the CP&B fund. But right now, I would not want to leave you with the impression that we have $40_million to spend for capital expenditures; we do not have that. The cash availability for future expenditures is very severely cramped.

Mr. DIMARIO. The revolving fund itself was established primarily to take care of the peaks and valleys in printing, and also to provide for capital funding. Over a period of time, we have depleted that fund substantially, so we have reached a point where we are very reluctant to put obligations against it that we believe otherwise should be funded through a specific appropriation.

Senator BENNETT. I can understand that.

ADDITIONAL COMMITTEE QUESTIONS I have no further questions. Thank you very much. We appreciate the hard work you have put in, and the service you have provided Congress.

Mr. DIMARIO. Thank you very much.
Senator BENNETT. Thank you.

[The following questions were not asked at the hearing, but were submitted to the Office for response subsequent to the hearing:)

ADDITIONAL COMMITTEE QUESTIONS Question. Does GPO estimate losses for fiscal year 1998?

Answer. Through January of the current fiscal year, the revolving fund lost $7.8 million on revenue of $258.3 million. GPO's long-term financial goal is to generate a small net income of about 1–2 percent in order to allow for capital replacement. This goal may be very difficult to attain this year, in view of the results to date. GPO's plans to improve financial results include major information systems upgrades, investments in more productive equipment and technology, a strengthened marketing program,

and continued cost reductions. Many important external factors are largely beyond GPO's control, such as congressional workload, compliance with printing statutes, and paper prices. Rate adjustments may also be required.

Question. How much has GPO included in its budget request for the year 2000 conversion?

Answer. For fiscal year 1999, we estimate that the year 2000 conversion cost for all GPO activities will be $4,390,500 in the revolving fund.

Question. What is the status of the ESOP language that GPO requested last year and was going to work with the Commerce Committee to pass?

Answer. GPO anticipated that legislation would be passed in the last session of Congress to include GPO in the National Energy Conservation Policy Act provisions authorizing energy savings performance contracts. Staff from the House Committee on Commerce were in contact with GPO regarding this effort. However, this legislation was not enacted and GPO is not aware of any current efforts in this area.

Question. In response to Mr. DiMario's letter of November 25, 1997, transmitting the Inspector General's Semi-annual report to Congress, his letter states that GPO has initiated some corrective actions on all four reportable conditions from GPO's fiscal year 1995 financial statements. Please note for the record what corrective actions GPO has not taken identifying where staffing constraints or operating priorities have limited GPO's ability to completely resolve the reportable condition. Please note where applicable what resources would be necessary to resolve the condition.

Answer. Management's position is that two corrective actions recommended by Arthur Andersen have not been fully implemented. They would require that a centralized computer security function be established to strengthen authorization and access controls over applications and to strengthen contingency plans and backup procedures for critical EDP systems. Full implementation of these recommendations would require additional staffing and overhead cost. Moreover, a complete back-up is not feasible at present. Additional time will be required to replace old legacy systems for which a practical off-site back-up is not available because the technology is obsolete.

Both Booz-Allen & Hamilton and KPMG Peat Marwick are assessing the status of GPO's implementation of corrective actions related to these reportable conditions. The Booz-Allen report draft is due to GPO for comment in April 1998, and the KPMG review will be delivered in final by then.

Question. Has the Inspector General completed his year 2000 assessment? If so, please provide the assessment for the record.

Answer. The Inspector General has not yet conducted a formal assessment of the program. At the time of the last semi-annual report, the Acting Inspector General indicated that the Office of the Inspector General (OIG) was preparing an advisory report to assess the current posture of GPO's efforts to address the year 2000 problem. Subsequently, the OIG became aware that GAO initiated a review. The Inspector General Act requires that the OIG avoid duplicating the effort of GAO.

Question. Does the year 2000 problem present any risks to GPO's ability to print and distribute the Congressional Record?

year 1999?

Answer. No, the software used in the processing of the Congressional Record was repaired, tested, and verified as year 2000 compliant in February, 1998. The hardware utilized for Record processing was tested and found to be year 2000 compliant.

Question. What is your estimated total cost to address the year 2000 problem? What are the cost estimates for each of GPO's mission critical systems? What has been spent to date on your year 2000 effort? What is requested in your fiscal year 1999 budget? What is your cost estimate to complete year 2000 work beyond fiscal

Answer. At this time, we estimate that our total cost to address the year 2000 problem will be about $19.3 million. The cost estimates for each of GPO's mission critical systems are indicated in the attached schedule, which shows the breakout of cost by fiscal year for the various replacements, upgrades, and repairments.

Through fiscal year 1997, a total of $6.2 million has been incurred for our year 2000 efforts. During fiscal year 1998, we estimate another $8.2 million will be spent. Our fiscal year 1999 budget estimates for the revolving fund include a total of about $4.4 million for Year 2000 efforts. At the present time, our cost estimates for year 2000 work beyond fiscal year 1999 are about $431,000.

Question. Has GPO completed a documented plan for making its mission critical systems year 2000 compliant, including schedules for renovating, validating and implementing each mission critical system. If so, please provide this plan for the record.

Answer. GPO has issued an agency directive that states its year 2000 plan for making all mission critical systems year 2000 compliant. A copy is attached. We are also submitting two schedules which show for each mission critical system the target date for completion and implementation for all repairments and replacements.

Question. Has GPO developed a contingency plan in the event of systems failures on January

1, 2000? If so, please provide a copy of the plan for the record, Answer. GPO's recently issued directive for the year 2000 establishes the requirement for the development of contingency plans for all

mission critical systems with a target date for completion beyond March 31, 1999. The responsible managers are currently preparing those plans for submission to the year 2000 Program Management Office for consolidation in an overall GPO Contingency Plan. We will be glad to submit this overall plan to the committee when it is finished.

Question. Please explain how GPO's printing procurement program runs a deficit? Isn't there a surcharge placed on each printing job to recover the cost of the program? Does GPO have a plan for turning this situation around?

Answer. GPO's costs to administer the printing procurement program are recovered from a surcharge on the cost of the procured printing. The surcharge will recover GPO's costs if the dollar volume of printing is about $500 million per year. While the program operated in the black during fiscal year 1995 and fiscal year 1996, it has had losses since then because workload and paper prices declined. Some agencies are sending less of their printing to GPO, which they either produce inhouse or purchase themselves, at higher cost and, in certain cases, in conflict with law. GPO's plan for turning this situation around includes the following elements:

- Increased marketing to our customers. -Increased interaction with contractors and agencies to develop new product

lines, especially in the digital arena. Creation of simplified purchasing agreements. -Continued cost reduction at GPO and information systems development, includ

ing expanded use of the Internet for electronic commerce. Question. How much of the current GPO facility on North Capital St. is actually in use for the printing, binding, and storage of materials and products used in government printing? What are GPO's costs of upkeep for any unused portion as well as used portion of the building?

Answer. Space within the current facility at North Capitol Street is assigned to a program or is considered common area. Common areas include Harding Hall, the Cafeteria, the Credit Union, the Blind Man Stand, all aisles, halls, support columns, shafts, restrooms, and elevators.

The total square footage of the 4 ilding Central Complex is 1,466,000 square feet. Total space assigned to GPO Programs, including administrative functions is 966,000 square feet. The space is assigned as follows:

Square Feet Plant Production (including Materials Management Service and Engineering)

715,000 Printing Procurement

26,000 Sales Program

66,000 S&E Programs

43,000

..........

Administrative Areas (includes Customer Service)

Square Feet

116,000

Total

966,000 The cost for cleaning used assigned space is approximately $2.1 million per year. In addition, there are about 500,000 square feet classified as common area. The estimated cost of cleaning the common portions of the building is approximately $1.1 million annually. The unassigned space is necessary for common areas that indirectly support operations.

We estimate that approximately 27,500 square feet of the assigned space is currently unused because of attrition in the workforce. We are considering the lease of space to other government agencies that may need it for small groups. The cost to upkeep unused assigned areas is minimal.

ATTACHMENT 1.-GPO INSTRUCTION 705.26, MARCH 16, 1998

year 2000.

GPO YEAR 2000 PROGRAM GUIDE Purpose.—To communicate general policies and procedures to define a process for implementing a Year 2000 Program throughout the Government Printing Office (GÞO). It is intended to provide insight, recommendations, and a uniform structured approach for planning, implementing, managing, and evaluating GPO's Year 2000 Program to ensure that all mission critical systems will be fully operational in the

Background. Since their inception, computer systems have typically used two digits to represent the year in an effort to conserve valuable resources and reduce operating costs. However, when the year 2000 arrives, these systerns may not be able to distinguish 2000 from 1900, 2001 from 1901 and so on. With less than two years left to accomplish this enormous project, GPO must embark upon this substantial effort and apply all the needed resources to successfully accomplish this project well within the fast approaching deadline.

The year 2000 compliance is defined as the ability of information systems to accurately process a date from, into, and between the twentieth and twenty-first centuries, including leap year calculations. The year 2000 date conversion problem is not unique to GPO and presents a global challenge to the entire information technology industry. Every organization, whether federal or private, must ensure that its information systems are fully year 2000 compliant well before December 31, 1999. While the year 2000 problem is not technically challenging, it is massive and complex. The date problem may not be solely confined to application software, but may also exist in hardware (mainframes, minis, desktops, file servers, etc.), firmware, operating systems, compilers, languages, libraries of program software, database management systems, telecommunication monitors, any equipment containing microchip, etc. Scope.

This guidance document addresses the conversion or replacement of all Federal Information Processing (FIP) resources that are affected by the year 2000 problem. The term FIP resources includes hardware (mainframes, minis, desktops, file servers, etc.), software (operating systems, compilers, languages, libraries of program software, data base management systems, application systems, running on different platforms), firmware, microchip components, operating components, etc.

Policy:- It is the policy of GPO that information is a valuable resource in support of its mission, and as such, must be managed efficiently, economically, and effectively. As a valuable resource, information must be planned, budgeted, controlled and managed; and to that end, it is the intent of GPO to establish, implement, and actively maintain an agency-wide Year 2000 Program to ensure GPO meets the challenge of the new millennium and is year 2000 compliant by October 1, 1999.

The GPO Year 2000 Program will encompass five critical phases: (1) awareness; (2) assessment; (3) renovation; (4) validation; and (5) implementation.

In that context the GPO shall ensure that:

All GPO and/or external major systems/components supporting core business activities or processes are certified as in compliance with year 2000 requirements or are converted or replaced to become year 2000 compliant by October 1, 1999.

All information systems and components in each business area are inventoried, and priorities are assigned to individual applications so that a year 2000 compliance program plan can be developed.

All future acquisitions of FIP resources for GPO or its customers are year 2000 compliant

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