FINANCIAL MANAGEMENT

STATE OPERATING BUDGETS

In March 1960 the National Guard Bureau initiated a financial management procedure by which the State submitted fiscal year 1961 State operating budgets to support their programs under the two appropriations National Guard personnel, Army; and operation and maintenance, Army National Guard. Guidance was provided to assist the States in the development of their annual program and funding requirements. Based upon the review of these State operating budgets annual State funding programs were authorized.

This procedure has provided a basis for sound financial management through initial review and subsequent quarterly analysis by the Bureau. The States are now required to plan all phases of their program for the year, as compared to piecemeal planning in prior years. So far this first year this has significantly reduced the number of funding adjustments and allotment documents which are now issued quarterly to the States.

PAY VOUCHER SYSTEM

Effective September 1, 1960, the Army National Guard adopted the new military pay voucher system, after testing in 15 States for a 6-month period. This system provides individual vouchers, as opposed to listings on a single payroll. Each guardsman now receives a copy of his voucher with complete information as to entitlement and actual pay received. The system is an adaptation of the Active Army military pay voucher with minor variations to meet the peculiar needs of the Army National Guard. This furthers the desired uniformity between the Active Army and the Guard. In addition to its mobilization value, the new pay system permits a more even distribution of the workload throughout the pay period as well as the elimination of several printed forms. In search of further improvement, the Army National Guard is now testing the preparation of these pay vouchers on electronic bookkeeping machines.

This next chart shows the December 31, 1960, overall status of equipment, on hand in the Army National Guard, by technical service. The 100 percent line represents the training requirements. The bars show the equipment on hand as a percent of the training requirement.

As shown we have 100 percent Chemical, 95 percent Quartermaster, 92 percent Medical, and 76 percent Ordnance; 70 percent each in Engineer and Signal and 40 percent of Transportation Corps items.

Equipment on hand includes obsolete and substitute items, and is generally adequate to meet current training requirements.

This chart depicts the vital role of our Army National Guard technicians. Daily, in all phases of our program; employed in units, maintenance shops, air defense NIKE sites and property and fiscal officers in each State, they are our hard professional core essential to mobilization readiness.

As of June 30, 1960, National Guardsmen in technician positions numbered approximately 20,700 officers and men. The chart shows some of the most important aspects of the guard program in which they are intimately involved; 400,000 strength, weekly drills and field training, unit training, $1.5 billion in equipment, and of course, the operational NIKE air defense.

The technician makes these as well as other important aspects of our program go. Their vital role in the mobilization readiness posture of the guard cannot be overstated.

In accordance with Army policy, every technician dollar relates directly to the maintenance of Federal equipment, the mobilization training of units and the day-to-day administration of the guard. In fiscal 1960, exclusive of the air defense program, 17,498 spaces were authorized, and the funds appropriated produced 16,850 manyears of employment. The average salary and related cost of $5,460

included payment of the Army-Air Force Wage Board increases authorized during fiscal 1960. In fiscal 1961, the program provides an authorization of 17,565 spaces and a utilization rate that will permit 17,222 man-years of employment at an average cost of $5,855. The increased average cost of $395 in fiscal 1961 over fiscal 1960 reflects the payment of Army-Air Force Wage Board increases authorized dur ing fiscal 1961 and implementation of the 7.5-percent Classification

1 Excludes differential pay of $1,268,021 for fiscal year 1960 and an estimated $500,000 for fiscal year 1961. *Includes $4.2 million Classification Act pay raise.

AIR DEFENSE MISSILE PROGRAM

The Army National Guard air defense missile program has made excellent progress. I reported to you last year that we had 36 NIKE firing batteries operational on site. Now 81 of the 82 batteries are operational. The 82 batteries represent the full accomplishment of our present air defense objective.

The Army service practice scores of these National Guard battalions compare favorably with battalions of the Active Army. The guard is proud of its role in the active air defenses of our Nation.

INFORMATION AND RECRUITING

The National Guard Bureau information and recruiting program, in terms of dollars, $400,000, is relatively small in comparison to other operation and maintenance support. However, it provides an extremly important assist to the States in conducting their essential public information and recruiting program. The purpose is to help the States to acquaint young men of America with the opportunities available to them to fulfill their military obligations and serve their country in either the Army National Guard or the Air National Guard. The basic objective is to create an atmosphere in which the unit recruiter in the States can work effectively. It is the local unit recruiter in the State who, by personal contact, must sell a man on enlisting in the National Guard.

Guardsmen must attend service schools and their training must be fitted into their employment and other civilian activities. It is necessary, therefore, that employers, customers, family, and friends understand the purpose and the importance of the National Guard and that they assist the guardsmen in discharging their military obligations. A continuing informative program including all media of television, radio, newspapers, billboards, magazines, movies, etc., is required. Though nationwide in scope, the information and recruiting program of the National Guard Bureau is conducted at reasonable

cost.

FISCAL 1962 REQUEST

The fiscal 1962 "Operation and maintenance, Army National Guard" budget request is $171.3 million; $143 million will provide for the operation and maintenance of equipment and facilities for the training of units. The remaining $28.3 million is for the Army National Guard air defense program. This budget provides a $2.4 million increase to support the full year of operation for 82 NIKE batteries, and an increase of $2.6 million in the other programs.

BUDGET PROGRAMS

The 1962 budget request for $1.7 million for program 7100, command and management, is the same level as fiscal 1961.

The fiscal 1962 training program approximates the fiscal 1961 level. The fiscal 1962 materiel program of $5.8 million is $0.3 million below fiscal 1961 and reflects the lesser TOE requirement based on a lower strength.

The $14.5 million supplies and repair parts program approximates the fiscal 1961 program.

The fiscal 1962 Army technician program, other than air defense technicians, provides $104.4 million for 17,454 man-years of employment. The average salary cost includes fiscal 1961 Army-Air Force wage board increases approved through August 15, 1960.

In addition, the funds requested provide the employers' share to the States for technician retirement plans, limited to those States whose laws authorize technicians to participate in State retirement systems. Payment of the employers' contribution to State retirement sysems and social security payments under this budget are limited to 62 percent of the total salary.

This budget estimate of $14.9 million for travel, transportation, and for repair and utilities in fiscal 1962 is $0.6 million under fiscal 1961. The decreases reflect the smaller number of trainees participating in National Guard field training at Federal and State camps, due to a lower strength and repair and utility costs at State logistical facilities.

The fiscal 1962 air defense program of $28.3 million is an increase of $2.4 million and reflects the personnel and operating costs necessary to support 82 operational NIKE batteries during all of fiscal 1962. Included is an increase of 292 man-years over fiscal 1961, for a total of 4,325 man-years and support for technician retirement in State systems.

This concludes my statement, Mr. Chairman.

67438-61-pt. 2-23