Mr. STEED. All right.

OMB ROLE IN SETTING GSA SPACE RENTAL

What has been the practice since this new program came into being of the GSA assessing rentals against all the agencies of the Government in terms of your reviewing these policies and these amounts that are assessed?

How thoroughly do you check out those items?

Mr. LYNN. Paul, do you want to describe that?

Mr. O'NEILL. I would say, Mr. Chairman, basically our work with GSA in this area is an oversight function. I think we currently have assigned a branch chief and one staff member who work full time with GSA and they selectively look at what is being done in the general responsibility that GSA has in this area. We are working with them on basically a sampling basis to see how it is going.

Mr. STEED. We get the impression from various agency people who have appeared before us and discuss the amount they have been assessed for rent that they were somewhat unhappy about most of the classification of the space they occupied and the rates being charged for it.

Do you have any capability of adjusting those matters, or is it just an arbitrary action by the GSA that prevails?

Mr. O'NEILL. I think if we were to suggest changes in the way that the GSA is allocating costs they would be sympathetic to ideas we have about changes in the formulas and changes in various allocations to the departments and agencies.

I don't have in my memory a specific case where we have done that with them, but yes indeed, I think GSA would entertain with interest any suggestions we might have in that process.

Mr. STEED. What were the justifications used in setting this program up? Was it that if they had to pay for the space and come and get appropriations for it that the agency would be a little bit more prudent and circumspect in their demands for space and that it would have an overall deterrent effect?

SAVINGS ACHIEVED

The evidence of that hasn't been made very clear to this subcommittee vet. Are you able to watch this and determine whether or not in fact we are becoming more space conscious and whether or not we are making some savings?

Mr. O'NEILL. I think. Mr. Chairman, it would be very hard to point to a specific case and say this is a case where this new practice made a marked difference. But I have seen in our own reviews that we go through with our examiners and the annual reviews of the Agency budget, that now that the examiners understand the space costs that are in the budget that they are responsible for reviewing, they take it into account in a way that wasn't taken into account before when GSA was looked at as a monolithic agency handling all of these costs themselves. In the review that is done by our examiners I think we are getting a fairer shot at the total cost of an agency's operation than we had before.

STANFORD LIBRARIES

Mr. STEED. What bothers me is this.

If an agency is assessed a certain amount of money by GSA for the space they have and then they can bring that to the OMB for approval and it is automatically approved, then there is no deterrent. But if they have to come to OMB and justify not the number of dollars but the number of square feet of space they are using then this might work. I was wondering if you really exercise this type of control over this item in that way.

Mr. O'NEILL. Yes, sir, we are looking at space requirements and requests as they come from the departments and agencies. I remember a particular case, now that you talk about the issue more, for example, in the Social Security Administration where there was a very hard look at the requirements that they were proposing for space against their workload and not just accepting it as a given thing, that since GSA said, yes, this is the cost a square foot it ought to be included in their budget. Rather, we pressed very hard programmatically to see whether or not the space requests really made sense in that con

text.

UNASSIGNED SPACE

Mr. STEED. We recently were given a copy of a report from the GAO about unassigned space and the astronomical figure of 26 million square feet of unassigned space concerns me very greatly.

I think there is over 4 million square feet of it shown to be rented space. The GSA had some explanations as to why some of that is true, but unless they can get a better inventory method than they have now I don't think there is any answer to it. I don't believe that GSA really knew what they had in unassigned space. It seemed to be that a lot of little bits and pieces of space cropped up, and in those kinds of cases where something is carried on the books it seems to me like it costs you a lot more to keep track of something like that than t would be just lumping it in with the Agency that has the rest of the space in that area.

There ought to be some way to clear the record of a lot of this kind of detail; 26 million square feet of unassigned space is stagzering, but if it works out that a lot of this is not really space at all, t ought not be in the record.

There ought to be some way to clean that up.

Mr. LYNN. Even with 300 million square feet, which is what I think they administer, that 26 million figure seems quite high.

IMPROVED INFORMATION GATHERING CAPABILITY

One thing is I was looking a little earlier here through my notes, Mr. Chairman-we have proposed $800,000 to fund an improved management information capability within GSA so that they can sep better track of their properties and who is in them and which ones are vacant and so on.

I would also say, if I recall correctly from my notes, that they are going to a two-tier kind of system, a rent for brand new space and then a lower rate for older leases, leases that are more mature.

DISCIPLINE ON THE AGENCIES

As a person who had to run a department, I can say I think that may have some disciplinary effect with the departments and agencies because each department is concerned about its overall budget levels, even though they can show justification for each item. If they know they are going to be hit with a much bigger budget for a brand new building they will think harder about making do with their space.

FEDERAL PAPERWORK COMMISSION

I have to say I think one of the greatest savings that could come in Washington could come out of the work of the new Commission that the Congress has authorized on paperwork.

At HUD, we started a program of trying to get rid of some of our old paper and files and we figured we could free up, I think it was something like 8 percent to 10 percent of our square footage in the building if we just got on with the job.

So adding these things into the budget of a department I think helps create that kind of thinking in the department.

Mr. SIKES. What are you going to do with your excess paperwork now? Send it up to Congress?

Mr. LYNN. I would hope not, sir.

I would think everyone has their fair share of it and we wouldn't want to impose that additional burden.

Mr. SIKES. Mr. Chairman, if I might comment, I am glad this subject came up and I commend the distinguished Director for his interest and I know he is interested in the problem of excess regulations and even nonessential agencies.

All of that figures in the discussion of too much paperwork. This is something that all of us need to try to get our teeth into. It really has gotten out of hand.

Mr. LYNN, Absolutely.

GSA SPACE RENTAL CHARGES IN THE BUDGET

Mr. STEED. There is an item here in this area that has been somewhat overlooked or it is not thoroughly understood. I have it come up almost every day from other subcommittee chairmen.

As you know, of course, prior to this program we made a direct appropriation for rent, construction, and so forth. Instead of that today we earmark out of this fund that this rent is paid in an equivalent amount by the agencies, so we are not in that sense adding to the budget; we are just transferring the source of the money, and instead of having it appropriated in a lump sum we are collecting it in rent from all agencies of Government.

This isn't generally understood, and the space that no rent is charged for, special space, the space that special charges are made for, the space that we own that rents are paid for, the space the government rents, that is never clearly set forth.

I think in the next budget summary there ought to be an item that clears this up so that you start out in the beginning of the year identify

ing these two items-why it is no longer in the budget at this place but it shows up in many places, and totals out in this fund.

The reason I think this is important is because if the rents aren't sufficient to meet the major charges against this fund, then there is going to be trouble because they could actually wind up with not enough money to pay the private owners of the property they rent from. While the other costs are out of one pocket into the other, because it is out of the other guy's pocket, there will be some concern. In order to avoid that sort of a situation growing and in order to avoid the situation we have between the Postal Service and the Defense Department where Defense just said they weren't going to pay their postage we need to explain it properly. I don't know where we are going to be if all my subcommittee and chairmen colleagues say they are not going to appropriate any rent money.

I don't think you could throw your tenants out in the street. But this fund is going to be a very sick item if this happens and until we get a better understanding of it I think the threat is there and it is a difficult problem.

If you can devise some way in your budget summary next year of identifying that item and spell that out, I think it would be quite helpful and it might prevent a lot of problems later on through the year. We have been trying to develop this whole thing and get a better handle on it, but it still has a lot to be desired.

LARGE INCREASES CAUSE CONFUSION

Mr. LYNN. I certainly agree that we should do what we can to clarify the fact that there has been a change in how rent is handled-which has affected the budget totals of each department of the GovernmentAnd to explain what is happening in that fund, money in, money out. I think it will be all to the good.

Now, as to whether to do that in the budget itself or by way of a parate reporting mechanism or how much to put in the budget as against separate reports, we will take a hard look at that, Mr.

Chairman.

PROBLEMS OF A NEW PROGRAM

Mr. STEED. I am perfectly willing to have all the pressures on the gencies not to abuse the space program in the first place, but, on the ther hand. I still think that enough money has to flow into this fund to meet those obligations. We have eliminated the direct appropriation route and GSA has no other source of funds, and these are in a large ense fixed charges.

Mr. LYNN. Of course.

Mr. STEED. So if the misunderstanding of how the money flows into t and how it gets mixed up with the space control part of it, we could have a sticky situation. GSA ought to have some factor in their calculaions like most sinking funds, where you have a safety valve in case it gets to be too much.

Of course, as long as we see to it that any surpluses flow back into The Treasury we have just had an exercise in accounting, but this may at always happen. The temptation to use that money for some other