Department of the Army Historical Summary: FY 1980

9.

Organization and Management

The Army’s mobilization exercise in 1978, known as NIFTY NUGGET, revealed embarrassing gaps in the mobilization of reserve components and the need to place higher priority on the Total Army’s mobilization programs and procedures within the Secretariat. This led to the creation of a Deputy for Mobilization and Analysis under the Assistant Secretary of the Army for Manpower and Reserve Affairs on 6 April 1980. A small office, it is responsible for supervising Army mobilization policies, plans, and programs. A mobilization task force assists in developing comprehensive, realistic mobilization plans and coordinates the Army’s participation in mobilization exercises. Of particular concern are manpower computer support systems, the distribution of mobilization resources, and procedures for processing arrival of reserve component units at their assigned mobilization installation. Congress has passed legislation directed at improving the readiness of reserve components, another area of concern since at the end of the fiscal year many designated ready reserve units were still lacking key enlisted personnel. The Deputy for Mobilization and Analysis is studying and analyzing various means of attracting qualified reservists to fill these positions.

The Army Force Modernization Coordination Office (AFMCO) was established last year within the Office of the Chief of Staff to coordinate the Army’s force modernization program and to ensure the effective fielding of new or improved weapons and materiel systems, which are discussed in Chapter 11.

AFMCO is headed by a major general who is assisted by twelve field grade officers and three civilian administrators. They assist elements of the Army staff and major commands directly involved in various force modernization projects. Another major responsibility is to keep Army leaders informed of significant developments and problems in this area before they become major crises of the sort that have plagued development of the Abrams or X1 tank. In this sense, the office acts as a troubleshooter both for the Chief of Staff and for organizations experiencing difficulties in the development of modern weapons systems.

Obtaining current, accurate, and relevant knowledge on any subject has always been a problem in large bureaucratic organizations

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which traditionally pigeonhole such information. The larger the organization the less likely it is that any sovereign or executive will obtain information he needs on which to base important policy or operational decisions. Ironically, the problem has gotten worse in the past century every time some mechanical device has been introduced to increase the speed with which such information can be transmitted or reproduced: the telegraph, telephone, radio and television, the printing press, typewriter, copy machines, and most recently the electronic computer. Like the sorcerer’s apprentice, governments today are drowning in a sea of paper which responsible executives are unable to control and from which they frequently cannot retrieve the information they need. The uncontrolled proliferation of expensive, incompatible, rapidly obsolete automatic data processing systems (ADPS) within the Army and Department of Defense led to costly blunders by managers unable to distinguish between equipment or hardware and the programs or software which instructed computers what calculations to perform.

The principal reason behind all these problems has been the failure of responsible executives to realize the absolute necessity for establishing centralized control over the design, development, and procurement of all systems which process or transmit data of all kinds into information that executives at all levels of command or authority can use effectively. Army commanders for more than a decade dragged their feet, refusing to admit that centralized control over ADPS was needed above their level of authority. Under relentless pressure from successive Secretaries of Defense, the Army raised the level of control over ADPS to an Assistant Chief of Staff for Automation and Communications (ACSAC).

ADPS is only one means by which executives obtain the information they need. There are thousands of studies and reports generated by various requirements throughout the Army which often never get to those who need them except by accident if they involve more than one function or mission.

To examine this problem, the ACSAC’s office let a contract to the management consulting firm of Arthur Young last year to study, analyze, and make recommendations for an Information Resource Management (IRM) program for HQDA. The study was completed in February 1980, and in June the Vice Chief of Staff approved its recommendations, designating the Director of Management within the Office of the Chief of Staff to administer the program. In July a six-person Information Resource Management Office was established. At the close of the fiscal year, a Chief of Staff memorandum was being prepared which would formally establish the IRM program

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within HQDA. The program would focus initially on the roles and responsibilities of OACSI, OACSAC, and TAGO.

The problem, as outlined in the Arthur Young study, was that the Army does not treat information as a resource subject to critical evaluation and cost-effective analysis like financial, personnel, logistical, and materiel development programs. Information resource management involves the expenditure of money and time over a six-phase life cycle: determining valid requirements for information; planning the procedures for collecting the information; the collection of data; processing data into information which managers can use in making decisions; the actual use of information; and the final disposition of information. The last phase may involve transferring the information into a data bank where it can be retrieved promptly to avoid the wasteful practice of continually reinventing the wheel. The entire information resource management life cycle requires centralized control and decentralized management of operations. The proposed IRM program will require several years of experiment through trial and error, and education. If successful in HQDA, the IRM program may be extended to the Army’s major commands.

General Meyer has stated that continued Army budget cuts have left the United States with “a hollow army,” where units supposedly ready for combat were seriously understrength. The various remedies, some of which require congressional action, are discussed elsewhere in this report.

One such effort, undertaken at General Meyer’s request, was the establishment of a small “Headquarters, DA Scrub Team” within the Office of the Deputy Chief of Staff for Personnel to conduct a detailed review or “scrub” of positions in the Army’s noncombat, nondeployable support units whose authorized strengths are included in tables of distribution and allowances (TDAs) as opposed to combat units which are organized under tables of organization and equipment (TOEs). The team was formed in April and submitted its review in July. The review identified civilian and military positions which could be eliminated and transferred to higher priority deployable combat and combat support units. The scrub team also identified positions where potential promotions were held up by excessive numbers in the next grades, particularly between E-5s and E-6s, a problem discussed in Chapter 5.

The scrub plan was divided into five coordinated phases, of which the scrub team’s review was the first. Phase II (from August to October 1980) is to allow written replies by the affected commands and agencies to the scrub team’s proposed personnel changes. The process struck a snag when several commanders complained that      

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unanticipated OSD- and Congress-imposed civilian personnel reductions, in addition to proposed team eliminations, would seriously impair the ability of many units and their parent commands to carry out assigned combat missions. In some instances military personnel would have to be assigned to civilian positions being eliminated. In September, General Vessey, the Vice Chief of Staff, reviewed these complaints and directed that affected commands and agencies receive greater flexibility in determining units and functions to which eliminated positions could be transferred. The remaining phases of the scrub plan involve personal discussions on the spot with units affected by special teams headed by general officers, a review of their recommendations by the Select Committee (SELCOM), and decisions on the SELCOM’s scrub recommendations by the Chief of Staff. The final elimination and transfer of positions and grade reductions are scheduled for completion between October and December 1982.

Studies involving the closure or realignment of Army bases within the United States have become a hardy perennial, largely because of the time and money devoted to preparing and revising Environmental Impact Statements required by Congress. The Director of Management within the Office of the Chief of Staff has overall responsibility for Army base realignment actions while the Assistant Chief of Engineers is responsible for providing information needed in developing base realignment plans and installation closures.

During fiscal year 1980, eleven base closure/realignment actions were completed or under way. Four studies culminated in decisions to retain posts in their current status. These were the Presidio of San Francisco, California; Letterman Army Medical Center, San Francisco, California; the New York Area Command located at Forts Hamilton and Totten; and the Army Training Center, Fort Dix, New Jersey. Reasons for retaining the first three centered on high relocations costs. The continuing need for the Army Training Center at Fort Dix was based on increased training demands resulting from achievement of manpower and recruiting goals. No final decisions were made on three completed studies—Intelligence and Security Command units at Arlington Hall Station and Vint Hill Farm, Virginia; Fort Sheridan, Illinois; and merging of the Training and Doctrine Command’s Combined Arms Test Activity with the Combat Development Experimentation Command at Fort Ord, California. Three other studies required Environmental Impact Statements prior to a final decision—Fort Indiantown Gap, Pennsylvania; Fort Monroe, Virginia; and the aircraft maintenance unit at New Cumberland Army Depot, Pennsylvania. In August, Secretary of the Army Alexander announced that a new realignment study would in-

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vestigate the possible operation of Navajo Army Depot by the Arizona National Guard.

Agreement was reached with the Air Force to use part of Fort MacArthur for constructing family housing units and transferring the remainder of the installation to the Air Force by the end of fiscal year 1982. Fort Wadsworth, New York, minus the Reserve Center, was supposed to have been transferred to the Department of the Interior this June, but was deferred due to congressional objections.

Traditionally, The Inspector General has concentrated on securing compliance by Army units with formal instructions, regulations, and directives. This approach often deals with symptoms rather than underlying causes and often results in too much time and effort being spent by units preparing for announced inspections.

In February 1979 The Inspector General of the Army announced a major shift in The Inspector General’s philosophy and procedures from compliance to problem solving, designated as “the systemic approach.” Henceforth, the emphasis would be on identifying problems and their underlying causes and suggesting solutions. Inspected units were to be directed as parts of a larger system rather than isolated as in the past. In cases where problems were the result of circumstances beyond the control of the unit commander, inspectors were to trace them to their real source above or below the inspected unit and were to monitor corrective action through Inspector General channels as well as regular staff channels.

The Army’s fiscal year 1980 budget request amounted to $34,337.1 million. This figure was cut by $1,176.2 million during reviews by Defense and the Office of Management and the reduced figure of $33,160.9 million was included in the President’s budget. Table 2 below shows major milestones for the fiscal year 1980 budget, while the narrative that follows presents additional details on the development of the budget, and fiscal year 1980 expenditures.

Reprogramming actions requested during fiscal year 1980 totaled approximately $505 million of which Congress approved all but $32.3 million. The principal appropriation categories involved were: military personnel, $169.1 million approved; operations maintenence, $87.6 million approved; and $40.8 for procurement of M60A3 tanks.

Planned obligations for fiscal year 1980 were $45.3 billion; actual obligations incurred were $46.8 billion. The deviation of +$1.4 billion is attributed to a $1.5 billion variance in reimbursable obliga-

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tions offset by a -$0.1 billion variance in direct obligations. Factors contributing to the direct obligations variances included unplanned collections of $103 million in offsetting receipts (recorded as negative obligations) and delays in the award of $92 million in weapons procurement contracts.

Unplanned reimbursable obligations for Cuban refugee support were incurred in Operation and Maintenance, Army Reserve (OMAR) and Operation and Maintenance, Army (OMA). There were also higher foreign military sales in procurement appropriations, more R&D laboratory and test facility work, early awards of reimbursable procurement contracts, and the transfer of Defense Telephone Service costs from the Army Management Fund to the OMA reimbursable program.

Planned outlays for fiscal year 1980 incurred under authorized obligations were $31.8 billion while actual performance was $32.6 billion. This deviation of +$810 million in outlays was primarily caused by a more rapid liquidation of operation and maintenance obligations than was provided for in the low disbursement rate used in developing the plan, accelerated vendor procurement appropriation deliveries, accelerated completion of military construction contracts, slippage in stock fund (revolving funds) war reserve materiel deliveries, and unanticipated collections.

When the fiscal year 1980 Army budget request was submitted, the administration’s prevailing economic assumptions were translated by OSD into a 7 percent increase in the prices of industry purchases by DOD. Army programs reflected this guidance. The general economic assumptions were revised before the beginning of the fiscal year and the OSD index for industry purchases was increased to 9.3 percent. Army programs were repriced accordingly and the budget request was amended to reflect these price increases. As the budget was being executed, the economic assumptions were again revised and the overall DOD index for industry purchases rose to 9.5 percent. In order to keep the prices of Army programs consistent with the new economic assumptions, the Army submitted a supplemental budget request for $58 million to reprice current programs at the higher levels.

The portion of the Army’s budget allocated to the purchase of fuel increased significantly in fiscal year 1980. This occurred despite a reduction in overall fuel consumption. Because petroleum products are centrally managed, the rapidly escalating prices of petroleum, oils and lubricants (POL) were not offset within the $58 million supplemental request for inflation. Thus, the Army’s supplemental request contained an additional funding increase of $294 million to pay for fuel price increases charged by the Defense fuel supply center.

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TABLE 2-CHRONOLOGY OF THE FISCAL YEAR 1980 BUDGET
Total Obligation Authority (TOA)
(In thousands of dollars)

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In the supplemental request, the Army identified $352 million above the amended President’s Budget request to properly price the fiscal year 1980 program. Of this amount, $139 million was to be funded by specific reductions to be made in approved programs and $213 million was requested in additional funding. Congress approved $17 million of the $58 million request for inflation increases and $294 million for fuel price increases, but only allowed program offsets totaling $71 million of the $139 million offered by the Army.

Because of the sharp decline in the exchange rates between the dollar and foreign currencies, Congress established a continuing transfer account to be used to offset these currency losses. This fund, which began in fiscal year 1979, was titled the Foreign Currency Fluctuation, Defense (FCF,D) Fund and was available to the operation and maintenance and military personnel appropriations of all military services. Congress initially appropriated $500 million in fiscal year 1979 to capitalize the fund. However, because of the great disparity between the budgeted exchange rates and the rates actually experienced, these funds were nearly depleted in fiscal year 1979. Congress appropriated an additional $470 million for FCF,D in fiscal year 1980. During the fiscal year $312.50 million was transferred to OMA and $88.57 million to Military Personnel, Army (MPA) to offset currency losses.

The Army’s Commercial-Industrial-Type-Activity (CITA) program was changed in accordance with the March 1979 OMB Circular A76. The most significant aspect of the revised program was the increased emphasis on cost studies to determine if in-house or contract operations of commercial and industrial type activities were more cost effective to the government. Among other changes was the requirement to use fully allocated costing instead of incremental costing. In addition, all in-house activities and service contracts will be reviewed for possible change in method of performance and, where appropriate, cost studies will be conducted over the next five years involving approximately 5,200 activities over 200 civilians have been hired to handle the increased work load and the development of special training courses in CITA management and cost study preparation.

During the year, the Army completed fifty-nine cost studies of internal activities, thirty-three of which indicated contracting to be cost effective to the government. Some 2,278 civilian and 537 military positions were freed for reallocation as a result of these decisions. From all conversions to contract in fiscal year 1980, a cost advantage to the government of $60.0 million over three years was identified. The twenty-six decisions to continue the in-house operation of the ac-

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tivities involved 993 civilian positions. The 70 military positions in the activities retained in-house were reallocated to other critical needs in the Army, and replaced with civilians, as necessary.

During fiscal year 1980, the Army completed cost study of nineteen functions, largely in the Directorate of Industrial Operations, at Fort Gordon, Georgia. This was the first major cost study of grouped functions at a typical Army troop installation. The bid of the winning contractor, Pan-Am, represented a nearly $32 million cost advantage to the government over three years, and the conversion affected over 660 civilian and 460 military employees.

Total Army Costing (TAC) is composed of costing guidelines for capital intensive (materiel) and manpower intensive (nonmateriel) systems in the Army, and a family of computer programs. The computer programs aggregate life cycle costs by system at several levels of detail and in multiple management languages. Much of TAC’s development is still in the early stages; however, computer programs were developed and tested using data from materiel systems during the year. This testing demonstrated the practicality of the TAC concept. Eventually, TAC will support the Planning, Programming, and Budgeting System through resource management.

The efficient and successful fielding of new weapons systems requires Armywide coordination and complete resource support. The key to good fielding decisions and the defense of those decisions outside the Army is a complete and realistic assessment of resources required to acquire, field, operate, maintain, and support each system. The resource requirements of commands and agencies for new systems are contained in the Program and Resource Review (PARR) documents submitted to HQDA. During the period May through September 1980, action officers of the Directorate of Operation and Maintenance and the Directorate of Cost Analysis worked with the staff of the Army Force Modernization Coordination Office (AFMCO) to develop a disciplined methodology for preparing the modernization resource information submissions portion of the PARR which MACOMs and separate agencies submit to support their modernization programs.

Fiscal year 1980 initiatives in the Army Productivity Measurement and Evaluation Program included expansion of the measurement program from twenty-one to twenty-four functional groups, and laying the groundwork for expansion to forty-two groups. A major change was the integration into the budget process of productivity goals established at major command level for major nontactical functional areas. Recognizing the increasing importance of managing non-manpower resources to achieve greater efficiency, a measurement

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concept called Total Factor Productivity was developed for considering all types of resources required to accomplish a mission and evaluating results in terms of timeliness, quality, effectiveness, and service in addition to cost.

Major commands and U.S. Army Finance and Accounting Center (USAFAC) developed summary level standards during the past year in base transportation, base communications, mission communications, commercial accounts, travel pay, civilian personnel administration, depot maintenance, depot supply, and senior ROTC detachments; MACOMs and USAFAC also began to prepare standards for base procurement, mission procurement, civilian pay, disbursing, base maintenance, triservice communications, and ROTC regions. The standards provided help manpower managers develop credible and reliable staffing standards to support manpower requirements.

The DA Productivity Technical Committee (PROCOM), established in June 1979, held its second meeting. The meeting led to increased support for development of the Performance Measurement Module of STANFINS Redesign (discussed below), standardization of summary-level-standard development procedures and presentation, and mutual major command support to develop Armywide summary level standards.

The Quick Return on Investment Program (QRIP) provides a fast method for recovering savings from investment opportunities which are frequently lost due to long delays in the normal budget process. For QRIP funding, projects (off-the-shelf capital tools and equipment) must cost $3,000-$100,000 and amortize in two years or less. Investments of $7.9 million in fiscal year 1979 and fiscal year 1980 will result in an annual savings of $11.9 million. The program has been received with such enthusiasm that the rate of projects received greatly exceeds the Army’s programmed and budgeted levels of QRIP funding. Projects are coming in at a rate of over $1 million per month in comparison to the rate of $200,000 per month at the end of fiscal year 1979.

The Fast Payback Program of the Army Industrial Fund (AIF) is designed to fund QRIP-type projects in AIF facilities; projects must cost $5,000-$300,000 and amortize in three years or less. During fiscal years 1979 and 1980, projects were approved for $4.1 million with an annual savings of $3.5 million.

The Secretary of Defense sets aside approximately $100 million per year for the Labor Saving Capital Investment Program (LSCIP). Projects must cost $100,000 or more ($300,000 or more for AIF) and save 50 percent of the investment cost in labor during the four-year amortization period. The first LSCIP submission in fiscal year 1979 resulted in the Army obtaining $34.2 million for fiscal year 1981;

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these projects will save $58.5 million. Projects submitted in fiscal year 1980 for fiscal year 1982 funding total $40 million.

Projects that don’t fall within the above “set aside” programs are eligible for submission under the Productivity Enhancing Capital Investment Program (PECIP). Projects must cost $3,000 or more and amortize in four years or less. The earliest funding expected for this type project will be in fiscal year 1983.

The Value Engineering (VE) program, a formal program in four major Army commands, contributes substantial dollar savings. It involves the elimination or modification of anything that adds cost to an item, process, or procedure which is not necessary to its basic function. VE is structured to challenge the way of doing things and systematically searches for less costly alternatives. It contains two distinct elements: (1) an internal effort performed by Army personnel, and (2) a program to stimulate contractors to develop and submit proposals for changes to those contract specifications, purchase descriptions, or statements of work which the contractors feel impose costly, nonessential requirements. Savings in fiscal year 1980 amounted to $198.5 million for the internal VE program and $64.5 million for the contractor program, representing a return on investment of about 14.7 to 1 and 42.9 to 1, respectively.

The Army Idea Interchange Program was established as part of the Productivity Improvement Program in May 1980. It directs major commands, installations, and activities to develop an internal system for identifying proven ideas that have been used within their organization, establish a reviewing body to explore new applications for ideas already in use, circulate proven ideas which have potential for application within their organization, and forward ideas that have potential application elsewhere in the Army and the federal government to the Army staff on a quarterly basis.

The Nonappropriated Funds Installation Standard System (NAFISS) was fielded as an Army standard system in November 1977. At the beginning of this year, NAFISS was in use for at least some funds at 52 percent of CONUS installations, 37 percent were in the process of implementation and 11 percent had deferments or were exempt. By the close of the fiscal year, 91 percent of CONUS installations were using it and 9 percent had deferments or were exempt. USAREUR was using NAFISS at four of its thirty-five communities. Eighth Army has 874 NAF activities which will be serviced at four locations during the next year.

The Army’s Standard Finance System (STANFINS) is being completely redesigned to meet General Accounting Office (GAO) requirements for Army installation level accounting and financial reporting systems. Accounting principles contained in the revised

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system will include double entry accrual accounting with assets, liabilities, and capital under general ledger controls. Data processing concepts employed include a data base management system; automation of labor intensive functions such as travel, commercial accounts, and disbursing; and the maintenance of manual fund control ledgers. General ledger accounts and subsidiary records will be revised daily, and interactive terminals will provide on-line data processing. The project, begun in February 1979, is scheduled for completion in October 1986.

The Program and Budget Accounting System (PBAS) will integrate the accounting and budgeting processes at Army staff and major command levels. It is designed to collect, store, and process fund control and budget execution data in a centralized data base for all funds administered by the Army. All departmental reporting requirements and financial information requirements of Headquarters, Department of the Army and the major commands will be produced from this centralized data base. Budget execution data will be reported directly from installations and activities to the centralized data base using general ledger, detail transactions, and trial balance reporting techniques. The system will connect with the Army’s standard installation accounting system and the budget formulation system utilized by the Director of the Army Budget. The system, approved by the Assistant Secretary of the Army (IL&FM) in April 1978, is scheduled for phased implementation beginning in December 1983.

In October 1979, the Vice Chief of Staff designated the Comptroller of the Army as the focal point for establishing a centrally managed data base to serve both the fiscal year 1982-86 program objective memorandum and budget formulation requirements. In November a functional work group consisting of members representing all Army staff agencies was established to carry out this directive. Objectives for the fiscal year 1982-86 program and budget cycle were: ensure a timely accurate program objective memorandum (POM) and budget submission to the Office of the Secretary of Defense, reduce or eliminate manual processes involved in feeding data into existing data bases, design procedures that will permit exchange of data between the various Army staff data bases on either an automated or semiautomated basis, develop an interface capability for translating data from one programming or budgeting language to another without manual intervention, and assure a smooth, orderly transition from POM development to budget preparation.

For the fiscal year 1982-86 program and budget cycle, the Army staff completed the following actions: integrated into a single Planning, Programming and Budgeting System (PPBS) data base a portion of the summary data to support Office, Secretary of Defense and

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budget automation requirements; established an Information Resource Management Division under the Director of Program Analysis and Evaluation to manage and operate the PPBS data base, discussed earlier; modified internal staff systems to provide an automatic interface with the PPBS data base; developed an automated system to translate the Army’s program into budget languages at a summary level; and established policies, procedures, responsibilities, and standard formats for a single source of data for the PPBS data base.

For over a year the concept of establishing a cost analysis office at the U.S. Army Finance and Accounting Center (USAFAC), Fort Benjamin Harrison, Indiana, was explored, This led to the establishment, in June 1980, of the Cost Analysis Division. The principal reason for establishing the division was the need to link downstream “controlling” factors based on accounting practices and data with upstream “deciding” considerations based on cost analysis techniques and data. The greatly improved automatic data processing capability being carried out at USAFAC will help in developing the mechanisms for using the Army’s finance and accounting system to provide data for cost analysis activities.

Under the USAFAC program of improving its computer equipment, a new UNIVAC 1100/82 was acquired and installed to replace two Control Data Corporation (CDC) 3300 computers. In preparation for the new computer, the Systems and Programming Operations Directorate rewrote the CDC programs for thirty-five systems, assigned new systems identification under Standard Naming Conventions, and prepared operating documentation. Between February and May 1980, parallel production testing of the rewritten programs was accomplished for all converted systems. Normal production continued on the CDC 3300 computers during the test period, and comparison of parallel outputs and processes enabled problem identification and corrective actions during this period of evaluation. In addition, production experience was gained during parallel operation. The new UNIVAC computer took over on 4 May 1980.

On 12 May 1980, USAFAC’s financial histories operations office was abolished due to declining work loads and overlapping functional responsibilities with other USAFAC components. Remaining functions were reassigned within USAFAC. The Examination Division was transferred intact to the Director for Quality due to similarity of missions. Functions pertaining to the maintenance and retrieval of both hard copy and microfiche financial records for individual soldiers and for disbursing officer accounts were transferred to Centralized Pay Operations.

Acting on a May 1979 GAO recommendation, the House Appro-        

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priations Committee included in its 1980 DOD Appropriations Report a requirement that DOD produce a plan for centralizing obligation and expenditure accounting and disbursing within Foreign Military Sales (FMS) and submit the plan to Congress by March 1980. Only FMS transactions involving direct site procurements were to be considered in the plan for centralization. In response, the services transferred approximately 250 FMS procurement contracts to a centralized test site located at the Security Assistance Accounting Center (SAAC), Lowry Air Force Base, Colorado. The Army portion of those transfers amounted to some forty contracts. The test will determine if centralization can eliminate or significantly reduce the problems identified in the GAO report; i.e., poor trust fund expenditure control, cash float in the services, and poor delivery reporting. A final report to the Congress is due in January 1982.

A DOD Directive on retention and transfer of materiel assets requires that shippers normally pay transportation costs for returns from DOD users to supply system inventories, including stock fund returns with or without credit. The Office of the Secretary of Defense (Comptroller) directed that the Army implement this policy, effective 1 October 1980. This will require modification of the Standard Army Financial Inventory Accounting and Reporting System (STARFIARS) to account for transportation obligations, and assignment and publication in DOD regulations of twelve Transportation Account Codes—one for each finance and accounting office servicing an overseas stock fund branch office.

There were forty cases under review at the end of fiscal year 1980 under revised statute 3679 activities involving overobligating or overspending authorized funds. Of these, 37 were resolved during the year; however, fifteen new cases were received, leaving eighteen cases under review on 30 September 1980, seven of which were over one year old.

The Army Audit Agency issued reports on the number of audits during the year which highlighted common problems at numerous installations. Actions taken on the audit recommendations should result in improved management of resources at all levels of command. The agency reported that: Army enlisted personnel were not being used in the skills for which bonuses totaling $8 million had been awarded; recruiting advertising goals were not being established or were too broad to measure the effectiveness of the recruiting advertising program which amounted to $65 million in fiscal year 1980; attendance at National Guard and Army Reserve training assemblies was not adequately controlled causing improper payments to reserve component members; the number of Chaparral and Stinger missiles authorized to be fired during training classes was twice the number

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necessary to provide adequate training; management controls over overtime at Army depots were not fully effective; contractors with a pattern of poor performances continued to receive contract awards; maintenance and repair projects at Army installations were designed, funded, or were in progress, for buildings that were scheduled to be demolished; weak accounting and inventory controls were causing significant excesses and shortages in conventional ammunition; European Commissary System financial and supply records were so inaccurate and unreliable that accessibility and operational control could not be maintained over the basic functions of ordering, receiving, pricing, and selling.

In fiscal year 1980, Army installations, as reported above, began a major effort to review commercial/industrial type activities to determine if the functions should be performed within the Army or by contract. The Army Audit Agency conducted independent reviews of the cost comparisons, and spent about 13 percent of its resources to make reviews of 109 CITA cost comparisons during fiscal year 1980. This was the Army’s initial effort in conducting cost comparisons under the full costing procedures prescribed by OMB Circular A-76, revised. Numerous errors and omissions were detected and corrected as a result of the audit reviews.

Army audit, inspection, and internal review activities uncovered 143 potential fraud cases which were referred to investigative organizations and twenty-five significant instances of waste which were included in Army reports that provided a basis for reporting to Congress pursuant to the Inspector General Act of 1978. The Army Audit Agency devoted nearly 30 percent of available auditor days to areas highly susceptible to fraud and waste. In instances where patterns of problems indicated a need for high level attention, “trend reports” were issued to Army staff elements with recommendations for needed action. In addition, field commanders received “advisory reports” summarizing common problems noted during audits of similar functions at a number of locations. In September the audit agency commenced an audit of yearend buying at fourteen installations or activities to ascertain if funds expended were in compliance with laws and regulations and that the materials acquired were needed. The number and mix of activities audited is expected to indicate adverse trends and highlight whether hurry-up spending at yearend is resulting in waste. At Army Audit Agency-conducted classes, special attention was devoted to basic audit techniques in evaluating internal controls and detecting wasteful and fraudulent conditions. Over 200 Army auditors received this training.

Internal review efforts were directed toward programs identified by commanders and staff elements as affecting mission objectives.       

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Resulting actions by commands have strengthened internal controls established to prevent or reduce fraud, waste, and uneconomical and inefficient practices.

Headquarters, Department of the Army teams conducted periodic inspections of five major commands and three Army staff agencies. An Armywide special review of conventional ammunition was completed. During Inspector General orientation courses particular emphasis was placed on the need to examine the effectiveness of internal control procedures. Steps which should be taken to ensure that commanders respond to conditions indicative of fraud, waste, and abuse were also stressed.

The Army Criminal Investigation Command’s increased emphasis on the detection and investigation of fraud and waste resulted in 3,780 fraud cases being referred to civilian and military organizations for action. In addition, 1,674 crime prevention surveys were completed. Development was started on a computer crimes investigation course and other training programs to target economic crime-susceptible activities for informants, criminal information and systems access. Finance and accounting courses were reviewed to identify those appropriate for training investigators in crimes committed against the military pay and contract payment systems.

The Records Management Division of The Adjutant General’s Office (TAGO) handled 951 requests for information under the Freedom of Information Act and eighty-four under the Privacy Act, many of which involved sensitive or classified material. Under revised regulations, Records Management personnel must consider that a compilation of unclassified documents, or portions of them, obtained under the Freedom of Information Act may have a potentially adverse effect on national security. To guard against such circumstances seven additional “Initial Denial Authorities,” making a total of twenty, have been added.

As reported last year, the Records Management Division’s Access and Release Branch is actively involved in Army litigation concerning the Army’s alleged role in “Love Canal” and in dealing with herbicides like “Agent Orange.” A large number of law firms have requested documents under the Freedom of Information Act for use in court. At one point, eleven lawyers representing various chemical manufacturers descended on the Access and Release Branch, spending three days reviewing location data on Vietnam records and searching for information and documents on Agent Orange. The U.S. District Court for the Eastern District of New York requested

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sixty-five documents concerning Agent Orange for Dow Chemical Company.

As noted in last year’s report, The Adjutant General’s Office is responsible for the care of high school transcripts previously generated by the Army, Navy, Air Force, and most recently the DOD Dependents Schools Records Program. TAGO receives about 100 requests a month from former students for transcripts of their records. Some 300 linear feet of school records stored at GSA’s Washington National Records Center in Suitland, Maryland, are being recalled to check on filing accuracy, elimination of duplicate copies, and general consolidation. The most recently retired manuscripts are being prepared for microfilming. The establishment of a sixth regional office in Panama has added three high schools and a junior college to TAGO’s list of schools for whose records it has responsibility.

The Army’s program for developing an Advanced Micrographic Access and Retrieval System (AMARS) moved forward. September 1979 Teknekron Research, Inc., of Berkeley, California, was awarded the contract to develop and build a basic test system for an automated, modular, micrographic storage and retrieval system. Its design was reviewed and accepted on 25 March of this year and the system is scheduled for delivery and installation at the Reserve Components Personnel and Administration Center (RCPAC) in St. Louis during the spring of 1982, followed by a period of testing and evaluation by RCPAC.

Army corps commanders have expressed great concern over the rising cost of paper and its resupply under conditions of rapid deployment. Consequently, TAGO and the Army’s Administrative Center, redesignated this year as the Soldier Support Center, undertook an effort to determine the practicality and effectiveness of using commercial computer output microform (COM) equipment in a tactical environment. COM equipment was delivered and installed in vans at two test sites in January 1980. A dry laser COM was field tested successfully at Fort Hood during June and a conventional or wet COM was successfully tested at Fort Bragg during July. Additional testing will be conducted to further evaluate the cost benefit of microfiche versus paper outputs in a tactical environment.

The Army’s Official Military Personnel File (OMPF) micrographic system services both the active Army and reserve component personnel management systems. Officer files are maintained at Headquarters MILPERCEN, enlisted files in the Enlisted Record and Evaluation Center at Fort Benjamin Harrison; officer and enlisted ready reserve files at RCPAC in St. Louis, and officer National Guard files at the ARNG Personnel Center in Falls Church, Virginia. All of these files are being converted from paper to microfiche. Active Army

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officers and enlisted personnel records have been completely converted; RCPAC has begun converting about 40,000 ready reserve officer records internally, and plans have been made to convert an additional 95,000 records; and TAGO approved an ARNG request to convert 35,000 officer paper records in July 1980, subject to the availability of funds.

TAGO is responsible for monitoring the micrographics portion of the personnel records system and for improving the quality of filming data. The first annual inspection of microfiche used for maintaining officers records was performed under contract during the year in accordance with federal regulations and National Archives and Records Service guidelines to detect and correct deterioration of microfiche documents. The first annual inspection of enlisted and ready reserve microfiche data is scheduled for fiscal year 1981.

At the request of the Director of the Army Staff, TAGO has accepted responsibility for design, execution, and funding of a project to convert records of the Armed Forces Discharge Review and Corrections Board Public Reading Room file to microfiche. A conversion contract was awarded in September. The contractor will use a packed microfiche concept where many records can be stored on a single microfiche. Approximately 150,000 existing records will be placed on 10,000 microfiche. A computer output microfiche index of file holdings will be produced each month on a cumulative basis and catalogued to permit previous and current actions on the same case to be found regardless of their physical location.

DARCOM’s Troop Support and Aviation Readiness Command (TSARCOM) is procuring a $1.5 million mass storage punch card system from Infodetics involving an automated storage and retrieval system with remote image display and automated production of aperture cards for inclusion in technical data packages. The system is scheduled to become operational after appropriate testing in December 1981. The TSARCOM system is being reviewed as a prototype for possible installation in other DARCOM subcommands. The Navy and Air Force have expressed interest in the new system.

Computer output microform (COM) production of microfiche is used widely throughout the Army. Standard COM had been extended to thirty-five of the forty-two continental BASOPS installations, and to Germany, Hawaii (WESTPAC), Japan, and Korea by 30 September 1981. West Point, the Military District of Washington, and the Computer Systems Command obtained approval for their own COM systems. The emphasis now is to extend COM to other multicommand information systems as a means of improving the efficiency of reports and reducing administrative systems costs.

The Army Micrographics Management Information System

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(AMMIS) went into limited operation this year. It provides the TAGO Micrographics Management Division and the major Army commands with information and technical assistance required to manage the micrographics program effectively. When completed by the end of fiscal year 1984, AMMIS will provide information relating to equipment inventory, micrographic systems, systems costs and savings, quality film and archival film submissions, and the status of micrographic production by all Army organizations.

TAGO’s Editorial Control Division continued efforts to improve the readability of Army publications. This year 227 different publications were edited bringing the reading grade level of these publications to a 10th grade average. It reduced the number of pages in each edited publication by an average of 15 percent and achieved a reduction of 12 percent in the number of publications. The division conducted training sessions in the preparation of regulations and effective writing for 1,035 regulation writers from the Army staff and major commands.

The initial development of The Adjutant General’s PUSH Army publication distribution method and its testing in the 2d Armored Division at Fort Hood, Texas, proved that centralized control of initial publications distribution was superior over the existing subscription system. This summer a fully automated test of the PUSH concept was begun at Fort Hood, involving over 800 accounts, including all the TOE active Army units at Fort Hood and all the TOE units of the ARNG and USAR in Texas. When completed the test will provide data needed to support expansion of PUSH worldwide for TOE units. PUSH distribution for Enlisted Personnel Management System (EPMS) materials (soldiers manuals, trainers’ guides, job books, etc.) to TOE and TDA units worldwide was also initiated.

In September the U.S. Army Adjutant General Publications Center in Baltimore completed installation of a mail sorting program aimed at reducing the time required to deliver publications and blank forms to major Army installations within the United States and overseas. Sorting packages by geographic destination before sending them through the U.S. Postal Service has eliminated extensive rehandling and speeded delivery of packages to their destinations by two to eight days.

The Micropublishing Branch in August 1979 started the Army Micropublishing Program for converting suitable Army publications from paper to microfiche. Standard specifications and guidelines for conversion were prepared including rating publications on their utility, timeliness, cost effectiveness and suitability for microfiche. During the year, publications suitable for microfiche were defined to include primarily reference works used in offices where viewers were    

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available and secondly, publications changed or revised frequently which are widely distributed and without color or graphics. Currently, 160 publications have been converted to microfiche, 2,500 others are being converted and an additional 1,500 identified as suitable for conversion to microfiche.

The Installation Integrated Administrative Support System (IIADSS)—combining the most useful aspects of internal communications, text and data processing, photo-composition, and micrographics—is being developed at Fort Benning, Georgia, under the auspices of TAGO and TRADOC. The overall objective of this system is to integrate all areas of office administration and management in a totally automated, integrated administrative system developed for installation needs. Because the system has been developed using a “modular approach,” it can be implemented at Army installations performing similar functions, either as a total package or piecemeal using only those software programs that are needed.

Effective 1 October 1979, word processing equipment (WPE) was reclassified by GSA as automatic data processing equipment (ADPE). This change requires close coordination and cooperation among all parties concerned in order to maintain clear lines of responsibility and authority for WPE and ADPE at all levels.

A revised Army Regulation, AR 18-1, Army Automation Management, dated 15 August 1980 clarifies the management responsibilities for Army automation and specifically outlines the authority to acquire administrative systems. The Adjutant General is the functional proponent for administrative systems. He or a designated representative is responsible for approving the acquisition of all administrative systems that run on Army automatic data processing equipment. The local approval authority will provide the necessary technical support, guidance, and assistance needed to acquire ADP resources to support administrative systems. This includes verification that time is not available on existing ADPE to accommodate validated administrative system requirements and that the existing ADP systems cannot be improved to satisfy the requirements in a timely and effective manner.

AR 340-8, The Army Word Processing Program, is being rewritten to complement the new AR 18-1. Increasing levels of expertise in the field and greater emphasis on increasing management and administrative productivity indicate the need for broader systems management of administrative functions and applications. As dollar

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costs increase additional documentation may be required to justify equipment and services. The Adjutant General and the Assistant Chief of Staff for Automation and Communications (ACSAC) have agreed that automation staffs should accept the approved functional documentation with as little change as possible.

The Administrative Systems Acceleration Plan (ASAP) project was initiated on 13 November 1979 to document Army staff administrative requirements, help staff agencies acquire modern administrative technologies, and meet the administrative needs of staff action officers. An ASAP team—composed of administrative systems analysts expert in word processing, micrographics, copier, correspondence, and computer systems interface—conducted training sessions, detailed automated surveys, individual interviews, information summaries, and analyses to define and validate specific administrative requirements, provide design and/or technical assistance prior to implementing new technologies, recommend alternative solutions and costs, and provide followup assistance. The ASAP team recommended improved utilization of existing equipment, streamlining and standardization of procedures, and the acquisition of an estimated $1.7 million worth of administrative systems equipment. Productivity increases of $1,040,776 through labor savings and savings in paper, postage, and computer time in the amount of $1.5 million were identified.

The fiscal year 1978 Copier Cost and Production Report showed the Army alone possessed over 9,000 machines producing more than 1.2 billion copies annually, at a total cost in excess of $33 million at an average cost per copy of $.0269. During fiscal year 1980, the Administrative Systems Division, Administrative Management Directorate, developed and implemented an automated copier management system, the first of its kind, utilizing word processing equipment. Over 9,000 office copier inventory records representing Army installations worldwide have been loaded into the system and are available for inquiry and agency reporting purposes. The system provides sort capabilities and supports a full range of mathematical routines. Total copier management is the objective of the new system.

As reported last year, the House Subcommittee on Postal Facilities Mail and Labor Management, the GAO, and the House Appropriations Committee all recommended a review and revision of the 1959 United States Postal Service/DOD agreement. Consequently, a new Postal Agreement was signed on 21 February 1980, after two years of negotiations. Principal changes in the revised agreement included adding the goals of providing mail service to military personnel equal to service provided civilians in the United States and minimizing energy expenditures while conducting military postal

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operations. The new agreement provides for review every five years and delegates to the Assistant Secretary of Defense (MRA&L) the authority to establish supplemental agreements to cover specific operational procedures.

The first supplemental agreement was signed on 22 February 1980 to cover details of administration. Areas addressed in the supplemental agreement include standards of service, and reimbursement for use of facilities and equipment and for expansion of United States domestic postal service to meet DOD requirements, including postal services expansion as a means of reducing shipping costs and improving services; a survey of facilities, services, and delivery in the United States; and a study of overseas military mail operations.

The Deputy Secretary of Defense signed DOD Directive 4525.6 on 5 May 1980 charging the Secretary of the Army as the DOD Single Manager for the Military Postal Service. The Secretary of the Army directed the Adjutant General to establish the Military Postal Service Agency (MPSA), which was formally organized as a field operating agency of TAGO on 1 June 1980 by Department of the Army General Order 6, dated 30 May 1980.

The MPSA operates under the broad policy guidance of the Assistant Secretary of Defense (Manpower, Reserve Affairs, and Logistics) and serves as the single DOD point of contact with the United States Postal Service (USPS) and other government agencies on military postal service policy and operational matters. The MPSA also acts as functional director for APO/FPO official and personal mail. The Service Secretaries continue to command and operate all internal postal facilities not assigned to the MPSA and recommend to the Executive Director, MPSA, policies and procedures for carrying out postal operations. Fiscal responsibility also remains with the respective military services, but the MPSA will have a coordination and monitoring role to ensure that the rapidly escalating postal costs for both official mail and second destination transportation costs are planned, programmed, and budgeted at appropriate and adequate levels.

The MPSA Table of Distribution and Allowances was approved on 14 July 1980 and the other uniformed services assigned elements to the new joint service staffed agency. Brig. Gen. Alan Ono became the first Executive Director effective 11 August 1980 with Col. Lloyd L. Wyatt appointed as Deputy Director. The MPSA consists of a jointly staffed headquarters in the National Capital Region and Joint Military Postal Activities (JMPA) Atlantic and Pacific, collocated with the USPS Postal Concentration Centers in the gateway cities of New York and San Francisco with subordinate elements in Miami, Jacksonville, and Seattle.

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