GAO Finds DOE Downsizing On Track
With both the National Performance Review and the drive to eliminate the federal deficit as impetus, the Energy Department has embarked on an effort to significantly reduce its budget. In addition to selling off Power Marketing Administrations, a petroleum reserve and stores of uranium, part of DOE’s plan includes prioritizing its activities and downsizing its staff. This Strategic Alignment and Downsizing Initiative, unveiled last May, is intended to save $1.7 billion between fiscal years 1996-2000 by selling excess DOE assets, improving information management, streamlining certain processes, and making reductions in staff levels, the travel budget, and support service contracts.
Chairman Dan Schaefer (R-CO) of the House Energy and Power Subcommittee asked the General Accounting Office (GAO) to assess DOE’s progress in the first year of the initiative, and held a June 12 hearing on its results. GAO praises DOE’s achievements so far in its report, “Energy Downsizing: While DOE is Achieving Budget Cuts, It Is Too Soon to Gauge Effects.”
Donald Pearman, DOE’s Acting Chief Financial Officer, reported that the department has already reduced the federal workforce by 1500 positions, closed eight field offices and four D.C.-area locations, initiated contract reform, and expects to save $227 million by the end of this fiscal year, exceeding its year-end goal of $221 milion. He explained that DOE’s strategic plan incorporated many of the recommendations of task forces led last year by Robert Galvin and Daniel Yergin, including reduction of oversight reviews and reports, deletion of unnecessary requirements, prioritization of the energy research portfolio, elimination of duplication and broader sharing of results. By the year 2000, DOE plans to have eliminated 27 percent of its staff, closed 12 field offices, and consolidated its headquarters operations from 16 offices to four.
Bernice Steinhardt, GAO’s Associate Director for Energy, Resources, and Science Issues, testified that while it is still early in the implementation process, “DOE’s planned budget savings are on target,” and the department “also seems on track for future reductions.” Steinhardt cautioned that it was “not yet clear” how successful future reductions based on process improvements and reengineering would be, nor whether large reductions in staffing and resources would affect DOE’s ability to carry out its mission. She added that the department needs to “be diligent in validating its claims of savings,” and identified potential areas where DOE might save additional money by applying its initiative more broadly to contractors and by developing a more accurate inventory of excess assets (such as machinery, timber and precious metals) it could sell.
Subcommittee members congratulated the department on its progress, but some questioned the need for its existence. Rep. Bart Stupak (D-MI) asked, “what does DOE do for the average individual?” Pearman cited DOE’s role in national security, non-proliferation, conservation, renewable energy technologies, materials studies, clean air and advanced automobile programs. Rep. Cliff Stearns (R-FL) responded that some of those things “are a blur in my mind [and] don’t register,” and inquired whether some of the efforts, like the clean-up of nuclear weapons sites, are being done elsewhere in the federal government. Steinhardt answered that while some clean-up is done within the defense department, it does not deal with the level of radioactive waste that DOE does. Stearns then commented that DOE’s R&D on renewable energy technologies does not seem to have “overtaken the market.” Pearman explained that results depend on the public, political and industrial “parts of the equation.”
For information on how to obtain the GAO report on the Internet, send the message “info” (in the body of the message) to info@www.gao.gov
