Statement by

Richard Rominger
Deputy Secretary of Agriculture

Before the Senate Committee on Agriculture, Nutrition, and Forestry

March 5, 1997

Mr. Chairman, members of the Committee, it is a privilege to appear before this Committee to provide you with an overview of this Administration's actions to reshape the Department of Agriculture. The issues you are discussing today are very important in our efforts to better structure agencies, programs, and support services into the twenty first century. I have with me Anne Reed, the Department's Acting Chief Information Officer.

Before I discuss the Department's plans to modernize its information technology systems and to link this technology support with our strategic plan, I would like to place this restructuring effort in the context of the broader picture in the Department.

ORGANIZATION OVERVIEW

USDA is a complex institution that reflects some of America's greatest social innovations that have occurred over the past 130 years. The mission of the Department of Agriculture is to ensure the well being of Americans, with special emphasis on individuals engaged in commercial agriculture and forestry; families needing nutritional services; consumers dependent on a safe, affordable food supply; and residents of rural areas. In recent years, the Department has increasingly been called upon to protect the Nation's natural resources base. USDA delivers a diverse portfolio of over 200 Federal programs throughout the Nation and the World.

The Department spends about $60 billion a year and employs over 113,000 people. About 90 percent of these people work outside Washington. Of the 19 budget functions in the Federal Budget, the Department has programs in 9. Because of this diversity in programs, the audience for USDA includes not only farmers and other rural residents, but consumers and all needy Americans.

About two and one-half years ago, Congress passed and the President signed into law the Department of Agriculture Reorganization Act. As a result, headquarters organizations were reduced from 43 to 30 and organized along 7 mission areas to strengthen program management. Along with the headquarters restructuring the Department began to restructure the field and reform management support systems. The commitment was made to complete the restructuring of headquarters staff by the end of 1995 and the field structure by the end of 1997.

The Reorganization Plan was merged with the Department's Streamlining Plan which had been in place less than a year. We also incorporated the National Performance Review, Regulatory Reform and budget constraints. The result was an overall Plan that was based on fewer offices, lower employment levels, and reform of administrative systems. It was expected to reduce employment by over 7,500 staff years and save at least $4 billion by 1999, while improving service to customers.

STRATEGIC PLANS

Since this overall plan was originally established, a number of legislative and budget events have occurred which require modification of some of the features of the planned reforms. Building on the changes that have resulted from the Reorganization and Streamlining Plan, the USDA Strategic Plan, which is in preparation, establishes the course for the Department over the next 5 years, as required by the Government Performance and Results Act of 1993. The strategic planning process has forced USDA to rethink, redefine and reevaluate its commitment to the American people and to focus on the impact of our programs. This commitment is embodied in the Secretary's four fundamental priorities which will direct and guide USDA's future activities. These four priorities are:

o Ensuring a safe, affordable, nutritious, and accessible food supply;

o Expanding economic and trade opportunities;

o Managing our natural resources in a sensible way; and

o Providing our services efficiently and effectively to save taxpayer money and foster good government.

Information technology is an essential component of good government, and the accomplishment of all of our goals depends in part on the adequacy of our information technology. The quality, timeliness, and cost effectiveness of USDA service delivery depends on our ability to strategically acquire and use information technology resources in line with the business objectives set out in the Strategic Plan.

Every USDA agency has developed a draft strategic plan. Many of these plans are now being revised to reflect the implications of the FY 1998 Budget . Because these plans describe what each agency does and plans to do, the plans have been instrumental in helping to identify common business processes and the future technology needs of the agencies.

The FY 1998 Budget Explanatory Notes include the mission statements and goals for USDA agencies, as well as proposed performance measures. For the FY 1999 Budget, agencies will work to refine these performance measures and develop Annual Performance Plans which will measure on a yearly basis their success in achieving the goals set forth in their strategic plans. The Annual Performance Plans will be incorporated into the budget process and used to evaluate future funding requests, as well as the overall performance of the agency. A great deal of time and effort has been spent on implementing GPRA, and the process has helped us improve program effectiveness, service quality, and customer satisfaction. We look forward to consulting with Congress on our draft strategic plans in the near future.

MANAGEMENT SUCCESSES AND CHALLENGES

I would like to take a few moments to give you some examples of some of the activities we have underway to meet the Secretary's priorities and better serve our constituents and also discuss some of the challenges we have yet to meet.

o The headquarters reorganization is complete. As required by legislation subsequent to the enactment of the Reorganization Act, the Risk Management Agency and, the Office of the Chief Information Officer have been established.

o USDA's initial reorganization and streamlining have resulted in significant staff year reductions. By the end of 1996, USDA was ahead of schedule and had reduced its Federal staff years to 100,700, a reduction of over 7,000 staff years below the Reorganization Plan. This reduction is more than 13,800 below the 1993 level of about 114,500. USDA's total Federal and Farm Service Agency (FSA) county employment in FY 1996 was more than 16,000 staff years below its FY 1993 level and by 2002 it will be more than 26,000 staff years below the 1993 level. USDA's employment today is lower than it has been at any time in the past 30 years. We are on track to save $4 billion by 1999 and $8 billion by 2002 due to these efforts.

o The restructuring of 3,700 county based field locations is well underway to establish a network of USDA Service Centers. The original plan was to establish about 2,500 Service Centers. However, the 1996 Federal Agriculture Improvement and Reform Act (the 1996 Act) provisions and budget considerations have caused us to reevaluate that plan. The Secretary has asked each of the involved USDA agencies, as well as our USDA Service Center Implementation Team, to give their best advice as to how we can organize within those budget levels. We have asked them to examine these agencies at every level to review every possibility for improved efficiency through sharing administrative services and adjusting staffing. We have indicated that we will hire an outside consultant to assist in this effort. While we have made a general commitment that we will reduce the number of our service centers, we have made no decisions about individual offices. We are committed to working with the Congress as we proceed with our review, and will keep you fully apprised of our plans.

o The Service Center partner agencies have initiated projects to reengineer common administrative functions, as well as to improve the management of the programs they administer. In addition, these agencies will undertake an initiative this year to significantly reduce the paperwork burden on our farm customers, in part by moving to common forms to be used across agencies and programs.

o The Rural Housing Service is moving from a costly, inefficient system of managing single family direct housing loans for over 620,000 borrowers to a program using state of the art technology, reduced regulations and fewer staff. This new centralized servicing system known as DLOS (Dedicated Loan Origination and Servicing) is expected to save at least $250 million over the next 5 years and reduce staffing requirements by about 1,500 staff years annually. More importantly, it will bring RHS up to the standards of private sector mortgage lenders.

o Given the budgetary pressures to reduce administrative costs, the FSA plans to study its farm program payment processes to determine if centralized or other alternative payment processes may offer potential advantages over the current system of issuing payments through county offices. Although the current system works well, FSA is extensively re-examining its administrative processes and resource requirements in light of the shifting workload requirements resulting from the 1996 Act as well as substantial budget reductions.

o The Natural Resources Conservation Service (NRCS) has made significant changes in how it delivers its conservation services to the field. The agency is now able to provide higher levels and more valuable technical assistance to farmers and other clients with proportionately fewer management and support staff.

o The FSA implemented the commodity program provisions of the 1996 Act which constituted perhaps the most sweeping change in farm support programs since their inception, in a very brief period in 1996. Nearly 99 percent of the nation's eligible acreage was enrolled in production flexibility contracts in this period with very few problems. The successful performance of FSA and its county office delivery system in this process must be considered to be outstanding. Given that FSA was and still is in the process of reorganizing and downsizing, its performance was all the more commendable.

o The Department is about to begin what will likely be the largest signup for the Conservation Reserve Program (CRP) ever attempted in one year. This will present a major challenge to the resources of FSA and NRCS and other agencies which will provide assistance. In addition to the enormous CRP workload, staff will work with producers to administer other farm programs, including the large percentage of production flexibility contracts which will need revision as participant's leasing arrangements are revised and other changes are made. We have advised our State directors and other key personnel to make maximum use of the legal authority for other USDA agencies to help with program delivery if that should prove necessary.

o The electronic benefit transfer (EBT) for the Food Stamp Program is now operational in 18 States and under development in all other States. Also, the WIC Program is conducting a pilot EBT program in one State in conjunction with the Food Stamp Program and has other State pilots under development. EBT systems provide program participants with a debit card, instead of paper food stamps or WIC vouchers, to make food purchases. EBT reduces the costly accounting procedures involved in issuing and handling food stamps or vouchers and provides a record of each transaction which is helpful in identifying certain types of program abuses.

o We have begun implementing our strategy for making significant gains in improving the safety of America's food supply. We have published the final rule for Pathogen Reduction and Hazard Analysis and Critical Control Point (HACCP) systems for meat and poultry products. This rule modernizes a 90 year old inspection system and lays out the Administration's commitment to ensure a healthy, safe, and affordable food supply. These changes rely on a well trained workforce of inspectors, using modern technology and science to do their job. The first implementation date was January, 1997. All meat and poultry plants are now testing for generic E. Coli.

o Exports of U.S. farm and food products achieved a second straight year of robust growth in 1996 and set another record at just under $60 billion. With the strong back-to-back gains of the last 2 years, U.S. agricultural exports have increased over 50 percent since 1991. As a result, agriculture led all trade categories as the most significant contributor to the U.S. balance of trade and supported one million jobs both on and off the farm, one-third of which were in our rural areas. Changes in the domestic farm programs have made America's farmers and ranchers more dependent than ever on exports to maintain and expand their income. It is critical that we continue our aggressive trade promotion efforts to meet today's challenges and keep pace with the competition.

o The 1996 Act required the Secretary to establish a Risk Management Agency (RMA) and gave RMA more responsibility for helping farmers to manage both production and price risk About 70% of the Nation's eligible cropland is insured, mostly by private insurance companies, that participate in the delivery and share in the risk of offering this protection. More importantly, RMA has moved quickly into the future by working with the private insurance industry in developing a highly successful pilot program for a revenue insurance product. The Administration is proposing legislation to expand the agency's authorities in this area. RMA has also been working with the private sector on a program to provide risk management education to farmers.

o Common sense management of natural resources is one of the cornerstones of our Strategic Plan as we go about implementing the conservation provisions of the 1996 Act. Our natural resource agencies are utilizing geospatial information systems (GIS) to better understand the relationship between people and their environment and apply this knowledge to improving natural resource use. We face a critical year in deciding the fate of 21 million acres that are coming out of expiring CRP contracts. The revised CRP will target only our most environmentally sensitive lands so that we get the maximum environmental benefit for every dollar spent.

o In the area of administrative management, several modernization initiatives are underway. An example is the recently piloted credit card purchasing system which uses modern personal computer technology and client/server software tools to streamline the acquisition process. When fully implemented, this initiative should save $50 million over five years. o While we consider further reforms and improvements at USDA, it should be noted that the Department continues to perform well in the delivery of its programs and services. We must ensure that further changes made in the name of improvement must not detract from our ability to deliver these programs and services to our customers.

CIVIL RIGHTS

o Civil rights management at USDA is a problem area and it is one of our highest priorities and challenges. We are committed to reducing the existing backlog of discrimination complaints and creating an environment in the Department where employees and program participants find fewer reasons for filing future complaints. We have undertaken a number of activities to make these goals a reality: hired additional staff and provided training primarily for adjudication and compliance related activities; contracted with private firms to investigate complaints, and provide additional counseling services; assigned temporary details from various mission areas to work on the backlog; and installed new software to provide improved case tracking of employment discrimination cases. The Secretary also established a civil rights action team to do a thorough review of civil rights issues and provide recommendations for improvement. Their report was released last week and we are now beginning to implement the recommendations. Some will require congressional action. We are committed to making positive changes at USDA to ensure that both our employees and customers are treated fairly and with dignity.

HISTORICAL OPERATIONAL CONTEXT

Providing information and productivity enhancing technology to support our diverse business objectives and clientele is a major challenge. Although we have done a good job of meeting our mission objectives in the past, budget limitations and increasing demand mean that, if we are going to continue that good record, we need to look for new approaches in our business processes and do a better job to coordinate and deploy appropriate technology to meet those business needs.

Historically, most agencies have operated independently to address their respective mission and clientele and meet their own information technology needs. This decentralized approach to program delivery, technology, and other support functions has been both our greatest strength and our greatest weakness as a Department. It has been our strength in terms of placing the maximum amount of decision making at the lowest levels and involving our customers in those decisions. It has been our greatest weakness because, even though each agency has worked hard to optimize technology and support functions within their agency, we have not been able to fully optimize those functions across agency lines and throughout the Department as a whole. Consequently, we now have a collection of disparate technology and technical solutions that severely limits our ability to exchange information between agencies and with our customers and partners on the outside. Likewise, the duplication of operating mechanisms and supporting structures of agency information systems is costly and no longer is supportable with our declining resources. While the unique missions and clientele of the USDA agencies suggest the continued need for a high level of autonomy, better leveraging of our resources in the information and support areas is needed. Given our USDA culture, this is not an easy task but we are making progress and this Committees' encouragement has been valuable in bringing that about.

CHANGING BUSINESS

A critical element in improving our business and information technology management in USDA is knowing where our programs are going in the future, what business processes are needed to support them, what technology will be available that can be applied to that business, and how we are going to provide it.

Ideally, we would be able to project legislative, programmatic, and technological changes at least five years into the future, since it takes about that long to effectively change organizational structure, business processes, and technology in a Department of our size and diversity. Unfortunately, given the pace of change in recent years, we have not had that luxury and it has resulted in a series of starts and stops, in terms of organizational, business, and technology changes. In the past three years, we have seen dramatic change resulting from reorganization, streamlining, the 1996 Act, and budget changes. No where has this been as evident as it has been with the Field Service agencies. We are hopeful that, with the help of Congress, this pace of change will slow down so that we can complete our business process changes and deploy the technology needed to support them.

USDA INFORMATION MANAGEMENT

Many USDA agencies have traditionally been on the leading edge of continuing to modify and improve their business processes and bring appropriate technology to bear to deliver the best service at the best price. Our challenge now is to permeate this forward thinking throughout the Department and do a better job of linking our strategic planning, business process analysis, and coordinated technology applications. To that end, we have begun to put into place a number of management improvements and modernization initiatives that will serve us well for the future. I want to highlight some of those for you and I think you will agree that we have come a long way in the past year or so.

INFORMATION MANAGEMENT MODERNIZATION

The Secretary launched a major initiative in the summer of 1995 to look at how we could improve and modernize our approach to Information Resources Management (IRM) in support of program delivery. The result of that effort was a USDA IRM Modernization Plan. The two highest priorities in the plan were to (1) improve the IRM decision-making process and (2) design and implement an information system technology architecture. Basic to this plan was the objective of firmly linking the processes of strategic planning, business process analysis, and appropriate technology acquisition and deployment. Not surprisingly, these priorities and objectives are all topical areas of concern that this Committee has raised with the Department over the past several years.

Interestingly enough, a few months after USDA developed the IRM modernization plan, Congress passed the landmark Clinger-Cohen Act of 1996, which established new information management requirements for all Federal agencies. Many of those requirements were already incorporated into the USDA plan which gave us additional comfort that we were headed in the right direction. Because we were well into our own IRM Modernization journey, we found ourselves ahead of the curve in implementing the new Act. But everything is relative and I am not going to tell you that we have all the answers or even all the questions, only that we have awareness of the issues and are now on a journey to resolve them. I would like to share a few of the actions we have taken and have underway.

NEW IRM DECISION-MAKING STRUCTURE

In 1996, we established an Office of the Chief Information Officer for USDA and appointed Anne Reed as Acting Chief Information Officer (CIO). This new position will significantly strengthen the Departmental focus on IRM issues and provide better linkage to the program delivery mission areas. Her office will provide long-range planning guidance, implement measures to ensure that technology investments are business driven and economical and effective, coordinate inter-agency IRM projects and implement standards to promote information exchange and technical interoperability.

We have also established two new boards to address the technical issues and the program investment issues. The IRM Council Board, made up of the Senior IRM Managers from each mission area, has been established to help the CIO with technical issues. They will provide technical analysis, implementation and selected project management assistance. This Board has been especially active in the technical architecture development done to date.

The second Board, the Executive Information Technology Investment Review Board (EITIRB), was established late last year. I personally chair this Board and it includes senior subcabinet program officials. The primary purpose of this Board is to make the strategic investment decisions that will leverage our limited budgetary resources to meet our strategic program objectives. The Board will not only select the new investment options but will also monitor and evaluate all technology investments to ensure that they deliver as promised. A new capital planning and investment control process is being developed to help agencies and the EITIRB with this decision process. We believe these changes in our decision making structure are key components in moving away from "stove pipe" solutions and systems and towards effective, affordable, and interoperable Department-wide solutions. There will always be a need for specialized technology for specific program missions but we also have many common ground needs that beg for common solutions. The budgetary payoff is in developing one solution to meet a common need.

ESTABLISHING AN INFORMATION SYSTEMS TECHNOLOGY ARCHITECTURE

Along with an improved strategic planning process and a new decision structure, we have also been working to develop an information technology architecture. This architecture seeks to provide a blueprint or a framework for building the infrastructure needed to support day-to-day activities and guide the use of technology to support mission delivery. The foundation blocks for this architecture are contained in the Department's draft Strategic Plan which establishes the program and administrative priorities. It is important to realize that such an architecture is never finished, but must be a dynamic and evolving design that adjusts to changes in missions, programs, objectives and available technology. The USDA architecture at this point is a high level, baseline document which establishes an umbrella beneath which we now need to fill out the pieces. It has three parts---the business/data architecture, the technical standards, and the telecommunications architecture.

The business/data architecture steps down from the strategic missions and objectives to identify the core business processes and information associated with filling those needs. This component merges business activities and data needs into a single strategy. These activities and needs are then compared to others that appear similar and are analyzed to find opportunities where efficiency and effectiveness can be improved. This approach will also help us identify areas of similarity and overlap which may indicate the need for programmatic or organizational change. This component of the architecture is the one that now has the heavy engagement of program leaders and senior policy staff in the Department and the new Investment Board. It is a difficult task and there are many ways to go about it. For USDA, the path we have taken is giving us a good start for a process that will continue to evolve and mature.

Part II of the architecture is the technical standards portion. This addresses the transition between old and new operational strategies with an analysis of computer hardware, software, telecommunications, and security. This component recognizes the need to consider technical standards as part of program delivery process redesign. These technical standards will act as the "building codes" and "zoning ordinances", essential for new information system construction arising from business changes and the need to renovate existing USDA processes.

The third component of the architecture is the telecommunications architecture. This provides a very high level definition of the Department's telecommunications capabilities and the inter-relations of department and agency telecommunications resources. It establishes a USDA telecommunications environment that will be optimized for maximum benefit and cost for the Department as a whole. With this telecommunications architecture as a guide, the existing Departmental and agency networks will evolve to become the USDA Enterprise Network, a completely integrated and efficient telecommunications utility. More work needs to be done before we can draw final conclusions, but we see this telecommunications arena as one that may provide significant savings and efficiencies in the future. Altogether, we believe that the decision-making changes, the architecture development, and other improvements we are pursuing will significantly improve the efficiency and effectiveness of our information resources activities in USDA . But it will not happen overnight. It will take time to fully and effectively implement the changes we are making, to obtain the budgetary resources to migrate from where we are to where we need to be, and to perhaps make the organizational and personnel shifts needed to put it all in place. Meanwhile, our old legacy systems are wearing out, programs are being changed, personnel reduced, and customers need to continue to be serviced. We will need to make some investments to continue to provide services even as the modernization moves forward. However, I can assure you that each one of these investments will be looked at closely and only move forward if they take us toward where we want to go in the future, are mission critical, or present such a high level of savings or efficiencies as to be imprudent not to pursue.

MANAGEMENT ISSUES

I suggest that our management actions over the past few months are proof of our resolve to make changes in the way we are managing this business. The moratorium that I put in place last November on new technology acquisitions has not only constrained spending while we bring the architecture development together, it has also brought a higher level of focus on technology issues at the Agency Head and Subcabinet levels. The Executive Investment Board has decided to continue the moratorium on a month to month basis until it is fully cognizant and comfortable with the architecture, especially the business component, and is assured that the key procedures will be in place to operate in a post moratorium period. I have been very pleased to see how these mission area policy officials have been able to put aside immediate investment needs of their agencies for the sake of the Department as a whole.

Other key actions we have taken include the suspension of installation of the modernized voice and data communications systems for the field service agencies, except for those needed to support the DLOS initiative, the strengthening of Departmental oversight capabilities for Service Center activities, and the initiation of an aggressive independent verification and validation process utilizing outside expertise to review key USDA projects and initiatives. Those management actions alone, are major milestones in the evolution of the Department from the old stove pipe, decentralized approach of the past.

Thank you. My staff and I are available to answer your questions.