CHECK COSTS Mr. RUDD. The Grace Commission recently put out a report which indicated that the U.S. Army spends about $4 for every paycheck it issues. What are your comparative costs for issuing checks? Mr. DOUGLAS. Based on fiscal year 1983 actual check volume of about 514,255,000 and operating costs in the amount of $121,282,000 the Bureau's comparative unit cost is $0.24. Mr. RUDD. What are you doing in this area to reduce costs? Mr. DOUGLAS. The Bureau is continually working toward greater efficiencies and cost savings in the disbursement of checks. Presorting checks mailed resulted in postage savings of approximately $12 million in fiscal year 1983. Other cost savings efforts under consideration are Carrier Route Presorting which would provide an additional one cent per item savings, and Zip Plus Four Presorting which would save an additional half cent per item mailed. Increased participation in the Direct Deposit/Electronic Funds Transfer program as a result of our continued marketing campaign, as well as the conversion from card to paper checks will result in additional savings in both postage and operational costs. ELECTRONIC FUNDS TRANSFER Mr. RUDD. How successful has the Bureau been in trying to use electronic funds transfer instead of cutting paper checks? Mr. DOUGLAS. The Bureau has been extremely successful in its effort to increase the use of electronic funds transfer. Since the Bureau's Direct Deposit/Electronic Funds Transfer program began in January 1976, we have increased participation from 2 million annual payments to 198 million in fiscal year 1983. It is projected that this will increase to over 230 million annual payments in fiscal year 1985, representing 39 percent of all eligible payments disbursed by Treasury. Governmentwide, annual EFT disbursements increased by 35 million in fiscal year 1983 to 27.5 percent of all Government payment transactions. This was almost twice the increase that occurred in each of the three preceding years. Mr. RUDD. What are you doing to expand the electronic funds transfer program? Mr. DOUGLAS. In the past, efforts have concentrated on increasing voluntary participation by Federal recurring payment recipients through the use of check inserts, posters, pamphlets and other promotional or educational means. Focus has also been on the conversion of Federal agency payroll offices to systems capable of delivering salary payments by EFT. Currently, in response to the Prompt Payment Act, vendor and miscellaneous payments are being converted to EFT. During the next few years, increased emphasis is planned on market research and the development of new techniques to follow through on the results of this research. [The justifications follow:] Salaries and Expenses, Bureau of Government Financial Operations SUMMARY EXPLANATION OF CHANGES REQUESTED FOR FISCAL YEAR 1985 Salaries and Expenses, Bureau of Government Financial Operations (continued) Pos. Pos. Amount Pos. Pos. Amount Pos. Pos Amount 4. Annualization of current year ADP increases. 5 Payment to General Services Administration for space and related charges. 6. Increased cost of Federal Telecommunications System and other communications ..... 7. Increased cost of ADP equipment leasing and maintenance costs. 407 8. Increased cost of printing 51 9. Increased cost of outside contracts. 10. Increased cost of supplies 9 19 H 222 168 2,009 563 H 11 11 6 37 100 1,508 H 800 119 89 96 35 49 150 221 14 |