THURSDAY, DECEMBER 30, 1926. UNITED STATES VETERANS' BUREAU TATEMENTS OF GEN. FRANK T. HINES, DIRECTOR; MAJ. O. W. CLARK, ASSISTANT DIRECTOR; HAROLD W. BREINING, ASSISTANT DIRECTOR, FINANCE SERVICE; WILLIAM WOLFF SMITH, GENERAL COUNSEL; S. M. MOORE, JR., BUDGET OFFICER GENERAL STATEMENT Mr. WASON. I presume you have a general statement you would ike to submit, General? General HINES. Mr. Chairman and gentlemen of the committee, ollowing my custom before the committee, I should like to be pernitted to make a general statement and then take up in detail the tems in such manner as the committee may desire. A careful scrutiny of the estimate for 1928 will show a consistent reduction made practically in every item of administrative expense, also in the operating expense of hospitals. Any exception to this statement can be accounted for wholly as the result of new legislation, or changes made, over which the bureau has only partial control. COMPARISON OF ESTIMATES FOR 1928 WITH APPROPRIATIONS FOR 1927 The committee will be interested probably first in the comparison of the total appropriation of 1927 to that submitted and now before you for 1928. The total sum appropriated for the fiscal year 1927 is $462,965,000, with an estimated deficit under military and naval compensation of approximately $27,350,000. This deficit is brought about by placing into effect the new disability rating schedule required by the amendment to the World War veterans' act of June 7, 1924, and to amendments recently made to that act of July 2, 1926. This last amendment to the act accounts for an annual increase in expenditures of approximately $12,000,000. This deficiency appropriation will be requested at an early date to increase the amount appropriated for the fiscal year 1927 to $490,315,000. The actual obligations for 1926 were $494,714,057.28. The total estimated appropriation for 1928 covered by these estimates amounts to $475,400,000. The actual increase over the appropriation for 1927, without considering the deficiency above referred to, is $12,435,000, which is accounted for in detail as follows: A comparison of this increase with the expected deficit result an estimated saving of $14,915,000 in 1928 over 1927. ADMINISTRATIVE EXPENSES At that point, Mr. Chairman, I should like to call the committee attention to another general condition which will account for th large amount of money that is being requested for the bureau, af at the same time the claim on the part of the bureau that I har made three times before this committee of a reduction in admintrative expense. If you will consider that in this total now befor you we have absorbed the adjusted service certificate administrate and the appropriations for that fund running last year over $116,000 000 and this year $112,000,000; then, too, we have absorbed t original amendments of the World War veterans' act, when estimated to Congress that those changes in the act would cause increased annual expenditure of $33,000,000, and our estimate h proved to be approximately correct as we go along; when we hav absorbed entirely in administrative overhead the administration n only of all these additional changes that have been made, which many cases required additional work, but have completely absorber the bonus administration in our insurance division, the cost of th administration of which originally, if you will recall, was put s $1,188,500 for the first year, you will get a general picture of whether these expenditures are in total increasing, which, of course, we know and unless there is an effort made to stop further amendments, th bureau will be in the position of having some difficulty in tellin you gentlemen just how long this administrative overhead, whit looks at times very high, will continue. We hope this year, and I think the bureau is in accord with the Legion, that there will be few, if any, changes in legislation. Th is very desirable for many reasons, but the primary reason is it s desirable to determine really what the effects of the existing la actually are. Every time Congress makes a material amendment in the veteran act, it requires a review of the cases. That means increased work. so that our predictions as to what we will do in personnel are many times upset because of this additional work brought about by these reviews. CHANGE IN RATING SYSTEM FOR COMPENSATION The most material change, of course, was the change in the system of ratings brought about by the World War Veterans' act, requiring the building of the new disability table and the application of tha table. We are only now, two years, you might say, after those amendments, completing the review brought about by that change So that if no further amendments are made, it seems to me tha " aring the next fiscal year, the bureau would be able to state with me definiteness to this committee about what they can expect with ference to these appropriations for compensation. They are not controllable, that is, controllable either by the comittee, unless you stop the appropriations, or controllable by the ureau, because they rest mainly upon medical judgment and the dgment of the board that rates the man. The increase under medical and hospital services is due to increased xpenditures imposed through the amendment of July 2, 1926, hich caused additional burdens totaling $272,000. This in reality onstitutes a saving when, as it will be brought out later, increased acilities will require additional expenditures which, it is anticipated, ill be met by futher economies to prevent requesting additional ppropriations. SALARIES AND EXPENSES The first large item of appropriation is "Salaries and expenses. The amount requested under this item is $130,000 less than the apropriation for the current fiscal year, exclusive of a reserve of 1,370,000 which has been set aside as the tentative mark of saving. Taking this item up by symbols, the first for consideration will be iven to personal services: The net increases in 1928 over 1927 is 46,878. The only increase in personnel is in hospitals as all other Toups either remain the same or show decreases. A detailed statenent is included in the folder presented to the committee, which ives the personnel force in every office, in every hospital, in every osition, together with the salary, so that the committee may have efore them in the greatest detail the personnel and should be able o check, if detailed checks are needed on any of them. REDUCTION IN PERSONNEL I might state generally that in the reduction of personnel during he calendar year we have made material progress. The committee vill recall that when I appeared before you I said that it would equire a cut of 1,000 people in order to meet the estimate for this year, which commenced July 1st. We made that cut and more, even absorbing the increased personnel going into the hospitals. It would be of interest at this point to note the change that is taking place in the character of the personnel. I think that last year, when I was before the committee, the administrative personnel, as against. nedical personnel in our hospitals, was about 50-50, about equally divided. The hospitals now have increased, so that their personnel is in xcess by approximately 2,000. But, to show that the bureau is naking a definite and concerted effort in the matter of cutting overhead without attempting to impair the service to the veterans, from July 1, 1926, to December 1 of the same year, there was a reduction of 791 administrative employees, or over 10 per cent of our load. On the schedule of expenditures showing the employees by grades n the departmental service, the changes noted in the higher rates are brought about by reason of reorganization of one of the main divisions in central office, and that was done primarily to meet the changed conditions, with the elimination of vocational training and the meeting of the necessity for vocational men on claims and rating boards in keeping with the principles of the new rating schedules. Mr. WASON. General, while you are on this point, could you insert in the record the number of employees that you have in the District as of December 1, 1926, and in the field as of the same date? General HINES. Yes, sir. Mr. WASON. Or would any other date approximating that be more convenient. General HINES. Probably it would be of more value to the committee if we showed the changes by fiscal years. Would that be helpful? Mr. WASON. Yes; for several years. General HINES. Shall we start, say, in 1923? Mr. WASON. Yes, sir. General HINES. Then, if it will be of value to the committee. I shall be glad to insert also a table that will show the segregation of these employees those that are devoted to the medical activities of the bureau, the hospitals, etc., and those that are more or less administrative overhead. I have such a table on page 1 of this folder which is before the committee, which shows the comparison for 1928 against 1927 and 1926. I think the table which the committee has just asked for would be of greater value to you. Mr. WASON.. If it is not very long, you might put that in, because some people who look at the record would like to see it. The committee at this time would like the comparison that you speak of. Mr. MOORE. I can add December 1, 1926 as well as July 1, 1926 Mr. WASON. Please do so. Comparative statement of personnel by years General HINES. Unless the committee desires, I shall not attempt to go into all the details of the various positions, but will proceed with the various items. The next item is supplies and materials. All items under this heading show decreases over previous years, with the exception of "wearing apparel and sewing supplies." Last year Congress approved the change of wording authorizing the furnishing of white duck suits and shoes to employees in hospitals whose duties required them. These suits are being supplied this year to 4,750 employees, whose duties are ward attendants, mess attendants, kitchen helpers, and cooks. As estimated last year, there are required two suits and a pair of shoes for each person, involving an expenditure per person of $17.50 per year. All other items show substantial decreases, brought about by economies which will absorb this increase. COMMUNICATION SERVICE The next item is communication service. A slight decrease will be noted in this item, which is brought about by efforts to reduce the number of telephone calls and telegraph messages wherever possible. TRAVEL EXPENSE Under travel expense, a decrease of $163,454 is estimated in 1928, which is due principally to the falling off in personnel travel as the work of supervising rehabilitation declines. This saving is even greater, however, when it is considered that an item of approximately $80,000 per annum is absorbed, which represents the increased expenditure resulting from the act of Congress authorizing the payment of $6 and $7 instead of $4 and $5 for per diem allowance. That has been absorbed, and still there is a saving of $163,454. TRANSPORTATION OF THINGS The next item is transportation of things. The increase for 1927 and 1928 over 1926 is due to the change in the wording of the appropriation allowing the transportation of household effects of doctors, dentists, and nurses when permanently transferred from an official station to another for duty. HEAT, LIGHT, ETC., RENTS The next items are for furnishing of heat, light, power, water, and electricity and rents. The reduction under these two items for 1928 is $320 and $84,160, and that is brought about by the proposed relinquishment of floor space in regional offices. This reduction in floor space will be made possible by the decline in rehabilitation activities, and the constant effort which is being made toward consolidation without impairment to the service which the law requires to be rendered. ALTERATIONS AND REPAIRS The next item is alterations and repairs. A reduction under this symbol will be noted, which results from savings proposed to be effected through replacements. Repair costs have been steadily increasing, as much of the equipment is very old and greatly worn. However, this will be brought out more clearly when we consider the item of equipment. |