congressional justifications for
2001 estimates

This section provides a consolidated justification for all Salaries and Expenses funds of the Department. Pursuant to 12 U.S.C.701(c)(3), the Secretary is authorized to consolidate all operating expenses into a single account to simplify day-to-day financial operations and provide some measure of flexibility in the use of personnel to carry out the wide variety of Departmental programs. This also permits simplification of personnel, payroll, management, and accounting procedures.

APPROPRIATION HIGHLIGHTS

The following table summarizes the funding sources and staffing included in this request.

SUMMARY OF BUDGET REQUEST

For fiscal year 2001, the requested appropriation is $1,094,733 thousand, which consists of $565,000 thousand in budget authority, and authority to transfer $518,000 thousand from various FHA accounts, $9,383 thousand from Ginnie Mae, $2,000 thousand from Community Planning and Development--$1,000 thousand in administrative funds (Section 108) and $1,000 thousand for America's Private Investment Companies Program Account, $150 thousand from Title VI Indian Federal Guarantees Program Account, and $200 thousand from Indian Home Loan Guarantee Fund Program Account. Including reimbursements, fees and other sources, it is estimated that total obligations for "Salaries and Expenses" will be $1,099,321 thousand. These funds will support 9,300 full-time equivalent staff.

The fiscal year 2001 Budget request of $1,099,321 thousand represents the Department's required funding level to more effectively promote homeownership for Americans free from discrimination, revitalize communities, strengthen economic opportunities and restore public trust throughout the United States. Additionally, this funding level will enable the Department to execute programs and services outlined in the Annual Performance Plan.

Fiscal year 2001 represents the Department's first full year of operations after implementation of HUD 2020 Management Reform. With completion of HUD's Reform and the fiscal year 2001 budget request, the Department is more confident about addressing housing and community development concerns that may arise. There are no new Reform initiatives proposed for fiscal year 2001, only the cost of doing business. The requested funding level includes baseline operational costs and adjustments for inflation. Through HUD's Reform, the Real Estate Assessment Center, Enforcement Center, and Office of Multifamily Housing Assistance and Restructuring (OMHAR) were established and opened. Additionally, technical staff were hired and trained as Community Builders. In view of these accomplishments, the Department will now heighten its energies on training Public Trust Officers. The goal of this training effort will be to establish and strengthen existing staff skills.

The increases in this justification are in nearly all object classes. The largest increase is for personal services due, in part, to the Department's average cost per FTE, the rise in inflation, hiring senior experienced staff, and merit staffing. The increase in other objects, such as ADP, training and contractual support, reflects the Department's intent to maintain administrative operations at the level which would fully support HUD 2020 Management Reform initiatives.

ESTIMATED OBLIGATIONS

The table below displays total obligations by object class and is followed by discussions of the estimates.

NOTE: Estimated obligations excludes "other transfers."

EXPLANATION OF CHANGES IN 2001 vs. 2000

1. Personal Services. Personal services costs include all salaries and personnel benefits which are paid by the Department. These include health and life insurance, the Government's contribution to employee retirement plans, accrued leave, and reimbursement for costs incurred during transfers, as well as salary and overtime payments and payments made to the Employees' Compensation Fund (ECF) for the medical support of former employees who have job-related medical problems.

Personal services costs also include payments to or for former personnel, including payments to the Federal Employee Compensation Account (FECA), which is a vehicle for reimbursing the various States for unemployment compensation payments made to former HUD employees. The FECA program is administered by the Department of Labor. In addition, severance pay for employees who have been involuntarily separated is directly provided to eligible former employees.

The fiscal year 2001 estimate is $761,300 thousand and will fund approximately 9,300 FTE. This level of funding reflects an increase of $42,767 thousand. The 9,300 FTE requested for
2001 includes staff support for the Community Builder Program and the Office of Multifamily Housing Assistance Restructuring (OMHAR) operating at full strength.

Personal services funding covers increases to the average cost per FTE, within-grade increases, benefits, terminal leave payments, and relocation costs. Concerted hiring during fiscal year 2000 to the Department's authorized ceiling will result in additional FTE utilization in fiscal year 2001. Therefore, personal services costs will increase in fiscal year 2001.

2. Travel and Transportation of Persons. This category represents the transportation of Government employees and/or other persons who travel under the auspices of the Federal Government, their per diem allowances when in authorized travel status, and other expenses incidental to travel which are paid by the Government directly or by reimbursing the traveler. It consists of travel both away from the official duty station and in and around the official station of an employee.
P

The fiscal year 2001 estimate is $22,623 thousand, an increase of $7,283 thousand to the fiscal year 2000 current estimate. The increase will primarily be used to support travel required within the newly established centers, satellite and hub locations. Other travel supported by the request include program and function activities, such as monitoring and inspecting, and training travel.

3. Transportation of Things. This classification consists of charges for the transportation of things and the care of such things while in the process of being transported. It includes rental trucks and other transportation equipment, and reimbursement to Government personnel for authorized movement of household effects or house trailers.
P

The fiscal year 2001 estimate is $847 thousand, an increase of $47 thousand to the fiscal year 2000 current estimate.

4. Rent, Communications, and Utilities. The funds under this object classification provide for all rental costs�-both space and equipment�-communication services, and utilities. The major cost associated with this object class is real property rental. The General Services Administration establishes rental rates and provides cost estimates for the space requirements identified by the Department.

The fiscal year 2001 estimate is $127,000 thousand, an increase of $7,000 thousand to the fiscal year 2000 current estimate. The Department estimates this category will increase by approximately 5.8 percent. The increase will be partially offset by future savings in space allocation achieved through office consolidations. However, it is important to note that the Department may need to incur "build out" costs to achieve future space savings. There is also approximately $1,500 thousand included for increased communications costs due to higher than anticipated cell phone and 800 number usage rates.

5. Printing. The funds included under this object class represent the cost of contractual printing and reproduction services, and related composition and binding operations performed by or through the Government Printing Office (GPO).

The fiscal year 2001 estimate is $3,700 thousand, which is an increase of $200 thousand from the fiscal year 2000 current estimate.

6. Other Services. This object class encompasses a wide array of services that are not captured in the other object classes. The types of services included are training; storage of household goods; data processing services; contracts such as data and statistical collection and analysis, management studies, technical, and public information services; and other services such as health services, library services, stenographic services, visual art services, etc.

   The fiscal year 2001 estimate of $173,610 thousand is an increase of $31,400 thousand over the fiscal year 2000 current estimate. This object class contains two major areas of expenditure: automated data processing (ADP) at $100,000 thousand and all other services, including contracts at $73,610 thousand. A $20,000 thousand increase in ADP Services is requested to enhance the Department's infrastructure, pay higher maintenance costs as new IT systems are deployed, and expedite the Department's effort to develop and implement a comprehensive information technology investment strategy. The $11,400 thousand increase in contracts will be used to fund activities related to the centers created under the HUD 2020 Management Reform and to pay for OMHAR contracts. Slight increases are requested for nearly every program account to conduct work which was deferred during the current fiscal year due to reductions in the fiscal year 2000 Appropriation.

   The Department will continue to invest in information technology in support of HUD 2020 Management Reforms. Reform initiatives targeted in this area include Financial Systems Integration, the Departmental Grants Management System, and systems for the Real Estate Assessment Center, Enforcement Center and OMHAR. The Department will continue to expand use of electronic communications with clients and business partners, as well as make information technology investments to further support functional consolidation, storefront locations, and back office processing centers.

   The fiscal year 2001 estimate for training will be used to provide Public Trust Officer staff with new and/or strengthened skills to support program and service objectives set forth by the HUD 2020 Management Reform and outlined in the Annual Performance Plan. The requested funding level will continue support of HUD's Upward Mobility Program, supervisory/management development training, professional skills development and career counseling activities. In addition, the Department will continue to provide technologically advanced training through distance learning and video conferencing systems.

7. Supplies and Materials. This object class identifies charges for commodities, whether acquired by formal contract or other form of purchase, that are ordinarily consumed or expended within 1 year after they are put into use, converted in the process of construction or manufacture, or used to form a minor part of equipment or fixed property.

   The fiscal year 2001 estimate of $3,760 thousand is an increase of $210 thousand to the 2000 current estimate.

8. Equipment. This object classification is used to support the purchase of various types of equipment. Equipment purchases may include, but are not limited to, office furniture and fixtures, office equipment, such as typewriters, quick copy machines and calculators; equipment to deliver in-house training and books.

   The fiscal year 2001 estimate of $1,590 thousand is an increase of $90 thousand to the 2000 current estimate. The requested level reflects accomplishments realized in immediately preceding fiscal years to install systems furniture throughout the Department and make workplace environments for the newly established Centers and satellite offices fully operational and compatible to receive and deliver training through cost-effective means of technology.

9. Insurance Claims and Indemnities. This object provides for the Federal Government's self insurance costs including court ordered payments. Historically, it is difficult to project these types of claims. On average the claims for a given fiscal year are between $300 thousand to $1,000 thousand. The fiscal year 2001 estimate is $303 thousand, a slight increase of $3 thousand to the 2000 current estimate.