Another telling statistic lies in the cases closed category. There were over 248,000 cases closed in FY 1981. By factoring out the no lost-time cases, cases with leave elected, and continuation of pay cases, among others, we are left with a total of 48,913 cases that were either disapproved or had compensation paid. Of these, 27,533, or 56.3%, were disapproved. These approval/disapproval rates serve a reasonable surrogate for the claims approval/dissaproval rates. as Question: What steps will the Department take in the future to reduce the incidence of unwarranted claims? Answer: The Office continues to believe that the best method of reducing "unwarranted" claims is to legislate changes in the law which would reduce incentives to workers to magnify minor injuries, and to resist return to gainful employment. Meanwhile, the Office is continually working to improve training and resource materials for examiners particularly in the area of occupational disease, to obtain greater involvement of employing agencies in monitoring claims, and to closely monitor claimants who are already in receipt of benefits to ensure early return to work or reduction of benefits on a showing of employability. If the low back project continues to show success, it will be expanded to take in other offices, and possible to cover other common work-connected medical conditions. THIRD PARTY DEBT COLLECTION EFFORTS In 1979, the General Accounting Office found that the Department was not making a strong effort to recover the cost of employee compensation claims from third parties who might be responsible for the injury. Question: What has he Department done to strengthen its third-party collection effort? Answer: In September 1978, the Office altered its procedures for processing third-party cases, directing district offices to refer appropriate cases (including all cases in which an attorney was engaged, and all cases in which disbursements exceeded $1,000) to the appropriate Regional or National Solicitor of Labor. In March 1979, district offices were directed to designate one or two third-party claims examiners, who would have the responsibility to review all claims in which there was potential subrogation, ensure that all cases with significant disbursements or in which an attorney was involved were referred with full information to the Solicitor of Labor, to keep careful records of all action, and to keep the Solicitor informed of disbursements at regular intervals. In November and December 1980, designated claims examiners received thorough training in their responsibilities and in identifying potential cases. In January 1981, the Office entered into an arrangement with the U. S. Postal Service, whereby they identify and follow minor cases, reporting collection and submitting recoveries to OWCP. In April 1982, the offices were instructed to begin reporting recoveries in more detail, and to report on the outcome of Postal Service action. Question: How many cases have you processed against third parties in the last three fiscal years and how much was collected? Answer: Figures for Fiscal Year 1979 are not available. In Fiscal Year 1980, the Offices identified 16,154 cases, and recovered $7,416,591. In Fiscal Year 1981, the Offices identified 15,652 cases, and recovered $9,711,408. The District Offices have apparently not been entirely consistent in reporting recoveries from third party litigation. While some Offices apparently have reported the claimant's gross recovery, others have reported only the refund made to the United States, which would be a portion of OWCP disbursements. New reporting requirements instituted in April 1982 should eliminate ambiguity and result in better data. STAFFING LEVELS Question: How can we be sure there is no more fat to be squeezed out of the budget? Answer: The Employment Standards Administration request for fiscal year 1983 is the minimum required to maintain our programs at the current level of operations. Of the $8.814 million increase for FY 1983 funding levels, $5.729 million is for non-discretionary expenses. The remaining $3.085 million is for ADP improvements and wage surveys necessary under the Service Contract Act. Reductions in the FY 83 request would have a direct impact on program staffing levels, productivity, effectiveness and responsiveness. Question: Why shouldn't we keep reducing the size of your agency by 16% a year until we find it cannot handle its workload? Answer: Any budget cuts in FY 1983 would have to be absorbed out of personnel costs since non-labor expenditures were sharply reduced in FY 1982 or by cutting the investments being made by ESA in ADP improvements for all ESA programs. Such a cut would be a major set back in developing the kind of modern data processing for the Workers' Compensation system. On the other hand, a 16% budget cut for Wage-Hour would result in a reduction of 325 positions, the total number of investigations would drop from 70,000 to 48,000. The complaint inventory would rise from 21,500 to almost 36,000 and the average waiting period for responding to complaints would rise from 3 4 months to almost one yer. Almost $40 million in illegal wage under payments, affecting 200,000 workers, would go undetected. The Office of Federal Contract Compliance Programs projects that it will be able to maintain program outputs in FY 82 through regulatory and internal management changes which, combined with training and growing expertise of the staff, will increase efficiency and productivity. Included among these steps are a streamlined complaint intake process, tighter controls on the time spent in completing compliance reviews and complaint investigations, efforts to establish closer liaison with the contractor community to reduce needless confrontation and provide technical assistance to compliance, and simplified procedures. Were there to be further resource reductions, there would be a direct impact on program outputs. The effect of the budget reductions is being felt primarily by the Federal Employees' Compensation (FEC) program and the Longshore and Harbor Workers' Compensation Program. The Black Lung program had only a small reduction in FY 82 The percent reduction in the budget did not result in an identical percentage reduction in staffing. By reducing funding for travel, training, ADP, and other support functions, we were able to maximize the staff-years available to process the workload, while minimizing short-term adverse effects. More specific information regarding each program follows: Performance in FEC has been relatively stable the past several months, with little, if any, deterioration in performance noted. Processing timeframes have been fairly consistent over the past four or five quarters, and the pending case inventory has shown only a slight increase. Similar results have been noted in other output items. That is not to say, however, that the current situation has not created some strains. The reduction in trainingcan affect both staff expertise and morale, and the consequences are likely to show up in later months. Some offices are short of clerical support and claims processors. One factor to consider in judging FEC's performance thus far is that the program currently has an approved, full-time permanent staffing level that represents a slight increase over FY 1981 Levels and is the highest FTP level ever for the program. Entering FY 1981, FECA had authorized 853 FTP positions plus ceiling for another 200 term appointments (through 9/30/81). This subsequently evolved into 903 FTP full-time equivalents for FY 1982, an increase of nearly six percent for FTP staffing. However, it represents a 14 percent reduction in overall approved staffing levels (853 FTP plus ceiling for 200 terms = 1,053 total). It has been our position that FTP staff are more stable and productive than temporary or term staffing. We believe that, at the very least, 1 FTP position is equivalent to 1.5 temporary/term position. Thus, the increase in FTP staffing does help, to some extent, offset the loss of the 200 term ceiling. Another factor that has been beneficial in the program's ability to accommodate the reduction has been the moderating workload growth rates. No doubt if the program's workload were increasing at the rate it did in the mid-1970's, the program's situation would be more more adversely affected. The situation in Longshore is somewhat different. There, deterioration in performance is evident. In the four quarters of FY 1981, Longshore processed 72%, 75%, 71% and 74% respectively of the controverted cases within 60 days. During the first quarter of FY 1981, only 58% of the controverted cases were processed within 60 days. Similarly, 57% of the informal conferences were completed within 45 days, compared to a range of 63 69% within 45 days in FY 1981. Other outputs show similar effects, and district office management has made it clear that the strain is becoming very great. 16-039 0-83-12 We do not believe it is a constructive approach to permit FECA or Longshore to continue undergoing 16 percent reductions until they reach the point at which they can no longer handle the workload as a means to find the optimum staffing level for each program. We look at our workload and production experience to determine the level of needed staff. The relationship between incoming workload, production, timeliness, and staffing is analyzed to see what can be accomplished with varying staffing levels. Based on this experience, we conclude that Longshore has already reached and has more likely gone beyond the point at which it can adequately handle its workload with current staff. The situation with FEC is somewhat better. Any further reductions will have undesirable consequences in terms of production and timeliness and we will experience a return to the problems and conditions that characterized the program three or four years ago. These problems begin gradually but eventually grow progressively worse as minor problems create major problems resulting in a "snowballing effect" of deteriorating service. Once systemic problems develop, it takes months or years to resolve them, as FEC found out in the mid-1970s. This would be a primary argument against reducing the programs' budget any further. Furthermore, because of the severity of the 16% budget cut, ESA has submitted two FY 1982 supplemental budget requests that would result instead in an approximate 12% budget cut for FY 1982. DEPARTMENTAL MANAGEMENT STATEMENT OF ALFRED M. ZUCK, ASSISTANT SECRETARY ADMINISTRATION AND MANAGEMENT ACCOMPANIED BY: LENORA COLE-ALEXANDER, DIRECTOR, WOMEN'S BUREAU SUBCOMMITTEE PROCEDURE Senator ABDNOR. We will just hesitate for a few minutes. I guess I am moving along too fast. We will wait for just a few seconds. [A brief recess was taken.] Senator ABDNOR. We will now hear from the Departmental Management Assistant Secretary for Administration and Management who will discuss departmental management requests. Mr. Zuck, is that the way you pronounce your name, or Zuck? Mr. Zuck. Let me tell you, Mr. Chairman, it is pronounced Zuck in eastern Pennsylvania where I came from. Senator ABDNOR. Fine. Thank you. We welcome you to the committee, Mr. Zuck. And since you just got here, I will state, as I have to earlier witnesses, your entire statement will be made part of the record. And if you care just to summarize your statement, we will go from there. Maybe you would like to introduce your colleagues who are with you. INTRODUCTION OF ASSOCIATES Mr. Zuck. Yes, Mr. Chairman. On my left is Dr. Leonora Cole-Alexander who is the Director of the Women's Bureau of the Department, and on my right is Mr. Thomas McBride who is the Inspector General of the Department of Labor. This account covers a wide variety of activities, and depending upon the nature of the questions, I have some other supporting witnesses should they need to be called upon. SUMMARY OF BUDGET REQUEST I will submit the statement for the record and just make a short summary comment. The departmental management request for fiscal year 1983 is for $158.5 million. It represents an increase of $11.1 million over the 1982 comparable level. We are asking for program increases only in the Office of the Inspector General, where we are requesting an additional 52 positions and $2 million in additional program funds. |