# Presentation: 347934

## MBWG FY 2006 Funding and FTE Recommendations

- NIH Steering Committee
- September 1, 2005

- Management and Budget Working Group

## Discussion Points

- Background
- MBWG Review Process
- Funding Recommendations
- FTE Recommendations
- Lessons Learned
- Next Steps

- Management and Budget Working Group

## MBWG Membership

- Members
- Dr. Stephen Katz, co-chair
- Ms. Colleen Barros, co-chair
- Dr. Duane Alexander, Director, NICHD
- Dr. T. K. Li, Director, NIAAA
- Dr. Paul Sieving, Director, NEI
- Mr. John Hartinger, Ass’t. Director for Budget and Financial Mgmt., NCI
- Ms. Camille Hoover, EO, NCCAM
- Ex Officio:
- Dr. Raynard Kington, DD, NIH
- Mr. Ken Stith, Director, OFM
- Mr. Richard Turman, Director, OB/ Mr. Andy Baldus, Acting Director
- Staff:
- Mr. David Heller
- Mr. Jack Mahoney
- Mr. Yehuda Schmidt

- Management and Budget Working Group

## Funding Sources by Office/Activity

- Management and Budget Working Group

## MBWG Schedule

- Management and Budget Working Group

## MBWG Budget Review Process

- Followed the premise that the role of the MBWG is to integrate priorities; the Working Groups are to perform detailed budget review.

-  For FY 2006, the MBWG requested the following FTE and dollar information by fund:
-  Commitment Base with reductions for non-recurring costs.
-  Listing of reductions that would be taken to accommodate to a budget at the same level as 2005 (minus non-recurring costs), and at -2% below that level.
-  An optional professional judgment budget.
-  Short narrative justification that describes the impact of reductions or increases.

-  Request for options at lower funding necessitated by overall constraints on RMS/IR funding.

- Management and Budget Working Group

## MBWG Budget Review Process

- Presentation provided by Working Group co-chairs.

-   In departure from past, discussion within MBWG focused on SSF FFS in addition to MF/SSF Assessment requests and FTEs.
-  Reflects increasing realization that budgetary control should be established over SSF FFS organizations.
-  Will make separate presentation on options for continuing or not continuing to finance services through this mechanism.

-  Appeal process following initial review to ensure that the MBWG did not overlook any major issues.

- Management and Budget Working Group

## MBWG Budget Review Process

- Budget Review and overall recommendations significantly affected by several cost drivers:
- Utility Costs
- Costs to maintain new space coming on line
- Requirement to implement “Smart Card” for security purposes
- OD initiatives (HR, Ethics, DEAS)
- While not constraining overall target level, lease costs continue to grow.

-  Budget Review also considered FTE requests in the context of the current underrun and the NIH-wide policy

- Management and Budget Working Group

## MBWG FY 2006 Funding Recommendations 

- (Dollars in thousands)

-  Recommendations for items “above the line” represent a 2.5% increase – somewhat higher than an average of House and Senate allowances.

- Three items considered “below the line” by MBWG.
-  Departmental Taps – No discretion
-  OD SSF – Reduction in SSF FFS Budget Authority masks actual increase in rates to ICs
-  Leases – Are the result of individual IC decisions and should not be offset by reductions to NIH-wide services; continued growth of costs merits concern, however.

- 9

- Two caveats
-  Funding increases recommended for HR and “Smart Card” are contingent upon actual costs.
-  Costs related to ORF MEO may increase when final bids are known; actual costs cannot be estimated at this time.

-  Increase is largely the result of cost drivers.
-  As a result, most other organizations have minimal growth.

- Management and Budget Working Group

## MBWG FY 2006 Funding Recommendations

-  OD
-  Funds recommended  to increase HR (+51 FTEs); DEAS (+94 FTEs) and Ethics (+16 FTEs)
-  Funds recommended to expand OFM audit capability and move costs, begin the risk assessment initiative and provide for unbudgeted costs related to newly centralized organizations.

-  CSR – Funds recommended at the FY 2005 level.

-  CC – Provides for a 1.5% increase above the FY 2005 level when non-recurring costs are considered.
-  Will require significant management savings.
-  May also result in some cost transfers.

-  ORS
-  Funds recommended to support the “Smart Card” as well as small increments for traffic signals, fire prevention, and defibrillators for off-campus sites.
-  Funds also recommended to provide stacked parking at MLP 9 and 10.

-  ORF
-  Funds recommended for utilities based on current projections; also assumes the proposal to achieve $4M in savings through energy conservation measures on nights and weekends.
-  Recommends funding to maintain new space coming on line in FY 2006.
-  Recommends funding for new leases.

-  CIT/Enterprise Systems
-  Recommends CIT Funding for Smart Card.
-  Funding increases recommended for Knowledge Management and NIH Ethics Enterprise System; operational funding level for other Enterprise Systems is somewhat less than the FY 2005 level with incremental reductions in use of the Contingency Fund.

- Management and Budget Working Group

## Working Group Requests Not Included in MBWG Funding Recommendations*

-  OD – Funding for an additional OGC attorney and additional funding to create the Office of Electronic Research and Reports Management within OER.

-  CC – Funding for the capital equipment replacement plan

-  CSR
-  Increase in SRAs to achieve 80 R-01 equivalent staffing from current 93 R-01 equiv staffing
-  Increase in SRAs based on increased review workload projected for FY 06

-  ORS
-  Funding for potential costs when moving to Orange Alert status
-  Establish a Contingency Fund for capital investments such as upgrading the Natcher Conference Center.

-  ORF
-  Contingency funding for potential additional costs of the Facilities MEO.
-  Increase to the hazardous waste disposal contract.

-  CIT/Enterprise Systems – Funding for the development of the Director’s Dashboard (alternative proposed).

*** **First cut made by the individual Working Groups

- Management and Budget Working Group

## MBWG FY 2006 FTE Recommendations

-  Two organizations (OD and ORF) requested additional FTEs for which funding increases are recommended.

-  However, both are underrunning their ceiling by more than the additional FTEs requested.

-  As a result, MBWG recommends no additional FTEs but that both organizations follow NIH policy to hire within available dollars.

- Management and Budget Working Group

## MBWG Management Recommendations

-  Recommend that the FWG oversee the development of a corporate leasing policy and present it to the Steering Committee.

-  Recommend that the ITWG oversee an the development of an integrated NIH-wide reporting strategy by the CIO that includes the NIH DataWarehouse, nVision, and the NIH Executive Dashboard and present it to the Steering Committee.

-  At the current time, Steering Committee policy is that extraordinary funding requests made during the operating budget year are submitted to the Director. Recommend that criteria be developed to better define the circumstances under which such funding requests should be considered.

-  Recommend that the resource decision-making process be refined so that all decisions with budgetary consequences consider long-term as well as short term costs, and that these decisions are made in the context of competing priorities to the greatest degree possible.

- Management and Budget Working Group

## Lessons Learned

-  Need to maintain discipline during operating year to be successful.

-  Outyear fixed costs such as utilities, leases, and space maintenance represent long-term burden within overall constrained funding.

-  Need to assess pros and cons of SSF FFS funding mechanisms to determine if this mechanism should continue to be used.

-  Working Groups generally provided greater level of scrutiny given overall funding constraints.

- Management and Budget Working Group

## Next Steps

-  Presentation to the IC Directors.

-  Working Groups continue in-depth review of selected items.

-  MBWG present recommendations to Steering Committee on SSF FFS mechanism.

-  Steering Committee approval of recommendations.

- Management and Budget Working Group