In response to the Government Performance and Results Act of 1993 and the Vice-President’s National Performance Review (NPR), the Secretary of Agriculture initiated a departmental reorganization to refocus and simplify the Department’s headquarters structure, improve accountability and service to customers, reform the Department’s field structure, and reduce costs. Several components of the Secretary’s reorganization required enabling legislation, which the Congress provided in the Reorganization Act of 1994. In addition to granting USDA broad authority for streamlining and reorganization, the Reorganization Act of 1994 directed USDA to (1) reduce the number of full-time-equivalent staff by at least 7,500 by the end of fiscal year 1999, (2) reduce the number of staff so that the percentage of the reduction in headquarters is at least twice that in the field offices, (3) consolidate headquarters offices, and (4) combine field offices and have them share resources. By the end of fiscal year 1997, USDA had achieved most of the act’s goals. It had reduced its overall staff-years by nearly 20,000, from about 129,500 in 1993 to about 110,000 by the end of 1997; 22 percent of the reductions occurred in headquarters, and about 13 percent occurred in field offices. In addition, the number of USDA agencies fell from 43 to 29, most of which are under seven mission areas. (App. I shows USDA’s staff by mission area and agencies and headquarters staff offices.) Of the seven mission areas, five include more than one agency. In four of these five mission areas,USDA has designated one agency as the lead administrative agency for the mission area. (USDA’s current administrative structure is shown in app. II.) Finally, USDA reduced the number of its county office locations by about 30 percent, from about 3,760 in 1994 to about 2,700 in 1997. The Farm Service Agency (FSA), Natural Resources Conservation Service (NRCS), and Rural Development (RD)—through the Rural Housing Service—operate three separate administrative structures to provide administrative support for seven field-based agencies in 50 states, two territories, and several Foreign Agricultural Service (FAS) overseas offices. These seven agencies employed about 37,900 staff, or about 35 percent of USDA’s total staff, in 1997 and are located in headquarters, about 150 state offices, 5,800 county-based service centers, over 500 other support offices, and several consolidated operations centers, such as FSA’s Management Office in Kansas City, Missouri; RD’s Centralized Servicing Center in St. Louis, Missouri; and NRCS’ National Science and Technology Consortium in Fort Worth, Texas. From fiscal year 1993 through fiscal year 1998, USDA reduced its departmentwide administrative staff by 15 percent, from about 10,300 to an estimated 8,800, in four areas identified by the NPR—human resources, budgeting, accounting and auditing, and acquisition. Administrative staff provide internal services for USDA’s program delivery staff, such as payroll processing, financial management and reporting, and the purchasing of supplies and equipment. USDA plans to have about 8,550 administrative staff supporting a departmentwide program staff of approximately 98,500 by the end of fiscal year 1999. Figure 1 shows the changes in the number of administrative staff for each of the four administrative functions for fiscal years 1993 and 1998. (Administrative staffing is shown in app. III.) As of November 1998, USDA had not consolidated administrative functions for its field-based agencies at the state office level. However, in October 1998, a USDA team submitted a plan (known as the Administrative Convergence Plan) to the Secretary of Agriculture that will, upon approval, implement this consolidation by 2002. USDA officials explained that the plan, when fully implemented, is expected to reduce costs and improve customer service and operating efficiencies. In addition, they said the plan will require up to 4 years to implement because the Department will need to complete a number of time-consuming and complex actions—relocating offices, developing common policies and procedures, and instituting common computing systems. Even though these actions are expected to provide savings and efficiencies in the long term, the Department has not identified the costs it will incur in the short term to achieve these savings. Furthermore, USDA officials commented that these tasks are not likely to be accomplished in a timely and effective manner unless a strong leader is appointed to oversee them. USDA expects to begin consolidating administrative functions at the state level for its field-based agencies approximately 6 to 9 months following the Secretary’s approval of the proposed October 1998 convergence plan. Under the plan, a new office headquartered in Washington, D.C.—the Support Services Bureau—will provide the administrative support now provided separately by FSA, NRCS, and RD for seven field-based agencies. (See fig. 2.) (as of Nov. 1998) In addition to its office in Washington, D.C., the bureau will have a single administrative support unit in each state and in each of its four consolidated operations centers to carry out combined administrative functions. The new state offices will receive policy guidance from the headquarters Support Services Bureau and will report to a board of directors composed of the state leaders of FSA, NRCS, and RD. While the NPR specifies only four administrative functions (personnel, budgeting, accountants and auditors, and acquisition), USDA’s Administrative Convergence Plan includes additional functions and categorizes them differently. The plan’s functions include financial management (excluding budgeting), human resources, civil rights, information technology, and management services (such as procurement and printing). By consolidating these functions into a single administrative support unit in each state or consolidated operations center, USDA expects to reduce the administrative staff for the seven field-based agencies by 45 percent from fiscal year 1993 through fiscal year 2002. However, by 1997, two-thirds of these reductions had already occurred. (See table 1.) (30.9%) (377) (33.3%) (38.6%) (380) (44.6%) (38.8%) (614) (60.3%) (22.7%) (796) (40.7%) (35.4%) (474) (80.3%) (30.6%) (2,551) (45.4%) According to USDA officials, they did not implement streamlining at the state office level earlier for two reasons. First, they were focused on implementing the Secretary’s initiative to create consolidated county-based service centers. And second, they were unable to reach agreement among the affected agencies on how to achieve consolidation. USDA officials stated they must deal with several challenges to fully achieve the cost savings, benefits, and efficiencies expected to be realized as a result of implementing the administrative consolidation plan. These challenges include relocating offices, developing common policies and procedures, and adopting a common computing environment. In addition, USDA officials said that strong leadership will be needed to implement the plan and additional investments for collocating offices and modernizing business processes and information technology will be required. Currently, in 28 states, the state offices for each of the different field-based agencies are not located in the same facility (collocated), and in 19 of these states, the offices are not even located in the same city. USDA is planning to begin consolidating administrative functions before many of these state offices have collocated. In those instances, the agencies will continue to maintain staff in up to three separate offices. Consequently, in these states, the benefits of sharing resources—reducing staff and equipment and expanding staff expertise—will not be fully realized until the agencies’ state offices are collocated. For example, in Kansas, the FSA, NRCS, and RD state offices are located from 50 to 100 miles apart in three separate cities. As a result, even though these agencies’ administrative staff will be one organization on paper, they will continue to function in up to three separate locations until the offices are collocated, requiring USDA to retain more administrative staff and continue to pay for separate equipment and facilities. In addition, at least some of the 24 collocated state offices will need to be reorganized before they can operate efficiently under the Administrative Convergence Plan. For example, several collocated state offices have separate office suites for each agency’s staff. Agency officials acknowledged that to combine administrative staff into functional work units under administrative convergence, it will be necessary to move staff within existing office space, reconfigure existing office space, or move agency operations to new facilities. In other cases, collocated offices are already designed to operate effectively under the planned administrative convergence. For example, the new state office for FSA, NRCS, and RD in Boise, Idaho—opened in February 1998—is expected to facilitate administrative convergence once the plan is implemented. When the three agencies planned the new office, they required that all employees in a functional area—such as human resources or information technology—share a common work space. In addition, the agencies share common mail rooms, printing equipment, and other office facilities. According to state officials, their location in a shared facility has already increased the efficiency of their operations by allowing them to have fewer staff, less space, and less equipment. USDA estimates that it will cost as much as $29 million to collocate offices in 24 of the 28 states where they are not currently collocated, including moving personnel and acquiring new space, and an undetermined amount to reconfigure existing space for collocated offices. Figure 3 shows the states with collocated offices, and those with noncollocated offices. (App. IV provides more detailed information on the noncollocated locations). While FSA, NRCS, and RD are subject to the same administrative regulations, each has developed a different approach to implementing them. As a result, there are slight to significant differences in the policies, procedures, and business processes that each agency follows.