IMPLEMENTATION OF OMB CIRCULAR A-44 (REVISED), DATED 16 FEBRUARY 1970

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83B00823R000400050017-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 20
• Document Creation Date: December 12, 2016
• Document Release Date: May 30, 2002
• Sequence Number: 17
• Publication Date: November 2, 1970
• Content Type: MF

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2 Nov 1970
MEMORANDUM FOR;, Deputy Director for Intelligence
Deputy Director for Plans
Deputy Director for Science and Technology
Deputy Director for Support
dated 1 P 7 0
1. OMIT Circular A-44 (Attachment A) proscribed an aggrerruivo
and comprehensive program to improve the management and efficiency
of Government operations. :Clio President has given the program his
personal endorsement and expects the support of key officials of all
agencies in complying with the spirit and principles of the OMB
directive.
2. Each Deputy Director should take immediate steps to
establish an effective management improvement program in
accordance with Agency instructions set forth in Attachment B.
I am certain there are areas where serious examination would
reveal possibilities for increasing the efficiency and reducing costs.
For example, we should give attention to all so-called "overhead"
activities -- substantive as well as administrative -- to assure
that staff review and coordination procedures and processes, as
well as services provided, make a necessary contribution to our
substantive missions and are performed as efficiently, and
economically as possible.
3. The Director of Planning, Programming, and Budgeting
is responsible for coordinating the Agency-wide management
improvement program and assembling the reporting data required
by OMB. Each. Deputy Director is asked to designate, by 10 November, //
a senior officer. as a contact point for him on these matters.
25X1
1j. A. ie
Executive Director-Comptroller
Attachments:
A -.,OMB Circular A-44
B -''Agency Management Improvement
Program Implementation Instructions
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ROUTING AND RECORD SHEET
SUBJECT: (Optional)
EXTENSION
NO
T`"'"'
.
DD/S 70-4385
Chief, DD/S Plans Staff
DATE STAT
7D 10, Headquarters
TO: (Officer designation, room number, and
building)
DATE
OFFICER'S
COMMENTS (Number each comment to show from whom
RECEIVED
FORWARDED
INITIALS
to whom. Draw a line across column after each comment.)
1. Director of Security
STAT
I has been
4E 60, Headquarters
designated as the O/PPB representa-
2.
tive for the Agency in setting up a
Management Improvement Program
and the undersi
ned has been
g
3.
designated to represent the Support
Directorate.
4.
Please note that the initial
report, as called for in Section IX
5.
of the Agency's Implementation
Instructions, is due in O/PPB on
31 D
b
1970
I
h
6.
ecem
er
.
t s
ould be
submitted to the Chief, DD/S Plans
Staff no later than 21 December 1970
7.
or earlier if completed before that
dam Submittals to the undersigned
should be in duplicate.
8.
I will forward to you addi-
9
tional Implementation Instructions
as developed.
ST
10.
Chi
f
DD/S Pl
S
ff
,
e
ans
ta
11.
Att: Correspondence re Implementa-
12.
tion of OMB Circular A-44 dtd 16 Feb
1970 (2 Nov 70)
13.
14.
l~-J) v
15.
T
S
FORM USEDPRION PREVIOUS I a q s ri 3 i s' t l
1 6? :
SECRET CQ 4I aI6TIRi. USE 0t;LY
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is
EXECUTIVE OFFICE OF THE PRESIDENT
BUREAU OF THE BUDGET
WASHINGYON, O.C. 20503
CIRCULAR NO. A?44
Revised
.TO THE HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS
SUBJECT: Establishment of a management improvement program.-.
applicable to all Government operations
1. Purpose and coverage.
a. This Circular establishes a formal Government-wide management
improvement program and is effective immediately. It supersedes and
rescinds Circular No. A-44, Revised, dated August 3, 1966.
b. Improving the efficiency and economy of Government operations
is a major concern of the President. Therefore, each individual in
Government should be motivated to be constantly alert to the develop-
ment and application of better ways to perform day-to-day tasks. flow-.
ever, for many programs, functions, and activities, management effec-
tiveness and efficiency cannot be measured or evaluated in terms of
dollars saved. Many of these operations, such as services to the
public, represent some of the most.ir;;;;:)rtant governmental activities
and potential areas for management improvement. Therefore, it is
vital that the ability exist to establish objectives, measure perform
ance, and evaluate results in all areas of governmental activity.
A combination of emphases on individual management actions and
total management efforts applied to selected priority areas, permits
both the measurement of cost reduction and the effectiveness of in-
tensive management attention. The management improvement program
.thus recognizes that management improvement actions can generate dollar
savings, system benefits, or both.
c. The management.-.improvement program will consist of five inter-
(1). effectiveness;,,
(2) Cost reduction;
(3) Idea interchange;
(4) Presidential recognition of exceptional improvement
Periodic:-study`'of Government-wide operations.
(No. A-44)
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1 ~
This Circular sets forth policies, procedures, guidelines, and respon-
11 execu-
that area.
represent the combined a ec
performance being achieved.
d. Performance results reported for each area selected will
ff t of all management actions taken for
.c. Each specific problem or a
inated from the program by the agency, based on the acceptability of
ctivity will be added to or elim-
further action as appropriate.
b. Areas for inclusion will be s77ected in a manner which assures
that priority attention is concentrated where the greatest needs exist.
sibilitics for carrying out these elements. It applz.es to a
tive departments and agencies and is effective immediately.
2. Reportinc. An annual management improvement report covering the
program elements will be prepared in accordance with the requirements
and definitions contained in Attachment,A and submitted in duplicate
to the President, through the Director of the Bureau of the Budget,
by September 30 of each year. The first report will be due on
September 30, 1970.
3. Management effectiveness. It has long been recognized that manage-
ment progress in many functions and activities cannot always be measured
on the basis of dollars saved. Many of these functions contain a sig-
nificant potential for management improvement but require a system for
identifying quantitative measures of performance, establishing perform-
ance goals, measuring performance, analyzing,the results, and initiat-
ing corrective actions. Therefore each department and agency head will
establish a formal, organized management effectiveness program to serve
this purpose. The objective of this program is to concentrate manage-
m:nt attention on persistent problem areas of high level priority.
These areas will be identified by a systematic review of agency activi-
ties and operations. The program is" designed to increase the emphasis
on and give recognition to the total management efforts of an agency
on improving effectiveness in identified problem areas or activities.
Agency management will identify and spotlight operating problem areas
or activities of high priority with a view toward developing and
implementing- corrective courses. of action. This requires, in-depth
assessment of existing functions, activities, and procedures. I
establishing a management effectiveness program, the following policies,
will be observed:
a. The formal management effectiveness program will require estab-
lishing a management system for identifying quantitative goals in the'
"selected problem areas, evaluating performance, and identifying
(No. A-44)
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0. Performance indicators will be expressed in quantitative
terms of units, tons,_nercentanes g-rosq doll
u y. However, it is recognized that indicators chosen
are measures of performance, and agency evaluation of the problem
area usually will involve additional factors
standards of measure most appropriate for theindividu -other
a
al area(s)
selected for st d
ductivity. ease pro-
some of which cannot
be reduced to quantitative terms.
f. In most cases, existing data be sufficient for evalua-
tion. However, when major deficiencies or voids in the data are
identified, a new data base will be established to obtain the inforraa
tion necessary to measure and evaluate performance.
g.. If dollar savings are achieved, the results will 'also be
reported under the cost reduction element.
4. Cost reduction.
a. Policy. The following policies will be observed in contin
uing agency cost reduction activities: 0.
(1) The head of each department and agency will assume
personal responsibility for improving the efficiency and economy of
his agency programs and activities.
(2) Management at a?11 levels will undertake vigorous and
continued efforts to improve operating procedures and techniques,
eliminate nonessential activities and positions and incr
(3) Encourage innovation and ingenuity in the development of
new and improved tech" .f
i
o ac.~i
objectives; and eving program
p on y an
d
.marginally effective activities;
(2) Develop new and less costly methods
b. Cost reduction plans. Each.department and agency head will
prepare specific plans which will systematically:
(1) Identify and eliminate or curtail low ri t
n
actvit~.es and by improving manpower control and utilization.
(3) Agencies will make every effort to accomplish unpro-
grammed workload requirements without additional staff resources
through adjustments in previously programmed requirements and exist-
i
ques. or increasing productivity..:,
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or organizational elements.
goal for the current year will represent the savings expected to be
realized from new and improved management actions compared with the
actual cost in the immediately preceding year, or the most recently
incurred costs, whichever is appropriate. In addition to this required
overall goal, each agency should establish 'subgoals for major activities
C. Monetary goals. A6 the beginning of the currant fiscal year,
'department and agency heads will establish a cost reduction goal. The
deliberate managerial actions taken for the purpose of raising effec-
tiveness or efficiency as opposed to management actions taken to carry
out some public policy. Only reductions in costs or increases in revenues
and fund availability which can be attributed to new or improved manage-
ment actions will be reported as monetary savings under this program.
(2) Monetary savings for the purpose of cost reduction reporting
do not include such things as:
d. Monetary savings.
(1) Cost reductions reported annually must be the result of
Reductions in outlays due solely to a decline in demand
for agency output. .
Reductions in outlays due to deferment of programs or
0 activities.
Reductions in outlays or a department or agency as a
result of transferring,responsibility'for a function
.,to another agency, except to the extent of a net '.
;:.savings to the Government.
Prevention of increases in operating costs resulting,
from use of voluntary uncompensated overtime, rather,
than increased staffing or paid overtime.
Reduction in outlays based on the acquisition of
excess property when funds for the purchases of.
similar new property were not or normally would.not
'`have been available.
Reduction in outlays resulting from decisions made
by authorities external to the reporting agency.
e. Measurement of monetary savings. The monetary savings
?' which result or are expected to -result from each new or improved,
management action will be calculated, separately identified, and
reported for each of three fiscal years--the year in which the action:
.,is taken and, where applicable, the next two succeeding fiscal years.
The'savings reported for,the first year will represent the funds made.
available as aresult:.of new or improved management actons and
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(2) Reprogrammed to another appropriation or budget activity
to finance other approved requirements. When this code is used, the
anticipated use of the funds in.the gaining appropriation or budget
activity will be reported.
additional revenue resulting from such actions. The savings reported
for each of the next two fiscal years will represent an estimate of the
amount of additional funds which would be required in each of the years
if the new or improved management actions had not taken place. Planned
,
expenditures which result from congressionally approved appropriations
for the department or agency in the past year, or the most recently
incurred costs, whichever is appropriate, will be used as a base in
determining monetary savings. The actual savings in the past year and
the estimatQd savings in the next two fiscal years will be dropped from
the reporting system after each annual report.
f. Identification, control, and use of savings. Each executive
department and agency head will establish controls to assure that funds
made available by cost reduction actions are used only for approved
programs. The following categories, designated by (1), (2) or (3),
will be used to identify the effect and use of past year savings:
Cl) Used to finance other approved requirements of the report-
ing unit.
budget.
(3) Placed in reserve, or applied to reducing the President's
No. A-44)
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Savings realized during the past year constitute additional re-
sources for the agency to use. These savings may be reprogrammed to
accomplish currently approved programs and activities which were not
funded in the agency's past year budget. The current-year and budget-
year effect of cost reduction actions must be identified so that appro-
priate consideration can be made in the budget formulation and review
.process for requirements that no longer exist in those years.
g. Validations of savings. Each department and agency head will
establish an internal system for the validation of reported savings.
The term "validation" means an independent evaluation of the
reasonableness and validity of amounts reported as savings. Respon-
sibility for validation should be assigned to an organization inde-
pendent of the claiming unit.
be weighed .against the potential benefits to'be:gained;
and reports are submitted to the Bureau of the Budget and the-President.
In establishing the scope of examination, the cost of validation will
For the purposes of this Circular, validation will consist of a
review of an adequate number of individual savings actions before data
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Cl) Reported actions actually took place;
,(2) The savings reported represent reasonable computations
.costs or improving operating effectiveness within their agency or on
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to report his action in the management improvement program.
LU ue successrul, personnel at all levels of an organization must be
motivated to seek ways to improve management and efficiency in Govern-
ment. For internal motivation, each agency should employ a variety
of techniques to stimula~e improvement actions. These techniques
include: award ceremonies, certificates o, merit, letters of apprecia-
tion, recognition through publicity media, symposiums and workshops,
money rewards (via Incentive Awards Program), etc. The objectives
of these techniques are: (a) to cause a person to think innovatively;
(b) to cause him to act on his innovative ideas; and (c) to cause him
;-Such procedures should be designed to provide reasonable assurance ?
'i'ile specific validation procedures used in each department and
agency should be designed to meet individual situations encountered
that:,
and estimates of the savings which occur in the year
reported and are the result of specific new or improved
management actions; and
(3)
Reported savings are net of identifiable offsetting
cost increases.
5. Idea interchange. An essential element of the. management improve-
ment program is the Government-wide dissemination of management
improvement information applicable to other organizations. Each
agency should have an internal system for distributing information
on management improvement actions to all of its organizational ele-
ments.
For external distribution of information, each'agency will identify
in its annual management-improvement report actions considered
applicable to other departments and agencies. Include a description
of the action, methodology used, and any new approaches or techniques
applied.
Program incentives. In order for the management improvement nroaram
Items chosen should be carefully screened for relevance to other
Government agencies. The descriptions should be concise and include
a point of contact for further information. The Bureau of the Budget
will consolidate the descriptions and distribute them to all agencies.
In order to provide high level recognition of outstanding perform-
ances, each agency head will have the opportunity to make nominations,'
organizational units. which have done an.exceptional job of reducing
 0
a Government-wide basis. The nominations should include a detailed
description of the efforts involved and the results achieved, and
will be included in the management improvement report. They will
be reviewed by the President's Advisory Council on Management Improve-
ment which will recommend to the President the individuals a;;:: organ-
izations to receive Presidential recognition.
7. Periodic study of Government-wide operations. Periodically,
the Bureau of the Budget will choose a common operational area for
Government-wide study. For each study area, an interagency steering:
group will be established to coordinate the effort and write a final,
report on the results and conclusions of the study.
Agency management will focus on the selected ar-as and submit a
report on accomplishments which will include resulting dollar
savings, management improvement actions taken, and plans for future
improvements and controls in the area. Possible areas for study
may iclude common administrative functions, records management,
travel and transportation, communications, printing and reproduction,
etc.
The Bureau of the Budget will notify agencies of the start of this
program element and will transmit detailed instructions.',,.:
ROBERT P. MAYO,'
Director
Attachment,,
Approved. For Release 20
No... A-44)
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ATTACHMENT A
Circular No. A-44
Revised
GUIDELINES FOR PREPARING THE. MANAGEMENT IMPROVEMENT REPORT
1.. Management effectiveness.
a. Definitions.
(1) Area. An area represents a priority problem or activity
which has been selected for coverage under the program.
(2) Current year goal. An approved quantitative objective
representing the desired performance to be achieved during the'
current fiscal year for a specific area.
(3) Performance evaluation. An appraisal of performance
measurement data to ascertain exceptional accomplishments, identify
shortfalls and their causative factors, isolate current and impend-
ing problems, and develop meaningful recommendations for further
improvement.
(4) Performance indicator. A significant quantitative'
measurement of performance in the problem area which provides the
best perspective of the total management effort being applied to
the problem or activity.
(5) Performance measurement. The recording-and comparing
of current accomplishments against-past experience and approved
goals.
b. Reporting. Each agency will prepare a plan'identifying the
problem areas to be studied during'the current year. In preparing
the plan only the most urgent problem areas and activities need be
selected for inclusion. For each area thus selected,.appropriate
performance indicators will be chosen which provide the basis for
evaluating the overall status of the area being reviewed and for
taking necessary corrective action.
(1) Performance goals. Goals will be established for each
area selected for the current year. In addition, an optimum goal
will be established for areas.which require long-term management
attention..
(2) Progress. A report on annual progress.will include:.
The identification and, scope of areas selected;
Goals established;
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.Performance achieved;
? A succinct performance evaluation covering 'achieve-
ments :rid problems; and
- Identification of corrective actions taken or planned.
(The initial report, due September 30, 1970, will include
the name and scope of areas selected for study and related goals for
fiscal year 1971 and a summary of any significant management improve-
ment projects completed during fiscal year 1970.)
c. Instructions for preparing report. A form covering the
above information will be prepared for each problem area designated
by the agency for evaluation. The following instructions are pro-
vided for completing the form (see Exhibit 1):
Cl) Submitted by. Enter the name of the agency preparing
the report.
studied.
(2) Area. Enter the name of the appropriate area being
(3) Fiscal year. Enter the current year.
(4) Period from/to. Enter the beginning and ending date of
the fiscal period covered by the report.
(5) Performance measurement. This segment of the format
will be used for: identifying the performance indicators selected
for meauring management progress for the area; base period refer-
ence identification; recording of the base year and current year
performance; and the approved goals applicable thereto. Each line
.used will be completed as follows for'the columns identified below:
(a) Performance indicator. Enter performance indicator(s)
chosen for the area.
(b) Base period rcfercnce idens-i. is ;.t~ on. Enter in the
first column the base period reference identification applicable to
the performance indicator being reported. The base period reference
identification is included on the reporting format: i.e., A - Preceding
fiscal year (cumulative annual results) and B - June 30 of preceding
fiscal year (performance level or status as of June 30)..
(c) Base year. Enter base period performance data in
accordance with the base neriod reference identification selected.
(d) Past year. Enter past year performance data reflect-
ing management,prograss for pus fiscal':sporting period.
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(e). Goals. Under past year, enter the performance goal
established last year and under current year enter the performance
goal planned for this year.
(6) Performance evaluation. Provide a concise summary evalua-
tion of results by comparing actual performance against p..;c experi-
ence and approved goals for each performance indicator. When appro-
priate, cite specific actions which have contributed to improved
performance in order that other agencies might benefit from the
experience .gained. Provide an analysis of shortfalls and indicate
'corrective actions initiated or required, including a target date
for completion or return to the desired performance level.
2. Cost reduction.
a. Definitions.
(1) New management actions -- those internally conceived
procedures, policies, innovations, or decisions which, when applied
for the first time, reduce the cost of a specific function or
increase revenue or fund availability. A new action is one that
has never been applied before by the reporting activity. It may
have been applied elsewhere in the overall parent organization but
must not previously have been applied by the activity or organiza-.
tion reporting the cost reduction.
(2) Improved management actions -- those changes both in
substance and emphasis, with respect to existing procedures, policies,
and techniques, which reduce the cost of a specific function or
increase revenue or fund availability. Actions which have been
previously applied but which have,been revised, changed, emphasized
or otherwise improved are included in this classification.
(3) Past year -- the fiscal year being reported upon.
(4) Current year -- the fiscal year in progress at the time
the annual report is submitted.
in areas other than where savings are ::.:)orted.
(5) Budget year -- the fiscal year following the current year.
(6) offsetting costs -- all costs incurred as a result of
implementing a particular management action, including costs incurred
(7) Cost reduction goal_-- a total monetary objective for
the effect'df cost. reduction actions to be.'taken during.the.current...
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'tain the goal:for.,the current year and any subgoals established by the
(1) Annual goal.' ..This section of the ar .ual report will con-
b. Reporting.
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(2) . progress reporting. This section will cover the
results of actions taken during the Past fiscal year., It will show
cost.reduction actions taken during the past year oward reaching
the overall cost reduction goal and resulting monetary savings. It
will also contain a narrative statement and a summary recap of progress.
.against the overall goal and any subgoals established by the agency.
(3) Narrative statement. This section will contain items such
as the following:.
General sutr;,iary comments and analysis of accomplish-
ments in relation to the overall goal and to any subgoals established.
- Specific actions taken during the year which assisted.
in the achievement of the goal.
- Progress on employee increased productivity and effi-
ciency programs.
- Reductions in manpower requirements which resulted from
cost reduction actions being reported.
The identification of any problems in accomplishing the
goals which require the assistance of the Bureau of the Budget, the-
President, other departments -andagencies, and new or revised legis-
lation.
(4) Summary recap of savings. This section of the report will
contain the following data as minimum:
,..A brief description of each area (program, project,
activity,etc.) for which a goal was established.
- The monetary savings goal which was.assigned.,-
- The estimated budgetary effect in the current and budget
year. as a result of cost reduction actions taken in the, past fiscal
year and.summarized by major organizational units.'
fiscal'year.
The nrionetary savings actually achieved during the past
Proposed disposition of anticipated savings using the
categories in paragraph 4.f. .
? - 'A summary of.past-year reductions in authorized positions?
resulting from cost rcduction.actions covereu oy.too:.repgrt..:::,.
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complete evaluation).:.;.
nclude a `stateme;it of his scope of the :area under review
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MANAGEMENT EFFECTIVENESS
1. SUBMITTED BY: Department of Government
ARBA: Processing of Grant Appli? .ions.
3. Fiscal year: FY 1969 4. Period from: July 1, 1968 To: June 30, 1969
5. PERFORMANCE M1jASUR-Ft/il:N'r
Performance
a.? Performance indicators c. lease d?. Past
t *BPRI Year Year
1969
! FY 1968 FY
~
_ --
Number of applications A
processed
1
Number of applications not assigned for review B
(end of year)
Number of applications B
over 6 months old
A
EXHIBIT 1
Circular No. A-44
Revised
Past
Current
Year
Year
FY 1969
FY 1970
8,.000
10,500
1,800
1.500
800
S00
* Base period reverence identification:.
A - Preceding-fiscal year B - As'of June 30 of preceding fiscal year
6. PERFORMANCE EVALUATION (Attach additional sheets as,, required for
7,600
8,300
-~-----
1,900
1,720
1,050
900
7.5
6.2.
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Agency Management Improvement Program
Efficiency and productivity increases,
. Purpose
' Implementation Instructions
In compliance with the provisions of OMB (BOB) Circular A-44
(Rev. ), dated February 16, 1970, a formal Agency-wide management
improvement program is established. These instructions set forth
policy, procedures and guidelines and assign responsibilities for
carrying out a continuous effort to increase productivity, to improve
operating efficiency and to reduce costs.
I. Definitions
For the purpose of these instructions, the following terms are
defined:
A. Management Effectiveness - Includes those actions
taken which result in improved operating efficiency, increased
productivity, and curtailment of redundant, low priority, and
i
marg
nally useful activities. Such actions do not have to 'be
measured in dollar values.
B. Cost-Reduction - Includes those actions taken to
increase productivity, improve, efficiency, and eliminate
unnecessary activities when such can be measured reasonabl
y
accurately in dollars or manpower actually saved or repro-
I . Pow
A. The Agency management improvement program consists of
 3. Special studies oi Agency-wide or inter-]directorate
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activities.
5. Recognition of individual accomplishment in
exceptional improvement actions.
B. The key element of :Directorate management improvement
? programs is the annual identification of program and component
cdst-reduction and management improvement objectives coupled with
evaluation of actual cost-reduction accomplishments on a regular basis.
This requires the development. of coherent quantitative measurements
ofpxoSram or Component productivity and performance. Where such
gkra~ffi a i""f ve factors are inconclusive, zziinformative, or impractical,
qualitative or other informative techniques will have to be devised,
This involves :
1. The development in each Directorate of procedures
for computing the dollar value of cost-reduction or other
management improvement actions taken and determining
the assignment and dollar value of resources reprogrammed
2. Effective executive action to implement rational
cost-reduction or other management improvement actions.
3. The recognition of individuals who achieve exceptional
results or otherwise make a commendable contribution under
the program.
C. The program will include special inter-Directorate and
Agency-wide studies. Deputy Directors, the Inspector General, the
the Director of Planning, Programming, and Budgeting are encouraged
Deputy to the DCI for National Intelligence Programs Evaluation, and
to identify those activities which, they. feel need inter-Directorate or
.agency
IV. Procedures
A. By 30 'June of each year, each. Deputy Director will submit to
the Executive Director-Comptroller a formal management and
cost-reduction, program plan. and report.: .The .`plan for :FY .1971 will
 e subzraitted by 31 December 1970 (see Section XX - Reports).
B. Directorate annual plans will include four sections:
Section -.'Management Effectiveness Goals (upcoming
fiscal year).
Section XX -'. Cost-Reduction Goals (upcoming fiscal year).
Section XII Management Effectiveness Accomplishments,.
(current fiscal year).
Section XV''''~-" Cost-Reduction' Accomplishments (current
fiscal year).
1. S ction I - Manalyem :n1: i'.Cfc.ctiyonc:sri Go,1111, 'T'his will
covcr actions and studies the ]directorate intends to initiate
during the upcoming fiscal year which can be expected to increase
efficiency or reduce costs. Normally this section will include
only those actions for which the quantification or identification
of monetary (dollar) savings cannot be clearly estimated.
year or the most recently incurred costs, whichever is. most
appropriate.
with the component's acbtal costs in the immediately preceding
and znanp _where as-s-ib3e:-Cost-reduction goals must be
realistic and represent actual savings expected as compared
and component cost-reduction goals, expresse in o -ays
.productivity. This section should set forth both Directorate
business; and the definition of concrete actions to increase
This section should focus on: critical analysis and evaluation
of low priority or marginal activities; identification and
development of less costly methods and techniques for doing
utilized.to meet unbudgeted workload or program requirements.
2. Section 11 - Cost-Reduction Goals. This will cover
those studies and actions to be undertaken during the upcoming
fiscal year by the Directorate which may lead to savings
measurable in dollars or manpower which will be or can be
This section reports efficiencies achieved as compared with
3. Section III - Management Effectiveness Accomplishments.
management, improvement planning goals, established in Section -I
 a. Reductions in costs due solely to a decline
in demand for Directorate or component output
or service.
b. Reductions in costs due to deferment or
postponement of new pro grams or activities.
c. Reductions in costs resulting from the trans-
fer of responsibility to another component, Directorate
or Government agency except to the extent that there is
a not savings to the Government.
d. Reductions in costs due to uncompensated
e. Reductions in costs based on the acquisition
of excess property when funds for purchase of similar
property were not or would not have been available.
f. Reductions in costs due solely to over-estimates.
of budgetary requirements. %
g. Reductions in costs resulting from decisions
made by authorities external to the Agency.
C. The estimated budgetary impact of cost-reduction actions will
be rclporto(l. The inojicta.ry :;avirig;:; which result or are expected from
each cost-reduction or management improvement action will be calculated,
individually identified, and reported for each of three fiscal years -- the
.year inwbicb the savings occur and the two succeeding fiscal years.
will also be described, including those recognized under
.the incentive awards program.
4. Section IV - Cost-Reduction Achievements. This
section will include actual dollar or manpower savings
achieved as compared with planning goals identified in
Section II of the pre~v_iouf3 ter! G st reduction ~ls _
Unanticipated cost-reduction achievements also will be
reported in this section. Only reductions in costs which
can be attributed to deliberate management actions will
be reported under this program. Monetary savings or
cost-reduction for this purpose does not include such
things as:
 Savings i?k? E-orted for those succeeding fiscal years will represent an
estimate of the funds or manpower which would have been required
in each year if the improvement or reduction actions had not taken
place. Thee data will be incorporated in the annual budget submission
in a m anner prescribed in the annual budget call,
D. Each Directorate will establish controls to assure that funds
or manpower made available throujth the rnar-agernent irnproverr-rnt
and co:~t-reduction prograrns3 are --,w-(l only for approved prograrr-ts
or activities, including approved in':reaswu in the level of resources
assigned to those activities. Savings will be reported by component,
program category, s'ub-category and element and will reflect
disposition of anticipated or actual savings in one or more of the
following categories:
1. Reprogrammed or reallocated to approved require-
ments of the affected component.
2. Reprogrammed or reallocated to approved requirements
of Directorate components.
3. No longer required to carry out approved programs
and either placed in reserve or applied to reduce the Agency's
budget,
V. Validation
A. The Director of Planning, Programming, and Budgeting is
responsible for the validation of the dollar or other unit value of
reported savings and reprog:rammings resulting from the Agency's
management effectiveness and cost-reduction programs. Validation
will consist of a review of reported actions to confirm the accuracy
of the amounts reported and their disposition or allocation to approved
programs, prior to preparation of the Agency annual report to the
Office of Management and Budget.
B. Validation procedures should provide reasonable assurance
that:
1. Reported actions actually took place.
2. The savings reported represent reasonably accurate
computations, or estimates, of the savings which occurred in
the:. year reported ;and are the result of, management initiative.
;Approved For. Release 2002/.0Pt18 CIA-RDP83B00823
 Approved For Rise 2002/06/18: CIA-RDP83B00823R400050017-1
3. Repoi tcd savings are the not of ictontifiod, offsetting
coca increases.
VY.. 111tor-Diro ctorato Studies
;Approved For Release 2002/06/18 : CIA-RDP83B00823R000400050017-1
if al)l.plic:tblo, a Deputy Director will includc in tha Diroctorato
annual pt;ai1 i'uL rcl)ort l as rocOMI-nr? )(lationl~ concerning aroab which
he ,fouls require intor-Diroetorato or Agoney-wide study..
V11, Idea ln:crchan