The Commission submits a budget request of $38,516,000 (356.5 FTE) for FY 2000. It represents a continuation of the FY 1999 funding level, as adjusted for inflation, new Information Technology (IT), or ADP, initiatives and personnel pay and benefits increases. It differs from the FY 1999 appropriation, however, in that it would fund 9 additional staff for the compliance and public financing programs (and .5 FTE in administrative support staff.) Although the stand-alone cost for adding 9 staff (personnel plus direct non-personnel costs) is an additional $656,000, this amount is offset in part by the elimination from the FY 2000 budget of several non-recurring expenses in the FY 1999 budget. In effect, for FY 2000 we have allocated to personnel costs funds expended in FY 1999 on one-time, non-personnel expenses. This shift allows the agency to maximize its return on the FY 1999 investment in the infrastructure supporting the Commission’s core programs. The 9 additional staff are allocated to audit and enforcement activities in FY 2000.

The enhancements in this budget request will enable the Commission to:

Complete the audits of an increased number of Presidential candidates from the 2000 election within two years after the general election.

Develop and maintain enhanced computer capabilities, including

electronic filing,

the imaging of reports for Internet access, and

a computer program for managing legal operations.

Carry out a more credible and timely enforcement program.

The difference between the FY 1999 appropriation and the FY 2000 request is an increase of $1,666,000, which reflects a modest net increase of 4.5% from the FY 1999 appropriation. Most of this increase is explained by increases in federal pay and benefits costs (an increase of $991,500) because of COLAs and inflation in benefits costs, and inflation adjustments for GSA rent and basic overhead (an increase of $345,000), for a total increase resulting from inflation and other uncontrollable costs of $1,336,500. In addition to these basic costs we have added two programmatic requests for funding in FY 2000 totaling another $1,108,000. This total request is then offset to some degree by certain one-time costs incurred in FY 1999, but for which funding is not required in FY 2000, for a reduction of $778,500 in FY 2000. This leaves a net total increase of $1,666,000.

The programmatic increases include $452,000 for the cost of the multiyear IT developmental initiatives (part of our five-year IT Strategic Plan) and $656,000 for the cost of 9 additional staff (FTE) for the public financing and compliance programs. New staff would be allocated between the Audit Division (3) and the General Counsel’s Office (6).

The reductions in costs from FY 1999 can be explained by several items. The Commission’s FY 1999 appropriation contained an earmark for a final increment of $1,120,000, which Congress encouraged the Commission to use for compliance (enforcement) initiatives which did not require additional staff hires. Subject to approval by the Appropriations Committees, the Commission earmarked these funds for several compliance activities: enforcement and litigation staff deposition and travel costs, legal training, computerized legal research tools, and computerized legal document imaging and indexing costs. The Commission is in the process of exploring some further initiatives in the compliance program which do not utilize additional staff resources (FTE) with the final $442,000 of these funds. Many of these items are one-time costs not requiring continued funding in FY 2000.

Furthermore, the Commission incurred some one-time costs for building renovations in FY 1999, as we acquired additional space in our currently occupied building, plus underwent renovations to existing space. Finally, the Commission determined to allocate an additional $100,000 to the Office of Elections Administration to initiate the revision of the Voting Systems Standards (VSS) in FY 1999. The final FY 2000 budget request is offset by all these one-time costs.

FY 1999 Appropriation $36,850,000

+ Increases in pay costs, rent costs, and overhead costs 1,336,500

- Net reductions from one-time costs FY 1999 (778,500)

+ IT Increase (see p. 22) 452,000

+ Staff Increase of 9 FTE 656,000

= Budget for FY 2000 $38,516,000

Our FY 2000 budget request will enable the Commission to perform its statutory mission and meet its program goals and objectives. The Commission’s budget request justification therefore reflects its fundamental mission: to administer and enforce the three main components of the Federal Election Campaign Act (FECA), as amended:

The disclosure of campaign finance information;

The monitoring and enforcing of contribution limitations and prohibitions; and

The public financing of Presidential elections.

Additionally, the Commission has the mandated responsibility of compiling information and reviewing procedures related to the administration of federal elections.

Programs, Objectives and Goals (See p. 13)

To accomplish this mission, the Commission has established several programs—core programs and management programs. For each program, the Commission has defined objectives and goals, which are listed in the full discussion of the FY 2000 budget (pp. 6 to 27).

The programs are listed below, followed by the dollar amount and FTE needed to achieve the objectives and goals under the FY 2000 Budget:

Promoting Disclosure (core) - $7,698,803 and 107.5 FTE

Obtaining Compliance with the Federal Election Campaign Act (core) - $9,740,540 and 109.4 FTE

Administering the Public Financing of Presidential Elections (core) - $3,211,043 and 42.6 FTE

Election Administration (core) - $607,500 and 5 FTE

Special IT Projects (management) - $4,866,500 and 8.5 FTE

Commission Policy and Administration (management) - $12,391,515 and 83.5 FTE

Internal IT Enhancements (See p. 22)

Under the Current Budget Request, the agency will fund new IT initiatives in the following four areas:

Computer Security

World Wide Web

Document Management

Client/Server Development and Conversion

 

Electronic Filing (See p. 23)

By the start of 1998, the Commission’s full electronic filing system was in place. (Under current law, electronic filing is optional for any political committee, other than Senate committees and the national parties’ Senate campaign committees.)

During FY 1999, the agency is "rolling out" this program, that is, it is developing incentives to encourage committees to file their reports electronically. Although the option of electronic filing will remain a voluntary decision under existing law, the system could handle all filers.

Year 2000 Computer Adjustment (See p. 24)

By March 1999, the Commission will complete work to ensure the viability of its computer programs and database in the year 2000.

Past IT Initiatives (See pp. 24)

The Commission has been working on several IT enhancements since 1995. These initiatives have resulted in improved disclosure services, with minimal increase in staff to administer the services. The Commission now provides disclosure services faster, in greater depth and to a larger audience than ever before. The initiatives have also assisted the FEC staff in certifying and auditing public funds provided to presidential candidates in the public funding program, and have enhanced the staff’s capabilities in compliance efforts such as audits, enforcement, litigation, and the compliance referral processes.

The Commission submits a budget request of $38,516,000 million (356.5 FTE) for FY 2000. It represents a continuation of the FY 1999 funding level, as adjusted for inflation, new IT initiatives and personnel benefits. It differs from the FY 1999 appropriation, however, in that it would fund 9 additional staff for the compliance and public financing programs (and .5 FTE in administrative support staff.) The final request for FY 2000 is virtually the same request the FEC submitted concurrently to Congress and OMB in November 1998. After discussions with OMB, the FEC and OMB reached agreement and the President’s Budget Request for the FEC for FY 2000 is for $38,516,000 million and 356.5 FTE.

Although the stand-alone cost for adding 9 staff (personnel plus direct non-personnel costs) represents an additional $656,000, this amount is offset in part by the elimination from the FY 2000 budget of several non-recurring expenses in the FY 1999 budget (see Table 1). In effect, for FY 2000 we have allocated to personnel costs the amount expended in FY 1999 on one-time, non-personnel expenses. This shift allows the agency to maximize its return on the FY 1999 investment in the infrastructure supporting the Commission’s core programs. The 9 additional staff are allocated to audit and enforcement activities in FY 2000.

The enhancement in this budget request will enable the Commission to:

Complete the audits of an increased number of Presidential candidates from the 2000 election within two years after the election.

Develop and maintain computer capabilities, including

electronic filing,

the imaging of reports for Internet access, and

a computer program for managing legal operations.

Carry out a more credible enforcement program.

 

As indicated in Table 1 below, the difference between the FY 1999 appropriation and the FY 2000 request is explained by increases in federal pay and benefits costs, inflation adjustments for GSA rent and basic overhead support costs, an increase in the cost of the multiyear IT developmental initiatives from FY 1999 to FY 2000 per the Commission’s IT Strategic Plan, and the cost of 9 additional staff (FTE) for the public financing and compliance programs.

New staff would be allocated between the Audit Division (3) and the General Counsel’s Office (6). In keeping with immediate past budget requests, the Commission is not requesting additional staff resources in the disclosure activities, but is limiting its request for additional resources allocated to the audit, enforcement, litigation, audit review, and computer support programs.

The net difference between the FY 1999 appropriation and the FY 2000 request is an increase of $1,666,000, which reflects a modest net increase of 4.5% from the FY 1999 appropriation. Most of this increase is explained by the increases in federal pay and benefits costs because of COLAs and inflation, and inflation adjustments for GSA rent and basic overhead, for a total increase resulting from inflation and other uncontrollable costs of $1,336,500. This is reduced by certain one-time costs incurred in FY 1999, but for which funding is not required in FY 2000, for a total reduction of $778,500 in FY 2000. This leaves a net increase of $558,000, to which we have added the two programmatic requests for funding in FY 2000, that bring the total increase up to $1,666,000. Thus, our increases resulting from inflation and for the requested programmatic increases are partially offset by the reductions from one-time costs incurred during FY 1999.

The programmatic increases include $452,000 for the cost of the IT developmental initiatives (part of our five-year IT Strategic Plan) and $656,000 for the cost of 9 additional staff (FTE) for the public financing and compliance programs.

The reductions in costs from FY 1999 can be explained by several items. The Commission’s FY 1999 appropriation contained an earmark for a final increment of $1,120,000, which Congress encouraged the Commission to use for compliance (enforcement) initiatives which did not require additional staff hires. Subject to approval by the Appropriations Committees, the Commission earmarked these funds for several compliance activities: enforcement and litigation staff deposition and travel costs, legal training, computerized legal research tools, and computerized legal document imaging and indexing costs. The Commission is in the process of exploring some further initiatives in the compliance program which do not utilize additional staff resources (FTE) with the final $442,000 of these funds. Many of these items will be one-time costs not requiring continued funding in FY 2000.

Furthermore, the Commission incurred some one-time costs for building renovations in FY 1999, as we acquired additional space in our currently occupied building, plus underwent renovations to existing space. Finally, the Commission determined to allocate an additional $100,000 to the Office of Elections Administration to initiate the revision of the Voting Systems Standards (VSS) in FY 1999.

State and local elections officials have requested that the FEC update the previously issued voluntary VSS, which have proved valuable to elections administrators in selecting vote counting and recording equipment. Funds for this project were not included in the original FY 1999 budget request by the Commission, and the request was made too late for inclusion in the Commission’s FY 2000 budget request. However, the FEC has made a commitment to start the revisions in FY 1999, and to make any funds which may become available in FY 2000 a priority reallocation to this project. If necessary, the Office of Elections Administration has committed to using existing contract funds in FY 2000 for the VSS update.

The final FY 2000 budget request is offset by all these one-time costs incurred in FY 1999. The net result is a modest increase in staff of 9 FTE (2.6%) and a total 4.5% increase over FY 1999 funding: a net 1.5% increase for inflationary increases and 3.0% for the 9 additional staff and increases in IT expenditures. Given the importance of the Commission’s mission in relation to the electoral process, we believe this is a reasonable request.

Table 1 depicts in greater detail the increases from FY 1999 to FY 2000 and the allocation of the $1.120 million compliance earmark in FY 1999.

TABLE 1 FEC FY 1999 TO FY 2000

* The hiring in FY 99 has not been fast enough to end the year at an aggregate of 347 FTE, although the on-board strength will be close to that figure at the end of the fiscal year. With the personnel cost savings, the FEC has moved to undertake appropriate projects and infrastructure development.

Despite large increases in Commission workloads due to ever-increasing federal election related campaign finance activity, the FEC has been relying on improvements in productivity, management initiatives, and technological advances to cope with any increases in disclosure program workloads. However, as the recently completed PricewaterhouseCoopers (PWC) audit of the Commission noted, the FEC’s existing compliance capacity is severely limited. To address the problem, the FEC’s FY 2000 request includes an increase of nine FTE in compliance staff.

The addition of nine FTE in compliance will not enable the Commission to meet its full enforcement workload requirements, but it will enable the FEC to activate more cases and take substantive action on more cases. Although the additional increment will not resolve the compliance capacity issue, it does provide for marginal improvement in the compliance program. The Commission will allocate the 9 additional positions between the Audit Division and the General Counsel’s Office, as explained below.

Three additional auditors will enable the Commission to handle the increased number of Presidential audits anticipated in the 2000 election cycle. An increase is likely because more candidates are expected to qualify for public funds in 2000 than did in 1996, the year of the last Presidential election. The presidential election of 2000 is essentially "open" for both major parties, and is expected to be heavily competitive in both the primary and general elections. In addition, the continued "front-loading" of the primary process means that there should be early drop-outs from the primary elections, which may enable the FEC to initiate post-primary audits early in the cycle.

This year’s request for 6 additional staff will allow the agency to carry out a more credible compliance program, which is fair and more prompt than in FY 1999. The FEC budget request does not, however, replicate the full requests for additional compliance program staff, particularly in enforcement and litigation, made by the Commission in FYs 1998 and 1999. This request is for fewer FTE than was requested by the FEC in FY 1998 and 1999. Therefore, while this request will assist in improving both the number of cases that can be closed with substantive Commission action (i.e. not dismissed with no action) and the case activation ratio, it will not provide for the full desired improvement in the number of cases closed with substantive action or in the case activation ratio.

The additional staff primarily will be used to step up compliance activity. However, the requested staff also reflects the need for additional PFESP staff for the legal and compliance aspects of the public funding programs during the 2000 election cycle.

Table 2 depicts the FEC staffing by Office and Division from FY 1995 through FY 1999 (projected). Past staff levels are compared to the FY 2000 budget request.

The Commission’s revised FY 1999 Management Plan recognizes that a delay in reaching the authorized staffing level of 347 FTE will result in less than 347 FTE for the entire FY. The FEC does expect to reach the 347 FTE ceiling by the close of FY 1999 and achieve the staffing requested for FY 2000.

Table 3 provides an historical view of the FEC’s budget, allocated among its organizational units.

* FY 1998 lapse includes $350,000 carryover of 50% of document imaging funds lapsed, per approval of Congress and OMB, for use in FY 1999 (FY 1999 appropriation supplemented by the additional budget authority, BA, of $350,000.)

Table 4 is an historical summary of the Commission’s budget, by object class.

* FY 1998 lapse includes $350,000 carryover of 50% of document imaging funds lapsed, per approval of Congress and OMB, for use in FY 1999 (FY 1999 appropriation supplemented by the additional budget authority, BA, of $350,000.)

Mission

The Commission’s budget stems from its fundamental mission: to administer and enforce the three main components of the Federal Election Campaign Act, as amended (FECA):

The disclosure of campaign finance information;

Contribution limits and prohibitions; and

The public financing of Presidential elections.

Additionally, following the mandate of the statute, the Commission’s mission includes compiling information and reviewing procedures with respect to the administration of federal elections.

To accomplish this mission, the Commission has established several programs—core programs and management programs.

The core programs are:

Promoting Disclosure;

Obtaining Compliance with the Federal Election Campaign Act (FECA);

Administering the Public Financing of Presidential Elections; and

Election Administration

The management programs are:

Special IT Projects and

Commission Policy and Administration

Within each of the core programs, the Commission has defined specific objectives. To reach these objectives, the Commission must accomplish certain goals, which are also defined. To the extent that the agency succeeds in reaching these goals and objectives, it will fulfill its fundamental mission.

The next few pages describe the core programs in terms of their objectives (and related goals), and explain how the requested budget will enable the Commission to reach those objectives. A series of tables supplement the explanation.

Tables 5A, 4B, and 4C provide an overview of the FEC’s budget, by program. Table 5A shows the total dollars budgeted for each program; Table 5B distinguishes between personnel and nonpersonnel costs; and Table 5C shows the personnel (FTE) for each program. tables 5A and 5C indicate what percentage of the total budget request each program represents.