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.

With regard to the Disclosure Program, the Federal Election Commission seeks to:

Review and process the financial reports (filed by political committees)—and the data taken from those reports—accurately and timely.

Make the reports and data readily accessible to the public, the media and the regulated community.

Educate the public, the media and the regulated community about the legal requirements pertaining to disclosure, contributions limits and prohibitions, and the public financing of Presidential elections—the core elements of the Federal Election Campaign Finance Law.

For each of the objectives described above, the Commission will try to achieve the goals listed below.

To achieve the accurate and timely review and processing of all reports, the Commission will:

Facilitate the electronic filing of reports by committees that voluntarily choose to file reports by modem, diskette or Internet.

Continue to meet the 48-hour deadline for placing reports (filed by political committees) on the public record.

Review all reports filed.

Review 60 percent of reports within 90 days of receipt at the FEC.

Attempt to have filers voluntarily correct the public record (i.e., the reports placed on the public record) by sending them, when appropriate, requests for additional information (RFAIs).

Code and enter into the FEC’s database the information contained in 95 percent of reports within 45 days of receipt at the FEC. (For the 1998 cycle to date, 95% of all reports have been entered within 26 days of receipt at the Commission).

To ensure that the campaign finance data are widely distributed, the FEC will:

Provide the public with Internet access to its disclosure database and digital images of the reports themselves (except those of Senate candidates).

Operate a store-front Public Records Office where reports and data are available in paper, microfilm and digital images (scanned from original reports) and where the public can access the disclosure data base.

Operate a Press Office to assist the media in the wide disclosure and dissemination of campaign finance data.

Compile and release comprehensive statistical information, based on the reports filed by political committees (e.g., the Internet and news releases).

To ensure that the public, the media and the campaign community fully understand the federal election law, and that information about the law is readily available, the FEC will:

Operate an 800 telephone line and maintain a well-informed staff to answer phone inquiries about the FEC and federal election law.

Produce educational and information brochures and booklets to supplement the FEC’s Annual Reports.

Make FEC publications available to the public through the FEC’s Website, an automated fax service and the U.S. mail.

Conduct technical workshops on the law throughout the country.

Provide policy guidance through the timely release of Advisory Opinions.

Review and revise FEC regulations to clarify federal election law.

The resources needed to meet the objectives and goals of the Disclosure Program in FY 2000 are summarized in Tables 6A and 6B.

The FEC’s compliance program is premised on the belief that the Commission’s first responsibility is to try to foster a willingness, on the part of the regulated community, to voluntarily comply with the law’s reporting requirements, fundraising restrictions and public funding statutes. The Commission encourages this willingness through education (described under the Disclosure Program, p. 13). To buttress its educational efforts, the Commission carries out a credible Compliance Program whose objectives are:

Conducting desk audits of every report;

Auditing those committees whose reports fail to meet threshold requirements for substantial compliance with the FECA; and

Enforcing the law, in a timely and fair way, against persons who violate the law.

For each of these objectives, the Commission defines the specific goals listed below.

The Commission will:

Conduct a desk audit of every report, the primary purpose of which is to encourage the regulated community to clarify the public record (i.e., the reports that have been placed on the public record) in those instances where information is inaccurate or incomplete.

Refer nonfilers and late filers for enforcement action (by OGC) when necessary.

Refer those filers who fail to comply with the FECA’s disclosure requirements or contribution limitations or restrictions—and who fail to voluntarily correct their reports—for an audit and/or enforcement action, if necessary.

In those cases where reports indicate that committees have failed to meet the threshold requirements for substantial compliance with the FECA—and have failed to voluntarily correct errors or omissions on their reports—the Commission will conduct about 30 audits for the 2000 election cycle, pursuant to 2 U.S.C. §438(b).

Because the bulk of the Commission’s caseload arises from complaints filed by parties outside the agency, the total caseload figure is not effected by the number of FTE. Instead, as illustrated in the below projections, the number of FTE affects the proportion of the total caseload that can be handled substantively, as well as the proportion of the caseload that is active vs. inactive. Note: where appropriate, the projections below include two alternative scenarios—one is based on an assumption that the caseload will continue to include the major 1996 election cycle cases, and that significant resources will continue to be focused on those cases. The other scenario assumes a caseload without the major 1996 cycle cases.

To reach the objective of enforcing the law in a timely and fair way, the Commission will:

If there are no major 1996 cycle cases still pending, Mmaintain a monthly average active pending caseload of between 275 and 290 cases, of whi47 percent. ly assigned, if there are no major cases from the 96 or 98 election cycles still peIf the major 1996 cycle and 98 cases are still pending, then the proportion of the average active monthly caseload is estimated to be 37 40 percent, of the total average monthly caseload,based on the premise that significant staff resources will be assigned to these major cases which are very complex.

Close an estimated 225 cases. s;If there are no major 1996 cycle cases still pending, the Commission will close 52.5 of this amount, close 55percent of those cases through substantive Commission action. (This figure represents cases in which the Commission has reached a substantive finding on the merits of the matter (other than dismissal), including findings of "no reason to believe the FECA has been violated.") This level is anticipated if there are no major cases from the 96 or 98 election cycles still pending in FY 2If the major 1996 cycle and 98 cases are still pending, then the Commission will close 42.5 percent of those cases through substantive Commission action, proportion of closed cases that will be closed with substantive Commission action is anticipated to be only 45 percent,based on the premise that significant staff resources will be assigned to those major cases.

Initiate from 12 to 15 civil actions under 2 U.S.C. 437g(a)(b).

Maintain the Enforcement Priority System (EPS), a system through which the Commission identifies and assigns the more significant enforcement cases to staff, disposes of the less significant cases rapidly, and manages limited staff resources.

Conclude some or all of the major cases involving complex legal issues—including those remaining from earlier election cycles (1996 and 1998) and those stemming from the 2000 cycle.

The increasingly complex issues of law and fact, as well as the rising number of respondents in the Commission’s cases,growing complexity of cases prompts the need for additional enforcement staff. The requested level of 121 FTE in OGC will result in a 7 to 9 percent increase (depending on the make up of the caseload) in the percentage of active cases, and a 3 to 5 percent increase in the number of cases substantively closed. It will also result in an increase in both offensive and defensive suits possible from FY 1999 levels.

the resources needed to meet the objectives and goals of the Compliance Program in FY 2000 are summarized in Tables 7A and 7B. (Just for comparison, Appendix A discusses what would be accomplished in FY 2000 if the OGC staff were increased further from 121 FTE to 130 FTE, the level that the Commission previously requested in FY 1998 and FY 1999.)

Under the Public Financing Program, the Commission seeks to:

Certify the eligibility of Presidential candidates and committees for federal payments in a timely and accurate fashion.

Help ensure that U.S. Treasury payments to certified committees are made accurately and on time.

Promote public trust that all public monies are accounted for and expended in compliance with the FECA.

To reach the objectives described above, the Commission will:

Complete all public funding audits within two years of the 2000 Presidential general election.

Successfully resolve all enforcement cases within the statutory time limits.

Process the certifications quickly and accurately. (The bulk of these will be completed by the end of FY 2000.)

As noted above, p. 7, three additional auditors are needed in FY 2000 to conduct audits of Presidential committees who receive public funds. The addition will allow the Commission to meet its goal of completing the audits within two years after the 2000 elections.

For FY 2000, the resources needed to implement the public financing program in the 2000 election cycle are summarized in Table 8A and 8B.

Through the FEC’s Office of Election Administration, the agency will:

Carry out its statutory responsibilities under the National Voter Registration Act (NVRA) to help improve the national level of voter registration.

Help ensure that state and local election officials receive informational and educational assistance in administering federal elections in an efficient and effective manner.

Foster public confidence in the fairness and reliability of the polling process in federal elections.

To realize the objectives described above, through the FEC’s Office of Election Administration, the Commission will:

Grant and oversee research contracts on issues of concern to election administrators.

Assist state election officials in implementing the NVRA, collect data on the impact of that law on election administration, and report to Congress thereon by June 30, 2000.

Serve as an on-call resource to election officials with immediate needs for technical and legal information.

Help state and local election officials adapt to changing technology and legal requirements.

Update the Voting Systems Standards, originally issued in 1990; revision initiated in FY 1999, will be funded in FY 2000 if money becomes available.

Prepare an administrative model to assist local election administrators in organizing their offices (local election offices see a high rate of turnover in most elections).

Resources needed to reach these goals in FY 2000 are summarized in Table 9A and 9B.

For FY 2000, the Commission will allocate $4.9 million of its FY 2000 budget request to fund enhanced IT initiatives and the electronic filing program. This amount, which is provided for in the FEC’s IT Strategic Plan, represents an increase of $464,000 ($452,000 in non-personnel and $12,000 in personnel) over the funding identified in the FY 1999 appropriation for IT initiatives.

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

Computer Security

World Wide Web

Document Management

Client/Server Development and Conversion

Under the FY 2000 budget, the agency will contract with one or more vendors to review and, if necessary, further develop the security protecting the agency’s computer operations. As these operations expand through the World Wide Web, the Commission must be vigilant about ensuring the integrity of the data.

In FY 2000 the Commission will contract with one or more vendors to review and upgrade its web site. The agency’s current web site comprises two parts: a static part and an interactive part. In the static part, the agency posts its publications, documents, press releases and other announcements. The interactive part permits all users to select and view images of financial reports filed with the FEC, and it allows the public to search a database consisting of information filed by political committees. For example, with the interactive inquiry system, initiated in FY 1998, anyone with a computer and modem can identify contributions to specific candidates by the name of the contributor and the date and amount of the contribution.

Under the FY 2000 initiative, the agency will seek to make the site more user friendly in terms of its convenience, scope and depth.

Document management involves several components:

Imaging those documents which have not been transmitted electronically (i.e., legal documents submitted to the FEC)

Organizing and storing documents (i.e., integrating internal electronic documents with images of other material)

Reviewing documents and developing search and retrieval methods for all materials

The process involves scanning images of documents into the computer and then organizing the imaged documents so they can be easily retrieved and reviewed

For many years, the Commission relied on a terminal-based computer system. Under this system, one central location served as the site where all data was stored and where all processing occurred. Beginning in 1995, the Commission initiated the first steps to migrate from this terminal-based system to a new Client/Server environment.

In FY 2000 the Commission will develop a strategy for completing the transition from the terminal-based software to the new Client/Server-based system. It will also begin to convert the data from the older system to the new. This process involves conversion of several million data records, along with thousands of programs used to retrieve and display information contained in the Commission’s data bases.

By the start of 1998, the Commission’s full electronic filing system was in place. (Under current law, electronic filing is optional—not mandatory—for any political committee, other than Senate committees and the national parties’ Senate campaign committees).

More precisely, the agency:

Defined the structure of the program.

Defined the mechanisms by which committees could electronically file their reports: by diskette, by modem and through the Internet.

Established the infrastructure to both receive and validate the reports filed.

Implemented a system for automatically placing the electronic data:

In the Commission’s database and

In an image format resembling an FEC form so that individuals, using a computer, can read simulated pages of reports.

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. Creating these incentives will involve a series of steps, including:

Analyzing the strengths and weaknesses of the early stages of the electronic filing program;

Evaluating and modifying the software developed by the Commission;

Evaluating and expanding the Commission’s program for training committees in the use of the software;

Evaluating and modifying methods for educating the filing community about electronic filing; and

Working with private software companies to integrate electronic filing features into their commercial products.

Development of new processes to improve internal document flow in this new "electronic filing" environment will continue in FY 2000. This will enable internal FEC users to integrate electronic filings into processes such as reports review, audits, and enforcement. Spending on this initiative during FY 2000 also includes funds for on-going operation and maintenance of the electronic filing system during the 2000 election cycle.

Although the option of electronic filing will remain a voluntary decision under existing law, the full system will be capable of handling all filers. For those committees that file electronically, the process of transferring the data into the disclosure database is automatic. Until there is mandatory electronic filing, however, the Commission will continue to manually input the data taken from reports filed by committees that choose not to file electronically. Although this is a slower process than electronic filing, the Commission has succeeded in shrinking time frames for coding and entry and in keeping costs low.

By March 1999, and in compliance with government-wide requirements, the FEC will implement converted software to accommodate the "year 2000 millennium bug." This means that in the year 2000 FEC staff will be able to handle FEC computer processes, and both the public and the staff will be able to access the FEC's database of campaign finance information, without incident.

The Commission has been working on electronic filing and a series of other IT enhancements since 1995. It is already clear that these initiatives have benefited the American taxpayer by significantly improving the FEC’s disclosure services while holding to a minimum the need for additional staff to provide these services.

Enhanced computer technology has enabled the FEC to respond to a growing demand for information—and to deliver the information faster—without adding staff for this purpose. Through the Commission’s automated fax system and the Internet, the public can now access FEC forms, publications and campaign finance data instantaneously.

Additionally, the new technology has broadened the audience for existing services. In the past, for example, a limited community of campaign finance specialists accessed the FEC’s database through the Direct Access Program (DAP), a fee-for-service program. Now the agency has made it possible for these same experts—and the public as a whole—to access the data on the Internet, at no cost to the individual user. The increased access to the data was made possible through the Commission’s enhanced images on the World Wide Web program (see Point of Entry Completed, below).

The Commission successfully completed its Point of Entry initiative in 1998. Under this program, all political committees (except Senate committees and the national parties’ Senate campaign committees) file their reports with the Commission (either on paper or electronically). The Commission then scans the documents to make images that are available for review on FEC computers and on the World Wide Web.

Finally, the agency successfully contracted for some of its IT initiatives at a lower cost than initially anticipated. The design of the electronic filing system came in under budget. Similarly, the cost of making images of reports available to the public through the FEC Website was nearly 37 percent lower than the amount Congress appropriated for the initiative.

the total request for IT enhancements and electronic filing in FY 2000 is $4.9 million. Tables 10A and 10B summarize the costs contained in the FY 2000 budget.

Tables 11A and 11B depict the costs and corresponding FTE for central policy guidance, management and staff support for all Commission operations that do not otherwise fit under the previously identified programs. Besides the offices of the six Commissioners and the Secretariat, this budget category includes all basic administrative overhead, such as rent, phones, postage, etc., and support functions, such as management, budget, accounting and personnel. Direct support costs for program-related items, such as travel, training, printing, etc., are allocated to specific Commission objectives and programs.

The Federal Election Campaign Act (FECA) charges the FEC with the responsibility of administering and enforcing the three main provisions of the FECA:

Disclosure of campaign finance information;

Contribution limits and prohibitions; and

Public financing of Presidential elections.

The Commission’s approach to "enforcing the law" has been a two-pronged effort: education and compliance. The agency actively helps the regulated community understand the FECA and, at the same time, supports a credible program of compliance.

Four divisions at the Commission carry out the educational program. The Information Division explains the law to the regulated community through workshops, publications and a toll-free phone line. The Reports Analysis Division (RAD) instructs committees that call for assistance (often in response to an FEC letter requesting additional information). The Audit Division assigns a staff person to each Presidential campaign that qualifies for public funds; that person guides the new committee through the public funding procedures. Finally, the General Counsel’s Office writes regulations to clarify the meaning of the law, and it drafts advisory opinions that, once approved by the Commissioners, respond to specific questions posed by individuals and committees.

As with any law enforcement program, however, education has little effect if it is not buttressed by credible enforcement.

While computer technology has provided invaluable support to agency investigations, timely and thorough investigations require significant human resources. Analyzing records, taking depositions, and drafting the reports, interrogatories, subpoenas, and briefs associated with these cases requires auditors, investigators and lawyers. As of October 1, 1998, 24 staff attorney FTE were handling 98 active cases. Our total caseload at that time was 195 cases involving 2,764 respondents living all over the country and abroad. By comparison, it is reported that the Department of Justice assigned some 125 staff in its investigation of possible criminal transgressions stemming just from the 1996 elections alone; and, according to the Secretary of the Senate, the Senate Committee on Governmental Affairs had a team of 54 staff investigating the 1996 elections.

A simple count of enforcement cases processed does not reflect the scale of the work required. The Commission has found the Activation Rate to be a more meaningful measure of performance. The following formula gives a percentage of active enforcement cases to all pending cases:

Monthly Average of Active Cases

Monthly Average of Total cases Pending

The higher the activation rate, the better, because the Commission is handling more of its cases substantively. If the total number of cases pending remains constant, the rate will be negatively affected by three factors:

number of staff;

increased number of respondents; and

increasing legal complexity of cases.

In recent years, this has been the Commission’s experience. Table 13 demonstrates, for example, that while the Commission had the same number of pending cases (319) in FY 1995 and FY 1997, the monthly average number of active cases declined from 145 to 102. This meant that the monthly average activation percent was 45 percent in FY 1995, while in FY 1997 (in the aftermath of the 1996 Presidential elections) the activation percent declined to 32 percent. The decrease can be explained primarily by a combination of a slight reduction in FTE in OGC, the increased number of respondents and the increasingly complex issues involved in the enforcement cases arising out of the 1996 elections.

The increase in FTE levels from FY 1998 to FY 1999 already is showing signs of improving the compliance program. The number of average active cases has moved up from 93 in FY 1998 to 106 thus far in FY 1999. See table 13.

Table 14 indicates that, in just the last two years, the average number of respondents per case has increased by almost 115 percent.

Over the last several years, the number of respondents in many of the Commission’s cases has risen dramatically. By way of illustration, just five of the largest current cases in FY 1998 involved a total of 222 respondents.

How does the number of respondents affect the Activation Rate? The increased number of respondents lowers the Activation Rate because more staff are required to handle fewer cases, and the impact of more respondents on the FEC’s caseload is exponential. For every respondent in a matter, , the Commission, in effect, pursues a separate case. Cases with more respondents thus mean more complex investigations, with more documents, more depositions, and complex negotiations with more parties to attempt to bring the case as a whole to a successful conclusion.

Many of the cases recently brought to the Commission involved legal issues of far greater complexity than before. The Commission is not just processing complaints involving late filers or candidates who fail to file 48-hour notices. the FEC now grapples with such complex legal matters as determining when improper coordination between a candidate and a labor union or corporation occurs, analyzing whether soft money is being used to fund contributions to federal candidates, defining what type of entity qualifies as a political committee, and determining when a person qualifies as a member of a membership association. These types of inquiries are staff intensive, causing the Activation Rate to decline unless additional staff are available to handle the additional work.

The FEC’s FY 2000 Budget Request contains only nine additional FTE for the compliance (six FTE) and public financing (three FTE) programs over FY 1999 levels. This is nine fewer than requested in the original FY 1998 and 1999 FEC submissions for those fiscal years. As a result of the lower staffing level, OGC estimates that 8 percent fewer cases would be activated and 6 percent fewer cases would be closed with substantive action in FY 2000 than if the Commission received funding for 365.5 FTE. The Commission’s enforcement program as requested is therefore at a lower level than at a full 130 FTE for OGC in FY 2000, if nine additional FTE were allocated to the enforcement programs.

As noted above, the Commission’s projections for case activation rates and substantive case closings versus dismissals are based on two alternative scenarios. One scenario assumes that the caseload will continue to include the major 1996 election cycle cases, and that significant resources will continue to be focused on those cases. The other scenario assumes a caseload without the major 1996 cycle cases. Under the second scenario, the activation rate and the number of cases closed through substantive Commission action can be increased because the remaining caseload would be less personnel intensive.

The Commission has attempted to limit its FY 2000 budget request to an increase in FTE supportable from funds allocated to one-time non-personnel items in FY 1999, when our FTE has been capped at 347 FTE, even with a $36.5 million appropriation. As a result of this cap, some FY 1999 non-personnel funds can be converted to personnel costs in FY 2000, once inflation and COLA adjustments are made to the FY 1999 authorized staffing level of 347 FTE.

Significant changes in the "backlog" of compliance cases realistically will not be possible with a nine FTE increment. The requested increment is designed to ensure that the Commission deadline of two years from the general election for completion of audits of all federally funded presidential campaigns is met. It will, however, only allow for limited improvements in the enforcement programs.

Furthermore, the PWC audit noted that productivity increases in the disclosure programs can not be counted on to always cope with rising disclosure workloads arising from increased federal campaign finance activity. Absent some form of mandatory electronic filing, which will result in significant savings in Commission document processing and data capture costs, the FEC may be forced to request additional disclosure resources in FY 2001 and in the future.

Absent statutory changes, the Commission does not believe that the FEC has the authority to mandate electronic filings by all filers, nor by a large segment of the filing universe. Unless Congress amends the FECA to require some level of electronic filing, we do not anticipate significant savings in data processing from the current voluntary electronic filing program, although the Commission has embarked on efforts to entice voluntary electronic filings by more of the regulated community.

Therefore, as the PWC study stated, the FEC’s disclosure program—a success as the audit noted—is threatened with being overwhelmed by rising levels of campaign finance activity and the resulting increased Commission workloads. The Commission’s FY 2000 budget request is likely the last one in which no additional disclosure resources are requested, unless statutory changes are enacted to the filing provisions of the FECA.