Prepared Remarks of NCUA Chairman Rick Metsger on the Agency’s 2016 Mid-Year Budget Review
Thank you, Rendell, for your thoughtful and detailed briefing. It is encouraging to know that we are on-target and under budget for the first half of the year.
I also want to thank you and your staff for the time and effort you have put into preparing analyses and descriptions of our budget. When you took this job, we didn’t warn you how much more work you were going to have to do because the agency was going to be more transparent about both its budget and its budget process. I really appreciate the cooperation we have received from your team.
We can be proud that NCUA continues to provide best-in-class transparency around its budget. We provide more information, more often, on our web site than any other federal financial institutions regulator, and we are continuing to improve both the breadth and detail of the information we provide.
I would add that you are providing this unparalleled level of disclosure without any additional staff to do the work.
Rendell, I also appreciate the specific examples you have provided on how the agency is constantly re-evaluating its expenditures and contracts with an eye towards improving efficiency and reducing expenditures wherever possible.
Even when a budget is adopted, we still look for opportunities to economize. That is what it means to be engaged in Continual Quality Improvement.
As of mid-year, we are $1.9 million under budget for pay and benefits and project that we will end the year using 33 fewer full-time equivalents staff during 2016. That is a good place to be, although I would point out to those who want to expand the size of the board that part of the reason why we are under budget for pay and benefits is because there is a vacancy on the Board.
We have also achieved significant economies in our travel budget by reducing expenditures for the National Exam Program Training event, which is held every other year. Even though the event was held this year, we estimate the overall travel budget for 2016 will be lower than it was in 2015.
While these are the largest reductions in the budget, no areas has been immune from scrutiny. You’ve looked under the couch cushions and also found savings in rent, supplies, and furniture, as well as nearly $200,000 in savings for contracted services. We are continuing to look for other opportunities to economize.
Contracted services make up about 10 percent of our budget, the third largest line item, and because some people have asked for more information on this line item, I asked our Chief Financial Officer to provide a new pie chart breaking down our contract services. On the agency’s website, you will see additional data from each of our offices on their expenditures for contracted services.
As part of my effort to promote Continual Quality Improvement, in just the first three months since I became Chairman we have:
- Asked for comments on how to improve call reports and the reporting progress;
- Formed an Exam Flexibility Initiative to review all dimensions of our examination and supervision process;
- Announced that we will be the only financial regulator to release pre-decisional information on our budget and hold a pre-decisional briefing for stakeholders; and
- Increased the amount of information on our budget we put on our web site, and its clarity.
All of this comes on top of several significant reforms instituted by Chairman Matz, including:
- The release of our full line item budgets by office;
- The release of individual Board office and travel budgets; and
- The posting of both the overhead transfer rate and operating fee for comment.
The bottom line is that the agency continues to be a good steward of its funds. We never stop looking for ways to economize, and continue to be a leader in our field on budget transparency. There will always be more to be done, but that is a record we can be proud of.