The GPRA also requires the FDIC to develop an Annual Performance Plan.
This plan, which combines the agencys corporate operating and business plans,
defines what will be accomplished during the year to achieve strategic goals and
objectives. The plan guides the allocation of FDIC resources to its three major
programsinsurance; supervision; and policy, regulation and outreachand
identifies annual goals for measuring performance. A quarterly reporting mechanism was
instituted during 1997 to provide senior FDIC management with regular feedback on the
Corporations actual performance against the measurable performance targets contained
in the Annual Performance Plan. The process allows management to evaluate performance and
to adjust strategic goals and resource allocations as needed.
One of the major initiatives for 1998 is to develop an automated
system that will assist the FDIC in linking its budget to the Strategic Plan and the
Annual Performance Plan, in accordance with GPRA requirements.
Expenses and Reducing Costs
The FDIC's budget is the culmination of the Corporation's annual planning
process. Budget and staffing levels are based upon the Annual Performance Plans for each
division and office. In 1997, the FDIC continued to make considerable progress in
controlling expenses and reducing costs. Actual expenses for 1997 were $1.38 billion
22 percent less than 1996 spending and 15 percent below the approved 1997 budget. Actual
1997 spending was below budgeted levels primarily due to lower costs for asset
liquidation-related contracting and a more rapid pace of staff downsizing.
Employee compensation and benefits were the largest budgeted
expenses for 1997, constituting 54 percent of the budget. At the beginning of 1997, a
total of 9,151 employees were on the payroll, and targeted staffing for year-end was
8,361. By December 31,1997, the workforce had shrunk substantially below the authorized
level to 7,793, primarily due to the consolidation of field operations. As a result,
spending for employee compensation and benefits totaled $752 million--17 percent below
the $910 million spent for this purpose in 1996 and 13 percent below the approved 1997
budget of $868 million.
Outside services represented the second largest component of
total expenses in 1997. Although the FDIC budgeted $429 million for this category, actual
1997 expenses were $330 million, which is 23 percent less than the budgeted amount and 43
percent below the $581 million spent in 1996.
The continued consolidation of field operations also contributed
to reduced expenses for buildings and leased space. For 1997, $123 million was spent for
buildings, down significantly from the $129 million spent in 1996.
Downsizing and Consolidation
As noted previously, the Corporation continued to shrink the size of its workforce in 1997
due to a decline in workload. Total FDIC staffing in 1997 fell by approximately 15
percent. Staffing for the Division of Resolutions and Receiverships (DRR), which
liquidates the assets of failed institutions, fell by over 40 percent during the year.
DRR staffing reductions were accomplished primarily through the
expiration of term and temporary appointments and by consolidating field liquidation
operations. DRR operations and related Legal Division and other support activities in San
Francisco, New York, Chicago, Atlanta, and Franklin, MA, were consolidated into other
offices during the year. This was part of a phased, three-year consolidation plan
announced the previous year. DRR field operations are expected to be fully consolidated
into a single site in Dallas by year-end 1999. In addition, the Division of Finance's
field financial activities were consolidated in Dallas in 1997, and three Division of
Supervision (DOS) field offices and a Division of Compliance and Consumer Affairs (DCA)
satellite office were closed.