Assessment Policy

                          MEMORANDUM


                                                                           
                                             November 3, 2000 

To:       All USGS Employees 

From:        Kathryn Clement   (signed Kathryn Clement) 
          Deputy Director 

Subject:  Assessment Policy 

In June, several Strategic Change decisions were announced, including one 
concerning USGS assessment policy.  At that time, an Assessment 
Implementation Team was named.  The team has submitted a progress report 
containing several important recommendations that are being implemented: 
   To achieve a common approach to assessments, USGS has begun developing 
   common business practices; 
   The Chief Financial Officer (CFO) is responsible for our assessment policy 
   and for implementing the common business practices; 
   The USGS assessment policy assumes that all costs are recoverable; 
   Explicit procedures for cost-sharing with our partners are being 
   developed; and On October 30, 2000, CFO Carol Aten issued guidance 
   directing implementation of the first common business practices. 

The progress report also outlines an implementation schedule that calls 
for a description of a comprehensive set of common business practices by 
January 2001, the bulk of implementation to occur during FY 2002, with 
complete implementation by FY 2004. 

In June, a target assessment of 24 percent for FY 2004 was announced.  
That target was set to improve collaboration among the disciplines by 
removing the barriers created by different approaches to assessments.  
That goal has not changed.  However, the team has suggested we attack 
these barriers directly and replace them with common business practices 
before determining the final rate.  Once common business practices are in 
place and we have better financial data, we can evaluate the different 
assessment rates and take action accordingly.  The goal of simplifying our 
operations and lowering our assessment rates remains a top priority. 

The decision in June assumed that the costs of essential infrastructure 
would be considered non-recoverable. None of these costs would be 
recovered from customers, but be covered entirely by appropriated funds.  
The Assessment Implementation Team concluded however that by treating 
certain costs as non-recoverable, USGS would forego a significant amount 
of justifiable reimbursable income.  In addition, applicable Federal 
policy requires that USGS, with a few legislative exceptions, collect full 
costs from customers.  USGS will adopt explicit procedures for sharing 
costs with our partners, such as other DOI bureaus. 
  
These decisions about assessment policy represent continued progress 
toward our fundamental goals: streamlined business practices and lower 
assessment rates.   

I invite you to take a look at the team's progress report posted at 
http://www.usgs.gov:8888/director/strategic_changes/assessmentrpt.html. 
 
Questions or comments about the progress report should be directed to 
Cathy Hill (clhill@usgs.gov) or to Carol Aten (carol_aten@usgs.gov).