Federal Trade Commission:

Information on Proposed Regional Restructuring Effort

GGD-99-25: Published: Feb 16, 1999. Publicly Released: Mar 17, 1999.

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Pursuant to a congressional request, GAO reviewed the Federal Trade Commission's (FTC) proposal to restructure its regional operations, focusing on: (1) FTC's rationale for proposing the regional restructuring; (2) the process FTC followed in developing its restructuring proposal; (3) factors FTC used and could have used in deciding how to restructure; (4) other options to the proposed restructuring identified in prior FTC studies or by Boston and Denver regional officials; and (5) the views of selected stakeholders regarding the impact the proposed restructuring could have in the areas covered by the Boston and Denver regional offices.

GAO noted that: (1) FTC's rationale for developing its proposal to restructure its regional operations was to address its growing concerns about an increased and more complex workload in the face of limited staffing resources; (2) the proposal was to accommodate increased and more complex workloads for both its competition and consumer protection missions; (3) FTC's decisionmaking process for developing its proposal consisted of deliberations among headquarters officials during the early months of 1998; (4) the process for developing the current proposal did not include discussions with staff or managers in its Boston and Denver offices or with external stakeholders that work with these regions; (5) in its strategic plan, FTC identified some of these stakeholders as partners in helping to carry out its mission; (6) after FTC developed the restructuring proposal, but prior to submitting it to the Commissioners for approval, FTC consulted with concerned Members of Congress and officials of the Department of Justice's Antitrust Division about the proposal; (7) according to FTC's proposal, the decision to close the Boston and Denver regional offices and to retain the remaining eight offices was based on three factors--population, gross state product, and the percentage of consumer fraud cases FTC filed in federal courts within each region; (8) according to FTC headquarters officials, FTC also considered staff expertise and geographic location as factors for retaining offices; (9) FTC officials said that FTC used geographic location as a principal factor in deciding where it would locate the three antitrust centers; (10) FTC staff from the Boston and Denver offices and GAO's review of FTC documents identified other factors--productivity, future population growth, and cost--that FTC could have used in making its decision to restructure regional operations; (11) FTC presented a single approach for restructuring its regional operations because it considered other options to be impractical or unrealistic; (12) concerning consumer protection matters, most of the external stakeholders who expressed a view said that they believed the closures would have a negative impact; (13) their primary concerns were: (a) FTC staff from different regions of the country would not be able to devote the time to or did not have knowledge of regional issues; and (b) FTC would not be able to adequately replace the service and assistance provided by the FTC Boston and Denver regional offices; and (14) Boston and Denver FTC officials said they believed consumer protection and competition matters would be negatively affected.

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