[House Report 104-435]
[From the U.S. Government Publishing Office]
Union Calendar No. 210
104th Congress, 1st Session - - - - - - - - - - - - House Report 104-435
MAKING GOVERNMENT WORK: FULFILLING THE MANDATE FOR CHANGE
__________
THIRD REPORT
by the
COMMITTEE ON GOVERNMENT
REFORM AND OVERSIGHT
together with
ADDITIONAL VIEWS
December 21, 1995.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
WILLIAM F. CLINGER, Jr.,
Pennsylvania, Chairman
CARDISS COLLINS, Illinois BENJAMIN A. GILMAN, New York
HENRY A. WAXMAN, California DAN BURTON, Indiana
TOM LANTOS, California J. DENNIS HASTERT, Illinois
ROBERT E. WISE, Jr., West Virginia CONSTANCE A. MORELLA, Maryland
MAJOR R. OWENS, New York CHRISTOPHER SHAYS, Connecticut
EDOLPHUS TOWNS, New York STEVEN SCHIFF, New Mexico
JOHN M. SPRATT, Jr., South Carolina ILEANA ROS-LEHTINEN, Florida
LOUISE McINTOSH SLAUGHTER, New York WILLIAM H. ZELIFF, Jr., New
PAUL E. KANJORSKI, Pennsylvania Hampshire
GARY A. CONDIT, California JOHN M. McHUGH, New York
COLLIN C. PETERSON, Minnesota STEPHEN HORN, California
KAREN L. THURMAN, Florida JOHN L. MICA, Florida
CAROLYN B. MALONEY, New York PETER BLUTE, Massachusetts
THOMAS M. BARRETT, Wisconsin THOMAS M. DAVIS, Virginia
GENE TAYLOR, Mississippi DAVID M. McINTOSH, Indiana
BARBARA-ROSE COLLINS, Michigan JON D. FOX, Pennsylvania
ELEANOR HOLMES NORTON, District of ColumbiaTATE, Washington
JAMES P. MORAN, Virginia DICK CHRYSLER, Michigan
GENE GREEN, Texas GIL GUTKNECHT, Minnesota
CARRIE P. MEEK, Florida MARK E. SOUDER, Indiana
CHAKA FATTAH, Pennsylvania WILLIAM J. MARTINI, New Jersey
BILL BREWSTER, Oklahoma JOE SCARBOROUGH, Florida
TIM HOLDEN, Pennsylvania JOHN B. SHADEGG, Arizona
------ MICHAEL PATRICK FLANAGAN, Illinois
BERNARD SANDERS, Vermont CHARLES F. BASS, New Hampshire
(Independent) STEVEN C. LaTOURETTE, Ohio
MARSHALL ``MARK'' SANFORD, South
Carolina
ROBERT L. EHRLICH, Jr., Maryland
James L. Clarke, Staff Director
Kevin Sabo, General Counsel
Judith McCoy, Chief Clerk
Bud Myers, Minority Staff Director
Subcommittee on Government Management, Information, and Technology
STEPHEN HORN, California, Chairman
CAROLYN B. MALONEY, New York MICHAEL PATRICK FLANAGAN, Illinois
MAJOR R. OWENS, New York PETER BLUTE, Massachusetts
ROBERT E. WISE, Jr., West Virginia THOMAS M. DAVIS, Virginia
JOHN M. SPRATT, Jr., South Carolina JON D. FOX, Pennsylvania
PAUL E. KANJORSKI, Pennsylvania RANDY TATE, Washington
JOE SCARBOROUGH, Florida
CHARLES F. BASS, New Hampshire
J. Russell George, Staff Director
and Counsel
Mark Uncapher, Professional Staff
Member and Counsel
Mark Brasher, Professional Staff
Member
Anna Miller, Professional Staff
Member
Andrew Richardson, Clerk
Matthew Pinkus, Minority
Professional Staff
David McMillen, Minority
Professional Staff
LETTER OF TRANSMITTAL
----------
House of Representatives
Washington, DC, December 21, 1995.
Hon. Newt Gingrich,
Speaker of the House of Representatives,
Washington, DC.
Dear Mr. Speaker: By direction of the Committee on
Government Reform and Oversight, I submit herewith the
committee's third report to the 104th Congress. The Committee's
report is based on hearings conducted by its Subcommittee on
Government Management, Information, and Technology.
William F. Clinger, Jr.,
Chairman.
C O N T E N T S
----------
Page
I. Summary of Oversight Findings and Recommendations.................1
A. Introduction.......................................... 1
B. Overview of Investigation............................. 3
C. Findings.............................................. 5
D. Recommendations....................................... 8
II. Report on the Committee's Oversight Review.......................10
A. Background............................................ 10
1. Need for Rethinking Government.................. 10
2. The National Performance Review................. 11
3. Additional Factors Prompting This Investigation. 11
B. Proceedings of the Subcommittee on Government
Management, Information, and Technology................ 11
1. May 2, 1995, Hearing............................ 11
2. May 9, 1995, Hearing............................ 13
3. May 16,1995, Hearing............................ 14
4. May 16 and 23, 1995, Hearing.................... 15
5. June 6, 1995, Hearing........................... 16
6. June 13 and 19, 1995, Hearing................... 17
7. June 20, 1995, Hearing.......................... 19
8. June 27, 1995, Hearing.......................... 20
C. Determining the Federal Role.......................... 21
1. Missions and Services........................... 22
2. Departments and Agencies........................ 24
3. Managing the Transformation..................... 26
4. Federal-State Government Goals-oriented
Management....................................... 28
D. Organizing Government................................. 28
1. Management Structure............................ 28
2. Reengineering Techniques........................ 31
3. Information Technology.......................... 32
4. Field Organizations............................. 33
5. Workforce Competency............................ 33
E. Making the Government Accountable..................... 33
1. Public Accountability........................... 33
2. Goals and Work Results.......................... 36
3. Outcomes Versus Outputs......................... 37
4. Reports to the Citizenry........................ 37
III.Conclusions......................................................38
VIEWS
Additional views of Hon. Cardiss Collins, Hon. Carolyn B.
Maloney, Hon. Henry A. Waxman, Hon. Robert E. Wise, Hon. Major
R. Owens, Hon. Edolphus Towns, Hon. John M. Spratt, Jr., Hon.
Louise McIntosh Slaughter, Hon. Paul E. Kanjorski, Hon. Gary A.
Condit, Hon. Collin C. Peterson, Hon. Thomas M. Barrett, Hon.
Barbara-Rose Collins, Hon. Eleanor Holmes Norton, Hon. James P.
Moran, Hon. Gene Green, Hon. Carrie P. Meek, Hon. Chaka Fattah,
and Hon. Tim Holden............................................ 42
APPENDIXES
Appendix A. Summary of Findings and Recommendations.............. 53
Appendix B. Index of Witnesses................................... 58
Union Calendar No. 210
104th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 104-435
_______________________________________________________________________
MAKING GOVERNMENT WORK: FULFILLING THE MANDATE FOR CHANGE
_______
December 21, 1995.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______________________________________________________________________
Mr. Clinger, from the Committee on Government Reform and Oversight,
submitted the following
THIRD REPORT
On December 14, 1995, the Committee on Government Reform
and Oversight approved and adopted a report entitled ``Making
Government Work: Fulfilling the Mandate for Change.'' The
chairman was directed to transmit a copy to the Speaker of the
House.
I. SUMMARY OF OVERSIGHT FINDINGS AND RECOMMENDATIONS
a. introduction
The Committee on Government Reform and Oversight (``the
committee'') has primary legislative and oversight jurisdiction
with respect to the ``overall economy, efficiency and
management of Government operations and activities, including
Federal procurement,'' and to ``[r]eorganizations in the
executive branch of the Government.'' It also has primary
oversight responsibility to ``review and study, on a continuing
basis, the operation of Government activities at all levels
with a view to determining their economy and efficiency''
(Rules of the House of Representatives, 104th Congress,
X,1(g)(6) and (12) and X,2(b)(2)).
In addition to its other oversight responsibilities under
Rule X,4(c)(2):
[T]he Committee on Government Reform and Oversight
may at any time conduct investigations of any matter
without regard to the provisions . . . conferring
jurisdiction over such matter upon another standing
committee. The committee's findings and recommendations
in any such investigation shall be made available to
the other standing committee or committees having
jurisdiction over the matter involved. . . .
Pursuant to this authority, the Subcommittee on Government
Management, Information and Technology convened eight oversight
hearings to solicit advice and recommendations for (a) changing
what the Federal Government does; (b) improving the overall
economy, efficiency and management of its operations and
activities; and (c) effectively planning, measuring and
reporting the results to the American public.
The committee's inquiry reflected public expectation for
reform, as expressed by the 1994 election, and including a
commitment to balance the Federal budget by 2002 in the
``Contract With America.'' As the ``Contract'' stated,
Balancing the budget will not be easy. It will
require a fundamental restructuring of government. We
believe the American people are ready for government
that does . . . [fewer] of the wrong things . . . [and]
does the right things well.\1\
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\1\ Gillespie, Edward and Schellhas, Bob, eds., Contract with
America, The Bold Plan by Rep. Newt Gingrich and Rep. Dick Armey and
the House Republicans to Change the Nation. New York, Random House,
1994, p. 23.
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The committee believes that any exercise in ``Making
Government Work'' must begin with an examination of the Federal
Government's mission. Fulfilling the commitment to balance the
Federal budget in seven years requires a recognition of the
fiscal constraints on the Federal Government, whose ambitious
tasks have outstripped available public resources. To redress
this overextension, a total review of the Federal Government's
activities is necessary.
The committee is responding to the prevailing public
expectations that provided a mandate to the Congress to
consider with care the various Government functions, and to
determine whether or not they should continue to be performed
and, if retained, how they can be made more effective. As
Barone and Ujifusa have noted:
The 1994 election . . . marked a return to old
traditions . . . [it] did not entirely transform either
the political opinion or civil society; it only
provided an occasion and a setting in which opinions
which had long been held could be expressed and a
society that had been for some time reshaping itself
could reveal its new form. . . . It is a country in
which political forces and governmental mechanisms tend
to ratchet the size of government down, not ratchet it
up. . . . Just as Americans decided from long
experience with the depression of the 1930s and the
prosperity of the 1940s and after[ward] that markets
don't work very well and government does, so Americans
decided from long experience with the stagflation of
the 1970s and the growth of the 1980s and after[ward]
that government doesn't work very well and markets do.
. . . Not all the forces tending to ratchet down
government will always succeed. But they are all
working in the same direction.\2\
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\2\ Barone, Michael, and Grant Ujifusa, ``Introduction: The
Restoration of the Constitutional Order and the Return to Tocquevillian
America,'' The Almanac of American Politics 1996, Washington, DC:
National Journal, Inc., 1995, pp. xxiii ff.
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The experience of American industry also influenced the
committee. In the past decade, corporations and other entities
have reexamined their roles and redefined their institutional
objectives and purposes. Many corporate changes have been
facilitated by technology that speeds information to decision
makers and thereby reduces the need for traditional
hierarchies. While such changes have been wrenching at times to
the people in these institutions, the result has been to make
American industry far more productive and competitive. The
Federal Government has yet to implement a similar
transformation on any appreciable scale. While the committee
recognizes fundamental differences between the purposes and the
cultures of business and Federal Government organizations, it
remains receptive to the suggestion that ``rethinking'' and
``reengineering'' methods successfully used in the private
sector can be and should be adapted for use in the Federal-
Government. We note that between 1990 and 1995 non-farm
productivity in the United States grew at a 2.2 percent annual
rate.\3\ If there had been a similar productivity growth in the
public sector, there would have been dramatic improvements in
the form of additional services and reduced costs.
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\3\ Farrell, Christopher, et al., ``Riding High,'' Business Week,
Oct. 9, 1995, pp. 134-135.
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b. overview of investigation
The committee notes that the last comprehensive effort to
reorganize the Cabinet was President Nixon's proposal of 25
years ago. At that time the President provided this assessment
of the executive branch, which is equally valid today:
As we reflect on organizational problems in the
Federal Government today, one seems to stand out above
all others: the fact that the capacity to do things . .
. is exceedingly fragmented and broadly scattered
throughout the Federal establishment. . . . [T]he wide
variety of offices and bureaus, departments and
agencies . . . [o]ften . . . trip over one another as
they move to meet a common problem. . . . Frequently,
they behave like a series of fragmented fiefdoms--
unable to focus Federal resources or energies in a way
which produces any concentrated impact. Consider these
facts:
Nine different Federal departments and 20 independent
agencies are now involved in education matters. Seven
departments and eight independent agencies are involved
in health. In many major cities, there are at least 20
or 30 separate manpower programs, funded by a variety
of Federal offices. Three departments help develop our
water resources and four agencies in two departments
are involved in the management of public lands. Federal
recreation areas are administered by six different
agencies in three departments of the government. Seven
agencies provide assistance for water and sewer
systems. Six departments . . . collect similar economic
information--often from the same sources--and at least
seven departments are concerned with international
trade. While we cannot eliminate all of this diffusion
we can . . . bring similar functions under common
commands.\4\
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\4\ Nixon, Richard M., President of the United States, Message to
the Congress, March 25, 1971, ``President's Departmental Reorganization
Program.''
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One could read the above quotation and believe that
President Nixon was describing today's Federal Government. In
fact, the Cabinet of 1995 has three more departments than did
the Nixon Cabinet, and Federal programs and agencies have
continued to proliferate virtually unchecked. The executive
branch of the Federal Government has not undergone a
comprehensive, systematic review of its missions, services, and
organization since the Nixon Administration. The similar
thrusts toward consolidation in President Nixon's 1971 plan and
The Heritage Foundation's 1995 proposal suggest that many of
the problems of duplication, proliferation, inefficiency and
waste within the Federal Government are as critical today (if
not more so) as they were a quarter century ago.
The Nixon reorganization plan, President Carter's Personnel
Management Project which led to the Civil Service Reform Act of
1978, the Grace Commission under President Reagan, and most
recently President Clinton's National Performance Review [NPR]
effort have each influenced the committee's report. The
committee also reviewed material and heard testimony on
departmental restructuring from scholars at several research
and public policy organizations--including The Heritage
Foundation,\5\ and The Brookings Institution,\6\--and the
various task forces of the House Republican Freshman. These
efforts have as their common purpose the alignment and
consolidation of the existing related functions of the Federal
Government, and the streamlining of the Cabinet departments.
However, the Heritage and House Freshman plans place
considerable emphasis on reducing the scope of Federal
Government activities. Because of the Administration's
management responsibilities for the Federal Government, the
point of reference for all material reviewed was the National
Performance Review (NPR), Phases I and II.
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\5\ Hodge, Scott A., Ed., Rolling Back Government: A Budget Plan to
Rebuild America, Washington DC, The Heritage Foundation, 1995.
\6\ Kettl, Donald F., Reinventing Government? Appraising the
National Performance Review, a report of The Brookings Institution's
Center for Public Management, August 1994.
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The series of eight hearings began on May 2, 1995, with an
overview of the NPR process. The committee focused next, on May
9, on the appropriate role of Federal executive leadership in
strengthening the management of Cabinet level departments. The
third hearing, on May 16, 1995, turned to consolidating and
restructuring the executive branch, assessing alternative ideas
for rearranging or reducing several departments and agencies.
In its fourth session, on May 16 and 23, 1995, the committee
examined the consolidation of a large number of Federal
programs and organizations. Attention turned in June to the
Federal Government's field establishment. After reviewing
several types of possible corporate structures for Federal
programs such as aviation, electric power, and transportation,
on June 6, the committee heard testimony from several regional
administrators on June 13, 1995, to understand their roles and
hear their suggestions, then adjourned to Chicago on June 19
for a firsthand look at the Federal Government's operations
from the field perspective. The seventh hearing, on June 20,
1995, in Washington, emphasized improving governmental results
through performance measurement, benchmarking and
reengineering, as many private corporations have done. The
hear-
ings ended on June 27, 1995, focused on agencies' preparation
for compliance with the Government Performance and Results Act
of 1993, or GPRA.
This report details the above eight hearings and expresses
the committee's views on resultant findings.
c. findings
Based on the investigation and oversight hearings conducted
by the Subcommittee on Government Management, Information and
Technology, the committee finds as follows:
1. The Management of the Federal Government Needs Improvement.
(a) The capacity of the President as the chief executive
officer of the Federal Government and its principal manager has
been diminished over several Administrations. The Executive
Office of the President has abrogated its responsibility to
oversee and improve the Government's management structure.
(b) The capacity available to the President in the Office
of Management and Budget [OMB] to reform or improve management
has steadily declined and now barely exists, despite a
competent Director of OMB and a Deputy Director for Management,
whose talents in this area are underutilized. Federal
management organization, oversight authority, and general
influence have been consistently overridden by recurring budget
crises and budget cycle demands, despite conscientious
intention to give ``Budget'' and ``Management'' equal voice
within OMB.
(c) The NPR, in its ad-hoc and episodic approach to
management issues, reveals the weakened state of management
capacity of the Executive Office of the President.
(d) The NPR-inspired announcement of a reduction of over a
quarter-million Federal jobs may have been warranted; however,
without first having a solid empirical rationale for doing so
and not knowing where or how, it reflected a lack of strategic
vision as to the Federal Government's role, and as such it
seriously eroded Federal workers' morale, productivity, and
planning for the future.
(e) The capacity of the Office of Personnel Management to
provide leadership to a revitalized career service has been
seriously impaired.
(f) Short-term political appointees have layered and
``thickened'' the Federal Government's upper echelons of
organization to a point where productivity, management, and
continuity of operation have become seriously affected.
(g) Some potential candidates for political appointment
believe that service in Federal organizations will hinder their
careers, imposing a protracted and intrusive nomination process
as well as numerous restrictions on financial and employment
activities during and following Federal Government assignments.
As a result, the pool of available talent qualified for
appointment and willing to serve has been diminished.
(h) Qualified people considering careers in public
administration are discouraged from Federal career employment
by layers of political appointees of uneven quality precluding
advancement to positions of senior responsibility.
(i) Career Federal public administrators have a long record
of faithfully executing clearly established policy and
rendering effective political leadership. However, political
appointees as a group have tended to display more loyalty to
individual political sponsors and special interests than to the
President, who is elected by and ultimately accountable to the
people.
(j) Employee-buyout programs in Federal organizations have
not worked as well as intended, resulting in the loss of
employees with the most marketable skills, leaving in the
workforce many of the poorer performers.
(k) Programs for Federal-employee professional education,
training and development are vital to a smaller workforce
adopting modern management methods and achieving desired
productivity improvements.
(l) The Federal Government must follow the best practices
of private and public organizations for exploiting information
technology in reforming management, reducing size, and raising
productivity and market competitiveness. A recent General
Accounting Office report provides valuable insights on how the
Federal Government can lower costs, improve productivity, and
provide better services to its citizens.\7\
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\7\ United States General Accounting Office, ``Managing for
Results: Experiences Abroad Suggest Insights for Federal Management
Reforms,'' GAO/GGD-95-120, May 1995.
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2. The Federal Intergovernmental Roles are Poorly Defined.
(a) The Federal role has evolved in a patchwork manner. The
Federal Government lacks a clear and comprehensive statement of
its proper role. The result is similar redundant programs
throughout disparate departments and agencies.
(b) Many citizens view the Federal Government as having
overreached its proper role, by ``meddling'' in affairs such as
elementary and secondary education (better left to States and
communities), marketing and distribution of energy resources
(better left to market forces), and applied research and
development (better left to private investment and
competition).
(c) Many State governments are willing to risk accepting
large Federal block grants, with fewer dollars, in return for
greater flexibility and fewer restrictions. There is some
concern that any residual reporting burdens and controls from
Washington may interfere with States' roles and as such
constitute an ``unfunded mandate,'' contrary to a law sponsored
by this committee.
(d) In the current environment many agencies and States are
trying to develop program partnerships. Federal-State program
partnership agreements reached a high point during the Johnson
and early Nixon Administrations. State and Federal leaders need
to be aware that those intergovernmental agreements later
deteriorated because roles and responsibilities were not
clearly defined and accepted by all interested parties. Another
cause was that the Federal Government seized a decision-making
role disproportionate to the resources it provided.
3. Organization of Federal Functions is Uneven and Duplicative.
(a) No Cabinet-level department has been eliminated
outright in our Nation's history, although many have been
reorganized, renamed, combined, or split.
(b) Today's Federal Government is even more enmeshed in red
tape, replicated functions and controls than it was in 1971,
when President Nixon tried unsuccessfully to organize and
streamline Cabinet departments.
(c) The proposed ``Department of Commerce Dismantling Act
of 1995'' contains a model for dismantling any high-level
Federal organization a transitional organization within the
Office of Management and Budget.
(d) Approximately a million Federal employees work in some
thirty thousand field offices outside of Washington. Although
some field-offices only have five or fewer staff, closing them
has consistently proven a difficult, almost intractable
political problem. The committee notes progress by the U.S.
Department of Agriculture in addressing the problem.
4. Public Accountability is Weak.
(a) The National Performance Review [NPR] contributed to
identifying the need to improve the Federal Government and
lower its operating costs.
(b) By not establishing first what activities the Federal
Government should be performing, the NPR was flawed from the
outset and did not achieve enough progress.
(c) NPR neglected to place sufficient emphasis on fiscal
accountability by failing to address the Federal Government's
responsibility for stewardship of public resources.
(d) The ad-hoc, even disjointed, nature of NPR is a telling
sign of the disconnect between policy and management, evidence
atrophy of the tools of management, and an admission that the
President has no organized capacity to manage the executive
branch.
(e) The NPR recommended a doubling of the existing 1-to-7
supervisory span of control to a 1-to-14 or 1-to-15 supervisor
to subordinate ratio. This recommendation was without
appropriate foundation and ignored the Government's widely
varying missions, and threatens public accountability.
(f) With more Federal work being done under contract with
private vendors, effective contract administration is
critically important in ensuring efficiency, effectiveness, and
accountability.
(g) The growth of ``contract government'' is a direct by-
product of the emphasis on personnel reduction. As successive
administrations have sought to limit or reduce the number of
Federal employees, more and more activities have been
contracted out.
(h) The experiences of other foreign and federal, State and
local governments in carrying out significant management and
accountability reforms are valuable to Federal agency managers
as they implement the Government Performance and Results Act of
1993 [GPRA].
(i) Government corporations and other Government-sponsored
enterprises have assumed roles and responsibilities very
different from those for which the Government Corporation
Control Act of 1945 was intended. Today, a conceptual framework
is needed for setting up these kinds of enterprises and
centralized oversight of their management operations.
(j) Executive branch accountability is made more difficult
by the complex congressional budget process and by additional
legislative branch restrictions and controls placed on
Government agencies, such as prohibitions on closing outdated
Federal field offices.
d. recommendations
Based on the foregoing findings, the committee recommends
as follows:
1. Strengthen the President's Role as Chief Executive Officer of the
Executive Branch.
(a) Management of the Federal Government should be a
Presidential priority. Among the President's many roles is the
responsibility to serve as chief executive officer or general
manager of the Federal Government. Many broad initiatives
intended to make the Federal Government work better depend on
the commitment by the President and his staff in the Executive
Office of the President. By approaching the Federal Government
almost exclusively from a budget or a policy perspective,
Presidents limit their capacity to reform management in the
Federal Government.
(b) The President, acting Jointly with Congress through a
Federal management office, should establish intergovernmental
partnerships, with clearly defined Federal and State roles and
responsibilities, and allow local Federal managers the
authority and flexibility needed to assist State and local
officials in managing devolved programs, functions, and
resources.
(c) To make the President's executive office more
accountable to the public, Congress should establish an Office
of Inspector General in the Executive Office of the President.
2. Establish an Office of Management.
(a) To enhance the President's management capability
throughout the executive branch, Congress should establish in
the Executive Office of the President a top-level management
and organization oversight office headed by an administrator
who has direct access to the President. Sustained attention to
management issues beyond recurring budget crises is vital to
ensure effectiveness. The new Federal management office would
combine the management functions of the OMB, the residual
policy and oversight functions of the Office of Personnel
Management, and the policy functions from the General Services
Administration into an entity separate from but equal in
stature to the remaining Office of the Budget.
(b) The executive branch is in serious need of an office
with responsibility for departmental reorganizations such as
the proposed dismantling of the Department of Commerce. The
current legislative initiative in that regard will be a model
for managing large-scale reductions in the Federal Government's
organizational structure and scope of work.
(c) An Office of Management could encourage the
implementation of the strategic information management and
technology practices increasingly common in quality private and
public organizations. It could stress the need to focus a
concentration of energy on technology improvements that attain
goals; and assert senior management control over technology
investment decisions.
(d) Executive agencies should exploit, publicize, and
replicate successful private sector ventures in making Federal
Government organizations work more effectively, drawing upon
past successes.
3. Convene a Commission on Federal Reorganization.
(a) Congress should establish a blue-ribbon inquiry
commission of experts from the business, academic, and
nonprofit sectors and Federal, State and local government to
recommend to the President and Congress in early 1997: (i) ways
to organize more efficiently the functions the Federal
Government performs, and (ii) changes in law that would reduce,
transfer, or eliminate Federal functions. If resources permit,
such a commission should produce a reorganization plan.
(b) Such a commission should apply the guideline criteria
for agency elevation to Cabinet department status which were
developed in 1988 by the National Academy of Public
Administration [NAPA].\8\ Such a review ought to result in a
new alignment and grouping of the tasks and functions of the
Federal role by major purpose.
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\8\ National Academy of Public Administration, ``Evaluation of
Proposals to Establish a Department of Veterans Affairs: A Report,''
Washington, D.C., 1988.
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(c) Congress should concurrently provide the President
broad authority, including optional fast-track authority, to
restructure executive branch departments and agencies, similar
to past (and now expired) Reorganization Acts.
(d) Congress should be fully involved in the consolidation
of the many Federal programs it enacts and funds; the proposed
commission should look for additional opportunities to
consolidate or combine Federal programs, and make
recommendations accordingly.
(e) Once changes have been made in the structure of the
executive branch, Congress should conform its own internal
committee organization and jurisdictions to parallel the
executive branch changes.
4. Reshape the Federal Civil Service.
(a) Congress should proceed with legislation that would
reduce the allowable number of political appointees to an
initial level of 2,000-aimed principally at Schedule C (not
subject to Senate confirmation) positions--and set lower
targets for future years as additional executive branch
organizations are consolidated or abolished.
(b) Congress should appropriate the professional education,
training and development funds for executive agencies, not as
separate line items, but as an integral part of total personnel
costs. That would afford managers the flexibility to choose
between training and hiring to upgrade collective
organizational skills.
(c) Any future Federal employee ``buyout'' legislation
should be limited to serving the needs of the downsized Federal
Government by focusing agency buyouts on those with less-needed
skills, functions, and capabilities.
5. Strengthen Public Accountability.
(a) Both the President and Congress should complete the
work to implement the Government Performance and Results Act,
in order to make the executive branch both performance-driven
and accountable. The Act's performance measurement provisions
ought to be used in all steps of the budget and management
process.
(b) To make public accountability in the executive branch
less cumbersome and counterproductive, Congress should simplify
the present complex structure of 13 separate appropriations
bills by combining them into a lesser number, possibly
comparable to the internal budget review structure in the
Office of Management and Budget. Congress should adjust its own
internal authorizing and appropriating committee structure
correspondingly.
(c) Congress should amend the Government Corporation
Control Act of 1945 to raise the efficiency and effectiveness
of the Federal Government's business-type operations and
organizations and to set standards consistent with today's
marketplace conditions.
(d) In its quest to attain the objective of balancing the
Federal budget by fiscal year 2002, Congress must recognize
three critical needs: (i) to preserve the Federal Government's
accountability to the governed throughout the transformation
process; (ii) to foster that objective by making investments in
human and technological development during that process; and
(iii) to accept the hard lessons learned by industry that
workforce strength is to be cut only after--not before or
while--the Federal roles have been determined and
organizational structures have been reduced or eliminated.
II. REPORT ON THE COMMITTEE'S OVERSIGHT REVIEW
a. background
1. The Need for Rethinking Government.
In preparing for its investigation the Subcommittee on
Government Management, Information and Technology noted the
following recommendations from author and management expert
Peter Drucker:
Of the 384 recommendations of ways to reinvent
government identified by the Vice President in 1993,
about half are being proposed in the budget for fiscal
year 1995. If all these recommendations are accepted by
Congress, they should result in savings of about $12.5
billion over two years . . . [but] an annual saving of
$6 billion . . . be a cut of no more than two tenths of
one percent of the budget. . . .
Government has outgrown the structure, the policies and the
rules designed for it and still in use. . . . The first
reaction in a situation of disarray is to do what Vice
President Gore and his associates are now doing--patching. It
always fails. The next step is to rush into downsizing.
Management picks up a meat-ax and lays about itself
indiscriminately. . . . In many . . . cases, downsizing has
turned out to be . . . ``amputation before diagnosis.'' The re-
sult is always a casualty. . . . The way to get control of
costs is not to start by reducing expenditures but to identify
the activities that are productive that should be strengthened,
promoted and expanded. . . . This has been done often enough in
all kinds of organizations--businesses, hospitals, churches,
and even local govern- ments--that we know it works. . . .
Continuing with activities that we would not now choose to
begin is wasteful. They should be abandoned.\9\
---------------------------------------------------------------------------
\9\ Drucker, Peter F., ``Really Reinventing Government,'' Atlantic
Monthly, vol. 273, no. 2 (Feb. 1995), pp. 49-61, citing Gore, Albert
P., Jr., Vice President of the United States, Creating a Government
That Works Better and Costs Less--The Report of the National
Performance Review. New York, Penguin Books USA, 1993, p. 292.
---------------------------------------------------------------------------
2. The National Performance Review.
On March 3, 1993, President Bill Clinton, in announcing the
NPR, told the Nation:
Our goal is to make the entire Federal Government
both less expensive and more efficient, and to change
the culture of our national bureaucracy away from
complacency and entitlement toward initiative and
empowerment. We intend to redesign, to reinvent, to
reinvigorate the entire national government.\10\
---------------------------------------------------------------------------
\10\ Gore, op. cit., p. xxix.
---------------------------------------------------------------------------
The committee supports the notion of cultural change toward
initiative and empowerment. Accepting the business ethic of
pleasing one's customers--the taxpayer--is a worthy pursuit in
a democracy. However, no initiative should be pursued at the
expense of fiscal accountability. Without determining
government's proper role, efforts to redesign, reinvent, and
reinvigorate any part of the Federal Government are likely to
fail. Those concerns underscore the findings, recommendations,
discussion and conclusions of this report.
3. Additional Factors Prompting This Investigation.
The majority of the committee views the 1994 electoral
mandate as a reflection of the electorate's changed
expectations as to the appropriate role of the Federal
Government. We note that the committee jurisdiction contains
several areas of the ``Contract With America,'' including the
need to eliminate unfunded mandates on State and local
governments and to rationalize Federal Government regulations.
The international trend toward devolution and performance-
driven government focused the committee's attention on the
recent accomplishments of other, smaller nations whose
economies and governments had fallen into even more serious
disarray than our own. The successes of the Government of New
Zealand in reestablishing creditworthiness through a fiscally
disciplined program of transferring nationalized functions to
government corporations and private industry were particularly
promising. The fact that these accomplishments of large-scale
management reforms were possible in the public sector is
pertinent to current U.S. Government reform efforts.
b. proceedings of the subcommittee on government management,
information and technology
1. May 2, 1995, Hearing on the NPR.
At that hearing, testimony was received from
representatives of the Office of Management and Budget [OMB],
the General Accounting Office [GAO], the governments of New
Zealand and Oregon, and four leading public policy research
group analysts. The National Performance Review [NPR] had two
phases, the first to make government work better and cost less,
and the second to have Cabinet departments fundamentally
reevaluate missions, goals and objectives. Witnesses testified
on the NPR's role and mission and on whether the NPR had
suitable benchmarks for evaluating its progress, had met
expectations as implemented so far, and could likely attain its
stated objectives.
Alice M. Rivlin, Director, and John Koskinen, Deputy
Director for Management, OMB, offered testimony for the Clinton
administration, focusing on assessing the results achieved to
date from the NPR and supporting its effectiveness in improving
executive branch departments and agencies. It was noted that
Vice President Gore had encouraged agencies to adopt the
review's 1,200 recommendations from its first phase. Dr. Rivlin
urged congressional funding to continue NPR's work through its
second phase.
Charles A. Bowsher, Comptroller General of the United
States, GAO, applauded the concepts and aims of the NPR.
However, he cited shortcomings such as the failure of the
National Performance Review to deal with three-fourths of what
the GAO considered to be the most important management problems
in Federal agencies, including acquisition systems at the
Federal Aviation Administration and defense weapons system
acquisition and inventory management. He also advocated clearer
statements of goals, better use of information, and a tighter
focus on outcome-based management.
Tony Dale, Budget Manager of the New Zealand Treasury (in
his capacity as Harkness Fellow, 1994-95, the Commonwealth
Fund), discussed his government's management reforms, which
included privatization of some public sector functions and the
consequent development of responsive government corporations.
This effort led to reduced government outlays, low inflation, a
growing economy, and a ten-year turnaround from a nine percent
deficit to a seven percent surplus in the budget of New
Zealand.
Duncan Wyse, Executive Director, Oregon Benchmarking
Project, recalled his State's recent reforms and advocated
similar reforms in both the legislative and executive branches
of the Federal Government, noting that improvements at all
levels must acknowledge that the Federal agenda is largely
implemented by State and local governments.
Dwight Ink, President Emeritus, Institute of Public
Administration, expressed frustration with what he called NPR's
feeble implementation progress to date, noting severe weakening
of the leadership and oversight capacities of OMB and the
Office of Personnel Management [OPM], widely divergent quality
of agency reviews, an initial focus on processes long before
deciding missions and roles, and failure to give attention to
managerial professionalism and to protection from political
manipulation and abuse of the new flexibility which he strongly
supported.
R. Scott Fosler, President, National Academy of Public
Administration, conveyed cautious agreement with the NPR's
scope and purpose, noting that to be successful NPR would need
to address key areas such as agencies' capacity, a coherent
framework, and the Government's accountability to the public.
Donald F. Kettl, Senior Nonresident Fellow, The Brookings
Institution, and professor at the University of Wisconsin,
Madison, countered that the NPR had already achieved
substantial progress and savings so far, but warned that its
progress could not be con- sidered self-sustaining and that
many unresolved questions re- mained.
Herbert N. Jasper, Senior Associate, McManis Associates,
praised many accomplishments of the NPR but expressed mis-
givings about its lack of analysis, inconsistencies between
statutory mandates and available resources, characteristic
``government- bashing'' tone in most supplemental reports, and
a pervasive top- down, autocratic approach in its
recommendations.
2. May 9, 1995, Hearing on Strengthening Departmental Management.
At that hearing, testimony was received from the GAO, two
Clinton administration Cabinet officials, two former Cabinet
officials, and a public policy research group analyst.
Thomas P. Glynn, Deputy Secretary of Labor, explained
Federal management and ``reinvention'' initiatives in his
agency, including a newly proposed chief information officer
position. The committee questioned the diffusion of management
accountability throughout the department among its deputy
secretary, the Secretary's chief of staff, inspector general,
assistant secretary for management, and chief financial officer
positions, each of which had some part of the overall
management role.
George Munoz, Assistant Secretary for Management and Chief
Financial Officer of the Treasury testified on the current
Federal management and ``reinvention'' initiatives within and
outside his agency, including the need to emphasize the three
principles of customer service, strategic planning, and
streamlining that had guided the department's management
improvements.
Assistant Comptroller General Johnny C. Finch, General
Government Division, and Gene L. Dodaro, Accounting and
Information Management Division, GAO, reviewed the critical
steps needed to strengthen Federal agency management, among
them clearly defining missions, strengthening financial
management, improving operational effectiveness through
technology-based reengineering, and building capacity to manage
the Federal workforce. Dodaro believed that government reform
efforts abroad have succeeded in large part because they have
addressed and solved problems of fixing accountability for
results--a measure missing or omitted from the NPR report.
Alan L. Dean, former Assistant Secretary of Transportation
for Management and coordinator of President Nixon's plan for
departmental reorganization, and William D. Hansen, former
Assistant Secretary of Education for Management and Chief
Financial Officer, discussed proposals for how the management
of today's Federal departments could be strengthened. Dean
noted increasing numbers of noncareer officials throughout the
Federal workforce and a loss of Government corporation
management expertise occasioned by OMB's most recent
restructuring, and proposed the creation of a separate Office
of Federal Management, outside OMB. Hansen outlined the effects
of block-granting educational programs on the internal
organization and structure of the Department of Education in
the early 1980s.
Roger L. Sperry, Director of Management Studies, National
Academy of Public Administration, summarized the Academy's
recent reports and other relevant work on the strengthening of
Federal departmental management. He identified six essentials
of Federal Government reform: strengthening Federal leadership,
harnessing information technology, combining and integrating
like functions, making performance the driving factor,
streamlining Federal field structures, and improving
legislative-executive branch relations.
3. May 16, 1995, Hearing on Consolidating and Restructuring the
Executive Branch.
At that hearing, testimony was received from four Members
of Congress, one former Cabinet official, and three public
policy research group analysts.
Representative Robert S. Walker of Pennsylvania, Chairman
of the Committee on Science, advocated a Department of Science.
The proposed department would combine science elements of the
existing Departments of Commerce and Energy as those two
agencies are phased out. The department would also include the
National Science Foundation, National Aeronautics and Space
Administration, Environmental Protection Agency, and the United
States Geological Survey. Chairman Walker noted that an
independent department would emphasize the role of science in
government decision making.
Representative Sam Brownback of Kansas explained the
overarching framework under which the Freshman Task Forces on
Departmental Restructuring were considering agency reductions.
His group endeavors to make the Federal Government smaller,
more efficient, and more focused, based on four principles:
localize, privatize, consolidate, and eliminate.
Representative Dick Chrysler of Michigan presented his plan
for dismantling the Department of Commerce, H.R. 1756. He
described the Department of Commerce as a loose collection of
more than 100 programs serving only 1,000 customers. He noted
that only a small percentage of the department's budget had
been used to support trade.
Representative Todd Tiahrt of Kansas argued for eliminating
the Department of Energy. After recounting its history since
being created in 1977, he noted that the department's rationale
for existence seemed to have evolved over time and questioned
whether the department's current missions justified a Cabinet
level agency.
Robert A. Mosbacher, former Secretary of Commerce, endorsed
the elimination of his former department. He noted that 60
percent of the agency budget and more than 35,000 members of
the work force were devoted to activities other than promoting
trade.
Scott A. Hodge, Grover M. Hermann Fellow in Federal
Budgetary Affairs, The Heritage Foundation, summarized the
recommendations of the Foundation's book, Rolling Back
Government. The Heritage proposal would shrink the number of
Cabinet agencies from 14 to 5, eliminating the Departments of
Agriculture, Commerce, Education, Energy, Housing and Urban
Development, Interior, Labor, Transportation, and Veterans
Affairs, and retaining the Departments of State, Defense,
Treasury, Justice and Health and Human Services.
Jerry Taylor, Director, Natural Resources Studies, Cato
Institute, focused his testimony on eliminating the Department
of Energy. He argued that energy production and distribution
was better directed by market forces than by government
regulation. Taylor proposed shifting Energy's weapons
responsibilities to a new sub-cabinet National Nuclear Weapons
Administration, and either terminating or privatizing the
department's remaining functions.
Herbert N. Jasper, Senior Associate, McManis Associates,
provided a range of viewpoints concerning the consolidation and
restructuring of the executive branch, and proposed the
creation of a Commission on Executive Reorganization. The body
would have six months in which to propose a Cabinet
reorganization plan. The commission would review program
restructurings in order to devise an appropriate organizational
structure.
4. May 16 and 23, 1995, Hearing on Combining Federal Programs and
Organizations.
At that hearing, testimony was received from
representatives of the GAO; the Departments of Energy,
Education, and the Treasury; three former Secretaries and two
former Under Secretaries of Energy; and two public policy
research group analysts.
Secretary of Energy Hazel R. O'Leary, contended that
matters such as national security protection, nuclear danger
reduction, weapons site cleanup, environmental management,
science and technology management, and energy enhancement were
Federal concerns justifying retention of the department, albeit
somewhat smaller. O'Leary rejected as unwieldy and ill-advised
a conceptual proposal for a Department of Science.
Donald P. Hodel, former Secretary of Energy under President
Reagan, characterized the department as meddlesome and unsuited
to the market-economy functions of producing and generating
energy.
Admiral James D. Watkins, U.S.N. (ret.) former Secretary of
Energy under President Bush, voiced concern for effective
stewardship of the Nation's nuclear energy program, without
siding for or against a Department of Energy. Watkins
recommended convening a team of experts to recommend
disposition of the department's functions.
John S. Herrington, former Secretary of Energy in the
Reagan Administration, proposed to dismantle the department by
placing nuclear weapons responsibilities under a new Under
Secretary of Defense, privatizing the Naval petroleum reserves
and five electrical power marketing administrations, and
terminating energy conservation and research and development
programs.
Shelby T. Brewer, former Under Secretary of Energy during
the Reagan Administration, stated that the departments original
mission of energy development, conservation, and demonstration
had degenerated to ten percent of its present array of programs
and functions, which, he said, now included environmental
management, basic science, and biological medical research.
Donna R. Fitzpatrick, former Under Secretary of Energy
during the Bush Administration, urged eliminating the
department and assigning nuclear weapons responsibility to a
sub-Cabinet agency independent of the Department of Defense.
Marshall S. Smith, Under Secretary of Education, supported
retention of the Department. He claimed that Education had the
smallest proportion of administrative costs and the lowest
ratio of employees to total budget among Cabinet departments.
But basically, he saw Federal involvement in education as a
matter of fulfilling a national interest because it supports
democracy and the economy.
Donald Wurtz, Chief Financial Officer of the Department of
Education, provided testimony and answered questions concerning
the department's need to improve the collection of student loan
debts.
Chester E. Finn, Jr., John Olin Fellow, the Hudson
Institute and former Assistant Secretary of Education during
the Reagan Administration, objected to Federal meddling in
American education and advocated either block-granting Federal
education programs to the States or transferring the Department
of Education's missions and functions elsewhere within the
Federal Government.
William D. Hansen, Executive Director of the non-profit
Education Finance Council and Assistant Secretary of Education
for Management in the Bush Administration, cited the near
doubling of categorical Federal education programs in 14 years
as a prime example of the need to consolidate overlapping and
duplicative Government programs, reduce Federal intrusion upon
local education, and cut back departmental staff.
George Munoz, Assistant Secretary for Management and Chief
Financial Officer of the Treasury, described management reforms
and recent improvements in financial management practices that
had been implemented in the Department of Education.
Paul Posner, Director, Budget Issues, Accounting and
Information Management Division, GAO, suggested that the
opportunity was ripe for raising governmental operating
efficiency and improving performance, by consolidating programs
with similar objectives and identifying and eliminating
duplicative and conflicting program requirements.
5. June 6, 1995, Hearing on Corporate Structures for Government
Functions.
At that hearing, testimony was received from the
Administrator of the General Services Administration [GSA], the
Deputy Administrator of the Bonneville Power Administration, a
former Defense Secretary, and four proponents of Government
corporations.
Donald H. Rumsfeld, former Secretary of Defense under
President Ford and chief executive officer of General
Instruments Corporation, offered testimony concerning the
general concept of using corporate structures for Federal
Government functions, stressing the critical importance of
first questioning an agency's mission and then restructuring
based on that review. Involved in several successful corporate
restructurings, Rumsfeld emphasized that restructuring an
agency without first reviewing its mission would be nothing
more than wasted effort.
Roger W. Johnson, Administrator of General Services,
explained the ongoing reorganization of his agency, stating
that there were a number of line management Federal jobs whose
incumbents' performance could be rated according to profit or
loss results. He stressed that ``governing by process'' rather
than by results, encourages risk aversion among Federal
managers.
Jack Robertson, Deputy Administrator, and Paul Majkut,
General Counsel, Bonneville Power Administration, suggested
Government corporation status for their agency, citing
competition from local power producers and increased compliance
costs of preserving endangered species as prime factors for the
change.
Daniel V. Flanagan, Jr., President, Flanagan Consulting
Group, proposed legislation to form a Defense-related
Government corporation, to be known as the Forrestal
Corporation, which would also funnel private sector investments
into Federal energy improvement required by the 1990 Energy
Act.
Harold Seidman, Senior Fellow, National Academy of Public
Administration and drafter of the Government Corporation
Control Act of 1945, presented an update of the act to improve
oversight of Government corporations through the strengthening
of Government expertise in keeping with the times.
Jack Johnson, President of the Professional Airways Systems
Specialists, and Barry Krasner, President of the National Air
Traffic Controllers Association, two unions, endorsed formation
of a Government, rather than a privatized, air traffic control
corporation, as more favorable to employee interests.
6. June 13 and 19, 1995, Hearing on Streamlining Federal Field
Structures.
At that hearing, testimony was received from
representatives of the Departments of Agriculture and
Transportation; the newly independent Social Security
Administration [SSA]; three retired public administrators; an
employee advocacy group president; as well as eight regional
directors from the General Services Administration and the
Departments of Defense, Housing and Urban Development, State,
Transportation, and the Treasury.
Dwight Ink, President Emeritus of the Institute of Public
Administration, offered several recommendations for
streamlining Federal field structures: (1) that field structure
reforms be the result of comprehensive analysis of agency
missions and activities, addressing the three interdependent
dimensions of structures, systems, and people; and considering
the total Government-wide impact of all agencies on communities
and the public; (2) that agency personnel be appropriately
trained for their changed responsibilities; and (3) that a
number of the higher level career positions be redesigned and
shifted from headquarters to the field.
Alan L. Dean, Senior Fellow, at the National Academy of
Public Administration, advocated decentralizing agencies'
management to their lowest practicable levels for greatest
responsiveness and best use of resources, adding that no single
model for field structure could suffice for all departments and
agencies but that field offices at every level should reflect
an agency's mission and impact on the public.
Charles F. Bingman, visiting Professor of Public
Administration, at The George Washington University, decried
the entrenched resistance to change which greatly impaired
Federal flexibility and initiative to reorganize operating
structures. He noted that field structures needed to be able to
adjust to reflect the changing characteristics of the programs
being administered.
Wardell C. Townsend, Jr., Assistant Secretary of
Agriculture for Administration, reported on the President's
Management Council Federal Field Office Study and on his
departments progress in restructuring its field offices,
proposing four general guidelines for restructuring: (1)
maintain government presence at points of service delivery only
where face-to-face contact is necessary; (2) upgrade service by
exploiting technology; (3) centralize back-room recordkeeping
and processing operations for greatest efficiency; and, (4)
eliminate unnecessary layers of control.
Shirley Sears Chater, Commissioner of the Social Security
Administration, explained her agency's reappraisal of its own
field structure and announced plans to abolish or merge five of
ten regional offices and by 1999 to increase the number of
employees each supervisor was responsible from a 7:1 to 15:1
ratio. The latter was possible as a result of a 5-year $1.1
billion investment in information technology.
Mary Barrett Chatel, President, National Council of Social
Security Management Associations, wanted to go beyond the
Social Security Administration's plan, by redistributing to the
field offices at least 30 percent of jobs located at the
agency's headquarters and regional offices.
D. Lynn Gordon, Miami district director, U.S. Customs
Service, Department of the Treasury, and George Rodriguez,
Houston area coordinator, Department of Housing and Urban
Development, reported successes in improving customer
satisfaction under the National Performance Review. Each agency
had succeeded in an initiative to improve ``customer service''
through enhanced administrative flexibility and adept use of
communication skills with individual clients and institutions.
William Burke, Great Lakes regional administrator of the
General Services Administration, and chair of the Chicago
Federal Executive Board (which coordinates certain activities
of Federal agencies in the region), outlined the agency's
initiative for controlling administrative costs through
telecommuting (work at home) programs and by pooling of
different agencies' overhead resources, a concept called the
Cooperative Administrative Support Unit [CASU] program. He also
briefed the committee on the extent of the regional Federal
presence located in the Chicago area.
Gretchen Schuster, Chicago Regional Director, Passport
Agency, Department of State, and also a Federal Executive Board
member, detailed the board's activities in coordinating the
actions of 154 member agencies in the Chicago area.
Joseph A. Morris, former General Counsel for Office of
Personnel Management urged further decentralization of Federal
Government work away from Washington, more thorough regional
coordination by Federal Executive Boards of agency field office
programs and activities, and greater reliance by Washington
headquarters offices on the advice of those Federal managers in
the field.
Michael P. Huerta, Associate Deputy Secretary of
Transportation and Director, Office of Intermodalism,
Department of Transportation, presented his agency's plan to
combine management of surface transportation and civilian
maritime functions in an Intermodal Transportation
Administration. He indicated, though, that the agency intended
to defer decisions on field offices until after the general
intermodal plan had been approved.
Kenneth A. Perret, Garrome Franklin, and Donald Gismondi,
Federal regional administrators in Chicago for highways (FHA),
aviation (FAA), and transit (FTA), described regional
transportation and infrastructure issues and the need for
increased cooperation to effectively administer grants under
the 1991 Intermodal Surface Transportation Efficiency Act.
Colonel Richard Craig, North Central Division Engineer,
U.S. Army Corps of Engineers, explained the Corps headquarters'
responsibility for budget and broad policy issues the division
(regional) offices' intergovernmental contacts and quality
management emphasis, and the district (field) elements' direct
operational responsibility for civil works facilities such as
dams and for environmental regulatory compliance.
7. June 20, 1995, Hearing on Performance Measurement, Benchmarking and
Reengineering.
At that hearing, testimony was received from
representatives of the General Accounting Office [GAO], three
research groups, two State governments, and two consulting
firms.
Donald F. Kettl, Center for Public Management, The
Brookings Institution, and professor at the University of
Wisconsin, Madison, endorsed the potential of performance
measurement to measure success in terms of results achieved. He
also elaborated on the utility of performance measurement in
revealing to citizens how tax dollars are delivering services
and to Congress how programs are producing results. Kettl added
that performance measurement is about communication and
management rather than number crunching, requires a long term
view, and addresses both outputs, which are comparatively easy
to measure, and outcomes, which are more difficult.
Harry P. Hatry, Director of State and local government
research programs at the Urban Institute, recommended that the
committee seek and use information on program quality and
outcomes; that it coordinate with authorizing and
appropriations committees in reviewing specific agencies'
performance; and that it encourage State and local governments
to measure performance in terms of quality and service to the
public.
Herbert N. Jasper, Senior Associate, McManis Associates,
discussed potential weak spots in performance measurement, such
as gaming by selecting safely attainable targets, selecting
measurement data on the basis of availability rather than
relevance, and ignoring the labor-intensive aspect of the
process. Calling ``reengineering'' the systematic application
of common sense, Jasper acknowledged that the very political
nature of the budget process could frustrate the aim of
performance budgeting which seeks more analytical and objective
budget decisions.
Johnny C. Finch, Assistant Comptroller General, General
Government Programs, GAO, described the four critical actions
needed for measuring performance in the Federal Government: (1)
focus on mission and desired results; (2) involve key
stakeholders; (3) develop systems that measure performance
relevant to the decisions managers must make; and (4) use the
measurement information to modify processes in ways that
further enhance performance.
Linda Kohl, Minnesota Director of Planning, outlined her
State's three-phase benchmarking project: (1) involving having
the citizens decide on a long-term vision for their State; (2)
developing a set of clear, outcome-based, measurable indicators
for which data were available; and (3) soliciting users'
feedback on the indicators, which she said could serve as tools
of accountability for Federal block grant funds.
Sheron K. Morgan, Planning Officer for North Carolina,
described the State's performance measurement system as one
which linked policy and budgeting and had shifted
accountability from ingoing efforts to outcoming results. She
stressed that success meant the involvement of senior
management and the acceptance by agencies of proposed
measurement indicators.
Joseph G. Kehoe, Managing Partner for Government Services
of Coopers and Lybrand, advocated activity-based costing--or
ABC--as a way of determining the true cost of a service or
activity, and of analyzing and measuring the value of each
service or activity's component processes to determine the
contribution of each to the overall quality of results.
Laura Longmire, National Director of Benchmarking, KPMG
Peat Marwick, outlined the utility of benchmarking, performance
measurement, and business process reengineering in enhancing
accountability. She asserted that all processes can be measured
in terms of quality and response time through use of these
techniques, and that to be improved, processes must first be
measurable. Longmire identified common themes for successful
projects: long-term scope, management commitment, investment in
technology and tools, continual communication, and a cultural
focus on results rather than compliance.
8. June 27, 1995, Hearing on Compliance with the Government Performance
and Results Act of 1993 [GPRA]
At that hearing, testimony was received from officials of
the Office of Management and Budget [OMB], the General
Accounting Office [GAO], as well as from two public policy
research group analyst, and the coordinators of four GPRA pilot
projects.
OMB Deputy Director for Management John A. Koskinen held
that the more than 70 first stage GPRA ``pilot projects'' were
valuable experiments but reported no immediate plans for second
stage projects. Koskinen announced OMB plans to integrate the
GPRA findings into the budget process. Fiscal year 1998 would
be treated as a ``dry run'' to comply with the Act's
requirements, which take effect the following year.
Johnny C. Finch, the Assistant Comptroller General for
General Government Programs at GAO, saw five challenges for the
agencies implementing GPRA: (1) developing and sustaining top
management commitment; (2) building the internal capacity of an
agency to use performance information; (3) creating cultural
incentives to change the focus of management and accountability
from compliance to results; (4) integrating GPRA into daily
operations; and (5) working together with Congress to build a
more effective oversight approach.
Paul C. Light, Director of Public Policy Programs, the Pew
Charitable Trusts, explained the difficulties inherent in
converting from the Federal Government's present compliance-
based accountability system to one based on performance, as
GPRA requires. Light focused on a compliance-oriented
management culture that had been reinforced by the many layers
of top-level political appointee positions, which he called the
``thickening'' of the Federal Government.
President R. Scott Fosler of the National Academy of Public
Administration, questioned the Federal Government's capacity to
implement GPRA and suggested it might lag behind schedule,
unless executive leadership and congressional support could be
mobilized to further the proper understanding and effective
implementation of the Act's provisions.
Anthony A. Williams, Chief Financial Officer, Department of
Agriculture, described the Forest Service GPRA pilot project.
The project, one of eight in the department, covers all program
activities of the Forest Service. The Forest Service has
developed an integrated financial and accomplishment reporting
system and a set of corporate performance measures.
Vice Admiral A.E. Henn, Vice Commandant, U.S. Coast Guard,
Department of Transportation, explained the Coast Guard's
project, one of four in the department. The project covers
Marine Safety, Security and Environmental Protection programs
and has focused on accountability for results coupled with
greater flexibility for managers.
Joseph Thompson, New York Regional Director of the
Department of Veterans Affairs, praised the GPRA as a tool for
organizational improvement, citing his organization's change in
structure from a top-heavy hierarchy to self-managed teams. One
of the results has been a reduction of customer service
delivery from 30 to 20 steps.
Colonel F. Edward Ward, Jr., Director of Field Offices,
Department of Defense Finance and Accounting Service, provided
testimony on the implementation of an Air Force GPRA pilot
project at his last previous duty station with the Air Combat
Command in Langley, Virginia. The command successfully
developed a cost accounting methodology to track costs per unit
of output and capture costs associated with performance
measures.
c. determining the federal role
As indicated at the beginning, the committee believes that
any exercise in making government work must begin with a close
look at the Federal Government's mission. The commitment to
balance the Federal budget in seven years requires recognizing
the fiscal constraints on the Federal Government, whose
ambitious tasks have outstripped available public resources. To
redress this overextension, a total review of the Federal
Government's activities is necessary.
1. Establishing Clearer Federal Missions and Effective Services.
The executive branch of the Federal Government has not
undergone a comprehensive, systematic review of its missions,
services, and organization since the Nixon administration. The
similar thrusts toward consolidation in President Nixon's 1971
plan and the Heritage Foundation's 1995 proposal suggest that
many of the problems of duplication, proliferation,
inefficiency and waste within the Federal Government are as
critical today (if not more so) as they were a quarter century
ago. Since that time, as the National Academy of Public
Administration and others have shown, the accretion of small
programs in domestic departments, such as Commerce and Housing
and Urban Development, have reduced these organizations to mere
``holding companies'' of disparate functions. During the Reagan
Administration the President's Private Sector Survey on Cost
Control (also known as the ``Grace Commission'' after its
chairman Peter Grace) recommended ways for reducing waste and
controlling costs in the executive branch. Most of its
recommendations were not implemented by Congress. The National
Performance Review [NPR] headed by Vice President Gore
reexamined them in 1993 and found many worth pursuing as
potentially cost-effective. However, in the committee's view,
both the Grace Commission and Phase I of the NPR neglected the
fundamental questions about what functions executive
departments and agencies ought to perform.
Some have argued that the Grace Commission's private-sector
experts never fully appreciated the accountability and
substantial cultural differences between profit-motivated
businesses and tax supported Government agencies, diluting
their recommendations by relying on cost-cutting solutions
better suited to business than to Government.\11\ Conversely,
some NPR critics suggest that its total reliance on career
Federal employees, rather than private sector managers, has
yielded a myopic view of Government's ills and how to cure
them. NPR can point to relatively few savings which it has
initiated and is directly responsible for implementing. The
review claims the across-the-board reduction of more than a
quarter-million Federal jobs as credit for most of its savings.
The appropriateness of crediting NPR with the savings from
eliminating these positions is open to debate. In addition, the
NPR reports have appropriated as their own many preexisting or
localized savings initiatives.
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\11\ ``See, e.g., Downs, George W. and Patrick D. Larkey, The
Search for Government Efficiency: From Hubris to Helplessness, New
York: Random House, 1986, pp. 220-221: ``. . . [T]he Commission appears
to have embraced the . . . arrogant notion that problems exist because
no one in government has noticed them and that they will go away if the
collective genius of the private sector points them out. Yet, if this
is so, what does it tell us about . . . the efforts of outstanding
managers . . . who have arrived in Washington following extremely
successful careers in business? . . . More probable is . . . that the
public sector's problem's are very difficult and very different from
those that private-sector management faces and that it will take more
than hackneyed solutions and business maxims to solve them.''
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Given a more appropriate mix among its task force members,
NPR might have been able to balance the unique characteristics
of the Government management environment against lessons
learned from the private sector's experience. The best kind of
group to rethink Government may therefore be ``neither Grace
nor Gore'' but a mix of the best minds from business,
government, universities, and foundations.
The committee applauds the present NPR efforts for
realizing the imperatives to rethink and transform the
Government for the next century. As such, NPR represents a
crucial and important first step. However, the committee
supports the additional measures discussed above for raising
current efforts by several orders of magnitude. The results
claimed by the most recent NPR recommendations have not been
independently verified, and the committee is unaware of any
Administration plan or process for verification. The NPR made
some contribution toward improving the Federal Government and
lowering its cost; however, it appears to be largely based on
anecdotal and ad-hoc information, rather than the result of a
deliberate and cohesive plan. In the committee's view, NPR
began by asking the wrong questions, did not go far enough, and
did not put sufficient emphasis on fiscal accountability.
In its just-released third report, for instance, NPR
decries ``taking an axe to the federal government'' as
problematic in ``that it won't fix what remains.'' Yet, a few
pages farther is the statement that ``In 1993, the
Administration announced a goal to . . . cut 252,000 government
jobs . . . in five years,'' and, in the summary of savings to
date, that, ``As a result [of 160,000 job reductions], savings
for FY 1995 are projected to be $4.4 billion. Total five-year
savings are estimated at $40.4 billion by the end of FY
1999''--that amounting to 70 percent of the report's estimated
total ``savings based on actions to date'' of $57.7 billion. It
appears from the Third Report that over two-thirds of the
projected five-year savings from actions already taken are
going to come from the very up-front job cuts the report
criticizes as taking an axe to the Government.\12\
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\12\ Gore, Third Report of the National Performance Review,
Washington, DC, 1995, pp. 2, 6.
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In the committee's view, the downsizing, and the estimates
of downsizing, should be one of the last actions, after there
is consensus on what functions the Federal Government should be
performing, and on what is the most cost-efficient, effective,
customer-friendly, and publicly accountable way of performing
those functions. By contrast, the NPR has put it first and has
thereby, by the committee's reckoning, started at the end of
its task. The NPR, now in the immediate Office of the Vice
President, is unlikely to enjoy the sustained institutional
commitment necessary for effective management. The NPR's
objectives would be better attained by a permanent Office of
Management, within the Executive Office of the President. In
that connection, the committee supports current and proposed
initiatives for convening a commission of experts from
business, universities, the nonprofit sector, and all levels of
government, including the legislative branch, to undertake a
reassessment of Government missions, processes and
accountability.
In the committee's view, the core group of Federal
missions, services and programs should be defined by broad,
overarching considerations of national priority. There are
basically five areas: economic policy; foreign affairs and
trade; national defense; natural resources and the environment;
and domestic safety, peace and justice. Many functions the
Federal Government performs now may more effectively and
economically be done elsewhere:
The education of America's children is essentially
local in nature. Under Secretary of Education Marshall Smith
told the committee that nationwide between six and seven
percent of the total cost of public education from kindergarten
through twelfth grade is underwritten by the Federal
Government, with the remainder supplied by State and local
sources; yet, according to William Hansen, Federal paperwork,
accounting and reporting requirements disproportionately burden
teachers and administrators and deter them from actually
educating our Nation's youth.\13\ The committee recognizes that
education is a priority for the Nation. However, the States and
localities are fully capable of educating the citizenry.
``Federalizing'' the response to problems has not made the
response more effective.
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\13\ Testimony of Marshall S. Smith and William D. Hansen at the
May 23, 1995, hearing. An example given in testimony was a 1991 survey
of Ohio school districts, which determined that each school district in
the State was required to complete 330 reports and forum, of which 157
were submissions to the State and 173 were Federally required,
suggesting that the Federal Government was responsible for 55 percent
of the paperwork burden while Federal funds accounted for about six
percent of the resources available to each school district.
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The sale, distribution, and consumption of our
Nation's energy resources are quintessentially affairs of the
commercial marketplace and should therefore be subject to
market conditions of supply and demand, not insulated from
them, according to testimony received from several witnesses. A
number of witnesses questioned whether a Cabinet-level
department was necessary or appropriate for the energy
function. Of particular concern was today's Federal competition
with private industry in the marketing of electric power, e.g.,
the Bonneville Power Administration and the Tennessee Valley
Authority.
Certain functions such as the printing and minting
of the Nation's money and the constitutional function of the
conduct of foreign policy and providing for the common defense
are unarguably Federal responsibilities. However, most
commercial-type activities supporting those functions could and
should be performed by private sector sources under contract to
the Federal Government. The committee noted the distinction
between ``contracting-out,'' where the Government retains
accountability for mission or program outcomes despite many of
the goods and services being delivered under contract by non-
governmental entities, versus divestiture and devolution, where
accountability for outcomes, and the functions themselves, are
transferred out of the Federal Government.
2. Establishing More Effective Departments and Agencies.
The committee supports a 1988 proposal by the National
Academy of Public Administration [NAPA] for organizing the
Federal Government by major purpose--as originally recommended
in 1949
by the First Hoover Commission \14\ and later by President
Nixon. \15\ The National Academy's criteria for departmental
status were repackaged by Mr. Jasper as the following:
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\14\ Hoover, Herbert Clark. Commission on Organization of the
Executive Branch of the Government, Concluding Report, May 1949, pp.
41-42: ``Many closely related functions . . . are so scattered that . .
. no one is charged with considering the problem as a whole [; and] . .
. many agencies contain functions which are totally unrelated to each
other . . . creating a lack of central purpose and greatly increasing
the problems of internal coordination. . . . [A]reas presenting the
greatest problems of duplication and coordination are those in which
services of a similar nature are located in different agencies in the
executive branch. This dispersion of related functions has led to
interagency rivalries and conflicts which have been extremely wasteful
and costly. . . . [I]t has been our constant objective to achieve the
greatest possible degree of unity in the departmental structure [so
that] . . . a maximum unity of purpose in each department is . . .
achieved.''
\15\ See note 4.
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Would a proposed Cabinet entity:
a. Have under its tutelage all the Federal programs
contributing to the broad national goal or goals
assigned the entity?
b. Be able, with its combination of related programs,
to improve service delivery and save money for both the
intended clientele (recipients) and the taxpayers?
c. Be free from domination by a single constituency
group or professional discipline?
d. Fill an acknowledged need for improved leadership,
visibility and public support for its programs?
e. Best serve the national interest as an independent
Federal entity (in or out of the Cabinet), as opposed
to being devolved or privatized?
f. Make the Cabinet stronger or weaker, or have no
effect on it? \16\
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\16\ Testimony of Herbert N. Jasper at the May 16, 1995, hearing.
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While generally supporting these criteria, the committee
believes that there is a basic criterion which should determine
Cabinet status: The departments in the Cabinet should be
entities with programs high in policy content and in divisive
issues requiring top-level attention. Those entities with
stable administrative programs that tend to ``run by
themselves'' would not be strong candidates for the Cabinet. A
Cabinet should contain those entities of the Federal Government
which require coordination by the chief executive officer and
his staff. Under the Constitution, the President is the Chief
Executive.\17\ As Article II, Section 1 clearly, begins: ``The
Executive Power shall be vested in a President of the United
States of America.'' \18\
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\17\ The American Cabinet is quite different than the British
Cabinet. In the United Kingdom the Cabinet is made up of party leaders
from the Parliament. The members bear collective responsibility for the
administration of the government under a Prime Minister. In the United
States, the idea of a Cabinet is based on Article II, Section 2 of the
Constitution: the President ``may require the Opinion, in writing, of
the principal Officer in each of the executive Departments, upon any
Subject relating to the Duties of their respective Offices. . . .''
President Washington met regularly with the Secretaries of State,
Treasury, and War, and the Attorney General. Congress may establish a
major department and provide for a Secretary to head it. Ultimately,
the President may add to the Cabinet those whose advice he wishes, such
as the U.S. Representative to the United Nations and the U.S. Trade
Representative, among others. For many Presidents, the Cabinet has been
``window dressing.'' Lincoln put his political opponents in the Cabinet
so he could keep his eye on them. Eisenhower was the first to have more
formal Cabinet meetings and a Cabinet Secretary. There were briefing
papers in advance, organized discussion, a decision memorandum and
follow-up by the Cabinet Secretary and other staff.
\18\ United States Constitution.
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Aligning and consolidating the programs of Federal agencies
by major purpose would lead to increased efficiency and
improvements in performance that significantly benefit
taxpayers, administrators, service providers, and beneficiaries
alike, according to Mr. Poser. Juxtaposing similarly-aimed
programs helps managers pinpoint those that are duplicative,
outdated, and no longer cost-effective and would help Congress
to make explicit tradeoffs among similar programs.
Administration and service delivery of the programs to be
retained or consolidated would be improved by discerning and
removing conflicting requirements and overlapping provisions.
Finally, consolidation of programs makes possible significant
cuts in Federal spending, by requiring less effort and fewer
employees to administer them effectively.\19\
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\19\ Testimony of Paul L. Poser at the May 23, 1995, hearing.
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Some possible illustrative departmental examples of
grouping by similar mission should be considered and include
those that follow. They are based on suggestions made to the
committee:
Forming a Department of Human Resources from the
Departments of Education, Labor, and portions of Health and
Human Services;
Forming a Department of Natural Resources from
elements of the Departments of Agriculture, Commerce, Energy,
and the Interior.
Pooling the statistics-gathering functions of
several departments and agencies, the Bureau of the Census
which is now in Commerce, and the Bureau of Labor Statistics
which is now in Labor, into a single, independent statistical
entity.
Consolidating Federal disbursing and related
financial services into a single entity.
The committee supports legislation to define for government
enterprises a set of realistic, contemporary standards of
accountability for public funds, while affording management the
autonomy to organize for best results. The proposal would
update the Government Corporation Control Act of 1945, and:
Redefine powers, duties and responsibilities of
Government corporations and future Government-sponsored
enterprises [GSE]; 20
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\20\ Existing government sponsored enterprises are subject to
various statutory reporting and control standards.
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Require annual reports on the corporations' and
the future GSE's effect on the public debt;
Set creditworthiness rating standards for future
GSEs; and
Require annual audits of government enterprises.
3. Managing the Transformation of the Executive Branch.
The fundamental rethinking of the Federal Government's core
functions will require both broad and high-level coordination
and unity of purpose in its undertaking. The ad-hoc nature of
the National Performance Review [NPR] organization dramatically
demonstrates a critical void in the President's capacity to
manage the executive branch of the Federal Government.
Witnesses offered a wide range of options for restoring
effective government-wide management oversight capacity and
organization to the executive branch. Witnesses agreed that
consideration of budget issues and budget officials had
regularly overridden management interests, with predictable and
tragic results such as the Department of Housing and Urban
Development scandal of the 1980s.\21\ To preclude yet another
occurrence, the President and Congress needs to act together to
preserve the preeminent authority and influence of a
government-wide management planning and oversight office.
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\21\ Moe, Ronald C., ``The HUD Scandal and the Case for an Office
of Federal Management,'' Public Administration Review, Vol. 51, No. 4
(July/August 1991), pp. 298-307. A 1983 NAPA panel report,
``Revitalizing Federal Management,'' urged the establishment of an
Office of Federal Management. The report drew input from a 17-member
Federal Advisory Council and contained views of nine top managers from
an in-depth study.
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Options included establishing a new statutory Office of
Management within OMB or establishing an Office of Management
outside OMB but within the Executive Office of the President.
If the latter route were chosen the Director of an Office of
Management would have the same relationship to the President as
the Director of OMB. Both would be nominated by the President
and confirmed by the Senate. Both would report directly to the
President. An Office of Management would combine the policy and
oversight functions of the General Services Administration and
the Office of Personnel Management [OPM] with management
functions of the Office of Management and Budget. Several
witnesses supported dismantling OPM and assigning to the new
office policymaking responsibility for Federal workforce
training and development.
In March 1994, then OMB-Director Leon R. Panetta and Deputy
Director Alice M. Rivlin announced a reorganization called
``OMB 2000,'' which essentially sought to integrate management
oversight functions into budget review. In the announcement,
they noted:
Critics of these recommendations may say that efforts
to integrate management and budget will end up in
merely bigger budget divisions, whose management
responsibilities will be driven out by daily
firefighting issues. We believe this criticism is based
on a false premise that ``management'' and ``budget''
issues can be thought about separately. In fact, the
changes are intended to improve OMB's ability to
oversee agency programs and policies to ensure their
efficiency and effectiveness.\22\
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\22\ Office of Management and Budget Office Memorandum No. 94-16,
March 1, 1994.
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The committee notes also that as a Member of this body Mr.
Panetta, in 1991, introduced legislation which would have
established an independent Office of Federal Management in the
Executive Office of the President, apart from OMB.\23\
Accordingly, the committee favors the earlier Panetta proposal
as more likely to afford the President a directly subordinate
capacity for carrying out his policy objectives, free of daily
budget disputes.
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\23\ ``Office of Federal Management Act of 1991,'' introduced by
Mr. Panetta on June 25, 1991, as H.R. 2750.
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As the Congress fundamentally begins to restructure the
Federal Government, the need for effective management
leadership in the Executive Office of the President is crucial.
The committee adopted a model for a proposed ``Program
Resolution Office'' within OMB as a mechanism for overseeing
the phaseout of existing executive departments and agencies and
ensuring the orderly redistribution and consolidation of
retained Federal Government functions. The dismantling of large
executive branch organizations is an example of an activity for
which an office with a mission for Presidential level
management planning and oversight would have responsibil-
ity. A salient reference work in that connection is the
National Academy of Public Administration's 1992 report, Beyond
Distrust, which addresses productive ways of sharing power
between the legislative and executive branches as a means
toward ``effective governance under modern circumstances''.\24\
The recommendations to be forthcoming from the proposed
Presidential commission must be focused on longer-term
improvement and on measured, investment-oriented considerations
of effective and stable government-wide oversight.
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\24\ National Academy of Public Administration, Beyond Distrust,
Washington, DC, 1992, p. 9.
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4. Federal-State Government Goals-Oriented Management.
The GAO has studied experiences of six selected State
governments which have undertaken results-oriented management
reforms similar to those required under the Government
Performance and Results Act of 1993, P.L. 103-62 [GPRA].\25\
The GAO believes that those experiences could help Federal
agencies to focus more on program impact, which may lead to
improved program effectiveness. The committee heard from
officials of Oregon, Minnesota and North Carolina regarding
their successes and their assessment of the effect that block-
granting of Federal programs was likely to have on those
successes. While it is important to strengthen working
relationships between the Federal Government and the States,
the devolution of Federal Government workload must focus most
intently on sorting out roles and responsibilities and assuring
effective implementation.
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\25\ ``Managing for Results: State Experiences Provide Insights for
Federal Management Reforms,'' GAO Report B-258332 of December 21, 1994.
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The committee believes that with devolution of Federal
activities to the States through programmatic block grants,
Congress will provide the management flexibility for State
executives to administer these programs, reduce the extensive
and crippling paperwork that now exists, and still have the
fiscal accountability the taxpayers have a right to expect.
Some flexibility in Federal audit controls over how the States
do that work (with Federal resources) might be less costly and
more beneficial overall than keeping present controls in place.
The goal of the Federal Managers' Financial Integrity Act of
1982, P.L. 97-255 [FMFIA] is that controls should not cost more
than the benefits they produce. The committee supports proposed
amendments to the Single Audit Act [SAA], P.L. 98-104 to raise
the organization-wide audit threshold from $100,000 to
$300,000. In this connection the committee advocates forming
strong Federal-State-local partnerships and consolidating
related activities in ``one-stop shopping'' centers.
d. organizing government
1. Management Structure.
The National Performance Review's span-of-control standard
of 15 subordinates under a single supervisor appeared
unrealistic to the committee, in light of testimony received:
The NPR report is certainly in the mainstream of
management thinking but it's clearly off base in
several respects such as relying too much on irrelevant
State and local experience. The NPR curiously
recommended--and you heard [OMB Deputy Director] John
Koskinen talk about it--that the seven-to-one ratio of
employees to managers should be changed to the alleged
private-sector ratio of 15 employees to each manager,
but Labor Department statistics report a ratio of only
6.3 to one, and some of the case studies that the NPR
used were the Ritz Carlton Hotel and I wonder what
supervision of chambermaids has to do with supervision
of toxic waste cleanups.\26\
The ``flatness'' (large span of control, few management layers)
or ``steepness'' (small span of control, many management
layers) of an agency's or department's organization will vary
with the mission or program and, in the committee's view,
should remain a management prerogative, based on the complexity
of the work involved and not some arbitrary standard.
Changes in span of control require careful assembly of the
appropriate support activities that, in effect, partially
substitute some of the activities traditionally performed by
immediate supervisors. For example, information technology can
enhance communication passed among multiple organizational
levels. Training and development can supplement the
instructional function performed by supervisors. Finally, the
Inspector General offices and other auditing activities can
backstop the oversight activities of supervisors.
The top ranks of the Federal Government are ``thick'' with
political appointees, whose positions remain vacant during a
protracted nomination and approval process, who may be ill-
prepared for their work, who are often loyal to others besides
the President, and who rarely stay in their jobs more than two
years. Legislation to roll back the 3,000 ceiling on political
appointees to 2,000 is being considered. While a one-third
rollback is a good start, the committee supports further
reductions, especially among Schedule C appointment positions,
if the Federal Government is to reach industry's demonstrated
level of delayering its top echelons. Professor Paul Light
noted that throughout the Federal Government in 1983 there was
one employee at the middle for every 1.6 on the front-line, and
that by 1992 the ratio was moving down toward one-to-one.\27\
To Federal career employees the political appointee layer
appears to be a ``glass ceiling,'' frustrating aspirations for
advancement to the top ranks, sapping morale, and discouraging
initiative. Reductions in the top levels will unclog the lines
of management communication, remove unnecessary layers of
review and supervision, and improve the clearance and policy
formulation process.
----------
\26\ Testimony of Herbert N. Jasper at the May 2, 1995, hearing.
\27\ Light, Paul C., Thickening Government, Washington, DC: The
Brookings Institution, 1995. The following extract from tabular data on
p. 12 makes the point:
Number of Occupants in Average Department Hierarchy, Selected Years,
1960-1992
------------------------------------------------------------------------
Primary Title 1960 1972 1980 1992
------------------------------------------------------------------------
Secretary............................... 1 1 1 1
Under Secretary......................... 2 2 2 2
Assistant Secretary..................... 9 10 12 15
Deputy Assistant Secretary.............. 8 14 28 36
Associate Deputy Assistant Secretary.... 2 5 7 18
Administrator........................... 9 10 9 9
Deputy Administrator.................... 5 9 11 14
Assistant Administrator................. 6 9 11 14
------------------------------------------------------------------------
The committee supports advisory (staff) rather than
directive (line) authority for Assistant Secretaries as a means
of preserving a direct line of communication between department
Secretaries and the principal operating officers of their
subordinate agencies. The employees at the subordinate
agencies--whether labeled an ``Administration,'' ``Bureau,''
``Center,'' or ``Institute,''--are in the most direct contact
with the public being served.
The committee has weighed a suggestion for forming an
administrative ``super-agency,'' a kind of holding company for
a miscellany of smaller, loosely related agencies, no one of
which had a mission justifying Cabinet rank. In concept, the
organization would function similarly to today's Department of
the Commerce, seen by some as a front office for several
largely self-contained, independent bureaus. Critical to
success in surfacing any of the component agencies' major
issues or problems would be direct and continual contact
between the administrator and the heads of the component
agencies.
Even more critical will be to improve the professional
quality of the appointees and career senior executives
remaining in the Federal Government. The ability to sustain the
type of operational flexibility introduced by th6 NPR depends
on a future career workforce that is professional and
nonpolitical.
In its 1989 report the National Commission on the Public
Service (Volcker Commission) reported that among its sample of
1988 honor society graduates, public service was not perceived
as a place where talented people could get ahead, and that
public service was often seen as a career of last resort, with
negligible probability of ending up in a top government
job.\28\
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\28\ Report and Recommendations of the National Commission on the
Public Service, (Volcker Commission Report) National Commission on the
Public Service, Washington, DC: 1989, p. 26. The Commission was named
after Paul Volcker, former Chairman of the Federal Reserve Board, who
chaired the Commission.
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Federal political appointees for their part have tended to
view public service assignments as private-career pauses,
during and following which their permissible work and financial
activities are circumscribed by conflict-of-interest rules.\29\
Younger candidates for appointment in the Federal Government
have had less time to build lucrative private careers, are less
affected by the losses in total income typically resulting from
Federal service, and therefore are more likely to accept
appointments than their more senior, better qualified, and more
prosperous counterparts. Under such circumstances it seems
likely that the caliber of willing candidates for political
appointment will continue to be lower than many expect and
those who accept are generally likely to have less experience
and maturity in managing or in helping to manage complex
organizations.
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\29\ The Volcker Commission Report (ibid., p. 15) noted, ``Men and
women are reluctant to interrupt promising careers and uproot families
to move to one of the most expensive areas in the country . . .
Nominees are exposed to an array of complex and overlapping disclosure
forms, most of which become public . . . [and] are asked to make
immediate divestiture, whatever the cost and tax burden, of any
financial holdings that might constitute a conflict of interest. And
they are often given little or no orientation about their new
responsibilities, in large measure because those doing the recruiting
may know little about the substantive demands of the jobs.''
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To focus much-needed Presidential-level attention on the
dearth of management capacity available to the Federal
Government, the committee supports charging the proposed new
Office of Management with accountability for the Federal
workforce's level of professional competency. Thinning the
ranks and improving the caliber of both political appointees
and career senior executives, are necessary but not sufficient
steps. The President (and Congress) should act to fill
vacancies more expeditiously. The individuals consequently
appointed should carry into their positions strong intention to
serve the full Presidential term. Political appointees ought to
be loyal to the President's policy objectives and possess a
solid understanding of the statutes which underlie the agency's
mission and program.
2. Reengineering Techniques.
The committee supports a Government-wide adoption of the
continuous process improvement advocated by Peter Drucker.\30\
A continuous series of steps characterizes the process by which
most Federal Government services reach citizens. At the June
20, 1995 hearing, Ms. Kohl, Dr. Morgan, Mr. Kehoe and Ms.
Longmire explained that the elemental steps in a long process
can be isolated and examined to identify the opportunities for
improvement. Although processes may appear impossibly complex
at first, agencies have succeeded in dissecting and simplifying
them.
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\30\ See footnote 9.
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Department of Labor officials recounted their success in
reducing the number of separate steps to recruit and hire new
employees from 120 to 41, an improvement of almost two-thirds.
Social Security Administration management and an employee group
presented views as to how their agency could be advantageously
reengineered using information technology, decentralizing
authority and accountability, and establishing one-stop
customer service points. Naval shipyards, in their attempts to
streamline and improve support functions, discovered through
value analysis that errors, rework, and unneeded work on ship
repairs could be eliminated.
Various witnesses indicated that once goals are
established, fully understood, and assimilated into the
organizational culture, then the workforce's attitude toward
process improvement generally shifts. Process improvement must
be continuous. Members of an organization need to understand
that even processes only recently reengineered can always be
improved.
Tools widely used in process improvement include
performance measurement and benchmarking. Ms. Longmire
explained that performance measurement is a different way to
evaluate what an organization is doing. It focuses on how well
goals are being attained, and at what cost. By systematically
evaluating the effectiveness and efficiency of required
resources, it is possible to quantify results, establish clear
accountability, and--ultimately--help government do more with
less. Longmire likened performance measurement to a compass,
showing current position and orientation, and benchmarking to a
map, indicating direction and distance from an objective:
``Benchmarking is a tool that shows how to drastically achieve
performance improvement by comparing your organization with the
best practices of others. . . . By comparing yourself to
private or public sector leaders, you can leapfrog improvements
in the way that you work.'' \31\
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\31\ Testimony of Laura G. Longmire at the June 20, 1995, hearing.
A benchmarking model used by Xerox Corporation since 1980 consists of
these phases: (1) Process owners flow-chart or map their processes,
measure them, and determine who should be their benchmarking partners.
(2) Process owners compare key performance indicators to industry
leaders, identifying performance gaps. (3) Communicating the ``best
practice'' findings, leaders seek to gain acceptance by the people who
will have to adopt changed methods, and establish stretch [harder to
reach] goals for improvement. (4) Comparative performance data are
translated into action plans and implementation for the ``best of
best'' practices or new improvements.
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However, just as processes leading to goals must be
continually reviewed and improved, so also must the goals
themselves be periodically reviewed and assessed, to be sure
they still fit the organization's or agency's external setting
and environment. Goals orientation and their review, and
process orientation and its review are continual and
complementary.
The committee recommends that as part of agencies'
implementation of the Government Performance and Results Act,
each organization explain its policies and procedures in a
brief, succinct manual for new employees and management
officials. The manuals would summarize regulations and
directives.
3. Information Technology.
The committee notes a report by the General Accounting
Office, ``Executive Guide: Improving Mission Performance
Through Strategic Information Management and Technology-
Learning from Leading Organizations'', which describes a
strategic, integrated set of fundamental management practices
that were instrumental in the success of several Federal,
State, and private sector organizations.\32\ The organizations'
leaders managed through three fundamental areas of practice:
quantitatively assessing performance against best-known private
and public organization performance benchmarks; directing
scarce technology resources toward high-value uses by
reengineering some critical governmental functions; and
reducing costs and improving service through the application of
modern managerial methods.\33\ The report chronicles the
repeated failures of the Federal Government to utilize
effectively the opportunities offered by information
technologies. Based on the GAO findings, the committee
concludes that some agencies have tended to look to
``hardware'' or ``software'' solutions to problems which would
have been better addressed through more effective management of
the basic processes.
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\32\ United States General Accounting Office, ``Executive Guide
Improving Mission Performance Through Strategic Information Management
and Technology-Learning from Leading Organizations,'' GAO Report AIMD-
94-115, May 1994.
\33\ An Office of Management and Budget statement of those best
practices is available as Circular A-130, ``Management of Federal
Information Resources''.
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Many of the functions of the Federal Government have
involved the review of paperwork at successive points of
coordination. Integrating information technology into the
``work process'' can reduce the layers of review and decision
making time, while maintaining accountability. However, merely
adding information technology to existing poorly thought
through work patterns usually yields limited benefits.
4. Field Organizations.
Nearly a million Federal employees are stationed in 30,000
field offices, 12,000 of which have five or fewer workers in
each. Changes in information and communication technology have
made many of these offices unnecessary. The grouping of many
disparate categorical programs into a consolidated block grant
will have an even greater impact on the field offices. The
committee supports the use of these guidelines for streamlining
field offices:
Locate executive department and agency field
offices and regional offices so that they are readily available
to (1) serve the individual citizen, and (2) relate to State
and local officials in implementing or overseeing a program.
In structuring field establishments, avoid
``steepness'' of organization (many echelons, narrow spans of
control, close supervision and review) in favor of
organizational ``flatness'' (few layers of review and
supervision, wide spans of control, local decision making
authority).
Push day-to-day operating decisions as far down
the chain as possible, for resolution by officials closest to
the situation; and keep headquarters offices in Washington
focused on policy making questions and broad management issues
at the department or agency level.
Include information and communication technology
considerations in every aspect of planning for the streamlining
of Federal field organizational structures, in order to take
maximum advantage of technology's potential for enhancing
productivity, cutting paper-based processes, shortening
delivery time, and assuring customer satisfaction.
Recognize that no single, universally applicable
model will suffice for streamlining all field offices, and that
the number of field offices and the degree of deployment and
decentralization from headquarters will vary by Federal program
and the need for face-to-face ``government-customer contact in
order to carry out effectively the program involved.
5. Workforce Competency.
The concept of a unified budget for agency field managers,
similar to that given laboratory heads under the fiscal year
1996 Energy and Water Development Appropriations Act may serve
as a target for enlarging Federal managers' flexibility,
authority and autonomy Government-wide. The committee
anticipates that over the transition period of several years
envisioned by the GPRA, a great number of control functions,
regulations, reports, and the Federal jobs associated with them
will be eliminated, resulting in much of the cost saving
currently driving the effort to balance the Federal budget.
e. making the government accountable
1. Public Accountability.
The Federal Government should be accountable to the
taxpayers-customers for the stewardship of the resources
entrusted to it. That important point was omitted from the
recommendations in the NPR report. The committee strongly
affirms that a major thrust of making government work is to
instill in every employee, management official, and contractor
of the Federal Government a commitment to serving the Nation
and its citizens. Congress is ideally positioned to simplify
the executive branch's task of becoming more accountable to the
public, by removing some of the legislative obstacles which
make that accountability unnecessarily difficult and
complex.\34\ The result would be to empower Federal agency and
field managers in ways similar to the NPR's recommendations.
The committee would support examples such as those which
follow, which were not present among any of the NPR's financial
management recommendations but were offered in testimony at the
hearings:
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\34\ Testimony of former Under Secretary of Energy Shelby Brewer at
the May 23, 1995 hearing: ``Part of the problem . . . is the clutter of
the multiplicity of congressional committees that oversee. And each
committee has a set of interests, different from others. And then the
appropriations structure is very confusing. If you look at the budget,
a layman cannot understand it.''
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Simplify executive branch accountability by consolidating
several of the thirteen separate Congressional appropriations
bills. If the legislative review process of the President's
executive budget was comparable to the internal review now made
by the Office of Management and Budget, there would be only
five appropriations subcommittee. A sixth separate subcommittee
could review the legislative and judicial branches as well as
the Executive Office of the President. These actions would
bring some order to the annual appropriations review with
several favorable results: (1) a more coordinated process for
appropriating funds, (2) downsized House and Senate committee
structures, and (3) smaller and more productive agency
headquarters and field offices to track this process. If the
executive branch were reorganized by major purpose, Congress
might take similar steps in that direction.
Control agencies' human resources only through dollars, not
by dollars and staffing caps, by appropriating a gross
personnel and training budget to each agency. Managers would
decide the numbers, salaries, and training investment of their
workforces within their budget. An example of this is the
combining of several appropriation accounts which was
encouraged by both House and Senate Appropriations Committees
in the proposed Energy and Water Development Appropriations Act
for fiscal year 1996.\35\ Those provisions have provided field
laboratory managers unprecedented freedom and flexibility in
shifting their resources.
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\35\ House Report Number 104-149, pp. 70-71; Senate Report Number
104-120, p. 88; H.R. 1905, 104th Congress.
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Allow interagency funding once again; take out the
restriction on ``passing the hat'' to fund interagency efforts
that Congress has inserted in every Treasury, Postal Service,
and General Government Appropriations Act since 1971. The
prohibition grew from Congress's suspicion that by pooling
funds from different agency appropriation accounts, the
executive branch would create new agencies without first
consulting lawmakers or getting statutory approval. The
proposed change would permit agencies to experiment with
interagency and intergovernmental service initiatives. The time
for mistrust is past; the time for inter-branch partnership,
cooperation, and trust is now. The executive branch has enough
flexibility, and Congress enough control, in permanent law.\36\
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\38\ 31 U.S.C. 1346 & 1347.
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The committee encourages the appropriations committees to
make, and enforce, rules against appropriation-bill riders
which outlaw the closure of named field offices or locations.
To do otherwise would deny executive agency managers the
flexibility and the empowerment which NPR recognized they need
in order to execute their programs with the best possible
results. If there are serious legislative concerns over the
failure of a proposed field office reorganization to serve
clientele effectively, then the agency could be asked to review
the matter for one year.
The committee noted that Federally contracted-out work is
still Federally accountable and as such is subject to the same
stewardship standards as work performed by Federal employees.
In that respect, Federal contract administration has become a
critical function in terms of the Federal Managers' Financial
Integrity Act, in that it relies increasingly on the technical
and professional qualifications of those who enforce the work
statements of Federal contracts. Well-written work statements,
clear award and sanction provisions, and airtight quality
control methods must be complemented by competent enforcement
to ensure adequate results. For these reasons, there needs to
be much more effective training of Federal contract
administrators. Those involved in acquisition and procurement,
contract administration, and continuous inspection of
production should be encouraged by monetary and non-monetary
incentives to be one of the elite groups within a revitalized
federal service. The $213 billion annually that are spent on
all types of contractor work demands talented people.
At the request of this and other committees of the House
and Senate, the General Accounting Office conducted an
assessment of approaches used by several national governments
in carrying out management reforms that Federal agencies could
use in implementing the Government Performance and Results
Act.\37\ There are growing efforts in implementing results-
oriented management reforms in Australia, Canada, New Zealand
and the United Kingdom. These approaches and experiences are
relevant to the Federal implementation of the Government
Performance and Results Act. New Zealand Budget Manager Tony
Dale explained his government's structural reforms, which have
separated policy advice functions from service delivery
functions.\38\ A key feature of the New Zealand reforms was
that a career professional departmental chief executive began
to be appointed on a limited (typically five year) term
performance-based, contract. Department chief executives sign
an annual agreement with their superior political ministers.
That agreement specifies the performance goals to be achieved
by the agency in the year ahead. At year's end the level of
achieve-
ment is used to determine the departmental chief executive's
salary . . . Dale noted: ``We have defined performance on the
basis of outputs in goods and services, not on the basis of
outcomes.'' \39\ In addition, political appointees are limited
to a small number that concentrate on policy.
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\37\ United States General Accounting Office, ``Managing for
Results: Experiences Abroad Suggest Insights for Federal Management
Reforms,'' GAO Report B-260057 May 2, 1995.
\38\ Testimony of Tony Dale, Budget Manager, New Zealand Treasury,
(in his capacity as Harkness Fellow, 1994-95, the Commonwealth Fund),
at the May 2, 1995, hearing. As an example, from the testimony,
responsibility for advice to government on environmental policy and
regulatory issues was assumed by a new environmental ministry; and a
service delivery agency, the Department of Conservation, was
established to run national parks and manage endangered species. The
purpose was to provide clearer focus for the operating agencies about
what their line of business was and where they should specialize their
expertise.
\39\ Testimony of Tony Dale, Budget Manager, New Zealand Treasury,
(in his capacity as Harkness Fellow, 1994-95, the Commonwealth Fund),
at the May 2, 1995, hearing.
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The United Kingdom's Citizen's Charter, begun in 1991, had
by 1994 published 38 documents covering major public services
and setting out the specific service standards that citizens
could expect and at citizens could do if the standards were not
met, according to the GAO report. As an example of citizens'
recourse, the Post Office was to compensate customers for late
arrival of a special delivery item by refunding twice the fee
paid or a book of first-class stamps, whichever was greater in
value. This approach to accountability would seem to work best
where enforceable penalties can be devised to fit specific
mission circumstances.
2. Goals and Work Results.
The Government Performance and Results Act [GPRA] is the
cornerstone of an effort to shift government away from a focus
primarily on resource inputs--such as budget level and number
of employees--toward specific and identifiable outcomes. GPRA
improves decision making by having agencies establish
performance goals and a credible evaluation system to determine
the degree to which the goals have been achieved over a
specific time period. The term ``performance goal,'' as used in
the Act, has recently been defined by the Chief Financial
Officers Council GPRA Implementation Committee.\40\
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\40\ ``Implementation of the Government Performance and Results Act
[GPRA],'' a work by the Chief Financial Officers Council, GPRA
Implementation Committee, defines a performance goal as, ``A target
level of performance expressed as a tangible, measurable objective,
against which actual achievements can be compared. . . . these are the
targets set by the program for specific reporting periods. A
performance goal is a statement composed of two components, an
indicator and a target. For example: ``to increase the immunization
rates for two-year-olds by 40% by 1999'' includes the indicator--
immunization rates--and the target--to increase rates by 40% by 1999.
GPRA requires annual goals for each indicator, but goals can be set for
shorter periods (e.g., quarterly) for internal management purposes.''
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The GPRA requires agencies to develop five-year strategic
plans by September 1997, and to link program performance
measures to the strategic goals thus developed. A strategic
plan includes a comprehensive mission statement and general
goals and objectives encompassing the major functions and
operations of the agency. A system to keep track of the
performance measures is crucial if the organization is to
assess how much improvement is taking place in each period. The
GPRA system is intended to make possible an objective
evaluation of work results.
Part of the challenge of GPRA will be for agencies to
specify goals and to measure results in quantitative terms. The
responsible committees of Congress should oversee agency goals
and measures.
To comply with the Act, agencies will have to work with the
congressional authorization and.appropriations committees to
develop acceptable statements of goals. As an example of how
the process works, for Fiscal Year 1995 the House
Appropriations Committee's Subcommittee on Treasury, Postal
Service and General Government utilized a performance goal-
oriented approach in its appropriation bill hearings. This
committee views such action as an early and welcome step toward
the incorporation of GPRA performance indicators into the
congressional oversight function.
3. Outputs Versus Outcomes.
The committee notes the distinction to be drawn between
agency outputs--which are the quantity and quality of services
delivered or products made--and outcomes, which are the
quantity and quality of the results achieved by the outputs in
satisfying the taxpayer-customer. Agencies have control over
outputs but usually have more limited control over their
programs' outcomes. Although outputs are generally
quantifiable, outcomes, which are often qualitative and
subjective, tend to be much more difficult to measure.
Witnesses at the hearings agreed that the programs'
outcomes often depend on factors other than the operation of
the programs themselves, and are, therefore, not totally within
the control of agency managers. Nonetheless, information about
outcomes is important in making resource allocation decisions.
The challenge for the legislative and executive branches will
be defining agencies' responsibility for the results they can
accomplish, with the recognition of the limits that agencies
may have in accomplishing desired outcomes. Program output,
e.g. funding supplied, is easier to measure, and witnesses
agreed that government managers can be held responsible for
their outputs. Accountability for outcomes can be considered at
the program, agency and departmental level.
The committee supports the continuation, development,
expansion, and extension of the pilot projects begun under the
Government Performance and Results Act. It supports OMB's
recent emphasis on training agency staff and developing
procedures to encourage performance management. The committee
encourages the OMB to identify projects that meet the GPRA's
subsequent managerial flexibility and accountability stage of
preparation to comply with the GPRA.
More effort is needed to define desired outcomes involving
intergovernmental and interagency cooperation. All affected
organizations should participate, with authority and
responsibility assigned in ways that clearly fix accountability
and stimulate innovation without fear of taking risks. In that
connection, agency executives and the Congress may come to rely
increasingly on agency Inspectors General for verification of
the appropriateness of performance measures chosen, and of the
accuracy of the resulting agency indicators.
4. Reports to the Citizenry.
The committee encourages the work now being done by the
Chief Financial Officers' Council toward reducing and combining
the requirements of ten statutory reports into (1) an
``Accountability Report,'' on the disposition or the public
resources entrusted to Federal agencies, and (2) a ``Planning
and Budget Report,'' on the levels of dollar and personnel
(full-time-equivalent, or FTE) resources
which are needed for the next year and projected to be
necessary for the next five years.\41\
---------------------------------------------------------------------------
\41\ These are the ten reports on which the CFO Council is working
on:
------------------------------------------------------------------------
Requiring Statute Government-Wide Report
------------------------------------------------------------------------
Chief Financial Officers (CFO) Act of 1990 CFO Act Annual Report
(P.L. 101-576). Including audited financial
statements); Agency CFO
Financial Management Status
Report and five year plan;
OMB CFO Financial
Management Status Report
and five year plan
Federal Managers' Financial Integrity Act FMFIA Report (annual)
(FMFIA) of 1982 (P.L. 97-255).
Inspector General Act of 1978, amended Management Report of Final
(P.L. 95-452). Action (Audit Follow-Up
report)
Government Performance and Results Act of Strategic Plan; Annual
1993 (P.L. 103-62). Performance Plan; Annual
Performance Report
Prompt Payment Act of 1982 (P.L. 97-177).. Prompt Payment Report
Federal Civil Monetary Penalties Inflation Civil Monetary Penalties
Adjustment of 1990 (P.L. 101-410). Report
------------------------------------------------------------------------
Resource levels must be established in light of program
goals. More information will become available to the public
when the Accountability and the Planning and Budget reports are
perfected. As a result, citizens will find that more
quantitative and meaningful information is available, which
will be arranged in much the same way that a publicly traded
company issues its prospectus and annual report. More research
and investigation are necessary to define the kinds of non-
quantitative and future-oriented projection information needed
for the reports. In that regard, one of the first tasks of the
Office of Management should be to coordinate the examination of
what information is needed by citizens, the President, and
Congress.
III. CONCLUSIONS
Making the Federal Government work must substantially begin
with managing the Federal Government more effectively. As a
result of its investigation, the committee concludes that
management functions have been de-emphasized at the most senior
levels of the Federal Government.
To correct these deficiencies, however, will require
innovation and creativity to be displayed and implemented on a
scale never before attempted. Toward this end, the Federal
Government must:
Organize and manage its functions efficiently and
effectively;
Define its role and its relationships with other
entities; and
Become fully accountable to the public.
Imperative in this effort are: an invigorated Federal
management office to provide guidance to the executive
agencies, a landmark commission to define and recommend the
Federal role, and a code of simplified planning and reporting
rules to make the Government more accountable to the citizenry.
organization and management of federal functions
The President's capacity to manage the executive branch has
atrophied, as demonstrated by the ad-hoc and transitory
National Performance Review group within the Office of the Vice
President instead of a vibrant, forceful management cadre in
the Executive Office of the President. After considering many
different views on the best organization of a central executive
branch management planning and oversight office, the committee
concludes there should be such an office in the Executive
Office of the President outside the jurisdiction of the present
Office of Management and Budget.\42\
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\42\ Obviously, the establishment of the Office of Management would
change the Office of Management and Budget to the Office of the Budget.
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Leading private and public enterprises have successfully
harnessed the potential of information technology to become
more efficient and more responsive organizations. The
successful and visionary executives of these organizations
practice disciplined self-assessment of their organizations in
the marketplace, concentrate the energies of their enterprises
on technological improvements to attain goals, and directly
consider technology investment decisions. Some information
technology success stories have taken place within the various
agencies of the Federal Government. The rest of the agencies
should heed these examples.
The problem of management continuity at Federal agencies is
exacerbated by the rapid turnover (usually 18 months to two
years) of political appointees. ``People problems'' associated
with organizational change have become so serious as to require
urgent attention. Compounding these problems are the employee-
buyout programs, which have led to the separation of many of
the most talented employees whose ``institutional memories''
are now lost.
This rotating leadership at the top has resulted in
revolving-door and empty-desk government non-management. Career
employees are asked to act in vacant political-appointment
positions which they will seldom be allowed to hold, and then
to spend months preparing newly-arrived appointees who must be
educated and oriented at length on their organizations'
missions and histories--until they move on.
Downsizing without apparent vision, goals, or strategy has
placed in a defensive stance those very individuals most
capable of bringing off the transformation to a leaner, more
effective Federal Government. A particularly harmful result is
that able people interested in public service careers are
increasingly avoiding the Federal Government as a career
choice. The result of the reduction of a quarter million
Federal jobs, because of downsizing without having first
rethought, restructured, and reorganized the executive branch
according to a well-ordered plan is likely to be a government
that, as Donald Kettl said, ``costs more and works worse.''
\43\
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\43\ See footnote 6.
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the federal role and relationships with other entities
The current conglomeration of interwoven, overlapping, and
conflicting Federal programs and responsibilities demands
order, alignment, and reconciliation. Redundant, inefficient
Federal programs and missions must be resolved and realigned,
with duplication purged. A number of recommendations from the
1930's Brownlow Committee, the late 1940's and early 1950's
Hoover Commissions, and the 1970's Nixon plan are worth further
review for present application.\44\ If the Federal Government
is to be streamlined and made more responsive, all parties must
be willing to glean the most attractive offerings from all past
efforts, including the Grace Commission and the National
Performance Review, as well as counsel from industry,
universities, the nonprofit sector, and all levels of American
government.
---------------------------------------------------------------------------
\44\ U.S. President's Committee on Administrative Management,
Report with Special Studies (Washington: U.S. Government Printing
Office, 1937).
U.S. Commission on Organization of the Executive Branch of the
Government, Hoover Commission Report (New York: MacMillan, 1949) U.S.
Congress, House Committee on Government Operations, Summary of the
Objectives, Operations, and Results of Commission on Organization of
the Executive Branch of the Government (First and Second Hoover
Commission), Committee Print 88th Congress, 1st Session, (Washington:
U.S. Government Printing Office, 1963).
U.S. Executive Office of the President, Office of Management and
Budget, Papers Relating to the President's Departmental Reorganization
Program (Washington: U.S. Government Printing Office, 1971).
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The dictates of reality and previous lessons from industry,
State governments, and a few foreign governments have clearly
shown that cosmetic changes and poorly considered unfocused
cuts of the workforce are not the answer to a moribund or
lethargic organizational culture. Rather, the success stories
have come from enterprises and governments that methodically
and responsibly considered and reconfigured their mission and
goals to achieve the most useful, favorable, productive, or
profitable outcomes for their clientele.
State and local government officials, in particular, will
feel a need for participation in deliberations over devolution
of Federal missions, functions, and activities. States and
communities will need a voice on a Presidential commission to
participate in forming effective intergovernmental processes
and relationships. A reduced Federal role and an accompanying
new management structure are essential to the achievement of a
balanced Federal budget.
public accountability
While the committee shares many of the general goals for
the National Performance Review [NPR], it believes that they
can be attained only through much more comprehensive and far-
reaching measures than those documented or achieved to date.
The NPR's belated examination of what functions the Federal
Government should perform--following its initial review of how
Government did its work--while welcome, is viewed as only the
first step toward attaining the needed efficiency and economy
to balance the Federal budget. Similarly, in its choice of an
institutional vehicle, the Administration has created an entity
poorly suited for the tasks with which it has been charged.
The committee believes that more robust steps are needed to
reach the goals of the NPR. Some examples of these are:
streamlining the core missions and processes
eliminating unproductive programs and activities
cutting the proliferation of political appointees
thinning out excessive layers of Federal
management
removing needless layers of review
focusing more emphasis on training and developing
those remaining in a smaller workforce
giving agencies professional help to adapt to
change, and
distinguishing and more clearly defining roles
between Federal and State agencies
As a result of these steps personnel and expenditures could
be reduced accordingly. To guide and coordinate all actions
leading to attainment of NPR goals, an ``engine of change'' is
needed. An Office of Management in the Executive Office or the
President would provide that energy and coordination on behalf
of the President.
Government agencies and Congress itself should update their
organizational structure, technology investment, and public
accountability. For instance, the Government Corporation
Control Act of 1945 may have been more appropriate for 1945
than for 1995; only belatedly, under the Speaker's influence,
has the House of Representatives begun to exploit personal
communication technology; and, as sweeping changes are wrought
within the executive branch, some corresponding realignment of
congressional committees may be appropriate. The broad aims of
the Government Performances and Results Act [GPRA] are as
equally incumbent upon Government corporations and Congress as
they are on the executive branch. Congress should incorporate
the fruits of the Act in its authorization and appropriation
processes.
The public accountability expected of executive branch
agencies could be abetted by a simpler and less cumbersome
arrangement of appropriation accounts. The Office of Management
and Budget manages the thirteen Federal appropriations through
five organizational elements, which merit some review for
possibly a similar alignment in the House.\45\ A less complex
array of accounts would simplify budget planning and execution
and fiduciary reporting by executive agencies, enable them to
adjust more quickly to the requirements of the GPRA and lead to
earlier and more comprehensive public accountability that
Congress sought in passing the Act.
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\45\ The Resource Management Offices in OMB are General Government;
Health and Personnel; Human Resources; Natural Resources, Energy and
Science; and National Security and International Affairs. (The United
States Government Manual 1995/96, Washington, D.C. GPO 1995.)
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Government is too big. For a government to serve its
taxpayers, who pay the bills to have certain services rendered,
efficient and effective management structures, processes, and
goals are needed. An unwieldy government will not be able to
meet the demands of the Twenty-First Century. That major
challenge needs the best ideas and energies of the President,
Congress and our fellow citizens.
ADDITIONAL VIEWS OF HON. CARDISS COLLINS, HON. CAROLYN B. MALONEY, HON.
HENRY A. WAXMAN, HON. ROBERT E. WISE, HON. MAJOR R. OWENS, HON.
EDOLPHUS TOWNS, HON. JOHN M. SPRATT, JR., HON. LOUISE MCINTOSH
SLAUGHTER, HON. PAUL E. KANJORSKI, HON. GARY A. CONDIT, HON. COLLIN C.
PETERSON, HON. CAROLYN B. MALONEY, HON. THOMAS M. BARRETT, HON.
BARBARA-ROSE COLLINS, HON. ELEANOR HOLMES NORTON, HON. JAMES P. MORAN,
HON. GENE GREEN. HON. CARRIE P. MEEK, HON. CHAKA FATTAH, AND HON. TIM
HOLDEN
Any member of this Committee who has paid attention to the
hearings held over the previous decade would agree that
significant improvements in the management of the Federal
government are required if it is to meet its citizens' needs
and its taxpayers' expectations. No administration can make the
necessary changes overnight. The Clinton Administration needs
to do more, just as the previous administrations did not do
enough.
Yet, the Majority fails to recognize that the current
Administration inherited a Federal government which from a
management standpoint had been neglected and abused for the
previous two decades. A 1989 report by the General Accounting
Office examined the Office of Management Budget and concluded
that OMB had been unable to coordinate its management and
budget functions effectively and had not established a stable
management capacity.\1\ GAO found that ``inconsistent
leadership, limited resources, implementation strategies that
failed to recognize unique agency environments, and
insufficient efforts to gain congressional support were fall
factors'' in these previous failures.\2\ GAO made four
recommendations in that report, three of which were ignored by
the previous Administration (the fourth was enacted through
legislation):
---------------------------------------------------------------------------
\1\ Managing the Government: Revised Approach Could Improve OMB's
Effectiveness (GAO/GGD-89-65) May 4, 1989.
\2\1d, page 3.
---------------------------------------------------------------------------
1) That OMB establish a systematic process within the
budget cycle for monitoring key management issues;
2) That OMB give budget divisions the responsibility
for overseeing agency implementation of management
improvements; and,
3) That OMB improve coordination between management
and budget staff.
The Clinton Administration, through a reorganization called
OMB 2000--an initiative of the National Performance Review--has
achieved each of these goals. In a draft report by the GAO
which has been provided to Committee, GAO has found that OMB
2000 has succeeded in bringing more attention to management
problems. GAO found positive changes in the emphasis on
management in OMB's management priorities, issues related to
its statutory offices, and other program-related management
issues.\3\
---------------------------------------------------------------------------
\3\ Office of Management and Budget, Changes Resulting From the OMB
2000 Reorganization (GAO/GGD/AIMD-95-to be determined).
---------------------------------------------------------------------------
Yet, the Majority fails to give any credit to the Clinton
Administration for its efforts to improve the management of the
Federal government, including OMB 2000, the National
Performance Review, procurement reform, the passage and
implementation of the Government Performance and Results Act,
and the wholesale reorganization of the General Services
Administration. While Members can argue whether these efforts
are being implemented as well as they could be, their
significance cannot be ignored.
In addition, the Majority has embraced a report that is
filled with inconsistencies and findings not supported by the
body of the report itself. As an additional irony, the
Majority's primary recommendations would create additional
levels of bureaucracy in order to reduce bureaucracy, a
position that runs counter not only to common sense, but to the
goals of much of its legislative agenda as well.
Some of the report's findings are not supported
Not a single witness is quoted from eight days of hearings
that puts forth the viewpoint of the Majority's number one
finding, that ``The Executive Office of the President has
abrogated its responsibility to oversee the Government's
management structure.'' \4\ Not only is there no discussion of
such a finding anywhere in the report, it flies in the face of
the Administration's creation of the National Performance
Review. NPR, which works under the auspices of the Vice
President, is directed from the Executive Office of the
President, and includes representatives of dozens of Federal
agencies and programs. Rather than abrogating its
responsibility, this Administration has elevated it to the list
of its top priorities.
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\4\ Page 5 of this report. All citations will be to this version of
the report.
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Another finding, (3)(b),\5\ asserts that there is more red
tape in the Federal government today than there was in 1971.
There is not a single bit of evidence anywhere in this report
to support this ``factoid.''
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\5\ Page 7.
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One of the Majority's recommendation, (1)(c),\6\ advocates
the creation of an Office of Inspector General in the Executive
Office of the President. Not only is there no discussion of
this recommendation anywhere to be found in the report, not a
single witness even discussed this issue in the eight days of
hearings on which the report is based.
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\6\ Page 8.
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As for other inconsistent statements, the Majority
apparently has failed to read its own report. As part of its
broad discussion, the report states that ``NPR can point to
relatively few savings which it has initiated and is
responsible for implementing.'' \7\ This statement is
demonstrably false, as the report itself makes clear when it
quotes from author Peter Drucker:
---------------------------------------------------------------------------
\7\ Page 22.
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If all (of the NPW's) recommendations are accepted by
Congress, they should result in savings of about $12.5
billion over two years. . . .\8\
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\8\ Page 10.
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Finally, the majority makes this erroneous statement:
The Federal Government should be accountable to the
taxpayers-customers for the stewardship of the
resources entrusted to it. That important point was
omitted from the recommendations in the NPR report.\9\
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\9\ Page 33.
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Yet, one of NPR's top priorities was passage and
implementation of the Government Performance and Results Act,
landmark legislation which takes as its very premise the
Federal government's accountability to those it serves as well
as to the taxpayers. Perhaps the Majority has forgotten that
this legislation was opposed by the previous Administration. It
was not until President Clinton's National Performance Review
embraced it and worked closely with Democrats and Republicans
and in an entirely nonpartisan manner that the legislation
became law.
The problems of government fraud, waste, and abuse facing the Clinton
Administration were monumental.
The problems of government fraud, waste, and abuse facing
the Clinton Administration when it took office were monumental.
Studies of agency-by-agency assessments from 1980 through 1992
documented more than $300 billion of wasted dollars, with
perhaps billions more that could not be quantified.\10\ The
biggest single cause of waste, fraud, abuse, and mismanagement
was the lack of leadership from both the Executive and
Legislative Branches of government.
---------------------------------------------------------------------------
\10\ See, for example, Managing The Federal Government: A Decade of
Decline, Committee Print House Committee on Government Operations, 1992
(hereafter cited as Managing the Federal Government).
---------------------------------------------------------------------------
While the agencies had been provided with many of the tools
to better manage the Federal government, ``Fed bashing,'' such
as President Bush's proposal to reduce the salaries of top-
level managers by 5 percent, only served to further undermine
Federal managers and their workers.\11\ Rather than fostering
the strong leadership that is the linchpin of effective
management, the Office of Management and Budget often led the
drive to deprive agencies of the tools they needed to manage,
cutting audit and enforcement resources, failing to plan for
the long term, and ignoring huge ripoffs in government health
care, defense, loan, and other programs.
---------------------------------------------------------------------------
\11\ Managing the Federal Government, page 3.
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The scandal at the Department of Housing and Urban
Development in the late 1980s is a case in point. Hearings
revealed that developers and other favored friends of the
Reagan Administration were overpaid by hundreds of millions of
dollars for public housing rehabilitation, while influence
peddling, greed, fraud, and embezzlement of other HUD programs
cost the taxpayers more than $2 billion.\12\ The HUD Inspector
General had been reporting on these programs for years without
any response from OMB or the Department. It was only after
Congressional hearings than an embarrassed OMB announced it
would take action.
---------------------------------------------------------------------------
\12\ Committee on Government Operations Report, ``Abuse and
Mismanagement at HUD'' (H.Rept 101-977) (Nov. 1, 1990), p. 2.
---------------------------------------------------------------------------
OMB appeared to take a positive first step by publishing,
in 1990, a ``high risk'' list of troubled government programs
that might cost the taxpayers hundreds of billions of dollars
in the future, and it vowed to get on top of the problems.
Unfortunately, the Bush Administration devoted only the
equivalent of three full-time employees to monitor these 99
high risk problems. With that lack of commitment, it is no
surprise that the OMB high risk initiative made little
progress. Meanwhile, OMB saw its staff reduced from 622 to 574
employees between 1981 and 1991.\13\
---------------------------------------------------------------------------
\13\ Based on a review of Federal budgets for fiscal years 1981
through 1992. See, Managing the Federal Government, page 4.
---------------------------------------------------------------------------
Congress, too, deserved some of the blame for the
leadership void. Congress was a partner to budget cuts to
agency programs that have resulted in less audit coverage and
evaluation of those very programs.
The Federal government is the world's largest purchaser of
equipment and supplies. Yet, ineptitude, poor planning, and bad
auditing--not to mention outright corruption--cost taxpayers
billions of dollars in faulty procurements. Procurement
officials repeatedly failed to identify the government's needs
and objectives, and as a result spent billions of dollars on
projects that could not accomplish what was required. For
example, the Department of the Treasury awarded a contract for
off-the-shelf, commercially available equipment and services to
a vendor whose proposed price was half-a-billion dollars more
than the runner-up's bid.\14\
---------------------------------------------------------------------------
\14\ Managing the Federal Government, p. 5.
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Meanwhile, the Administration and Congress were cutting
back on contract auditors responsible for policing the
procurement system. While defense contractors were overpricing
their government contracts by $3 billion between 1987 and 1990,
the Defense Contract Audit Agency faced a proposed cut from the
Bush Administration of 86 auditors.\15\ While the Department of
Health and Human Services' spending increased by more than 150
percent from 1981 through 1992, the Department's Inspector
General staff grew at only one-fifth that rate.\16\ The result
was a significant decrease of oversight of fraud related to
medical equipment and Medicare programs.
---------------------------------------------------------------------------
\15\ General Accounting Office Report, ``Contract Pricing: Issues
Related to the Defense Contract Audit Agency'' (GAO/NSIAD-92-188) (May
1992) at p. 3.
\16\ Department of Health and Human Services, Office of Inspector
General, Fact Sheet on Fiscal Year 1993 Resources (September 1992).
---------------------------------------------------------------------------
The Federal government was plagued by massive problems in
information resources management (IRM), the computer systems
that allow agencies to process the information needed to manage
operations and make intelligent decisions about programs. Yet
IRM has consistently been one of the weakest links in the
government, resulting in cost overruns in the hundreds of
millions of dollars and years of delays. For example, the
Internal Revenue Service was attempting to serve a 1990s
population using 1960s technology.\17\
---------------------------------------------------------------------------
\17\ House Committee on Government Operations Report, ``Tax systems
Modernization: Some Early Observations On Its Progress'' (H.Rept. 102-
388) (November 26, 1991) p. 2.
---------------------------------------------------------------------------
Nearly every Federal agency had a financial management
structure that was ineffective and inconsistent, leading
directly to repeated fraud. For example, accounting systems at
HUD were unable to detect the diversion of $5 million by an
employee dubbed ``Robin-HUD.''\18\ At the Defense Department,
inventory records were so bad that the Department purchased $30
billion in unnecessary inventories.\19\ HHS erroneously paid
millions each year for health care that private insurance
companies and self-insured businesses were liable for.\20\
---------------------------------------------------------------------------
\18\ House Committee on Government Operations Activities Report,
(H.Rept. 101-1006) (Jan. 2, 1991) p. 121.
\19\ Managing the Federal Government, page 53.
\20\Maximus, Inc., ``Medicaid Third Party Liability, Final
Report,'' report prepared for the Department of Health and Human
Services, Health Care Financing Administration, Third Party Liability
Branch (September 30, 1990), pp. ES4-5.
---------------------------------------------------------------------------
One experiment of the 1980s was an effort led by President
Reagan to turn over major areas of the Federal government to
the private sector. Privatization can be a cost-effective
method of delivering some Federal services. However, without
appropriate safeguards, private contractors can cost taxpayers
millions of dollars. For example, at NASA, millions of dollars
were lost every year because private sector service contractors
misrepresented their hours, slept on the job, fell far behind
schedule, and had little if any supervision.\21\ At the
Department of Energy, 16,000 employees were responsible for
monitoring the performance of over 100,000 contract employees,
who in turn were responsible for the waste production and
management plants that behind schedule, tripling in costs, and
unable to meet program objectives.\22\
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\21\ Inspector General Management Problems, National Aeronautics
and Space Administration (1992), p. 20.
\22\ See testimony of John C. Layton, Inspector General, Department
of Energy, ``Contractor Accountability At Department of Energy Nuclear
Facilities,'' hearing before the House Committee on Government
Operations, Subcommittee on Environment, Energy, & Natural Resources,
(Oct. 24, 1989), p. 11.
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The Clinton Administration's Accomplishments: What Are the Facts?
Speaker Newt Gingrich, speaking about the National
Performance Review on ABC News earlier this year, characterized
its results:
``The Vice President's effort is a total success.''
\23\
---------------------------------------------------------------------------
\23\ February 2, 1995, ABC World News This Morning.
---------------------------------------------------------------------------
Today, there are nearly 200,000 fewer federal employees in
middle management and staff jobs than there were when President
Clinton took office. Today, the Federal government is smaller
than it has been in 30 years.
President Clinton has committed to cutting 16,000 pages
from 86,000 pages of federal regulations. The Administration
has developed partnerships with businesses being regulated by
OSHA and EPA. Regulators reward results, not red tape. They
negotiate, not dictate. As Philip Howard, author of ``The Death
of Common Sense,'' notes, the federal government has made ``a
complete U-turn away from the reigning philosophy of government
regulation.''
The Clinton Administration has increased accountability of
government. It supported the Government Performance and Results
Act, and requires performance agreements with top agency
officials to ensure their commitment to these goals. It is
preparing the first annual financial accountability statement
to the taxpayers. It has directed all agencies to develop
customer service standards so agencies will be accountable to
their customers, not to some bureaucrat in Washington. To date,
over 200 agencies have publicly committed to over 3,000 service
standards.
The report says the ``last comprehensive reorganization
study'' in the government occurred under President Nixon.\24\
Yet, it conveniently ignores the fact that this effort failed.
The report also talks about the need to first focus on mission
and roles, then on structure and process. It ignores the fact
that Congress and the President have been arguing about these
issues since 1981 with no resolution. Vice President Gore
rightly determined that ``how the government works'' can be
fixed independently of ``what the government should do.''
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\24\ Page 3.
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What did the National Performance Review set out to do?
The fundamental principle of the National Performance
Review is that improved government, and improved service to the
public, does not come through reinventing the bureaucracy--or
by creating a new office--but by changing the culture of how
the work gets done. This is done not from the top down, but
from the bottom up. Neither the Office of Management and
Budget, nor even the President, can simply say, ``do it this
way,'' and expect things to change. Rather, the culture of
government must be changed by changing the way people think
about their job. This is done through giving line employees
more control over their job, consulting those employees on what
they see that needs fixing, and through one employee seeing
another change the way he or she approaches the job.
As a result of this philosophy, the National Performance
Review did not set out a set of rules and procedures by which
work should be done. Rather, it looked for opportunities for
change--places in the government where employees were eager to
change the way things were done, places where the red tape
within government had so tied up the workers that they could
not perform their job. These demonstration projects would be
the seeds of change sowed within the system. From them new
projects would grow, and new ways of doing things would be
rewarded.
Shortly after entering office, President Clinton and Vice-
President Gore initiated the National Performance Review to
``radically change the way government operates--to shift from
top-down bureaucracy to entrepreneurial government that
empowers citizens and communities to change our country from
the bottom up.''\25\
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\25\ Bill Clinton and Al Gore, Putting People First, New York,
Times Books, 1992, 23-24.
---------------------------------------------------------------------------
The National Performance Review established a system of
rewards for managers and employees who established new ways of
doing things that emphasized improving service to the public
and doing it with fewer resources. Through examples and
rewards, the National Performance Review plans to reform the
way government works--not by changing the bureaucracy, but by
changing the bureaucrats.
The first step of this review was to look at what the
government does and how it does it.\26\ Teams of experienced
federal employees were brought together to identify what works,
and what does not. The next step was to fix those things that
do not work. Next, the
Review went to the American public to determine what works and
what does not. Thousands of citizens were contacted directly at
town meetings, national conferences, and local neighborhoods.
More than 30,000 letters and phone calls from citizens across
the country were received.
---------------------------------------------------------------------------
\26\ Al Gore, Creating a Government that Works Better and Costs
Less, Washington, D.C., U.S. Government Printing Office, 1993, p. 1.
---------------------------------------------------------------------------
After careful study, it was estimated that the improved
efficiencies developed under the National Performance Review
would result in a reduction of the Federal workforce of over
250,000 positions. This was not a goal, but the result of
evaluations of how government functions could better be
accomplished. The only attempt to make it a goal was by
Congressional Republicans who attached it to several bills
moving through Congress.
The National Performance Review identified four major areas
for improving government services: cutting red tape, putting
customers first, empowering employees to get results, and
cutting back to basics.
Cutting red tape focused on changes in the budget process,
personnel, and procurement. This initiative was designed to
incorporate state and local governments into developing
procedures that accomplished a reduction in the number of
categorical grants, increase state and local flexibility in the
use of the remaining categorical grants, and severely limit the
number of unfunded mandates on state and local governments to
provide administrative savings at all levels.
The initiative to put customers first focused on giving
customers a voice in the government, and a choice in how
services were delivered. The use of market dynamics to
influence employee behavior and market mechanisms to solve
problems were central tenets of this effort.
Empowering employees attacked the centralized and
hierarchical structure of government. By decentralizing
authority, those who work on the front line become responsible
for their own decisions. This initiative also addresses the
number of layers in government. Following the best practices of
private and public organizations,\27\ the National Performance
Review sought to reduce the bureaucratic distance between
employees and supervisors, much as private business has reduced
the number of middle managers.
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\27\ Thomas Peters and Robert Waterman, Jr., In Search of
Excellence, New York, Warner Books, 1982. See also, Peter Drucker, The
Age of Discontinuity, New York, Harper Torchbooks, 1978.
---------------------------------------------------------------------------
The initiative to cut back to basics emphasized eliminating
what we do not need, and investing in greater productivity.
These are not piecemeal efforts as in the past, but fundamental
changes in the systems which organize the federal bureaucracy.
One of the first legislative changes of the National
Performance Review was the passage of the government
Performance and Results Act in 1993. The leadership of Congress
in passing this Act is acknowledged in the first National
Performance Review report.\28\ This bill had languished before
previous Congresses and had been actively
opposed by the Bush Administration. It took the leadership of
the National Performance Review and Congress to make it law.
---------------------------------------------------------------------------
\28\ Al Gore, Creating a Government that Works Better and Costs
Less, Washington, D.C., U.S. Government Printing Office, 1993, p. 7.
---------------------------------------------------------------------------
What has the National Performance Review accomplished?
In the past two-and-a-half years, the National Performance
Review has been responsible for a number of changes in how
government addresses its basic functions. The initiative to put
the customer first has resulted in a number of improvements in
government service. The May 29, 1995, issue of Business Week
reported that a survey of telephone customer service by Dalbar,
Inc., put Social Security at the top of the list--ahead of
Nordstrom, and L.L. Bean, and Federal Express. Immigration and
Naturalization Service has changed the procedures used to
process incoming passengers through customs. In fact, the
improvements were so dramatic, that passengers were getting
through customs before their bags had been processed by the
airlines. The Veterans Administration has streamlined its
hospital intake procedures from 93 questions to three.
The National Performance Review is working. In March 1995,
Newsweek reported on a Miami company that used to file 700,000
Customs forms every year. Now it files one a month.\29\ Robert
Pear, in The New York Times, called it a quiet revolution.\30\
The Houston Sun reported on the opening of a ``general store''
for small business, where businessmen and women can go to get
information on what the government requires, and what it can do
to help--not just for one agency, but for nearly all government
agencies.\31\ Financial World praised President Clinton for
``working behind the scenes to improve government financial
controls, contract oversight, performance measurement,
strategic planning, training, procurement and a host of other
seemingly mundane administrative procedures that ultimately
determine the success or failure of any federal program.''\32\
---------------------------------------------------------------------------
\29\ Joe Klien, ``The Birth of Common Sense,'' Newsweek, March 27,
1995, p. 31.
\30\ Robert Pear, ``A Welfare Revolution Hits Home, but Quietly,''
The New York Times, August 13, 1995, p. 4-1.
\31\ Sheshe Giddens, ``General Business Store Opens in Palm
Center,'' Houston Sun, July 17, 1995.
\32\ Financial World, October 24, 1994.
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Recommendations for Reform
These problems, large as they are, are not unsolvable. The
solutions require leadership and a commitment to sound
management practices.
Performance Measurement.
Measuring performance is essential to good
government and employee morale. The Administration needs to
develop a set of performance measures based on results which
tell managers and employees alike when they are succeeding.
Performance measures must be based on what the
customers value, not what is important to the agency.
Rewards, both monetary and symbolic, must be based
on performance measures. The Administration should implement a
system to assure that all financial rewards are based on a
thorough review of result-based performance measures.
Competition.
The Administration should develop better ways to
expose government work to competition for those functions that
are not inherently government in nature.
Agencies and Field Structure.
The Administration should continue to strengthen
its programs to determine which agencies are performing
necessary governmental functions, and which could be eliminated
or merged with other agencies.
The Administration should pursue more vigorously
the consolidation and elimination of field offices. While the
work at the Department of Agriculture is exemplary, and the
Houston experiment laudable, there remain in most cities too
many Federal offices in too many different locations.
Management.
The Administration should continue to reduce the
number of middle managers in pursuit of an manager-to-employee
ratio more in line with the private sector.
The Administration should pursue a simplification
of job classifications within the Federal government in
conjunction with the development of a results and performance
based promotion and rewards system.
The Administration should vigorously pursue a
management system that clearly delineates policy from service
delivery. Top management (policy) should be separated from
operations (service delivery). This allows policy to be
developed with a clear vision towards balancing competing
resources, and operations to focus on getting the job done.
Congressional Organization and Control.
The joint House leadership, the Rules Committee
and committee chairs should ensure that unnecessary legislative
riders are off appropriations bills. Use of such mechanisms
have often disrupted management of executive agencies, for
example, by outlawing the closure of specific field offices or
by setting excessive personnel ceilings in agencies. The
leadership should also ensure that issues involving government
management generally are properly referred to this committee
and others with authority under the rules of the House.
Chairmen of authorizing committees should also
consider utilizing their authority under clause 2(b)(2) of Rule
XXVIII to resist
legislative provisions in instances where the Senate may
attempt to impose through the appropriations process.
Cardiss Collins.
Carolyn B. Maloney.
Henry A. Waxman.
Robert E. Wise.
Major R. Owens.
Edolphus Towns.
John M. Spratt, Jr.
Louise McIntosh Slaughter.
Paul E. Kanjorski.
Gary A. Condit.
Collin C. Peterson.
Thomas M. Barrett.
Barbara-Rose Collins.
Eleanor Holmes Norton.
James P. Moran.
Gene Green.
Carrie P. Meek.
Chaka Fattah.
Tim Holden.
APPPENDIX A--SUMMARY OF FINDINGS AND RECOMMENDATIONS
findings
The Management of the Federal Government Needs Improvement.
The capacity of the President as the chief
executive officer of the Federal Government and its principal
manager has been diminished over several Administrations. The
Executive Office of the President has abrogated its
responsibility to oversee and improve the Government's
management structure.
The capacity available to the President in the
Office of Management and Budget [OMB] to reform or improve
management has steadily declined and now barely exists, despite
a competent Director of OMB and a Deputy Director for
Management, whose talents in this area are underutilized.
Federal management organization, oversight authority, and
general influence have been consistently overridden by
recurring budget crises and budget cycle demands, despite
conscientious intention to give ``Budget'' and ``Management''
equal voice within OMB.
The NPR, in its ad-hoc and episodic approach to
management issues, reveals the weakened state of management
capacity of the Executive Office of the President.
The NPR-inspired announcement of a reduction of
over a quarter-million Federal jobs may have been warranted;
however, without first having a solid empirical rationale for
doing so and not knowing where or how, it reflected a lack of
strategic vision as to the Federal Government's role, and as
such it seriously eroded Federal workers' morale, productivity,
and planning for the future.
The capacity of the Office of Personnel Management
to provide leadership to a revitalized career service has been
seriously impaired.
Short-term political appointees have layered and
``thickened'' the Federal Government's upper echelons of
organization to a point where productivity, management, and
continuity of operation have become seriously affected.
Some potential candidates for political
appointment believe that service in Federal organizations will
hinder their careers, imposing a protracted and intrusive
nomination process as well as numerous restrictions on
financial and employment activities during and following
Federal Government assignments. As a result, the pool of
available talent qualified for appointment and willing to serve
has been diminished.
Qualified people considering careers in public
administration are discouraged from Federal career employment
by layers of political appointees of uneven quality precluding
advancement to positions of senior responsibility.
Career Federal public administrators have a long
record of faithfully executing clearly established policy and
rendering effective political leadership. However, political
appointees as a group have tended to display more loyalty to
individual political sponsors and special interests than to the
President, who is elected by and ultimately accountable to the
people.
Employee-buyout programs in Federal organizations
have not worked as well as intended, resulting in the loss of
employees with the most marketable skills, leaving in the
workforce many of the poorer performers.
Programs for Federal-employee professional
education, training and development are vital to a smaller
workforce adopting modern management methods and achieving
desired productivity improvements.
The Federal Government must follow the best
practices of private and public organizations for exploiting
information technology in reforming management, reducing size,
and raising productivity and market competitiveness. A recent
General Accounting Office report provides valuable insights on
how the Federal Government can lower costs, improve
productivity, and provide better services to its citizens.
The Federal Intergovernmental Roles are Poorly Defined.
Federal role has evolved in a patchwork manner.
The Federal Government lacks a clear and comprehensive
statement of its proper role. The result is similar redundant
programs throughout disparate departments and agencies.
Many citizens view the Federal Government as
having overreached its proper role, by ``meddling'' in affairs
such as elementary and secondary education (better left to
States and communities), marketing and distribution of energy
resources (better left to market forces), and applied research
and development (better left to private investment and
competition).
Many State governments are willing to risk
accepting large Federal block grants, with fewer dollars, in
return for greater flexibility and fewer restrictions. There is
some concern that any residual reporting burdens and controls
from Washington may interfere with States' roles and as such
constitute an ``unfunded mandate,'' contrary to a law sponsored
by this committee.
In the current environment many agencies and
States are trying to develop program partnerships. Federal-
State program partnership agreements reached a high point
during the Johnson and early Nixon Administrations. State and
Federal leaders need to be aware that those intergovernmental
agreements later deteriorated because roles and
responsibilities were not clearly defined and accepted by all
interested parties. Another cause was that the Federal
Government seized a decision-making role disproportionate to
the resources it provided.
Organization of Federal Functions is Uneven and Duplicative.
No Cabinet-level department has been eliminated
outright in our Nation's history, although many have been
reorganized, renamed, combined, or split.
Today's Federal Government is even more enmeshed
in red tape, replicated functions and controls than it was in
1971, when President Nixon tried unsuccessfully to organize and
streamline Cabinet departments.
The proposed ``Department of Commerce Dismantling
Act of 1995'' contains a model for dismantling any high-level
Federal organization using a transitional organization within
the Office of Management and Budget.
Approximately a million Federal employees work in
some thirty thousand field offices outside of Washington.
Although some field offices only have five or fewer staff,
closing them has consistently proven a difficult, almost
intractable political problem. The committee notes progress by
the U.S. Department of Agriculture in addressing the problem.
Public Accountability is Weak.
The National Performance Review [NPR] contributed
to identifying the need to improve the Federal Government and
lower its operating costs.
By not establishing first what activities the
Federal Government should be performing, the NPR was flawed
from the outset and did not achieve enough progress.
NPR neglected to place sufficient emphasis on
fiscal accountability by failing to address the Federal
Government's responsibility for stewardship of public
resources.
The ad-hoc, even disjointed, nature of NPR is a
telling sign of the disconnect between policy and management,
evidence of atrophy of the tools of management, and an
admission that the President has no organized capacity to
manage the executive branch.
The NPR recommended a doubling of the existing 1-
to-7 supervisory span of control to a 1-to-14 or 1-to-15
supervisor to subordinate ratio. This recommendation was
without appropriate foundation and ignored the Government's
widely varying missions, and threatens public accountability.
With more Federal work being done under contract
with private vendors, effective contract administration is
critically important in ensuring efficiency, effectiveness, and
accountability.
The growth of ``contract government'' is a direct
by-product of the emphasis on personnel reduction. As
successive administrations have sought to limit or reduce the
number of Federal employees, more and more activities have been
contracted out.
The experiences of other foreign and federal,
State and local governments in carrying out significant
management and accountability reforms are valuable to Federal
agency managers as they implement the Government Performance
and Results Act of 1993 [GPRA].
Government corporations and other Government-
sponsored enterprises have assumed roles and responsibilities
very different from those for which the Government Corporation
Control Act of 1945 was intended. Today, a conceptual framework
is needed for setting up these kinds of enterprises and
centralized oversight of their management operations.
Executive branch accountability is made more
difficult by the complex congressional budget process and by
additional legislative
branch restrictions and controls placed on Government agencies,
such as prohibitions on closing outdated Federal field offices.
recommendations
Strengthen the President's Role as Chief Executive Officer of the
Executive Branch.
Management of the Federal Government should be a
Presidential priority. Among the President's many roles is the
responsibility to serve as chief executive officer or general
manager of the Federal Government. Many broad initiatives
intended to make the Federal Government work better depend on
the commitment by the President and his staff in the Executive
Office of the President. By approaching the Federal Government
almost exclusively from a budget or a policy perspective,
Presidents limit their capacity to reform management in the
Federal Government.
The President, acting jointly with Congress
through a Federal management office, should establish
intergovernmental partnerships, with clearly defined Federal
and State roles and responsibilities, and allow local Federal
managers the authority and flexibility needed to assist State
and local officials in managing devolved programs, functions,
and resources.
To make the President's executive office more
accountable to the public, Congress should establish an Office
of Inspector General in the Executive Office of the President.
Establish an Office of Management.
To enhance the President's management capability
throughout the executive branch, Congress should establish in
the Executive Office of the President a top-level management
and organization oversight office headed by an administrator
who has direct access to the President. Sustained attention to
management issues beyond recurring budget crises is vital to
ensure effectiveness. The new Federal management office would
combine the management functions of the OMB, the residual
policy and oversight functions of the Office of Personnel
Management, and the policy functions from the General Services
Administration into an entity separate from but equal in
stature to the remaining Office of the Budget.
The executive branch is in serious need of an
office with responsibility for departmental reorganizations
such as the proposed dismantling of the Department of Commerce.
The current legislative initiative in that regard will be a
model for managing large-scale reductions in the Federal
Government's organizational structure and scope of work.
An Office of Management could encourage the
implementation of the strategic information management and
technology practices increasingly common in quality private and
public organizations. It could stress the need to focus a
concentration of energy on technology improvements that attain
goals; and assert senior management control over technology
investment decisions.
Executive agencies should exploit, publicize, and
replicate successful private sector ventures in making Federal
Government organizations work more effectively, drawing upon
past successes.
Convene a Commission on Federal Reorganization.
Congress should establish a blue-ribbon inquiry
commission of experts from the business, academic, and
nonprofit sectors and Federal, State and local government to
recommend to the President and Congress in early 1997: (i) ways
to organize more efficiently the functions the Federal
Government performs, and (ii) changes in law that would reduce,
transfer, or eliminate Federal functions. If resources permit,
such a commission should produce a reorganization plan.
Such a commission should apply the guideline
criteria for agency elevation to Cabinet department status
which were developed in 1988 by the National Academy of Public
Administration [NAPA]. Such a review ought to result in a new
alignment and grouping of the tasks and functions of the
Federal role by major purpose.
Congress should concurrently provide the President
broad authority, including optional fast-track authority, to
restructure executive branch departments and agencies, similar
to past (and now expired) Reorganization Acts.
Congress should be fully involved in the
consolidation of the many Federal programs it enacts and funds;
the proposed commission should look for additional
opportunities to consolidate or combine Federal programs, and
make recommendations accordingly.
Once changes have been made in the structure of
the executive branch, Congress should conform its own internal
committee organization and jurisdictions to parallel the
executive branch changes.
Reshape the Federal Civil Service.
Congress should proceed with legislation that
would reduce the allowable number of political appointees to an
initial level of 2,000--aimed principally at Schedule C (not
subject to Senate confirmation) positions--and set lower
targets for future years as additional executive branch
organizations are consolidated or abolished.
Congress should appropriate the professional
education, training and development funds for executive
agencies, not as separate line items, but as an integral part
of total personnel costs. That would afford managers the
flexibility to choose between training and hiring to upgrade
collective organizational skills.
Any future Federal employee ``buyout'' legislation
should be limited to serving the needs of the downsized Federal
Government by focusing agency buyouts on those with less-needed
skills, functions, and capabilities.
Strengthen Public Accountability.
Both the President and Congress should complete
the work to implement the Government Performance and Results
Act, in order to make the executive branch both performance-
driven and accountable. The Act's performance measurement
provisions ought to be used in all steps of the budget and
management process.
To make public accountability in the executive
branch less cumbersome and counterproductive, Congress should
simplify the present complex structure of 13 separate
appropriations bills by combining them into a lesser number,
possibly comparable to the internal budget review structure in
the Office of Management and Budget. Congress should adjust its
own internal authorizing and appropriating committee structure
correspondingly.
Congress should amend the Government Corporation
Control Act of 1945 to raise the efficiency and effectiveness
of the Federal Government's business-type operations and
organizations and to set standards consistent with today's
marketplace conditions.
In its quest to attain the objective of balancing
the Federal budget by fiscal year 2002, Congress must recognize
three critical needs: (i) to preserve the Federal Government's
accountability to the governed throughout the transformation
process; (ii) to foster that objective by making investments in
human and technological development during that process; and
(iii) to accept the hard lessons learned by industry that
workforce strength is to be cut only after--not before or
while--the Federal roles have been determined and
organizational structures have been reduced or eliminated.
------
APPENDIX B--INDEX OF WITNESSES
BINGMAN, Charles F. Visiting Professor of Public
Administration, The George Washington University, JUNE 13/19.
BOWSHER, Charles A. Comptroller General of the United
States, General Accounting Office, MAY 2.
BREWER, Shelby T., Under Secretary of Energy, (Reagan) MAY
23.
BROWNBACK, Representative Sam, (Kansas), MAY 16.
BURKE, William, Great Lakes Regional Administrator, General
Services Administration and Chair, Chicago Federal Executive
Board, JUNE 13/19.
CHATEL, Mary Barrett, President, National Council of Social
Security Management Associations, JUNE 13/19.
CHATER, Shirley Sears. Acting Commissioner, Social Security
Administration, JUNE 13/19.
CHRYSLER, Representative Dick, (Michigan), MAY 16.
CRAIG, Colonel Richard. North Central Division Engineer,
U.S. Army Corps of Engineers, Department of Defense, JUNE 13/
19.
DALE, Tony. Harkness Fellow, The Commonwealth Fund of New
York and Budget Manager of the New Zealand Treasury, MAY 2.
DEAN, Alan L. Senior Fellow, National Academy of Public
Administration, Assistant Secretary of Transportation (former),
and coordinator of President Nixon's plan for departmental
reorganization, MAY 9, JUNE 13/19.
DODARO, Gene L. Assistant Comptroller General, Accounting
and Information Management Division, General Accounting Office,
MAY 9.
FINCH, Johnny C. Assistant Comptroller General, General
Government Programs, General Accounting Office, MAY 9, JUNE 20,
JUNE 27.
FINN, Chester E., Jr. (Reagan) Assistant Secretary of
Education, John Olin Fellow, The Hudson Institute, MAY 23.
FITZPATRICK, Donna R. Under Secretary of Energy (Bush), MAY
23.
FLANAGAN, Daniel V., Jr. President, Flanagan Consulting
Group, JUNE 6.
FOSLER, R. Scott. President, National Academy of Public
Administration, MAY 2, JUNE 27.
FRANKLIN, Garrome. Regional Administrator, Federal Aviation
Administration, JUNE 13/19.
GISMONDI, Donald. Regional Administrator, Federal Transit
Administration, JUNE 13/19.
GLYNN, Hon. Thomas P. Deputy Secretary of Labor, MAY 9.
GORDON, D. Lynn. Miami District Director, U.S. Customs
Service, Department of the Treasury, JUNE 13/19.
HANSEN, William D. Assistant Secretary of Education for
Management and Chief Financial Officer (Bush), and Executive
Director, Education Finance Council, MAY 9, MAY 23.
HATRY, Harry P. Director, State and Local Government
Research Programs, Urban Institute, JUNE 20.
HENN, Vice Admiral A.E. (Gene). Vice Commandant, U.S. Coast
Guard, Department of Transportation, JUNE 27.
HERRINGTON, John S. Secretary of Energy (Reagan), MAY 23.
HODEL, Donald P. Secretary of Energy (Reagan), MAY 23.
HODGE, Scott A. Grover M. Hermann Fellow in Federal
Budgetary Affairs, The Heritage Foundation, MAY 16.
HUERTA, Michael P. Associate Deputy Secretary of
Transportation and Director, Office of Intermodalism,
Department of Transportation, JUNE 13/19.
INK, Dwight A. President Emeritus, Institute of Public
Administration, and former Assistant Director for Management,
Bureau of the Budget and Office of Management and Budget, MAY
2, JUNE 13/19.
JASPER, Herbert N. Senior Associate, McManis Associates,
MAY 2, MAY 16, JUNE 20.
JOHNSON, Jack. President, Professional Airways Systems
Specialists, JUNE 6.
JOHNSON, Roger W. Administrator of General Services, JUNE
6.
KEHOE, Joseph G. Managing Partner, Government Services,
Coopers and Lybrand LLP, JUNE 20.
KETTL, Donald F. Nonresident Senior Fellow, Center for
Public Management, The Brookings Institution, and professor at
the University of Wisconsin, Madison, MAY 2, JUNE 20.
KOHL, Linda. Director of Minnesota Planning, JUNE 20.
KOSKINEN, John A. Deputy Director for Management, Office of
Management and Budget, MAY 2, JUNE 27.
KRASNER, Barry. President, National Air Traffic Controllers
Association, JUNE 6.
LIGHT, Paul C. Director, Public Policy Programs, The Pew
Charitable Trusts, JUNE 27.
LONGMIRE, Laura. National Director, Benchmarking, KPMG Peat
Marwick LLP, JUNE 20.
MAJKUT, Paul. General Counsel, Bonneville Power
Administration, JUNE 6.
MORGAN, Sheron K. North Carolina Office of State Planning,
JUNE 20.
MORRIS, Joseph A. General Counsel, Office of Personnel
Management (former), JUNE 13/19.
MOSBACHER, Robert A. Secretary of Commerce (Bush), MAY 16.
MUNOZ, George. Assistant Secretary of the Treasury for
Management and Chief Financial Officer, Department of the
Treasury, MAY 9, MAY 23.
O'LEARY, Hazel R. Secretary of Energy, MAY 16/23.
PERRET, Kenneth A. Regional Administrator, Federal Highway
Administration, JUNE 13/19.
POSNER, Paul. Director, Budget Issues, Accounting and
Information Management Division, General Accounting Office, MAY
23.
RIVLIN, Alice M. Director, Office of Management and Budget,
MAY 2.
ROBERTSON, Jack. Deputy Administrator, Bonneville Power
Administration, JUNE 6.
RODRIGUEZ, George. Houston Area Coordinator, Department of
Housing and Urban Development, JUNE 13/19.
RUMSFELD, Donald H. Secretary of Defense (Ford) and chief
executive officer of General Instruments Corporation, JUNE 6.
SCHUSTER, Gretchen. Chicago Regional Director, Passport
Agency, Department of State, and a Federal Executive Board
member, JUNE 13/19.
SEIDMAN, Harold. (former) Assistant Director of the Budget,
Senior Fellow, National Academy of Public Administration, JUNE
6.
SMITH, Marshall S. Under Secretary of Education, MAY 23.
SPERRY, Roger L. Director of Management Studies, National
Academy of Public Administration, MAY 9.
TAYLOR, Jerry. Director, Natural Resources Studies, Cato
Institute, MAY 16.
THOMPSON, Joseph. New York Regional Director, Department of
Veterans Affairs, JUNE 27.
TIAHRT, Representative Todd. (Kansas), MAY 16.
TOWNSEND, Wardell C., Jr. Assistant Secretary of
Agriculture for Administration, JUNE 13/19.
WALKER, Representative Robert S. (Pennsylvania), Chairman
of the Committee on Science, MAY 16.
WARD, Col. F. Edward, Jr. Director of Field Offices,
Defense Finance and Accounting Service, Department of Defense,
JUNE 27.
WATKINS, Admiral James D. Secretary of Energy (Bush), MAY
23.
WILLIAMS, Anthony A. Chief Financial Officer, Department of
Agriculture, JUNE 27.
WURTZ, Donald. Chief Financial Officer, Department of
Education, MAY 23.
WYSE, Duncan. Executive Director, Oregon Benchmarking
Project, MAY 2.