Accompanying Report of the National Performance Review Office of the Vice President Washington, DC September 1993
Reduce the costs associated with management control structures by one half over a five-year period.
The costs of management control structures should be cut roughly in half as a consequence of the implementation of decentralization, empowerment, reduced regulation, and other NPR recommendations over the next five years. Roughly 650,000 to 700,000 individuals work in management control positions at an estimated annual cost of $35 billion to $40 billion annually (see Appendix B for an illustrative breakout by major agency). A portion of the savings should be reinvested in quality management initiatives, improved technology, training of administrative staff reassigned to line positions, and methods to continuously reduce control structures. Significant savings, however, are not expected in the first few years due to early outs, buyouts, severance pay, training, relocation, and guaranteed outplacement services, which will be provided to the affected staff.(1)
As part of the initiative to streamline management control structures, the President should
Reengineering work processes will require legislative changes in some cases, but this strategy will also play a major role in streamlining management control structures.
The preferred method for both reducing the costs of the central control positions and increasing the span of control is through a broad offering of separation incentives-- not just to the estimated 650,000 to 700,000 employees in positions related to the control structures. In this way, employees in the targeted positions, who are not eligible for early outs or do not elect a buyout, can be transferred to line positions as they become vacant. With a broad offering of incentives coupled with a commitment to train and reassign staff, a reduction-in-force--the least desirable method of streamlining--might be minimized.
The President's Management Council (PMC) will oversee and coordinate the strategic plans for reductions in costs of central control structures and in increasing the management span of control. The PMC consists of chief operating officers--the senior leaders of cabinetlevel departments as well as large agencies--who are in a position to know the best way to cut administrative costs while improving performance.
Traditionally, streamlining efforts directed by central management agencies have been across-the-board cuts. While these efforts led successfully to temporary cuts in staffing, they did not result in improved performance and left behind many of the same problems without changing the culture. The PMC is charged with a very different streamlining initiative that is driven by a reduction in costs--not just people--and is specifically directed toward better government at less cost. PMC will need operational assistance in this effort and should identify the type of assistance needed from the Office of Management and Budget (OMB), the Office of Personnel Management (OPM), and the Federal Quality Institute, as required.
NPR's estimates in the magnitude of existing management controls and their associated costs are hampered by a lack of a clear measure of their scope. Therefore, an early charge to the PMC from the President should be to define baseline costs and expected savings in a standardized way that is acceptable to and understandable by most people. For much the same reason, PMC--supported operationally by OMB and OPM--should define and track progress toward increasing the ratio of workers in relation to managers in the federal government.(3)
Use multi-year performance agreements between the President and agency heads as a tool or guide for downsizing, reengineering, partnering across established boundaries, and empowering teams with authority, skill, and accountability. (2)
Performance agreements should be used to identify methods for measuring progress toward agreed-upon results and systemic changes that will allow major reductions in the costs and number of staff dedicated to central control structures.(1) In exchange for these commitments, the Executive Office of the President should support agencies with increased flexibility through regulatory relief, executive orders, or legislative initiatives. Service reductions should not be accepted if they are across-the-board or if substantial administrative costs and staff remain in headquarters or regional offices. Where possible a criteria like the Postal Service's "Do they touch the mail?" should be developed by each agency.
Within 18 months, establish a list of specific field offices to be closed and submit this list to Congress for approval. (2)
The President should charge the President's Management Council (PMC) with coordinating an 18-month government-wide review culminating in the submission to Congress of a list of civilian field offices that should be closed. This should be a participative process between the agencies, the Executive Office of the President, and congressional leaders using objective criteria and review processes to establish the closure lists.
Agencies with existing plans for restructuring field offices should remain on schedule and not await the PMC submission.
Legislation should be enacted to grant the President reorganization authority. (3)
Congress should reinstate the President's authority to restructure agencies in the executive branch. Congress has given the President statutory reorganization authority several times (for limited periods) since the 1930's. The last authority was granted through the Reorganization Act Amendments of 1984, which expired at the end of 1984. In the absence of such authority, the President can only reorganize through the standard, time-consuming legislative process.
Initiate three or more cross-agency efforts to improve service delivery or policies addressing common issues or customers. (2)
To establish cooperative efforts between agencies on issues such as illegal immigration, food safety, debt collection, welfare reform, and homelessness, the President's Management Council (PMC) should initiate three or more initiatives, starting in fiscal year 1995. The PMC should identify lead officials, clearly define the mission, and help establish performance agreements between the participating agencies. The PMC and the participating agencies should establish reporting schedules and use the results to foster and better implement other cooperative efforts.
Identify restrictive regulations and laws that are barriers to crossorganizational cooperation and develop legislative proposals to eliminate them. (3)
Restrictive legislative provisions such as those contained in the Treasury, Postal Service, and General Appropriations Act of 1993 (P.L. 102-393), the Intergovernmental Personnel Act, and Title 31 of the U.S. Code, should be modified to make funding of cross-agency activities easier when it is in the public's best interest.
Eliminate phrases such as "no part of any appropriation contained in this or any other Act shall be available for interagency financing of boards, commissions, councils, committees, or similar groups" and "which do not have a prior and specific statutory approval to receive financial support from more than one agency or instrumentality."
Summary of Actions by Implementation Category ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
(2) President, Executive Office of the President, or Office of Management and Budget can do
ORG01: Reduce the costs associated with management control structures by one half over a five-year period.
ORG02: Use multi-year performance agreements between the President and agency heads as a tool to guide agency efforts to streamline, reengineer, partner across established boundaries, and empower teams with authority, skills, and accountability.
ORG03: Prepare a list of specific field offices to be closed and submit it to Congress for action.
(3) Requires legislative action
ORG04: Legislation should be enacted to grant the President reorganization authority.
ORG05: The President's Management Council should initiate three or more cross-agency efforts to improve service delivery or policies addressing common issues or customers.
ORG06: Remove legislative barriers to cross-organizational cooperation.
Numbers of Personnel*
Table 1 Supervisors, Personnel Budget ******* Managers & Administrators Staff SES ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Air Force 26,915 3,687 1,875 Agricultur 14,017 2,047 565 Army 40,400 5,676 4,903 Commerce 5,556 547 214 Defense 16,259 1,458 472 Justice 15,661 1,483 296 Labor 3,013 1,438 95 Energy 4,073 424 245 Education 786 91 51 EPA 3,098 236 88 GSA 3,589 323 209 HHS 16,789 1,753 483 HUD 2,094 263 50 Interior 10,915 1,399 482 NASA 4,351 397 40 Navy 35,822 4,278 3,699 OPM 865 1,549 21 State 2,455 210 97 DOT 11,313 913 236 Treasury 18,826 3,531 291
Affairs 26,403 2,323 358
Other 15,258 2,244 494 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Total 278,458 36,270 15,264
Table 2 Accountants Acquisition Headquarters ******* & Auditors Specialists Personnel Total** ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Air Force 5,867 10,323 4,544 53,211 Agricultur 3,360 5,327 9,643 34,959 Army 11,275 11,513 7,362 81,129 Commerce 613 1,068 2,221 10,219 Defense 11,201 16,301 3,799 49,490 Justice 1,643 685 11,164 30,932 Labor 376 196 4,218 9,336 Energy 820 970 5,167 11,699 Education 351 364 2,512 4,155 EPA 519 377 4,118 8,436 GSA 996 1,097 2,046 6,546 Interior 2,001 1,687 7,340 23,824 NASA 639 1,229 1,437 8,093 Navy 9,164 11,274 4,383 68,620 OPM 199 32 1,430 4,096 State 402 72 6,078 9,314 DOT 1,427 1,028 8,581 23,498 Treasury 6,854 769 16,472 46,743
Affairs 4,477 1,984 3,113 38,658
Other 4,329 2,965 38,115 63,405 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Total 70,190 72,597 188,587 661,366
*Note: Totals reflect the rounding off of full-time equivalent allocations
**Note: Agency totals in Table 2 include Table 1.
The following sources were used to develop estimates of the types of categories of staff that should be considered in the development of agency streamlining efforts. Because agencies use different Education approaches to the use of personnel classification categories, these numbers are not definitive sources on which to base staffing reductions. Also, because of differences in definitions, the numbers included in defining management control and headquarters can vary substantially. For example, some agencies would include certain types of contractors; others would not.
These figures were taken from Office of Personnel Management reports. They are the sum of supervisors and managers as of March 1993 and allocations of Senior Executives as of September 1990.
This refers to the number of personnel by agency in the 200 series less military personnel specialists (series 204 and 205). The data were published in OPM publication MW-56-22 dated September 30, 1991. The numbers were adjusted to exclude supervisors based on each agency's supervisor to nonsupervisor ratio (derived from OPM reports).
These figures represent the number of personnel by agency in the 560 and 561 series published in OPM publication MW-56-22 dated September 30, 1991. The numbers were adjusted to exclude supervisors based on each agency's supervisor to nonsupervisor ratio. For this reason, these numbers are lower than the 17,550 reported in the MissionDriven, Results-Oriented Budgeting report.
This includes the number of personnel by agency in the 500 series less budget staff (560s and 561s) and tax personnel (512s, 526s, 545s, 570s, 592s,and 593s) published in OPM publication MW-56-22 dated September 30, 1991. The numbers were adjusted to exclude supervisors based on each agency's supervisor to nonsupervisor ratio. This estimate is lower than the figure of 120,000 reported in the Improving Financial Management report because that report includes budget specialists, supervisors, and some management and budget analysts' staff in series 343.
This refers to the number of personnel in the 1101, 1102, 1103, 1105, 1106, 1150, and 1910 series from OPM publication MW-56-22 dated September 30, 1991. The numbers were adjusted to exclude supervisors based on each agency's supervisor to nonsupervisor ratio. This estimate is lower than the figure of 142,000 reported in the Reinventing Federal Procurement report because that report includes other logistics functions as well as supervisors.
Headquarters personnel are the personnel constituting headquarters staff as reported to the National Performance Review by the agencies; a proxy was used for Department of the Treasury and "Other." The proxy is the number of personnel by agency in the Washington, D.C., area. The numbers were reduced by 28.5 percent to account for duplication of headquarters personnel who might also be supervisors or specialists. The 28.5 percent factor is the ratio of supervisors and specialists to total civilians in the Washington, D.C., area.
This figure represents the number of management control personnel, by agency. It is the sum of all previous columns, and should be the primary target for streamlining reductions.
Creating Quality Leadership and Management QUAL
Streamlining Management Control SMC
Transforming Organizational Structures ORG
Improving Customer Service ICS
Mission-Driven, Results-Oriented Budgeting BGT
Improving Financial Management FM
Reinventing Human Resource Management HRM
Reinventing Federal Procurement PROC
Reinventing Support Services SUP
Reengineering Through Information Technology IT
Rethinking Program Design DES
Reinventing Environmental Management ENV
Improving Regulatory Systems REG
Agency for International Development AID
Department of Agriculture USDA
Department of Commerce DOC
Department of Defense DOD
Department of Education ED
Department of Energy DOE
Environmental Protection Agency EPA
Executive Office of the President EOP
Federal Emergency Management Agency FEMA
General Services Administration GSA
Department of Health and Human Services HHS
Department of Housing and Urban Development HUD
Intelligence Community INTEL
Department of the Interior DOI
Department of Justice DOJ
Department of Labor DOL
National Aeronautics and Space Administration NASA
National Science Foundation/Office
of Science and Technology Policy NSF
Office of Personnel Management OPM
Small Business Administration SBA
Department of State/ U.S. Information Agency DOS
Department of Transportation DOT
Department of the Treasury/ Resolution Trust Corporation TRE
Department of Veterans Affairs DVA