IMPROVING THE FEDERAL ADMINISTRATIVE

MANAGEMENT PROGRAM

Based on study conducted between January 1952 and December 1952

SUMMARY OF REPORT

This report is submitted in the interest of attaining maximum utilization of manpower in the executive branch of our Federal Government. It is concerned with that segment of the top governmental management structure which has been expected to provide effective leadership in the management of the men, money, materials, and methods. The substantive programs designed to carry out the mission of the various departments and agencies are not included in our study. The Bureau of the Budget, the United States Civil Service Commission, and the General Services Administration are the principal agencies assisting the President in providing leadership in the four areas of administrative management mentioned above. The subcommittee sought to objectively appraise the working relationship among those agencies with respect to matters of broad planning, operations, and control functions. Particular attention was given the management leadership activities of the Bureau of the Budget-considered since 1939 to be the fountainhead for effective administrative management practices throughout the executive branch.

To assist in the accurate appraisal of the top management structure of the executive branch, the subcommittee examined the administrative management practices and their effectiveness in 25 of the largest departments and agencies in the executive branch.

As the substantive portion of this report will show, the subcommittee finds that the following conditions in the executive branch must be corrected before maximum utilization of manpower can be realized. I. Because of the absence of central leadership and direction at the pinnacle of the administrative structure of the executive branch, departments and agencies lack consistent, planned management programs. Consequently, while some agencies have more or less independently developed positive management programs, a great many others are pursuing methods of administration built on "management by accident" rather than upon "management by design."

II. The President looks to the Bureau of the Budget as the focal point in meeting the greatest portion of his administrative management responsibilities. The Bureau of the Budget, however, has been unable to completely fulfill such a role, partially because of decreasing staffing authorizations in its key administrative management activities. The Civil Service Commission and the General Services Administration as a result have been unable to contribute their full measure toward maximum leadership because of the poor organizational alinement and absence of coordination among the three agencies. III. Faulty organization of the top management structure is a definite obstacle to the President in discharging his responsibilities for

effective management of the executive branch. This impediment is compounded by the great burden and complexity of major policy matters and numerous duties of considerable lesser consequence. As a result of those factors, he is unable to obtain the solidarity in and unity of top management leadership which in accordance with fundamental principles of business administration must exist in order to attain optimum management efficiency.

To overcome these conditions the subcommittee recommends that an Office of Administrative Management be created in the Executive Office of the President with a Director in charge. This Office should be responsible to the President for those functions currently assigned to the Bureau of the Budget, the United States Civil Service Commission, and the General Services Administration. However, as is demonstrated in this report, there is a compelling need to realine the supporting functions so as to afford the type of leadership in their respective program areas required for the most effective utilization of the men, money, materials, and methods throughout the Federal Government. The following is a brief graphic portrayal of the proposed organizational structure of the Office of Administrative Management and the realinement of its four supporting agencies.1

*Other offices comprising the Executive Office of the President are not shown.

SCOPE OF STUDY

While the emphasis of the work of this subcommittee is primarily on the "men" aspect of the four constituent parts of management (men, money, material, and methods) we have recognized from the very beginning that the "men" phase does not and cannot stand alone in a study of manpower utilization in any organization, governmental or industrial. There is an absolute interrelationship among these four elements of management. One cannot stand inactive or inarticulateall must work in harmony. Any attempt to study the "men" aspect

1 See exhibit XV of the appendix for a proposed organizational and functional chart of the Office of Administrative Management.

alone cannot help but be incomplete, lacking, as it does, cohesion with overall management responsibility. Such an attempt would be comparable to the work of a doctor who isolates and retards an infectious virus, but can never effect a complete cure because the source of incubation is beyond his professional knowledge and reach. Any prescription for governmental manpower ills must consider the interplay of all factors in the management structure.

We have not attempted a study so broad as that of the Commission on Organization of the Executive Branch of the Government. We purposely avoided scrutinizing substantive programs.

Our first objective was an appraisal of the adequacy of top management structure of the executive branch in furnishing the tools for good administrative management, i. e., men, money, material, and methods. In conducting this study, while the attention of our staff was directed at the Civil Service Commission (men), the Bureau of the Budget (money and methods), and General Services Administration (materials), the Bureau of the Budget was the point of main focus.

Our second objective was to examine the work of management staff units in various departments and agencies and evaluate the utilization of available resources.

For background information, we have relied upon studies, reports, hearings, and compilations.2 Interviews were conducted with a number of persons who participated in past studies of the management phases of the Federal Government in order to obtain "fill-in" information.

Throughout the entire mass of reference material, regardless of the date, this point stands out: Better organization and management of the executive branch is urgently needed if maximum economy and efficiency are to be fully achieved. The subcommittee agrees with and reemphasizes that opinion-better organization of and management techniques within the executive branch are as vitally required today as at any time in our history. It is toward that objective that the effort of the subcommittee has been directed in this study.

PRESENT MANAGEMENT ORGANIZATIONAL STRUCTURE

Much of the difficulty in effecting good management at the top of the executive branch is traceable to the anomalous relative positions of its principal internal management arms, namely, the Bureau of the Budget, the Civil Service Commission, and the General Services Administration attention is invited to exhibit I of the appendix.

The fact is noteworthy that, while the Bureau of the Budget is situated in the Executive Office of the President, the Civil Service Commission and the General Services Administration are organizationally located among the independent offices and establishments

? The following listing is illustrative of the type of reference material used:

W. Brooke Graves, "Basic Information on the Reorganization of the Executive Branch, 1912-1948," Public Affairs Bulletin No. 66 (February 1949).

John D. Millett, The Division of Administrative Management in the Federal Bureau of the Budget, an unpublished study for the uses of the Commission on the Organization of the Executive Branch of the Government (January 1948).

Reports of the Commission on Organization of the Executive Branch of the Government (1949). Hearings Before the Committee on the Civil Service, House of Representatives, 78th Congress, 1st session, pursuant to H. Res. 16 (1943).

Hearings Before the Committee on Expenditures in the Executive Departments, House of Representatives, 82d Congress, 2d session, on bills relating to Commission on Organization Recommendations (June

whose program purpose and influence are directed outside the Government and are regulatory or substantive in nature.3

Actually the Civil Service Commission and the General Services Administration have responsibilities in management service activities to departments and agencies very similar to a substantial part of the activities of the Bureau of the Budget.

This condition was partially recognized by the Commission on the Organization of the Executive Branch of the Government and resulted in its strong recommendation to create an Office of Personnel in the Executive Office of the President.

A key staff member of this same Commission revealed that consideration was also given to a proposal to locate the General Services Administration at an organizational level comparable with the Bureau of the Budget. This suggestion was finally dropped, not because it violated good organizational principles, but because the general services function was considered more operational than staff in nature.

We do not subscribe to this decision. It is our conviction that the efficient and economical management of space, property, and records has a direct impact on the effective utilization of manpower and of

money.

BUREAU OF THE BUDGET

The present organizational pattern of the Bureau of the Budget portrayed by exhibit II was adopted as of April 1, 1952. The organizational framework prior to that date is depicted by exhibit IIa. The most significant change effected by this reorganization is the separation of what might be termed pure staff functions from operating functions. Prior to this organizational realinement, the relationship of staff responsibilities to day-to-day operating functions was confused. The staff functions grew increasingly difficult to manage because of the preoccupation of the personnel of the Bureau at all levels with immediate operating problems, especially the processing of the budget document a tedious, onerous, time-consuming task.

The effectiveness of the Bureau in matters of broad administrative proportion was generally reduced. To a large degree this condition stemmed from a succession of budgetary curtailments which caused reductions in personnel. Such a trend unfortunately seemed to be leading back to the era prior to 1939 when the functional role of the Bureau of the Budget was substantially a fiscal agency with little attention given to management problems.

An effort to forestall this retrogressive trend was made by the Bureau on April 1, 1952, when the first major reorganization since 1939 was effected. Despite the efforts of our staff to do so, the effectiveness of this reorganization cannot be evaluated at this time. However, the representative of the private management service who was an adviser in the reorganization expressed reservations as to its success. (This matter is more fully discussed later in this report. See p. 24.)

See exhibit I of appendix.

UNITED STATES CIVIL SERVICE COMMISSION

Exhibit III of the appendix shows the organizational structure of the Civil Service Commission. From this chart it would appear that nothing in its organizational structure would prohibit the Commission from executing its role.

4

However, while the Commission has dispersed a large part of its operating functions to 14 regional offices, the central office handles operational matters for departmental services." This in itself is no small task since the top staff of the central office is responsible in the personnel field for approximately 164,000 Federal employees in the Washington, D. C., metropolitan area.

Thus, the staff function at the top echelon of the Commission, as was true at the Bureau of the Budget, becomes enmeshed with daily operational problems. Preoccupation of top level staff members with operating problems cannot help but reduce their ability to render optimum staff service to regional offices as well as other agencies in broad personnel matters."

GENERAL SERVICES ADMINISTRATION

As shown by exhibit IV of the appendix, the organizational structure of the General Services Administration is well arranged from the standpoint of staff and line relationships. The top administrative echelon is not burdened with operating responsibilities. The opportunity is presented for administrators to render staff direction and advice vertically throughout the General Services Administration as well as horizontally with top level department and agency officials. Further, through a high degree of decentralization the 10 regional offices have virtual complete authority to act as representatives of the Administration. This greatly enhances the ability of the General Services Administration to service customer field activities. Also the central office administrative staff is relieved of the time-consuming detail of processing individual action requests.

PRESENT MANAGEMENT SERVICES RELATIONSHIPS

Insofar as the everyday management of the executive branch is concerned, it has been the common finding of numerous surveys that, in addition to his important responsibilities for substantive policy matters, the President has historically been burdened with myriad duties and responsibilities of a minute character. With the growth and expansion of Government programs, this encumbrance has been increasing. However, since 1939, when the Bureau of the Budget was made a part of the Executive Office, the President has been

One of these offices is in Washington. Except for conducting loyalty investigations for all activities in Washington, this office services only "field" activities in that city.

'Departmental services include those organization units of an agency which have responsibility for the general administration of agency functions. The positions in departmental service ordinarily make up the "central office" as contrasted with the "field offices."

The Civil Service Commission has no precise figures as to the number of employees for which is it responsible. The 164,00 figure is an estimate by the Commission.

A comprehensive report covering the staff and operating functions of the Civil Service Commission will be issued by the subcommittee at a later date.

One of the regional offices is located in Washington and its operating service encompasses all echelons of its customer activities. This is to be contrasted to the Civil Service Commission whose central office as described in footnote 6, above, performs the operational tasks for the departmental service.

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