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Union Calendar No. 874
81ST CONGRESS ) HOUSE OF REPRESENTATIVES
2d Session
\
J
KEPORT
\
No. 2457
INVESTIGATION OF EMPLOYEE UTILIZATION IN THE
EXECUTIVE DEPAKTMENTS AND AGENCIES
JUNE 30, 1950.—Committed to the Committee of the Whole House on the State
of the Union and ordered to be printed
Mr. WILLIAMS, from the Committee on Post Office and Civil Service,
submitted the following
PRELIMINARY REPORT
(Pursuant to H. Res. 114, 81st Cong.)
PART I
Pursuant to House Resolution 114, Eighty-first Congress, approved
May 2, 1949, the Committee on Post Office and Civil Service appointed a Subcommittee to Investigate Overstuffing in the Executive
Departments and Agencies, composed of Mr. Williams as chairman,
Mr. Davis, Mr. Herlong, Mr. Roes, and Mr. Hagen. The subcommittee is conducting a survey of several agencies, the purpose of
which is—
(1) to explore and evaluate the utilization of personnel;
(2) to appraise the effectiveness of existing agency management facilities in employee utilization;
(3) to ascertain and identify some of the causes and effects
of overstaffing; and
(4) to suggest remedial action necessary to correct overstaffing in the executive departments and agencies.
Accordingly, the committee submits the following interim report
relating to the Federal Security Agency as part I of its over-all report on overstaffing in the executive departments and agencies:
THE FEDEKAL SECURITY AGENCY
The Federal Security Agency was established in 1939 to promote
social and economic security, educational opportunity, and the health
of the citizens of the Nation. Under the Office of the Administrator,
the Agency consists of the Social Security Administration, the Public
Health Service, the Office of Education, and the Office of Special
Services.
In addition, the Federal Security Administrator has direct responsibility for the Saint Elizabeths Hospital and general supervision of
Howard University, the Columbia Institution for the Deaf, both
located in the District of Columbia, and the American Printing House
i'or the Blind in Louisville, Ky. (A complete statement of the
69164—50
1
1
2
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
functions performed by the Agency appears in the appendix as
exhibit I.)
On June 1, 1950, there were approximately 34,000 Federal employees
in the Agency distributed in the manner illustrated in Figure I:
Organization Chart of the Federal Security Agency.
The field structure of the Agency consists of the following establishments:
(a) Ten regional offices for the Agency;
(b) Sixteen district offices for the Food and Drug Administration;
(c) Six area and 478 local field offices for the Social Security Administration; and
(d) Twenty-four hospitals; 122 out-patient clinics and offices; 245
foreign quarantine stations; 65 medical centers, laboratories, units
and other stations; 22 communicable-disease centers; and 10 riverbasin offices for the Public Health Service.
Organizationally, the Agency may be characterized as a "holding
company"—a loose confederation of semiautonomous bureaus, each
with a separate mission but with related activities under common
supervision.
GENERAL FINDINGS
1. The committee finds that there is no clear line of responsibility
or authority in the Agency.—The first complete set of organization
charts ever devised in the Agency was completed early in 1950, after
nearly 11 years of operations.
The present organization scheme is the product of an Agency
Organization Committee established in 1948 and represents, at best,
a series of compromises arrived at by the representatives of the
"vested interests" of each constituent unit. Jurisdictional conflict,
duplication of effort, empire building, and outright repudiation of the
organization plan by operating personnel stem from unresolved disagreements and a reluctance to exercise central authority.
In addition to the conflict between the Agency and its constituent
bureaus, there are other important human relationships which retard
the development of an efficient organization.
Major differences of opinion were found to exist between the people
engaged in the various specialized programs and the administrative
leadership; between civilian and commissioned officers; among the
advocates of centralization versus the proponents of decentralization;
and between employees engaged in line and staff work.
Although these separate groups are not organized in the formal
sense, they exercise potent influences which, in the end, determine the
form of internal organization, and, more important, the manner in
which the organization is managed. The inevitable result is confused
responsibility accompanied by diffused authority.
2. The committee finds that there are too many layers of administration in the Agency.—At the departmental level there is an Office
of the Administrator in which is located a complete staff responsible
for the entire Agency program and administrative services. Immediately under the Agency staff, there is a " Commissioner or
Administration level" comprising the heads of the various activities
of the Agency, such as Public Health, Social Security, Education,
and Special Services. With the exception of the Office of Special
Services, each of these "Commissioners" has a complete staff com-
ORGANIZATION CHART OF
FEDERAL SECURITY AGENCY
34,083 EMPLOYEES (JULY 1,1950)
THE FEDERAL SECURITY ADMINISTRATOR ( 4 )
ASSISTANT ADMINISTRATOR FOR PROGRAM ( 2 H "
ASSISTANTS TO ADMINISTRATOR (7)
ASSISTANT FEDERAL SECURITY ADMINISTRATOR
(6)
OFFICE OF RESEARCH
OFFICES
OFFICE OF THE GENERAL COUNSEL (151)
EXECUTIVE ASSISTANT
OFFICE OF PUBLICATIONS & REPORTS ( 3 3 )
OFFICE OF FEDERAL-STATE RELATIONS(165)
Division of State Grant-In-Aid Audits
Division of State Merit System Services
I
I
OFFICE OF ADMINISTRATION ( 2 7 0 )
Division
Division
Division
Division
Division
of Budget & Finance
of Personnel Management
of Service Operations
of Library Services
of Administrative Planning
K-
SOCIAL SECURITY ADMINISTRATION
BUREAU OF OLD-AGE & SURVIVORS JNSURANCE( 1 1 , 2 9 8 )
BUREAU OF PUBLIC ASS I STANCE ( 2 6 8 )
CHILDREN'S BUREAU
(263)
' BUREAU OF FEDERAL CREDIT UNIONS ( 1 2 8 )
OFFICE OF INTERNATIONAL RELATIONS W |
OPERATIONS
PROGRAM
OFFICE OF THE COMMISSIONER ( 6 0 )
I
DIVISION OF FIELD SERVICES (21)
PUBLIC HEALTH SERVICE
OFFICE OF THE SURGEON GENERAL(740)
BUREAU OF MEDICAL SERVICESi(8994)
Freedmen*s H o s p i t a l ( 8 6 6 ) '
BUREAU OF STATE SERVICES ( 4 , 1 9 2 )
NATIONAL INSTITUTES OF HEALTH,( 2 , 3 8 4 )
OFFICE OF SPECIAL SERVICES
OFFICE OF THE COMMISSIONER ( 5 )
FOOD t DRUG ADMINISTRATION ( 1 , 0 7 3 )
OFFICE OF VOCATIONAL REHABILITATION(136
OFFICE OF EDUCATION ( 3 5 5 )
ICE OF THE COMMISSIONER
•"••"lSJJB53S?Mr
ion of Vocational Education
>f Hiahtr Education
j>f Internal. Educ. Relation*
of School Administration
of Central Services
of Auxiliary Services
....
ion
ion
ion
FEDERALLY-AlBED CORPORATIONS
SAINT ELIZABETHS HOSPITAL(2,430)
Over-all coordination or field actlvltl**
Federal Responslbl}UJ*a
REGIONAL DIRECTORS
(228)
AMERICAN PRINTING HOUSE FOR THE BLIND
COLUMBIA INSTITUTION FOR THE DEAF
HOWARD UNIVERSITY
CO
FIGURE I
4
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
posed of not only the usual administrative services but aJso program
officers as well.
Next in line come the various bureaus, where additional duplication of staff organization occurs. Then we find the divisions, at
which level the actual operation of the Agency programs commence.
Even at this or the subsequent branch level, there is additional duplication in providing administrative or program services. There are
indications that this same "overorganization" continues through the
10 regional field offices.
This gross duplication of effort at the several levels of the organizational hierarchy, disguised under varying nomenclature, points up
several questions:
(a) How far must the line and staff organizational concept ]be
extended?
(b) At what point does the determination of policy cease and the
operation of programs begin?
(c) What is meant by the term "decentralization"? Does it mean
a system in which there is a centralized control of decentralized operations, or, as applied in the Federal Security Agency, that the same function is duplicated at every echelon?
(d) Is it necessary that each of the organizational elements be
self-sufficient?
3. The committee finds that the annual rate of employee turn-over
has rapidly diminished.—In the 3-year period, between fiscal years
1947 and 1950, the rate has decreased from 45.4 to 26.3 percent.
However, the rate remains sufficiently high to lend itself for use in
the application of attrition as a means of affecting a reduction in
force.
The accompanying chart—Figure II: Rate of Turn-Over by Salary
Grades, FSA, Fiscal Year 1950—reveals that judicious application
of attrition by salary grade affords an equitable method of employee
reduction.
4. The top-management staff oj the Federal Security Agency includes
some oj the most capable and best-qualified career employees in the
Federal service.—They readily recognize the problems outlined herein
and are completely aware of the remedial actions necessary to correct
them. The reason that they are unable to take action lies in the fact
that "There is no clear line of responsibility and authority in the
Agency."
STAFF SERVICES
\v this survey, the committee has not challenged the merits of
the Agency's programs. It has, however, concerned itself with the
full utilization of employees in carrying on the administrative activities incident to those programs. Accordingly, it lias made a more
detailed study of four representative staff services, following each one
through the several layers of administration in the Agency. Those
studies are presented under the following headings: "Personnel
manager ent," "Fiscal iaanagement," "General services/' and "Management improvement."
PERSONNEL MANAGEMENT
Our study of overstaffing placed particular emphasis upon an
evaluation of the Agency's "Personnel *^anagement" program. The
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
IS K- 13 12. II io 9 8 7 6 S 4- 3
SALARY GRADES
RATE. OF TURN OVER. BY S/M-ARY GRAPES
F.S.A. FISCAL. YfcAfc. I95O
(See Exhibit 2, appendix)
FIGURE 2
quality of the operation of the entire Agency depends, to a
large extent, upon the manner in which the personnel program is
administered.
The committee finds that there is no effective control over the
personnel program in the Federal Security Agency. The personnel
offices in the Agency are operating on a self-styled plan of decentralization. They are not inclined nor equipped to exert influence toward
the development of economy in the utilization of personnel. Top
personnel officials contend that this type of control is not a proper
function of the personnel office. Yet at the same time they argue in
favor of maintaining staff people to (1) conduct job audits, (2)
develop workload data and staffing patterns, and (3) insure better
employee utilization.
In all, there are 539 employees engaged in personnel work on a fulltime basis in the Agency, assigned as indicated in Table I: Ratio of
Personnel Employees to Total Employees in Bureaus, Federal Security
Agency, as of June 30, 1950.
6
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
TABLE I.—Ratio of personnel employees to total employees in bureaus, Federal
Security Agency, as of June 80, 1950
June 30, 1950
Organizational unit
l
PSA* Office of Administrator
.
Agency regional offices a
Office of Education
St Elizabeths Hospital
Social Security Administration:
Office of Commissioner
Bureau of OASI
_
Bureau of Public Assistance
Children's Bureau
"Rnrftq.il nf Fftftarqi Orfirtit Unions
Public Health Service: *
Office of Surgeon General 8
Bureau of Medical Services
Bureau of State Services
National Institutes of Health
Division of Commissioned Officers
Freedmen's Hospital
Office of Special Services:
Office of Commissioner
Food and Drug Administration
Office of Vocational Rehabilitation
__
»
__ _
..
Total
___
Total
employment
Personnel employees
Ratio of
personnel
to total
employment
663
228
355
2,430
33
38
7
18
1*20
1:6
1*51
1:135
60
11,298
268
263
128
102
3
4
1
1:110
1*89
166
1:128
670
7,864
3,515
2,120
2,141
866
5
1,073
136
89
89
36
28
72
9
1:8
1:88
1:98
1:76
1:30
1:96
7
3
1:153
1:45
34,083
539
1:63
1
Division of Personnel Management provides Agency-wide services in the control of personnel policies,
central referral and correspondence on all applicant and congressional contacts, direct personnel service to
the Office of the Administrator (663 positions), the Office of the Commissioner of Social Security and the
Office of the Commissioner of Special Services; supervises the operation of the 10 regional personnel units.
» The 10 regional personnel units provide processing services (for GS-7 and below) to approximately 3,800
positions in Bureau of Old-Age and Survivors Insurance in the field and to approximately 336 positions in
Public Health Service, Office of the Administrator, and other units in the field.
s Public Health Service, Division of Personnel, delegates appointment authority for top-grade-level
GS-7 to regional directors in the National Institutes of Health, Bureau of Medical Services and Bureau of
State Services. The medical officers in charge of a total of 26 hospitals are delegated appointment authority
for top-grade-level GS-4. Appointment and classification authority is delegated to medical officers in charge
of Public Health Service hospitals at Lexington and Fort Worth for top-grade-level GS-9, National Institutes
of Health for GS-13, and Communicable Disease Center, Atlanta, Ga., for GS-11. The Division of Personnel provides personnel services to bureaus and divisions not covered by classification and appointment
authority.
* 5,000 employees without compensation are not included in the Public Health Service's total employees.
ORGANIZATION
The over-all philosophy of the FSA personnel program favors
decentralization to the lowest possible echelon. In practice, this
decentralization is mere lip service.
In 1947, the personnel divisions at the Washington headquarters
processed 68 percent of all personnel actions in the Agency. In 1950,
under the so-called plan of decentralization, they still handle 53
percent of all personnel actions. In reality, they have delegated
only 15 percent of the total actions.
The wide variation between theory and practice presents several
operational obstacles to the entire Agency. One of these impediments
arises from the manner in which appointing authority is delegated
among the constituent units and the field service.
The top Agency personnel office retains authority to appoint to all
positions above grade GS-13 but delegates authority to appoint at or
below this level to the Social Security Administrator, the Surgeon
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
7
General, and the Commissioners of Education and Special Services.
These officials, in turn, delegate authority for appointments below
grade GS-12 to the bureau chiefs. Here the successive delegation
breaks down, for the bureaus delegate power only below grade GS-7.
There is, then, a large group of positions, especially in the field service,
between grades 7 and 11 for which appointing power is jealously
maintained at the headquarters office.
The reason for this discrepancy is not as obvious as it first appears.
It involves basic disagreement between bureau program-operating
officials and the top Agency leadership wherein the program people
will not permit the several regional directors to appoint "their people"
to positions in the regional offices. The regional director, therefore,
can only appoint persons to his staff serving below the GS-7 level.
All other regional-office employees must be appointed in the headquarters office. This system can hardly be reconciled, with a "highly
decentralized plan."
This kind of decentralization is costly. In the 10-year period
between fiscal 1940 and fiscal 1950, the total number of Agency
employees increased by 52.3 percent. During this same period, the
number of Agency employees working in personnel offices increased
181 percent.
Complete decentralization of personnel activities may have some
advantages, but it invariably causes an increase in the total personnel
staff without a proportional decrease in the size of the staff in the
central office. This condition is illustrated in Table II, Comparison
TABLE II.—Comparison of total employees and ratio of personnel employees to
total employment in the Federal Security Agency as of Jan. 1, 1940, and June 30,
1950
Change in number
of personnel employees
June 30, 1950*
Jan. 1, 1940»
Ratio of perRatio of perTotal Personnel sonnel em- Total em- Personnel sonnel employees to Number
employemploy- employ- ployees to
total employ- ployment
total employees
ees
ment
ment
ment
166
1 :125
31,642
467
Percent
1 :68
+181
+301
*
1 See Rept. 1593, 80th Cong., 2d sess., House of Representatives: Study of Personnel Offices in the Executive Departments and Agencies of the Government.
a Does not include the Division of Commissioned Officers at the Public Health Service.
20,780
of Total Employees and Ratio of Personnel Employees to Total Employment in the Federal Security Agency as of January 1, 1940 and
June 30, 1950, wherein it is shown that the Agency ratio of personnel
employees to total employment is 1 in 68 as against the optimum ratio
of 1 to 103 as originally emphasized by the Committee on Post Office
and Civil Service and now prescribed by the Bureau of the Budget.
Table I, Ratio of Personnel Employees to Total Employees in
Bureaus, Federal Security Agency, as of June 30, 1950, lists the ratios
prevailing at the Bureau level and clearly substantiates our finding
that there is no effective control exercised in the personnel-management program.
8
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
COST DATA
During the course of this survey, inquiry was made to secure current
records of the total costs for personal services and average salaries of
personnel employees in the Agency. A top official in the Personnel
Division replied that there were none available and that he could not
see what value could be derived from an accumulation of this information. He manifested practically no interest in this phase of the
survey except insofar as it might cause additional staff work to develop.
The data referred to were developed from fiscal records and are presented in Table III: Costs of Personal Services and Average Annual
Salary of Personnel Employees in the Federal Security Agency for
Fiscal Year 1950.
TABLE III.—Costs of personal services and average annual salary of personnel
employees in the Federal Security Agency for fiscal year 1950
Fiscal year 1950
Number
of employees
Organizational unit
FSA Office of Administrator
.
Office of Education
St Elizabeths Hospital
Bureau of OASI
Bureau of Public Assistance
Children's Bureau
Bureau of Federal Credit Unions
Public Health Service
Division of Commissioned Officers
Freedman's Hospital
Food and Drug Administration
Office of Vocational Rehabilitation.
_._._
Total
Annual
salary
costs
Average
annual
salary
71
7
18
102
3
4
1
242
72
9
7
3
$262,606
26, 526
67,936
440,185
11,749
12,302
3,788
922, 496
250,000
36, 695
26, 699
8,819
$3,698
3,789
3,774
4,315
3,916
3,075
3,788
3,812
3,472
4,077
3,814
2,730
539
2,069,801
3,840
Table IV, Comparative Total and Average Salary of Personnel
Employees in the Federal Security Agency as of January 1, 1940 and
June 30, 1950, shows that total salary costs for personnel employees
are 7% times what they were in 1940. On January 1, 1940, the total
annual salary of personnel employees in the Agency was $241,193;
at the present time it is $1,819,801, an increase of $1,578,608, or 654
percent.
•
TABLE IV.—Comparative total and average salary of personnel employees in the Federal
Security Agency as of Jan. 1, 1940, and June 30, 1950
Increase for period
Jan. 1, 1940 1 June 30,1950 2
Amount
Total salary
Average salary
$241,193.00
1,452.97
$1,819,801
3,897
$1, 578,608
2,444
Percent
654
168
1
See Report, 1593, 80th Cong., 2d sess., House of Representatives: Study of Personnel Offices in the Executive
Departments and Agencies of the Government.
8
Does not include the Division of Commissioned Officers at the Public Health Service.
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
9
The average annual salary of personnel employees has also sharply
increased since 1940. Table IV shows that in fiscal year 1940 the
average annual salary of personnel employees was $1,452 while currently it is $3,897. This is an increase of $2,444, or 168 percent.
Legislative pay raises account for $743 (51.2 percent) of the increase
for the classified service during this 10-year period. There has been
an additional administrative increase of $1,701 (116.8 percent).
It is clear that the Personnel Division is not equipped with sufficient
current information to do an acceptable job of personnel management.
MANUALS
One of the most serious detriments to the attainment of better
personnel management in the Agency may be found in the sheer weight
of the Agency's personnel manual. The Civil Service Commission
issues a basic personnel manual which governs pertinent action for the
entire executive branch. It is usually contained in one volume.
With the addition of more specific instructions, the Agency Personnel
Division has expanded this into five large volumes. The prime purpose of this elaborate manual is to provide instruction for personnel
actions in the Agency and particularly for the use of personnel offices
in the field. Inasmuch as some of the field offices are restricted to the
processing of actions only below grade GS-7 (and in the Public Health
Service below grade GS-5), it is difficult to justify the costly maintenance and wide distribution of this set of instructions. Field office
personnel must find it almost impossible to cope with the many
voluminous instructions issued to them by the headquarters offices.
A survey report on management functions and organization,
FSA regional office (Kansas City, Mo.), conducted by an Agency
survey team in November 1948, lists the following instructions
necessary to conduct personnel actions at the regional office level:
" 1 . Washington instructions (other than Civil Service Commission) Federal
personnel manual, Agency personnel manual and constituent transmittals to
Agency personnel manual.
"(a) RD—(1) field services manual, (2) Division of Field Services memoranda, numbered:
"(b) PHS—(1) General circulars (issued by Office of the Surgeon General),
(2) TJn-numbered circulars (issued by Office of the Surgeon General), (3) Division
of Commissioned Officers and numbered circulars (issued by Division of Commissioned Officers), (4) Commissioned Corp Bulletin (issued by the Division of
Commissioned Officers), (5) numbered civilian personnel circulars (issued by
Personnel Office, Office of the Surgeon General), (6) Organization Manual (issued
by Bureau of State Services), (7) PHS regulations (issued by Division of Commissioned Officers, TB Division, Sanitary Engineering Division, and other divisions in Bureau of State Services), (8) PHS budget and fiscal office numbered
and un-numbered memoranda.
DIVISION OF COMMISSIONED OFFICERS
Another barrier to the attainment of good personnel management is
found in the separate handling of the 2,141 commissioned officers in
the Public Health Service. These officers are assigned throughout the
Service in both medical and administrative posts from a central Divi-
60164—50
2
10
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
sion of Commissioned Officers with 72 employees assigned to its component branches as follows:
Employees
Office of the Chief
Planning Branch
Liaison Branch
Recruitment and Commissioned Branch
Assignment and Utilization Branch
Training Branch
Administrative Management
Total
6
6
9
18
6
4
23
72
In the Administrative Management Branch the Contacts Section
reports the following duties:
Administers program for assisting and advising officers and their dependents
in obtaining benefits provided by law. Reviews and processes disability claims.
Determines eligibility for campaign ribbons; arranges for authorization to wear
decorations and medals. Maintains liaison with the Department of National
Defense, Veterans' Administration, and other agencies on matters of benefits and
privileges. Arranges for commissary and post-exchange privileges. Provides
income-tax-consultation service for commissioned officers.
Except for historical prerogative and a declining need for mobility
in assignment, there is little justification for continuing this very elaborate and costly duplicate personnel office with a ratio of 1 personnel
worker for every 30 officers.
FISCAL MANAGEMENT
In conducting its survey of the Federal Security Agency, the
committee did not concern itself with monetary costs except insofar
as they bear upon the number of employees carried on the payroll of
the Agency. We believe, however, that in any endeavor, good fiscal
management is indicative of good over-all operation. The survey of
fiscal management is cited to show how the function is organized, the
number and kind of people engaged in its administration, the responsibilities and authorities under which they operate and their relationships to other administrative and program operations.
ORGANIZATION AND STAFFING
The responsibilities of the Fiscal Management Division of the
Federal Security Agency may be grouped into four general functions
as follows:
(a) Budget estimating, preparation and control;
(6) Accounting (or bookkeeping);
(c) Auditing;
(d) Payroll, leave, withholding, and retirement accounts and
records.
In general the basic requirements for these four functions are
prescribed outside the Agency—in the Bureau of the Budget, Treasury
Department, General Accounting Office, or the Civil Service Commission. Only the administration and, in some cases, the method are left
to the discretion of the Budget and Finance Division of the Agency or
its constituent units.
In the fiscal management functions of the Federal Security Agency,
there is little uniformity or control of either administration or methods.
The following tabulation (table V, Personnel Engaged in Fiscal
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
11
TABLE V.—Personnel engaged in fiscal management activities in the FSA—19501
Number engaged in—
Identity of organizational units
Budget
prepara- Accounting
tion and
control
I. Office of Administrator:
Staff
Field services
Payroll
and
leave
Audit
Ratio to
total personnel
Total
17
3
20
27
6
10
13
20
56
60
20
47
16
33
116
4
4
6
27
2
4
3
2
15
37
1:24
1:66
1
58
4
2
1
543
6
7
2
34
2
21
1
1
1
656
12
10
4
1:17
1:22
1-27
1:32
66
558
36
23
683
1:18
27
22
35
19
71
27
73
43
43
9
12
18
39
3
15
7
180
61
135
87
1:176
1:31
1:27
103
214
82
64
463
1:39
1
3
7
9
4
1
23
1:47
1
5
1
7
1:20
Subtotal
5
12
9
5
31
1:39
Total FSA 3
Ratio
202
1:173
864
1:40
149
1:234
130
1:269
1,345
1:26
1:26
Subtotal
II. Office of Education: Division of
Central Services
III. St. Elizabeths Hospital
IV. Social Security Administration:
Staff
Bureau of OASI
Children's Bureau
Bureau of Public Assistance
Bureau of Federal Credit Unions
Subtotal
V. Public Health Service:
Staff 2
Bureau of Medical Services
Bureau of State Services
National Institute of Health
Subtotal
VI. Office of Special Services:
Staff
Food and Drug Administration.
Office of Vocational Rehabilitation
1
8
Audit of State grants not included.
Includes Division of Commissioned Officers.
3 Includes locatable field.
Management Activities in the FSA) shows the wide dispersal of units
in the fiscal management of the Agency. The ratio of personnel
engaged infiscalmanagement activities is in general within established
standards. The one exception is in the field of accounting where the
Agency concedes that the number of people employed is entirely too
high. This may be attributed to the decentralized system of procurement and distribution existing in the Agency.
RESPONSIBILITIES AND OPERATION
The Division of Budget and Finance in the Office orf the Administrator is responsible for all fiscal management within the Agency.
(a) Budget.—The Agency budget is correlated and prepared for
presentation to Congress by this Office. This Office also prepares
budgets, keeps accounts, conducts audits and performs payroll and
leave functions for some of the Commissioners and bureaus in the
Washington office.
Other organizational units maintain complete budget staffs extending, in some cases, even down into sections. The Agency budget
officer has supervisory and correlating cognizance of these operations.
This relationship is, however, a voluntary one based on the professional relationship between individuals engaged in the same work.
12
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
(6) Accounting.—The FSA Division of Budget and Finance performs general accounting and auditing for the Agency as well as
maintaining daily accounts for many of the headquarters units. Each
of these headquarters units also maintains a staff for memorandum
accounting. In addition, some of them perform local audits on travel,
procurement and miscellaneous voucher accounts. This is especially
true in the Bureau of Old-Age and Survivors Insurance where IBM
methods are effectively employed.
Accounting operations are scattered throughout the Agency and
are not under central control. The Public Health Service and the
Social Security Administration have relatively large staffs engaged in
accounting operations. Even within these Commissions the various
bureaus maintain accounting staffs, each doing its work on an individualized basis without standard methodology.
(c) Audit.—The auditing operations of the Agency are also decentralized. The Administrator's office does, however, exercise fairly
strong control over the various audit units. In this area this results
in more uniform methods, better supervision and fewer personnel.
(d) Pay and leave.—Payroll and leave functions are performed with
a view toward better employee relations rather than the attainment
of efficient administration. There has been some consolidation of
these operations in the Washington office.
The Agency conducts what appears to be a wasteful and inefficient
method of distributing pay envelopes to some of its employees.
Instead of the customary payment by check, an employee may elect
to receive his biweekly salary in cash. This entails the preparation
of individual pay envelopes and makes it necessary that each employee appear in person at a pay table which is set up temporarily at
various points in corridors throughout the headquarters building.
On at least one occasion, a group of 75 to 100 employees was observed
waiting in line at the pay table. The work of adjacent offices was
also disrupted for an unnecessarily long period. It is estimated that
thousands of man-hours of productive effort are lost yearly in this
process.
RELATIONSHIPS
In pursuing the relationships between fiscal management and the
housekeeping functions down through the various levels of Agency
organization, an effort was made to determine the extent of monetary
control over organization, personnel classification, procurement,
travel, duplicating, automotive transportation, and other service
functions insofar as overstaffing is concerned. The picture is one of
frustration. In theory, fiscal management has authority to review
and make recommendations on any changes in organization, function,
or personnel actions. Actually this authority is on paper only due
to the domination of the program operators over administrative
officers throughout the Agency. The fiscal officers, in most cases,
know where the "fat" exists in both the administrative and program offices. They are, however, helpless to do anything about it
as long as the program executives control appropriations.
GENERAL CONDITIONS
The total number of personnel engaged in fiscal management has
increased more than 12 times in the past 10 years. This increase
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
13
has been due primarily to changing requirements for budget preparation and the control of program appropriations.
The present system of budgeting on the basis of specialized programs presents an organizational anomaly. This is particularly true
in the Public Health Service wherein budget allocations and subsequent appropriations are made to particular operating programs, such
as Alaska disease and sanitation, Philippine rehabilitation, training
for nurses, foreign quarantine, and so forth. In practice, this places
the available funds in the hands of the operating divisions and they
are then called upon to contribute funds or personnel to support the
bureaus who supervise them. Thus, in a fashion, the supervisor receives all of his financial support from the programs he is obligated
to control. In some instances this perplexing situation attains
ridiculous proportions. For example, in the Bureau of State Services,
we find in the—
Office of the Chief—18 persons paid from 8 different program
funds;
Plans and Reports Branch—3 persons paid from 2 different
program funds;
Organization and Methods Branch—12 persons paid from 6
different program funds;
Budget and Fiscal Branch—33 persons paid from 11 different
program funds;
General Services Branch—16 persons paid from 11 different
program funds;
Personnel Branch—17 persons paid from 8 different program
funds.
There are 14 separate and distinct* program appropriations made
to the divisions in the Bureau of State Sorvicos from which money for
administration is donated to the office of tbe Bureau Chief by his
operating divisions. In such a complex arrangement, is it any wonder
that a high percentage of budget and accounting personnel is required?
The confusion now existing in fiscal management in the Agency is
not due to lack of qualified personnel. The key people involved are
far above the average in both technical and persona! competence.
Rather, the cause may be attributed to a lack of sustained authority
on a straight line from the top down to the smallest unit.
GENERAL SERVICES
In the headquarters offices of the Federal Security Agency the
general service, or housekeeping function, includes the following kinds
of work:
Administrative direction
Procurement and supply
Records and mail
Space planning
Reproduction services
Tabulating services
Payroll, leave and retirement
Transportation
Total
Number of employees engaged
in these functions
'
60
292
517
12
57
86
104
59
1, 187
14
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
Although each of the constituent bureaus has some kind of service
facility, there is little or no control over them from the Agency level.
The Division of Service Operations in the Office of the Agency Administrator carries on what is described as a decentralized operation.
It provides all of the functions listed above for the Office of the
Administrator and some of these services for the Commissioner of
Social Security, the Bureau of Public Assistance, Children's Bureau,
and the Bureau of Federal Credit Unions. In addition to this consolidated service, there are 31 persons in these small bureaus doing the
same kind of work in the same headquarters building. At the departmental level the Food and Drug Administration has an additional
53 employees; the Office of Vocational Rehabilitation, 8 persons; and
the Office of Education, 9 persons, providing these same services on an
independent basis. Each of these bureaus protects and attempts to
justify these separate facilities on the grounds that (1) they must be
alined to meet highly specialized requirements and (2) they must
maintain direct control over them. There appears to be little basis
for either contention for there is no evidence to indicate that the quality
of service would suddenly diminish under a consolidated plan or that
their requirements are so specialized as to require separate techniques
in the procurement process. Actually, the activity in some of these
independent services is limited to the buying of administrative office
supplies. To obtain the proper perspective, one might compare these
service offices to the modest staff required in the purchasing office of a
large college or university. Here, a small central staff is called upon
to buy everything from football shoes to isotopes, dealing in a wide
variety of commodities and equipment, with a personnel complement
no larger than exists in the smallest bureau mentioned above. One
must also recognize that they accomplish this task without the assistance of an over-all system like that provided by the General Services
Administration.
PROCUREMENT
The data presented in table VI, Average Number of Employees
and Relative Cost of Purchasing Operations During Fiscal Year 1949,
illustrate the extent of overstaffing in the procurement process in the
Agency. It will be noted that of 121,014 purchase orders issued in
fiscal 1949, half (50 percent) of them were for amounts of less than
$20. Yet, the average cost of issuing each order amounted to $5.
In the Food and Drug Administration and the Office of Education,
the proportion of orders under $20 was more than 60 percent and the
average cost of issuing each order was in excess of $10. It cost the
Office of Education $10,293 to spend $31,148 for an overhead of 33
percent. It should also be noted that the average workload for each
of the 197 persons engaged in processing procurement orders was less
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
15
TABLE VI.—Average number of employees and relative cost of purchasing operations
during fiscal year 1949
Employees engaged in issuing purchase
orders
Purchase orders
Organization
Administrator's Office
Social Security
Public Health
Office of Education
Food and Drug Administration. _
Office of Vocational Rehabilitation
St. Elizabeths Hospital
Total
Total
cost
Percent Numof
perunder ber
emsonal
$20
ployees services
Yearly
average
per employee
12 $34, 674
19 53, 750
134 413, 481
4 10,293
20 69, 000
375
405
713
236
322
1.5
1.6
2.8
.9
1.3
$7.70
6.99
4.33
10.89
10.72
4,834
19, 828
420
850
1.7
3.4
5.75
3.89
197 605, 860
614
2.4
5.00
Number
issued
Dollar
volume
4,500
7,692
95, 500
945
6,437
$534, 516
3, 399, 624
18, 871, 562
31,148
382,921
61
63
49
61
60
840
5,100
57,996
2, 650,872
64
34
121,014
25, 928,639
50
2
6
Daily
average Average
per em- cost
ployee
than three per day (2.4), and half of them were for items costing less
than $20.
This condition has prevailed for more than a year and the figures
contained in table VI were known to Agency officials; yet, no remedial action has been taken.
SUPPLY ROOMS
The circumstances surrounding the current consolidation of the
four existing supply rooms in the headquarters office provides a case
in point. Two years ago, at the time of the physical integration of
the Agency in the two adjacent headquarters buildings, a management
study was made to determine the feasibility of consolidating these
separate supply rooms into one centralized service. Research on the
project was done by Agency management people as well as by experts
from the Bureau of Federal Supply and the Bureau of the Budget.
Each of these groups, in turn, recommended the consolidation, and the
Agency reports that it will effect the consolidation in the near future;
however, that determination and decision has been in process for 2
years and the result is not yet a reality.
LIBRARY SERVICES
A similar story could be related incident to the consolidation of
library services. They have been centralized but not integrated and
all personnel formerly employed in the separate libraries were merely
transferred to the new central one. Under this kind of administration, the alleged economies are largely imaginary.
16
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
PROCUREMENT IN THE PUBLIC HEALTH SERVICE
The central procurement office in the Office of the Surgeon General,
Public Health Service, is described as a highly centralized staff of 43
persons serving the needs of the entire Service. However, it was found
that matters of procurement are handled at 15 different points within
the Public Health Service organization including 46 employees at the
National Institutes of Health (Bethesda, Md.) and a warehouse
facility with 18 employees at Perry Point, Md. (See table VII.)
This supply station was established, to a large extent, to serve the 24
hospitals operated by the Bureau of Medical Services.
TABLE VII.—The following chart identifies [the points at which procurement
activities are carried on in the Public Health Service, Federal Security Agency
Public Health Service
Office of the Surgeon General
Division of Supply
Division of Commissioned Officers
Division of International Health
Division of Management Services
Bur. of Medical ServT
Div. of Hospital Facilities
Div. of Medical Hospital
Resources
Div. of Dental Resources
Div. of Administrative
Management
Div. of Administrative Manage
ment
Div. of Chronic Disease
Div. of Dental Public Health
Div. of Tuberculosis
Div. of Venereal Disease
Communicable Disease Center
National Institutes of
Health
Office of the Director
Purchase & Supply Efanch
In addition to the above-described procurement service, the headquarters also maintains a Division of Management Services (108
employees) which includes an Office Service Branch (38 employees)
and a Records Management Branch with an additional 38 persons.
Similar functions are duplicated at subsequent bureau and division
levels throughout the Public Health Service.
It is difficult to reconcile the existence of this disordered arrangement under a centralized system. Justification for the maintenance
of a single warehouse with a complete staff located on the extreme
eastern seaboard to provide service within a Nation-wide supply
system is highly questionable. This again points up the rather
peculiar concept of the centralized versus decentralized issue within
the Agency. It again exemplifies the prevailing spirit of indecision
and lack of control and authority in the Agency.
MANAGEMENT IMPROVEMENT
Prior to the initiation ol this survey, the committee sent a
questionnaire to several civilian departments and agencies, requesting
the following information:
1. The name, jurisdiction, authority, and organizational position
of each unit having assigned responsibility for management improvement activities;
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
17
2. A list showing the name, title, and annual salary of each employee in these units;
3. The estimated total cost of management-improvement activities
during fiscal year 1950;
4. A statement describing the over-all operations of these units as
they contribute to better utilization of manpower;
5. A copy of each study made by these units during fiscal year
1950.
The purpose of the inquiry was to determine if the agencies were
equipped with the management tools necessary to put their own
house in order. Although the reply submitted by the Federal Security
Agency was incomplete, disorganized and evasive, it is hoped that
the additional information developed during the survey provides a
conclusive answer to this basic question.
It is significant to note that emphasis is currently being placed on
management improvement activities within the executive branch as
reflected in the contents of Presidential Executive Order 10072,
which states in part that—
1. Department and agency heads shall (a) review the programs under their
respective jurisdictions to assure themselves and the President that such programs
are being carried out with maximum effectiveness and economy, (b) provide for
periodic and systematic appraisals of operations to identify opportunities to
improve effectiveness and performance, (c) schedule action to work out and
install improvements, giving priority to the activities promising greatest benefits
in economy or better service for the same or less money, and (d) report periodically
to the Bureau of the Budget on the progress made in establishing management
improvement programs and the results achieved therefrom.
Table VIII: Personnel Engaged in Management Improvement in
the Federal Security Agency, shows that there are 292 employees
engaged in management improvement activities at 29 different points
throughout the Agency at an estimated annual cost, for personal
services, of $1,463,356. As a result of this dispersal or decentralization, each management group works within the confines of its own
office, bureau, or commission. The prevailing idea is one of detailed
manual or machine operation improvement with little thought given
to organization and administrative problems as they affect the entire
Agency.
The Agency's focal point for leadership in this field is the Division
of Administrative Planning in the Office of the Administrator. It is
composed of seven persons. Most of the management personnel are
scattered throughout various Organization and Methods units. Our
survey disclosed that few, if any, of these units were engaged in management-improvement activities in the accepted sense. Actually,
they are assigned to various day-to-day operations not always related
to management.
There is an important difference of opinion on how these people can
best be assigned. In the Office of the Surgeon General, for example,
a central-management group is available for temporary assignment as
individuals or in teams to study any problem which arises throughout
the Service. In the Bureau of Medical Services, however, the individual members of the management group are assigned indefinitely
to operating units within the Bureau. No decision has been made
on the optimum utilization of these people and, as a result, their
efforts are usually frustrated and ineffective.
69164—50
3
18
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
TABLE VIII.—Personnel engaged in management improvement in the Federal
Security Agency—1950
Number of persons
Identity of organizational units
I. FSA, Administrator's Office (staff)
_.
(1) Division of Administrative Planning
(2) Office of Field Services
II. Office of Education (staff)
III. Social Security Administration (staff)
(a) Bureau of OASI:
(1) Division of Accounting Operations.._
(2) Division of Field Operations
__
__.
(3) Division of Claims Control
(4) Division of Management Planning and Services..
(6) Bureau of Federal Credit Unions
(c) Children's Bureau (staff)
(d) Bureau of Public Assistance (staff) _ .
(1) Fiscal and Administrative Methods BranchIV. Public Health Service (staff)
(1) Division of Management Services
(2) Division of Finance,.
(3) Division of Personnel
(4) Division of Supply
(a) Bureau of Medical Services (staff)
(1) Division of Administrative Management
(2) Division of Hospital Facilities
(3) Division of Foreign Quarantine
_
(4) Division of Federal Employee Health
(6) Bureau of State Services (staff)
(1) Division of Administrative Management
(2) Division of Chronic Disease
(3) Division of State Grants
(c) National Institutes of Health (staff)
(1) National Cancer Institute
_
(2) National Heart Institute
(3) National Institute of Mental Health
(4) Division of Research Grant and Fellowship.
V. Office of Special Services (staff)
__.
(o) Food and Drug Administration (staff)
(1) Division of Business Operations
(b) Office of Vocational Rehabilitation (staff)
(1) Division of Administrative Standards
VI. St. Elizabeths Hospital
Total
Ratio to total personnel.._
Total number of central locations in FSA.
Cost for personal services
1
Reported on
management
improvement
questionnaire
by agency
None
5
None
2
None
32
19
15
None
2
None
4
None
5
None
None
None
None
3
None
None
None
None
2
None
1
3
1
None
None
None
None
10
3
None
1
None
Shown by
survey
2
7
8
None
None
41
44
19
26
None
2
None
5
9
31
8
7
5
None
9
19
None
11
2
None
5
2
2
5
1
1
1
3
None
11
None
292
1:121
29
11, 463, 356
Projected from reported costs.
There is too little acceptance and enforcement attached to their
staff findings and recommendations. The reason for this nonacceptance stems from the basic conflict between the so-called program
versus administrative people. As previously explained, the program
operators dominate the funds and, in the end, this makes it possible
for them to reject any suggestions for improvement that might be
construed as an impairment to their program.
Occasionally, when an over-all need arises such as the action required incident to Executive Order 10072, the Agency Management
Committee is convened to develop recommendations which will be
acceptable to all of the constituent bureaus. Under this arrangement
the majority rules and the Administrator's representative is hopelessly
outnumbered. The resulting recommendation is often a watereddown version of what is patently desirable for it is usually based upon
the particular interests of Services or Bureaus rather than upon the
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
19
merits ~of the case. In these instances, the committee device is
cumbersome, time-consuming, and almost completely ineffective.
The management program is not entirely without merit. Several
examples of outstanding work were encountered in the Bureau of
Old-Age and Survivors Insurance of the Social Security Administra*
tion. One of their projects has resulted in the development of a
staffing pattern based upon workloads in each of the 478 field offices.
Commendable progress has been made in the staffing standards for
machine operations in this same Bureau.
In other bureaus there is a very unfortunate tendency to evaluate
the degree of administrative efficiency upon a percentage of all the
money expended. Inasmuch as a.major portion of the funds handled
in FSA takes the form of grants, fellowships, or trust funds, it is
hardly reasonable to use the volume of expenditures as a measure of
efficiency.
The Agency is placing a major emphasis upon a work-plan device
which originated in the Social Security Administration and is now
being extended throughout the entire organization. Its original purpose was good, for it was directed at the coordination and control of
programs and upon the validity of contemplated activities. It has,
however, been allowed to degenerate into a presentation of all of the
ideas that individual units aspire to put into action. The extent of
deviation from its original purpose is indicated in a list of 137 administrative projects suggested in the Public Health Service. Actually,
an examination reveals that less than half of them pertained to improved management.
Along with these work plans each Bureau Director also submits a
forecast and guide designed to govern operating personnel in developing their own. particular work plans. The nature of these instructions
is revealed in the following excerpts taken from a guide issued by the
Bureau of Old-Age and Survivors Insurance for the period January
to June 1950:
In the light of the Bureau's continuing goal to advance economic security and
of the forecasts of conditions in January-June 1950, our priority guides for work
in this period will be to—
1. Obtain legislative changes, increasing benefits, broadening coverage, and
providing disability insurance. Our first job will be to get the needed facts and
ideas to the Members of Congress as they consider the legislation.
2. Complete administrative plans for the expanded and improved OASI program. Rules and regulations, methods, organization, personnel, training, budgets,
public information, supplies, equipment, and office space—these are the major
areas in which plans need to be advanced to the operational stage as the legislation
becomes more definite.
3. Reach agreements within the Bureau and with the Administration and the
Agency as to delegations of authority and responsibility. The Bureau will continue to cooperate in Administration, Agency, and Government-wide efforts to
explore the desirability of further decentralizations as urged by the Hoover
Commission.
4. Advance the career interests of Bureau employees.
5. Gain congressional authorization and appropriation for the construction of a
new central-operations building, and decide on plans and location. Early in the
period, we must be prepared to present our case for a new building to the Rouse
Public Works Committee and, when House approval is obtained, to the Senate
committee.
6. Create more understanding of the purposes and procedures of our program.
We will aim activities at two audiences: (1) our Bureau staff; and (2) the public.
With few exceptions, the management-improvement activities in
the Agency operate in an atmosphere of uncertainty. The various
20
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
units are frustrated and disorganized. Under the present arrangement they are not producing in proportion to their costs. Their adversaries, firmly entrenched in programs and fortified with historical
prerogatives and purse strings, will not permit improvements until
definite action is taken at the top of the Agency.
AREAS OF UNSATISFACTORY STAFFING
In evaluating the quality of administration in the Federal Security
Agency, there are three organizational units which require careful
scrutiny. They appear to be examples of gross overstaffing. They
are (1) the Office of Education; (2) the Division of Management
Planning and Services in the Bureau of Old-Age and Survivors Insurance, in Baltimore; and (3) the field service units throughout the
Agency.
1. The Office of Education numbers 355 employees. Of that number 155 are in positions above grade GS-11. There are 102 secretarial employees representing 28.7 percent of the total work force in
the office. The Division of Central and Auxiliary Services in this
office numbers 98 employees.
2. Bureau of Old-Age and Survivors Insurance, Social Security
Administration Headquarters in Baltimore, Md.: the Division of
Management Planning and Services in this headquarters has a
personnel complement of 240 employees, assigned in branches as
follows:
Employees
Office of the Chief
Fiscal Management Branch
Administrative Management Branch
Management Services Branch
Total
3
71
26
140
240
Considering that this unit serves only at the bureau level, and in
view of the duplication of similar effort at other levels throughout the
Administration, this unit appears to be unreasonably large.
In 1948 the Social Security headquarters office was reduced in conformance with the provisions of the Labor-Federal Security Agency
Appropriations Act of 1949. The majority of the headquarters staff
was moved from Washington to Baltimore at that time. It is clear
that these additional units were not properly realined with the staff
already existing at the new location.
At any rate, as now constituted, this Division presents a fertile area
for reorganization and reduction of employees.
3. Field service offices: One of the most unique characteristics of
the Federal Security Agency is the existence of field service offices
attached to almost every part of the organization. ID fact, there are
no less than 30 of these office? dispersed through the various bureaus
and divisions, many of them duplicating efforts assigned elsewhere in
the Agency. In many instances, their existence does not follow any
acceptable organizational pattern.
At least some of the key officials interviewed attempt to justify
their existence as a vital part of the Agency's public relations program.
Employees in these units were described as the people who make
speeches and acquire radio time to promote the Agency's program.
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
21
Documentary evidence secured in the Agency reveals that some of
the field service employees feel that a disproportionate part of their
time is spent in public relations. This evidence is reproduced herein
as exhibit 3 of the appendix.
CONCLUSION
The above examples are cited to illustrate the extent to which
administrative indecision, lack of fixed responsibility and authority,
faulty budget structures, and uncontrolled personnel practices contribute to overstaffing and resulting inefficiencies in the Agency.
There is no evidence to refute the implication that the same elements
do not affect the program side of the Agency in the same manner—
perhaps to an even larger degree.
In the holding-company type of organization like the Federal Security Agency, wherein related activities are placed under common
supervision, it seems reasonable to assume that the most promising
area for the development of efficiency and economy is in the common
administrative staff services. Certainly less resistance would be
encountered there and incalculable benefit could accrue from the
welding together of these elements into a cogent whole.
Many, if not all, of the shortcomings and discrepancies are known
by the key officials in the Agency. Some of them contend that departmental status for the Agency must precede their solution. Others are
wary of making decisions that will reduce employment or incur the
ill-will of a colleague or a particular group with whom they disagree.
Still others are evasive and tend to defend the prevailing circumstances regardless of the preponderance of evidence to the contrary.
Most of these officials, however, in a sincere attempt to treat the
problem objectively, will admit that most of the charges made herein
are valid. They, as well as the committee, realize that there is no
organized effort working toward the self-improvement of these conditions from within.
It is important to recognize that the Federal Security Agency is a
relatively new addition to the executive branch. During its comparatively short life, it has experienced major additions and deletions in
its organization—most of them incident to World War II. The continued surveillance of committees of Congress should be a vital factor
in the improvement of the Agency in the immediate future and
especially before it has reached the degree of immobility usually
associated with an old-line department.
RECOMMENDATIONS
In the light of findings outlined in this report, the committee
makes the following recommendations which it believes necessary to
improve the over-all management of the Federal Security Agency and
to identify the areas in which significant reductions in employment
can be made without loss of efficiency.
1. The line and limit of responsibility and authority should be clearly
defined in the Agency.—An understanding of and an adherence to a
more unified pattern of administration among the constituent bureaus
should be established. Authority should be commensurate with
responsibility.
22
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
2. A thorough study of the organizational structure of the Agency
should be conducted by the Office of the Administrator.—Its primary
objectives should be to—
(a) eliminate personnel engaged in conflicting, duplicating and
nonessential areas of line and staff work;
(6) develop more extensive use of consolidated administrative
services;
(c) reduce the number of units and personnel carrying on field
service relationships in both administrative and program operations ;
(d) reduce the number of units and personnel engaged in
duplicating and overlapping program activities.
Responsibility and authority to implement the recommendations
of this study should be definitely fixed.
3. Authority now delegated to the executive assistant in charge of the
Office of Administration should be strengthened to enforce attainment of
the following objectives throughout the Agency and its constituent bureaus.
PERSONNEL MANAGEMENT
(a) A stronger central control of personnel management, emphasizing the economical utilization of employees;
(6) A reduction in the number of employees engaged in personnel
work to comply with established staffing ratios;
(c) A more realistic delegation of appointing authority under the
current plan of decentralized operations;
(d) A strong central control of position classification to correct
present inequalities and insure future alinement with accepted
performance standards;
(e) A central source of current personnel data necessary to the
intelligent administration of a large group of employees;
if) An elimination of the special handling of personnel in the
Division of Commissioned Officers and a subsequent integration of all
its personnel activities in the Personnel Division, Public Health
Service.
FISCAL MANAGEMENT
(a) A rearrangement of the budget structure to provide funds
directly to organizational heads rather than to the various category
programs they supervise;
(6) A consolidation of accounting functions with an accompanying
reduction in the number of widely dispersed units;
(c) A strengthening of the position and authority of the Agency
budget officer in the initial review and control of requests from bureau
chiefs for organizational changes, increased functions or additional
personnel.
GENERAL SERVICES
(a) An immediate reduction in the number of units and personnel
performing duplicate housekeeping functions such as procurement,
supply, mail distribution, space, time and leave records, and reproduction services;
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
23
(6) A strengthening of the influence and control to be exercised
by the Agency Division of Service Operations in both the headquarters
and field offices;
(c) A better delineation between the provinces of the Division of
Service Operations and the Office of Field Services in the Office of
the Administrator.
MANAGEMENT IMPROVEMENT
Finally, but of the utmost importance—
(a) A complete reassignment of responsibilities and authorities for
management improvement in the Agency and its constituent bureaus.
The present abundance of qualified management personnel should be
completely redeployed throughout the Agency without regard to the
selfish interests of particular programs.
(b) Subject to the review and approval of the Administrator, the
Executive Assistant should be authorized to—
1. determine the need for all management improvement surveys throughout the Agency;
2. assign personnel to the survey teams;
3. approve or reject team recommendations;
4. implement and enforce approved recommendations.
Additional recommendations pertaining to the Federal Security
Agency will be included in subsequent reports of the committee.
In conclusion, the members of the committee wish to express
their appreciation to the many career employees of the Federal
Security Agency who gave their generous cooperation in the developmen c of this report.
APPENDIX
EXHIBIT I
The Office of the Administrator of the Federal Security Agency includes the following staff offices: Research, Administration, General Counsel, Publications and
Reports, International Relations, Federal-State Relations, and Field Services.
This group assists the Administrator in supervising and directing the activities
of the Agency and its constituent organizations, which consist of:
I. The Social Security Administration, with the Office of the Commissioner
supervising the following bureaus:
A. Bureau of Old-Age and Survivors Insurance.—Administers a national system
of old-age and survivors insurance; maintains accounts of employee earnings;
processes and certifies for payment initial claims for insurance benefits; recertifies
monthly payment of awarded claims; appraises the old-age and survivors insurance program and recommends improvement.
B. Bureau of Public Assistance.—Develops Federal program requirements and
standards for State old-age assistance, aid to dependent children, and aid-to-theblind programs; provides technical assistance to States on public assistance program requirements and improvement; reviews and approves State public-assistance
plans, operations, and grants; appraises the national public-assistance program
and recommends improvement.
C. Children's Bureau.—Investigates and reports upon matters pertaining to the
welfare of children and child life, includng the formulation of standards, guides,
and recommendations for use in the development of services for children; administers grants to States under the Social Security Act for maternal and childhealth services, services for crippled children, and child welfare services; provides
advisory services to States and to public and private agencies on the development
of effective programs for mothers and children.
D. Bureau of Federal Credit Unions.—Administers the Federal Credit Union
Act, including the following: Charters, examines, and supervises Federal credit
unions; prescribes accounting forms and operating procedures; promulgates
Federal credit union rules and regulations; issues manuals and instructional
material for Federal credit union officials; makes studies of credit union conditions and trends.
II. The Public Health Service.—The Office of the Surgeon General provides
staff assistance to the Surgeon General and gives leadership in the promulgation
of Service-wide policies and procedures for the over-all management of the Services; makes and coordinates studies of national health problems for planning new
programs or new approaches to existing programs; participates in and coordinates
Service-wide aspects of international health planning and operations; and develops and maintains certain administrative and office services on a centralized
basis. The Surgeon General supervises activities in the following Bureaus:
A. Bureau of Medical Services.—Administers service hospitals and clinics for
beneficiaries; enforces quarantine laws; advises on policy and develops standards,
techniques, and plans affecting medical and hospital services; administers State
grants for survey, planning, and construction of hospitals and health centers;
advises on and assists in developing nursing methods, resources, and remedial
care; advises on dental aspects of clinical care; collaborates in development of
dental methods and resources; administers service aspects of Federal employee
health programs; provides professional personnel for medical programs of Federal
agencies.
B. Bureau of State Services.—Constitutes the operating bureau for FederalState and interstate health programs, including interstate quarantine; administers
programs assisting and supplementing State health activities in the areas of
general health, radiological health, industrial hygiene, environmental and general
sanitation, water-pollution control, tuberculosis, venereal disease, vital statistics,
dental health, and communicable and chronic diseases; supervises the Philippine
rehabilitation and Alaska health and sanitation programs; through PHS regional
medical directors, coordinates field activities of the Service insofar as FederalState relationships are involved.
24
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
25
C. National Institutes of Health.—Conducts scientific investigations in medical
and related sciences; coordinates research activities of the institutes with related
programs elsewhere in the Service; cooperates with other governmental and
private agencies to further medical research; administers research grant, fellowship, and training programs; including grants for teaching, construction of
research facilities, and cancer and mental health community controls; develops
and enforces biologies control regulations; publishes and disseminates scientific
findings; advises the Surgeon General on all scientific research matters.
III. The Commissioner for Special Services is responsible for the direction and
supervision of the following organizational components:
A. Food and Drug Administration.—Administers a program to protect United
States consumers and manufacturers. Through inspections at ports of entry and
factories, laboratory analysis of samples, seizures, and other means, acts to
prevent imports and remove interstate shipments of misbranded and adulterated
food, drugs, devices, or cosmetics. Promulgates standards of identity and
quality for food and acts on applications for new drugs. Certifies coal-tar colors,
insulin, penicillin, streptomycin, aureomycin, chloramphenicol, and bacitracin.
Cooperates with other Federal agencies and State officials to check adulteration
and misbranding. Assists other Federal agencies in the analysis and investigation of food and drug products.
B. Office of Vocational Rehabilitation.—Administers a program of grants-in-aid
to States for the vocational rehabilitation of disabled persons, including such
services as vocational diagnosis, counseling, training, medical examinations and
corrective surgery, medical and psychiatric treatment, prosthetic appliances,
maintenance during training and physical restoration, and furnishing of customary
occupational tools. Makes studies, investigations, and reports on aptitudes and
capabilities of handicapped individuals to develop their potentialities and prospects for gainful employment. Provides direct services for disabled citizens in
the District of Columbia.
IV. The Commissioner of Education supervises six divisions which perform the
following functions:
A. Division of Elementary and Secondary Schools.—Conducts studies of
organization, supervision, teacher training, and instructional problems; furnishes
information through published material; carries out experimental and demonstration work leading to the development of criteria for evaluating the effectiveness of present systems; furnishes consultative and advisory services; maintains
cooperative professional relationships with Federal, State, and professional bodies.
B. Division of Vocational Education.—Administers George-Barden and SmithHughes Acts; makes studies and investigations in the field of vocational education
to improve instructional programs, teacher training, administration, and further
develop vocational education; furnishes consultative and advisory services, maintains cooperative professional relationships with Federal, State, and professional
bodies.
C. Division of Higher Education.—Stimulates and carries on research to develop
programs for the improvement of higher education; collects and disseminates
information regarding higher education; furnishes consultative and advisory
service and maintains cooperative professional relationships with Federal, State,
and local agencies dealing with higher education; administers fands appropriated
for land-grant colleges under the Morrill Act of 1862 and subsequent related acts.
D. Division of Central and Auxiliary Services.—Develops and maintains central
statistical and report analysis services and information and publications services;
carries on studies and continuous research on school libraries, education uses of
radio, visual education, and related subjects; furnishes consultative and advisory
services; maintains cooperative relationships with professional organizations and
bodies; provides a central administrative analysis and procedures service; maintains administrative services including budget, accounts, personnel, and service
operations; administers collection of student war loans.
E. Division of International Educational Relations.—Prepares and publishes
basic studies of the educational systems of other countries; evaluates credentials
of foreign students desiring to enter colleges or universities in the United States;
plans procedures to be followed in the exchange of educational personnel, professors, teachers, and students, and for the exchange of educational materials for use
in schools; cooperates with the Department of State and other public and private
groups in development of specific policies and projects.
F. Division of School Administration.—Carries on cooperative studies with State
and local authorities involving school organization, pupil transportation, legislation, finance, housing, school health services, and general business administration
26
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
of schools and school systems; furnishes consultative advisory services; maintains
cooperative professional relationships with Federal, State, local, and professional
bodies; supervises the program of the Office of Education relative to the disposal
of surplus and donable real and personal property.
EXHIBIT II
Tabulation of personnel activities during fiscal year 1950
Rate o
turnover
GS or corresponding grade
15
14
13...
12
11.
10...
_
__
.
q
s
7
19.1
8.5
10.4
12.8
36.7
9.0
26.9
6.2
25.2
Number of
Separations
74
32
71
161
447
9
368
20
216
Acces
sions
160
39
90
140
202
4
250
16
163
GS or corresponding grade
6
5
4
3 .
2
1
EXHIBIT
SUMMARY—CONFERENCE
Rate of
turnover
Total or average
Number of
Separations
Acces
sions
11.3
21.1
16.9
25.2
31.8
57.1
37
403
205
425
721
905
25
435
169
540
674
921
26.3
4,094
3,828
III
OF REGIONAL DIRECTORS,
WASHINGTON
I. INTRODUCTION
The regional directors' conference held in San Francisco February 21-23, 1950,
was the first such meeting to be scheduled on the Pacific coast, and the fourth
since the establishment of the Federal Security Agency regional organization.
Assistant Administrator Thurston acted as conference chairman. Administrator
Ewing attended on the third day, as did Mr. Arthur Altmeyer, Commissioner for
Social Security, r« turning from his trip to New Zealand. Dr. Joseph O. Dean,
Assistant Surged General, represented the Public Health Service at the sessions.
Opening the corference Mr. Thurston expressed to Fay Hunter on behalf of
the other regional directors and the Washington staff the group's and his own
personal pleasure in having this opportunity to meet in the Golden West. He
mentioned the goal of quarterly conferences, with meetings to be held in the other
regions throughout the country. Mr. Thurston went on to say that this schedule
should permit exploration of many more problems a,nd with greater intensity than
had been possible in the past. He preferred to name these conferences "Regional
Directors' Staff Meetings," encouraging an informal free exchange of ideas and
opportunity to identify major problems as well as to outline achievements.
Next, Mr. Hunter welcomed the group and announced specific arrangements
which h£d been made to facilitate the effectiveness of the staff meeting and to
assure each visitor an enjoyable stay while in San Francisco.
Discussions in the ensuing sessions followed the subject matter of the agenda
quite closely except that (a) "Management improvement" was moved up from
session V to the end of session IV, (b) audit questions were inserted at the opening
of session V, (c) the remainder of this session was devoted to hearing from the
Administrator regarding Federal legislation and from him and Mr. Altmeyer
regarding social insurance abroad, and (d) a tour of the laboratory of the Food
and Drug Administration was substituted for the planned tour of the regional
office.
For the general reporting of the conference we are indebted to members of the
secretarial staff of the region X office; for tl is summary, in mrjor part to Mr.
Iyan Asay, of the Public Health Service, and Miss Esther Faier, administrative assistant to Fay Hunter; and for general supervision of the reporting arrangements
to John W. Gray, executive assistant in the region X office.
The summary follows a subject-matter arrangement which does not in all cases
represent the chronological order in which all phases of the material wrere discussed.
II. REGIONAL DIRECTORS' REPORTS
To provide at the outset a high-light sampling from regional vantage points,
each regional director made a brief statement, some centering on subjects previously suggested by the office of field services.
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
27
Program developments in region I {Mr. Bresnahan)
Public-assistance problems have entailed extensive negotiations in Connecticut
and Massachusetts. The public does not recognize the situation in Massachusetts as a State problem and is blaming FSA. Unless steps are taken to counteract
criticism, the public will lose confidence in the Agency. It is important to know
how far we can compromise and still not lose face; also what ceiling and floor
should circumscribe the regional director's responsibility for negotiating with
States.
White House Conference committees are active in six States. A request to
Washington for a sample plan of operation has, however, been pending 5 months.
OASI has completed a very successful 6 months' training program for general
orientation in FSA programs.
More help is needed in handling surplus-property-disposal matters.
Requests for health-insurance speeches from the staff and speakers bureau have
reduced 50 percent.
Excellent operations and public-relations results characterized the chest X-ray
survey in Boston, where 523,000 were X-rayed and only 3,000 potential cases
were found.
Water-pollution control reports on all New England streams are being prepared*
The Governors are interested. There is some fear that tightening of standards
will drive industries to other areas.
A survey of milk control in Providence has been made by the regional staff upon
request, and the report will be released shortly.
Problems and progress in region II {Mr. O'Connor)
Requests for information on OASI benefits to which individuals are entitled are
coming increasingly from industries with retirement plans paying the difference
between a given total and the amount payable under OASI. They are being
referred to headquarters. This is a growing problem and policy regarding availability of OASI records for this purpose is needed.
A trend toward avoidance of Federal supervision is seen in New York where
the Governor is advising against acceptance of relatively small Federal grants
under certain PHS and CB programs. The State commissioner of welfare recently expressed the Governor's attitude vigorously to a congressional committee.
Regional office integration has been completed. A central file has been established and is working satisfactorily. However, Nation-wide uniformity in the
filing system seems unwise. Regional directors should be free to develop their
own systems as emphasized at the Dallas conference and concurred in by the
Administrator.
Interconstituent coordination in the regional office is making for more effective
relations, particularly in dealing with State commissioners and governors. In
Pennsylvania, for example, an integrated approach is bringing merit-system
results for the first time. Coordinated strides are also being made on the New
Jersey merit system.
Comprehensive orientation in FSA programs has gone forward, not only for
the regional office clerical staff but for OASI field-office personnel. Information
concerning any FSA program can be obtained from field managers.
About 150 talks on health insurance have been made or arranged on a selective
basis by the regional staff since the last conference.
There is need for clarification on grant and audit policies, particularly as
between PA and PHS.
It would seem that a real contribution could be made by regional directors
by more frequent participation in the formulation of legislation and other aspects
of national program policy. Serving as eyes and ears for the Administrator they
are in a position to know a good deal about what the public needs and will support.
Major needs in region III {Dr. Coffey)
While much could be said about progress and achievements, a listing of major
current problems for headquarters' consideration may be the most useful contribution :
1. A clearer and more uniform policy governing the audit of State grants is
essential to efficiency and good relations with States.
2. The increasing backlog in auditing State accounts leads to waste and injured
relations.
3. More equitable stenographic staffing for the various regional office program
units should be developed, in terms of both numbers and grades. Uneven workloads and unexplainable variations in grades are bad for morale and efficiency.
28
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
4. Clearance for attendance at professional meetings (aside from those requiring the Administrator's clearance) is required by some bureaus, even though
the individual may be taking annual leave. Clarification and consistency are
needed on this issue.
5. A consolidated filing system for the regional office is desirable. Region III
itself could have long ago extended either its subject-numeric plan (PHS) or its
Dewey-decimal plan (SSA) except for advice that a recommended plan for all
regional offices might be forthcoming.
6. A supply of uniform, up-to-date letterheads would be an improvement over
the continued practice of having to adapt a variety of old letterhead stock.
7. Lack of funds for even small essentials of a central service character is a
serious handicap to integrated operations. If central funds are inadequate to
subscribe for periodicals, for example, it would seem better that they be purchased from bureau allotments.
The state of region IV (Mr. Johnson)
Some progress is being made in gaining understanding of extended coverage
for agriculture and State employees. The Governor of Ohio does not agree with
the opposition expressed by the secretary of the State retirement system.
PHS is moving along. Progress on hospital construction will be exemplified
March 4 when the first Ohio hospital will be dedicated, hopefully with the Surgeon General as speaker. Pioneering is being done on home-accident prevention.
How liaison will be maintained with out-patient offices after July 1 is a question.
Will hospital MOC's be able to handle these contacts with local contract physicians as some regional medical directors have?
There are indications that individual faculty members, if not the deans of
schools of medicine, can be counted upon to support aid to medical education.
Agency policy on this is desired.
OVR is making significant progress in Kentucky and Ohio. In Ohio the
regional representative is doing an excellent job of stimulating a study which
ought to bring this State up to the front ranks from its present position of fiftieth
in terms of per capita expenditures.
Child-welfare programs need improving. A capable new child-welfare representative has been assigned, but a representative for MCH is still lacking.
The Federal Credit Union is making good progress, with the UAW showing
definite interest.
PA is going along well. There are merit-system problems in Ohio. The State
has lost $800,000 in 5 years through exceptions taken to grants due to poor personnel practices, but we have had conferences with the Governor and hope to get
back about $40,000 as a token of good will. Improved practices in the future
are anticipated.
The experiment in Detroit with in-service training is a satisfying example of
coordinated effort. In attendance were 110 OASI employees and 15 persons
from the regional office, FDA, and marine hospital. This was a 1-day institute
on what the FSA is trying to do. The evaluation sheet filled out by each participant will be valuable in planning future sessions.
OASI managers are being encouraged to develop programs on problems of the
aging and many of them are taking it up.
The tabulation sheet shows the workload of region IV is third highest, our
population is the third largest, and yet we have the least staff. Representatives
are essential for child health, mental health, and dental health.
Initial impressions from region V (Dr. Miller)
As this was his first regional directors' confe ence, Dr. Miller was given a special
welcome by Mr. Thurston. In summarizing first impressions Dr. Miller touched
upon the following points:
As outpost for the Administrator, the regional director's job seems to include
the over-all implementing of health and welfare programs with the political, social,
and health forces of the States. In Chicago are located the headquarters of many
social agencies, plus the AM A; also organizations of mayors, governors, and
other public officials. To work with such agencies the regional director needs
an especially capable executive assistant.
Region V office space is excellent—all on one floor. Whether PBA will permit
its retention is a problem now receiving attention.
A special handicap noted by one who is just new is the dire poverty of the
regional set-up. Compared to welfare budget standards for OAA and ADC the
regional office budget would seem quite inadvisable.
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
29
Inconsistencies are apparent in correspondence, typing, filing, and other procedures among the various program offices of the region. Training in office
practices and orientation in FSA programs will need to be given attention by
the executive assistant.
Further delegation of authority for personnel actions seems desirable, as soon
as the regional directors are sufficiently instructed and equipped.
Region V has a tremendous job in public relations, with a powerful press
constantly seeking to discredit Agency programs. A public relations committee
has been set up and a consolidated library is planned. It is unfortunate to be
unable to procure subscriptions for essential periodicals.
The regional director's own orientation is being approached from the standpoint of p.) what is our legal responsibility in each program; (2) what is the
organization of each program and how is it carried out; and (3) functionally, how
does the organization work? It is planned to get into the States and to see how
things work from the receiving end.
Program outlook in region VI (Mr. Lyle)
Clarification of PHS audit policy is needed. The regional medical director who
recently transferred from region V observes inconsistencies between regions,
particularly as regards the blanket reservation to the effect that, although the
auditor has found nothing wrong, available records do not enable him to certify
that all expenditures were for the purposes authorized.
Integration of the CB programs of Puerto Rico and the Virgin Islands into
region VI would be a great improvement. To have CB programs handled by
region III while all other FSA programs are handled by region VII seems a
paradox.
Considerable interest in H. R. 6000 was shown by the Southern Conference of
Governors when the regional director and some field managers led a discussion at
their Mississippi conference. They are frightened over the possibility of bankruptcy unless PA expenditures are lightened by extended insurance. Follow-up
discussions with the Governors of Maryland, Mississippi, and South Carolina and
with the actuary of Georgia, confirmed their interest. Work with the Agricultural Extension Service on questions of extending OASI to farm occupations is
showing good results. Agricultural workers can be shown how much they lose
when they work in covered employment occasionally but never enough to be
eligible for benefits. Southern governors seem to favor coverage of agriculture.
Four State welfare heads have testified in favor of it in the Senate. Support is
coming from unexpected sources.
Reaching people through labor unions in region VII (Mr. Doarn)
It has not been hard in a particular city to develop fairly elaborate programs
of cooperation with labor unions. But a region-wide program is needed, and
region VII has been able to work one out with UAW-CIO:
1. Area education conferences are being held by the CIO throughout the
Nation, including all principal cities in region VII. Xhe regional staff will help
develop programs, provide display material, furnish speeches, take part in panels,
and distribute information.
2. Union counselor training programs are also Nation-wide. Here counselors
will attend 6- to 8-week classes for training in how to advise union members on
their personal problems. For the current classes in the two Kansas Citys, the
regional office has designated a person from each bureau to make a presentation.
Classes will be extended to other cities and will continue to be held for rank-andfile members. As both of these CIO programs are Nation-wide they afford a
channel for participation by other regions.
3. A list of all CIO publications in the region has been obtained and the way
is open for a series ot articles on FSA. These 10 to 20 articles can be very worth
while. Who will write them is a problem.
4. The CIO has trained many speakers through its adult-education program.
Topics and material for speeches are needed and FSA program material finds
eager acceptance.
5. UAW has an extensive circulating film library. Regional staff members are
seeing some of their films and showing them some FSA films. This affords an
opportunity for mutual exchange and for FSA films to reach CIO locals.
6. Lists of key CIO officials have been furnished all regional representatives
and they are expected to contact these officials regularly as they visit various
cities. They will learn more about union programs and much good can come
from such knowledge.
30
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
7. Bureau representatives also are invited to attend monthly CIO luncheons
in Kansas City. Better acquaintance and mutual exchange should result.
The union is a good channel of communication. Its people have interests in
common with FSA. They not only want facts to use but are able to reciprocate
with much valuable information.
For a series of radio programs help is needed in writing scripts. When region
VII made what seemed like an extreme request of 20 radio stations for 15-minute
programs to continue 12—14 weeks, the response was surprisingly favorable.
Scripts written for this could have Nation-wide value. Washington ought to
find some way of furnishing necessary help.
Information and training in region VIII (Mr. Bond)
The regional information program was evaluated with the aid of three experts
obtained for limited periods and was renovated in line with their recommendations. Later, it is hoped a reappraisal can be made.
One of the first steps was to set up a speakers' bureau. An activity control
was established including a listing of some 3,000 organizations and individuals and
a procedure for keeping track of their interests, the timing of their conventions,
etc. By this means available material is distributed selectively. A clerical
worker in the regional office who has some special background for this kind of
work is kept busy on it.
Region VIII information activities, July-December 1949, included 1,875
broadcasts, 8,057 spot announcements, 397 speeches, and 1,743 press releases to
a wide variety of periodicals. One specific activity was the development of 8page letters based on FSA's year-end release for 1949. Recipients included
United States Senators, State officials, 135 labor organizations, 140 veterans
organizations, 32 civic associations, and 75 business firms Or associations. (Sample
replies wTere displayed.) A news release was sent to 120 papers in Texas, 47 in
Oklahoma, 62 in Louisiana, 37 in Arkansas, and 25 in NewMexico.
On December 14, 15, and 16, region IX conducted jointly with the University
of Texas an institute on the central theme of Better Management of the Public
Business. It was attended by several members of the Washington staff, by
members of the regional staff, by heads of State agencies with which we have
program relationships, and by all OASI field office managers and assistant managers in the region. It aimed to bring into focus the basic problems of public
administration at this time and to orient key members of the regional, State, and
field staff of their increasing responsibilities in the field of individual and family
security. There was good publicity. The governor made a fine statement about
the institute, expressing his desire for better cooperation between State and
Federal people. Other expressions testified that this institute was of great value
in advancing the cause of management improvement in the region. The universities of Oklahoma, Arkansas, and Tulane are interested in a similar arrangement.
Integrative activities in region IX (Mr. Harper)
Mr. Harper first expressed appreciation for the help given by Mr. Doarn in
connection with region IX participation in the area education conference just
held in Denver. The CIO has done a remarkable job of revitalizing its locals
and future FSA work with them in Denver will be much easier.
The regional staff is at last united in the Equitable Building. As a result,
attempts at integration have been greatly assisted. Those who were most skeptical now seem to be among the most satisfied with the new set-up. General
staff meetings are more feasible and require less time. More important, weekly
meetings with the unit heads and special conferences on emergency problems are
held more readily
A 15-session orientation course for the entire clerical and nonprofessional staff has proved to be not only a valuable training device but, as a
byproduct, has resulted in making that important section of the staff much better
acquainted with its attendant benefits.
This week the executive assistant is to be away also and the regional medical
director is acting regional director.
The proposed plan for integration of health activities affecting the several
constituents is one on which a statement has been requested. We began by exploring for the related PHS content in the OVR program and this led to a most
stimulating series of sessions on coordination. As a result, the regional medical
director made suggestions to the Surgeon General and to his regional staff indicating the areas in which he believes fuller cooperation is possible.
It is our purpose in further meetings not only to explore all the programs for
their health content, but to examine the programs of all the constituent units and
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
31
bureaus for content related to other programs. The ultimate objective is not
merely educational but to extend the type of cooperative action which the regional medical director has already proposed to the Surgeon General.
Before developing meetings with outside agencies and organizations on the
subject of the problem of the aging, the region is first conducting a testing and
training program for its own staff. In the course of seeing whether the professional staff is equipped adequately to conduct panel discussions on this probblem, a $5 prize is being offered for the best question submitted.
Highlights from region X {Mr. Hunter, with Mr. Wade and Mr. Burr)
Mr. Wade feels the programs in Alaska are making progress in spite of Indian
troubles, regarding the administration of health, education, and welfare. The
Territorial Government operates one system and the Bureau of Indian Affairs
another, which does not always correspond with FSA philosophy. Until the
Indian problems are solved in Alaska, we will have a continuing conflict in the
two fields.
Mr. Burr reported that the most significant thing in the past year has been to
get across to the public an appreciation of what Agency programs mean to the
Hawaiian Islands. With the 6-month crippling strike the entire Territory is now
an E area. In the last 10 months it has spent more for unemployment compensation than was paid out in the previous 10 years. With that situation we have
been trying to show how much worse conditions might have been had it not been
for the FSA programs. In spite of a somewhat hostile press, some success has
been attained.
Mr. Hunter summarized various management tools developed in region X:
The Appley task-list method was adopted, by which each employee lists his
actual duties and makes a statement Qn his responsibility. Differences are clarified, supervisor and employee agree upon the presentations, and these are placed
in a manual. Ideally, task lists should be reviewed every 6 months, but in view
of staff limitations, an annual review is proposed, to confirm the status quo or
record changes.
Organizational and functional charts for each bureau have been prepared with
the participation of regional representatives. These have been used effectively
by the regional office staff and were supplied to OASI field offices for training
purposes. Each regional director has received the chart of a typical regional
office which region X developed. The only detailed charts not completed are
those for PHS, which have not yet received headquarters approval.
The third round of the 6-month work plan has just been completed. Improvement has been such that regardless of whether headquarters requires work plans,
regional representatives find them effective. Two reviews are held on each plan—
near the end of the third month to see how time goals are being maintained and
at the close of the period to evaluate accomplishments. The work program is
an excellent tool for planning ahead, for self-appraisal, and for interprogram
acquaintance and coordination.
A monthly meeting notice is sent out at the beginning of each month which
shows meetings to be held in and out of the region, dates, and who will attend.
This information not only provides a control over attendance at meetings, but is
a tool of integration. If a staff member can't go to a particular meeting and has
a point he wishes emphasized, he can ask that it be presented by another who is
going.
A travel control on visits to States is also maintained. This notice to the staff
on proposed dates and regional office visitors to States helps avoid having several
people in a State at a time.
A number of interagency management activities have involved region X staff.
A regional management improvement committee composed of representatives of
all Government agencies meets about once a month to discuss management techniques and problems. Recently an annual manager" en t conference brought out
about 600 participants from education, industry, and government. This conference arrangement is an excellent means of acquainting industry with the fact that
government is doing progressive things in management. Standard Oil vas very
interested and wanted to send 70 to 80 people.
The junior management assistant training program which was recently begun
had to be divided into two groups because of the large attendance. There will
be about 17 lectures on management and Federal agency activities, the first being
given by Mr. Hunter.
Work is also carried on with the Governors' Board of Intergovernmental Relations. It is composed of the governors from the three largest Western States in
the region, five representatives from each of the three leagues of cities and asso-
32
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
ciations of counties, and Federal regional directors. This Board is an excellent
means of acquainting the governors with our programs and problems.
An institute on government was held 2 weeks ago by the* University of Southern California in Los Angeles. About 2,000 Federal, State, and local people were
present. The panel, which included FSA activities, was attended by about 500.
In three recent instances in region X difficult problems have arisen out of conformity issues: The repeal of proposition 4 in California; a court ruling in Washington on confidentiality of records; and withdrawal of funds from Arizona for
the crippled children program. Through negotiation the regional staff was able
to settle the issues in California and Washington. However, Arizona brought bad
publicity, such as cartoons showing Uncle Sam dumping crippled children out of
bed. In the Arizona situation, the headquarters staff did a good job at the hearing held in the State, although the report on the hearing was very slow reaching
the regional office. What was serious was the lack of discussion with the Governor
and clearance with the regional office before funds were withdrawn. We tend to
cry "conformity" too often and too quickly.
Ill
ROLE OP THE REGIONAL DIRECTOR
This subject was discussed extensively as part of the gradual process of clarification for Washington as well as the regions. Mr. Lund pointed out there will
always be a "gray area" subject to interpretation and differences of opinion.
Much depends upon individuals—both the regional director and regional representatives. But it is important to keep narrowing the "gray area" and broadening
the area of common understanding.
In the hope of furthering this, a draft entitled "Some Ideas on the Job of the
Regional Director" has been prepared. It .attempts to give a perspective on the
regional director's job which is broader than merely an administrative service
concept It proposes some guide lines while still leaving considerable latitude.
What should be done with the statement remains to be determined, but it may
be helpful in some measure toward arriving at a meeting of minds. It is divided
into three parts: (1) Administration, (2) program supervision and coordination,
and (3) public relations. Perhaps too much emphasis is given to No. 3. (The
parts were read separately and discussed.)
1. Administration.—The regional director represents the Federal Security
Administrator in the field. He is responsible for carrying out those responsibilities and functions outlined in agency orders and field service directives in such
a manner as to insure maximum service to the States, localities and the public
within his region. His administrative responsibility includes coordination and
general supervision of the entire staff of the regional office and full supervisory
responsibility for that staff not attached to specific programs or bureaus. The
regional director exercises, primarily through his executive assistant, direct
responsibility for the administration of management and service functions such
as personnel, regional budgets, control and purchase of equipment and supplies
and space procurement and allocation; in brief, all phases of management. Those
administrative responsibilities also entail the function of staff training and
development and the important responsibility of keeping headquarters fully
informed as to the progress and accomplishments of the Agency in the region.
In discussing the meaning of the third sentence, three categories of FSA staff
were recognized:
First are those employees devoted to Agency-wide services and management in
the regional office and not specializing in the work of a particular constituent.
In general, these are the Regional Director's "full supervisory responsibility."
However, auxiliary service specialists, such as regional attorney, auditor, and
personnel representative receive technical supervision and leadership from their
principals in Washington. Perhaps there should be inserted wording such as,
"With respect to auxiliary representatives serving program representatives in
the regional office, the regional director exercises full administrative supervision
but not supervision over the technical aspects of the job." It is necessary that
the regional director and executive assistant participate more actively in scheduling
priorities for auxiliary representatives because of the horizontal impact of their
work on many programs It is important to have a leader in a position to make
a decision on priorities where there is a stalemate between representatives themselves. (A question was raised as to whether this concept is understood by the
auxiliary representatives in the regions and by their Washington offices )
At the other extreme are FSA personnel performing duties not considered an
integral part of the regional office organization but located within the boundaries
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
33
of the region. It is generally agreed that activities not under the supervision of
the principal bureau representatives of the regional office are likewise not subject
to "coordination and general supervision" by the regional director in the same
specific sense. It has not always been easy to identify these activities. However,
as general representative of the Administrator the Regional director has a broad
public relations function encompassing all FSA activities in his region. Problems
occasionally arise in this connection. For example, a Marine Hospital or an
OASI area office might handle personnel matters in such a way as to incur the
strong criticism of local labor unions. The regional director should first attempt
informally to rectify the situation locally. Failing that, he should present the
problem to the Office of Field Services. But, if the problem continues, does he
have the authority either to demand a report from the local man in charge or
to go into the problem office and investigate? It is true, Agency Order 16-1
authorizes the regional director to ask for information on any FSA activity.
Yet, it is strategically unwise if not actually doubtful that he would be upheld in
Washington if he tried to superimpose his authority upon these nonsupervised
activities except upon authorization from the Office of the Administrator. Such
a problem is largely academic, Mr. Thurston pointed out, but it does help bring
out the scope of the regional director's authority. It may suggest an area for
continuing effort toward further clarification.
Between the two extremes are the professional representatives of bureaus and
divisions having Nation-wide responsibility for getting programs carried out. They
are admittedly under dual supervision and the line between what part of their
supervision comes from program headquarters and what part from regional directors is admittedly not easy to draw. Both they and the regional director have
to do a lot of playing by ear. The second section of the rough draft statement
bears on this problem.
2. Program supervision and coordination.—In this area it is the primary duty of
the Regional Director to insure that the professional knowledge and abilities of
the regional representatives and other program members of his staff are so utilized
that the regional office operates properly, efficiently and expeditiously. To this
end he will work closely with the regional representatives, and keep himself well
informed both through their program reports to their bureaus and by personal
contact. He will seek to prevent duplication of effort, and to promote similarity
of approach in dealing with common problems. Where unusual situations arise,
or where disagreements occur among the program representatives, he will schedule group conferences and attempt to bring about satisfactory group decisions.
If unsuccessful, he will forward individual reports, with his comments, to the
Director of Field Services, for discussion with Bureau directors in order to resolve
differences.
As a technique for achieving coordination, the Regional Director will insure
that proper liaison is established within the office, so that the component parts
of the Agency program are coordinated to the extent that a unified approach
can be made in dealing with State officials and with Federal departments and
agencies. On interprogram problems, the Regional Director should provide
that "control point" at which it is decided as to which official is to represent the
Agency, what the approach should be and when the proper contacts are made,
since interprogram problems are concerned basically with relationships and public
relations.
In exercising this responsibility, the regional director will rely on the Bureau
representatives to provide the professional and technical knowledge and background required in a particular interprogram problem area. However, the
regional director must insure necessary coordination in order to carry out his
responsibility for over-all relationships and public relations.
The regional director gives proper recognition and consideration to the responsibility of the Commissioners, Bureau directors, and their representatives in the
regions for substantive program operation and development, which is a technical
responsibility. It is, however, the responsibility of the regional director to make
reports and recommendations in program areas when in his judgment the programs
are not being developed in accordance with Agency or constituent policy.
Discussion brought out that, when a difference of opinion arises between the
regional director and program representative, if it is clearly in the technical program area, the judgment of the regional representative would usually prevail. If
the regional director considers the matter sufficiently serious, after further negotiation has failed to bring a resolution, the problem should be presented to Washington jointly or separately. Occasional service as a referee is a proper function
for headquarters. In rare instances, where the time element precludes such
34
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
referral, it may be advisable for the regional director to halt questioned action on,
for example, a merit system matter until the issues can be locally resolved, or to
press a regional attorney to make an imperative trip even though it means postponing or working overtime on another pressing matter. However, it is usually
better not to be adamant in a particular case, but rather to work toward a general
principle to help resolve similar issues in the future.
There is an area affecting program representatives which is more clearly within
the regional director's purview as, for example, if a representative were habitually
keeping "bankers hours" to the detriment of progress and general morale in the
office or seems to be wasting travel money.
Even where there is no issue of the regional director's authority, however, the
bureaus sometimes question regional practices. For example, Mr. Lund recalled,
there has been a feeling with respect to some regions that too much time is spent
in staff meetings, that limitations on bureau representatives dealing with Governors are extreme, and that public relations require disproportionate attention.
Also, Mr. Howard added, some regional representatives have felt that central
control over clerical staff or files is excessive, and that limited funds for communications, etc., are not properly apportioned. Such complaints are diminishing
and, when bureaus bring them to the attention of the Office of Field Services, it
can often help iron them out. Regional directors want to be notified of specific
problems where this is feasible so they can take corrective steps. This is already
being done to a considerable extent.
One regional director emphasized his hope that the problem of a representative
trying to serve two bosses can be minimized by considering that (a) the line of
responsibility of regional representatives runs to their bureaus, and (6) the regional
director is responsible to see that he fulfills his obligations also to help him do so—
and to let headquarters know if he does not. A boundary between operation and
general administration is most difficult to draw.
At the other end of the range, more than one regional director seemed inclined
toward the concept of centering additional power and responsibility in the regional
director's job so he can get more expeditious and balanced action in the field. The
areas of difference seem to have narrowed, however, and there was an absence of
strong feeling and occasional reminders that we should all take a quizzical look
at any proposal to extend control in blanket fashion, because there is in reality
a degree of duality of responsibility. We should make generous use of the pragmatic test of what contribution each proposal would make toward attaining
program goals.
(a) The leadership role.—Mr. Thurston put forward for consideration a concept
of the regional director's role as one of exercising influence through leadership
rather than direction. In this important experiment in the regional coordination
of multiple programs, the inevitable dualities of responsibility and control do
make for difficulties. Where "general" supervision ends and "program" supervision begins is hard to say. We must not be misled, however, by the enticing
but futile lure of reliance on authority. We must recognize the limitations of our
scope. Representatives should be coming in, not because they are told to, but
because they get sympathetic understanding and assistance, and—in a fair proportion of times—the right answer. Getting them to want to come in is the
No. 1 job of the Administration and Assistant Administrator at headquarters as
well as of the regional director in the field. If the program people have confidence
in the leadership and guidance at the regional director level, they will undoubtedly
be more eager for the decentralization that is essential to effective operations. If
we have a history of telling people what they have to do; if we disregard the wishes
of bureau officials who also have a sense of their responsibility, then we ruin our
chances for effective leadership. The role of the regional director moves between
constructive control and broad-gage leadership. More attention to the latter is
one thing most of us can look forward to now that immediate administrative
problems are leveling off.
3. Public relations.—The regional director is responsible not only for the formal
aspects of public relations such as the conducting of informational services and
other -specific public relations activities, but also for the over-all function of providing leadership in the varied relationships which are essential to effective
Agency-wide activities. Within the office he maintains sound working relations
with his staff and keeps himself fully informed as to the status of the programs in
progress Outside the office, the regional director maintains personal working
relationships with State governors and other high State officials through periodic
visits, as well as through other techniques, to keep them fully informed of the
activities of the Agency within the States. He likewise makes periodic visits and
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
35
maintains personal acquaintanceship with State administrators of departments
having jurisdiction over programs directly related to those of the Federal Security
Agency. In fulfilling these responsibilities for Federal-State relations, the regional
director works closely with program representatives and regional medical directors,
frequently making joint visits. He visits as frequently as possible the various
field installations of the programs operating under the Federal Security Agency.
The regional director maintains and promotes effective public relations through
continuing contacts with press and radio, labor unions, civic organizations, and
other public groups.
In exercising his responsibility for public relations and related over-all functions
the regional director carries out a planned program of leadership toward the
achievement of the goals which are necessary to carry out the objectives of the
Agency program.
Through obtaining a basic understanding of the proper roles of the various
staff members in carrying out the Agency's program, the regional director must,
in his day-to-day operations, stimulate the work of his staff in a give-and-take
process which will cause all employees to feel that they are an essential and integral part of the organization. Outside the office, the leadership responsibility
varies greatly and requires the regional director to analyze the whole area of relationships with official administrative bodies, Federal, State and local, with legislative committees, civic leaders, and the public in general. The regional director
is required to insure that adequate leadership is given on all fronts and not solely
in those areas in which he has a particular interest. He will be selective and discriminating in accepting invitations to make speeches, to participate in community
forums, and in serving as consultant in formulating legislative programs related
to the work of the Agency.
The regional director must constantly evaluate himself as to how well he is
serving as a spokesman of the Administrator and the regional office in contacts
with public officials, labor groups, press and radio representatives, and civic
and community leaders, and he must continually think in terms of the additional
steps he can take to perform more effectively the leadership and related responsibilities of his office.
There was general agreement on this statement but some thought was expressed
at various points, that, if the document were to be distributed widely, it might
well need modification so as not to give an impression that a disproportionate
part of the regional director's work is in this area. Also hope was expressed that
a substitute could be found for the term "public relations."
4. Disposition of the draft statement.—Although all agreed there was much of
value in Some Ideas on the Job of the Regional Director, and in the discussion it
engendered, there was a difference of opinion as to whether it should be developed
for formal issuance. Some of the regional directors preferred to let Agency Order
16-1 suffice without further interpretation, fearing that interpretations are likely
to pyramid; remembering too that they often inhibit flexibility and raise questions
rather than solve problems. Others wondered how such understandings as were
emerging here could be imparted to bureau people in the field and at headquarters
without articulating them on paper. It is often not true, Mr. Thurston pointed
out, that the less you spell out the fewer are the problems. Moreover, current
misunderstandings about the scope of the regional director's job, such as Senate
committee investigators have expressed, need to be cleared up.
Aside from the general need to continue endeavoring to clarify the regional
directors role, the discussion closed with a recogniation that the following are
unfinished business: (a) How the draft statement should be improved and used
remains to be determined; (6) whether the role of a program representative should
be spelled out in a complementary document is worth considering; (c) in any case
each regional director should make sure, through individual and group discussion,
that all regional staff members understand the full scope of his role.
IV
MAINTAINING PUBLIC AND OFFICIAL RELATIONS
1. Public relations
Mr. Thurston observed that our use of this term needs to be examined critically
as it stirs up allergies in many. He introduced Mr. David Bernstein, assistant
to the Administrator, mainly as an interested listener. Coming with a broad
background, he wants specific orientation on Federal security matters as the
regional directors view them.
Mr. Bernstein asked for impressions of (a) informational problems and (b)
additional assistance needed from Washington. He later referred to three broad
36
EMPLOYEE UTILIZATION IN "EXECUTIVE DEPARTMENTS
areas: (1) The job of internal relations, (2) direct relations with the public or
representatives of the public, and (3) public information through press, radio,
movies, etc. Short of having informational officers in the regional offices, how
can regional staffs be enabled to handle these three areas more adequately?
Among other things, how can a local boost be given national releases so they will
not progressively fade out as they move from east to west? How can there be
an interplay between headquarters and regional informational work, which are
parts of the same thing? These were the kinds of questions posed as the discussion moved along.
Most of the problems cited relate to the need for more help in handling information matters. A great deal of the time-consuming work is somewhat mechanical, e. g., maintaining distribution lists. One region has succeeded in making
available for such work a capable clerical staff member. Most others have not
been able to do this. A few indicated they are at a loss to see how they and their
secretaries can handle the problem on top of other duties.
Some regional directors have found interconstituent public relations committees
effective but others have not. Bureaus have questioned expenditure of time on
certain of these committees. They have also advised against an individual program representative with special skill in writing or publicity, continuing to spend
time on special information projects. This is understandable but it puts the
regional director in a dilemma.
In any case regional resources available for information work will remain very
limited and it is up to the regional director to be as resourceful as he can in using
them. It has not even been found strategic to press for special provision for
regional information personnel in the 1952 estimates. Funds for temporary or
part time employment are not available except as a region may have a little
balance in its own allotment. It may well be a good investment of limited funds
occasionally to employ a top caliber public relations adviser such as Byron
Johnson, of region IX.
For the present such resources as are available for technical service on public
relations are necessarily concentrated in Washington. Mr. Bernstein invited
comment as to how this service can be made more effective and received such
pointers as the following:
(a) Issue a basic policy guide for FSA public relations.
(b) Synchronize headquarters bureaus more fully in their occasional releases
on the same or related subjects.
(c) Try to improve the quality of news material from the standpoint of its
adaptability for consumption by local papers. For example, the year-end
release on FSA, although used extensively, was found by some to be unduly
filled with statistics and unduly lacking in illustrations. Many of the wire
service releases and headquarters speeches are of little value.
(d) Try to be more prompt in sending out special notices, particularly where
they are expected to be relayed to field offices, e. g., notice of a broadcast by the
Administrator.
(e) Provide a diversity of stand-by material such as Bell Telephone supplies
its local managers for ready use in event of disaster and the American Legion
furnishes its posts to help them prepare news releases and radio scripts.
(/) Produce the comprehensive display for RO's which was discussed at the
last regional director's meeting.
(g) Make every effort to meet such special needs as the UAW radio script
series in region VI (see RD's report) and the insurance material for the International Communications Workers in region IX.
(h) Disappointment with headquarters services in general was expressed by
one or two, the feeling being that it is geared to headquarters rather than to
regional needs.
(i) Another considered it a wrong premise to assume that the typical regional
director—irrespective of time limitations—would be able to plan a sound informational program or know what kinds of speeches will go over with particular
audiences.
Mr. Bernstein agreed that one thing needed is an over-all FSA policy on
public relations and he expects one to be developed. Perhaps it will help bureaus
and regional directors gain more nearly a common understanding of the public
relations function of all of the regional staff. Certainly each program representative has a part to play. Much of it is played as an incident to regular work
rather than identified as an informational activity. The number of speeches or
press clippings may not be too indicative of the real public relations accomplishments. Here again the leadership role of the regional director comes into play.
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
37
Suggestions to the regions were interspersed throughout the discussion. Dr.
Dean cautioned against stepping in with Federal publicity on matters which
should be a State responsibility. Mr. Bernstein urged that regional directors
be alert for human interest material for use nationally and Mr. Thurston illustrated by giving an example just gleaned from the visit to the plague suppressive
lab. Mr. Doarn reminded the group that some of the sincere reservations
which bureau people have about spending time on public relations may have a
basis in someone's having actually gone overboard on a promotional project.
Mr. Johnson described successful experiences with impromptu sidewalk interviews and studio interviews such as a recent one on how a bill goes through
Congress. He feels a radio presentation is often better when informal and spontaneous than when a prepared script is followed. OASI managers he considers
to be the best public relations resource available in the regions. His region has
found definite public relations value in the biweekly showing of movies such as
the excellent one on telephone courtesy.
Mr. Bond made observations looking toward future improvement of both
Washington and regional ends. This year probably will be a crucial one for the
FSA, he felt, and we can undertake no more important activity than that of
getting down to cases on some of the major allegations which are being widely
circulated and arguments against our policies and programs. A regional specialist
is very badly needed to spark-plug an adequate program but if that proves impossible, we still should plan very carefully to get some kind of decent job done. The
approach being used in region VIII may be worth putting into the hopper. It
covers:
(a) Statement of the specific objectives which we are trying to reach through
public relations, e. g., (1) improved operations, (2) improved Federal-State
relations, (3) program acceptance and support, and (4) legislation.
(b) Allocation of responsibility with respect to (1) Washington office, (2)
regional office, (3) State office, and (4) local office.
(c) Coordination of public relations, including bureau efforts in Washington,
undertakings in the region by headquarters personnel, and activities of all members of the regional staff.
(d) Working out more clear-cut arrangements for public relations between
members of regional staff and programs of State agencies.
(e) Proper utilization of OASI managers.
(/) Appraisal of present public relations activities at the Washington, regional,
and State levels.
(g) Establish files on key organizations and individuals within each region;
also ''control" devices to facilitate selective communication to an extensive,
varying audience on a priority basis.
(h) Increase emphasis upon direct contact with individuals and organizations.
2. Regional negotiations with governors
Criticism is sometimes heard that, whereas regional directors formerly were
inclined to have program representatives accompany them on visits to governors,
an increasing tendency is to proceed without such participation. Practices in the
regions range from virtual exclusion of visits to governors by regional representatives or permitting representatives to visit governors occasionally after careful
clearance and planning, to an attitude of considerable freedom for handling each
case without a general formula.
Some feel that governors often get into discussion on several programs and it
would be difficult always to bring along all of the specialists involved. Also when
a regional representative goes directly to a governor, the State program director
may feel he is being circumvented. On the other hand, the regional director can
muddy the waters by attempting to handle technical matters personally. Moreover, regional representatives need opportunity for experience in high level negotiation, and as well as a sense of participation.
In any case contacts with a busy chief executive should be selective and wellplanned and followed up. Mr. Bresnahan's statement of principles and a related
case study were distributed but not expressly discussed.
Mr. Thurston alluded to the ideal of having governors feel such confidence that
they will be inclined to contact the regional director concerning any major FSA
question, particularly where they may not feel satisfied about regular program
channels. In this field those qualities which make for good leadership are what
really count.
38
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
VI. POLICY AND PROGRAM QUESTIONS
1. Participation in national policy and planning
Considerable stress was laid upon the desirability of opportunity for greater
participation by the regional directors, and the field staff generally, in the national
planning of Agency activities and policies. Through their close day-to-day
contact with program problems at their source, field personnel have a real contribution to make; but there is not felt to be any steady effort whereby this reservoir
may be tapped. Too often the field considers that decisions are made high in an
ivory tower. Earlier emphasis on consultation with regional directors on Agencj'wide matters appears to have lost headway. Washington staff tends naturally to
become so intensely occupied with technical specialties as sometimes to lose
perspective on wider problems of administration and public relations. This tends
to make regional administration revert to the unsatisfactory basis of putting out
fires. Bureau planning on a jurisdictional program basis fails frequently to give
due weight to the total Agency concept of serving the "whole man." The bureaus
also differ considerably in the extent of participation which they obtain from their
own field staffs on planning and policy questions.
Opinion was expressed that the regional directors should be consulted on
legislation, program planning, budgeting, staffing, public relations, program execution, and program coordination. This might be accomplished in several ways:
(a) More frequent personal contact between regional directors and the Administrator, Assistant Administrator and the Office of Field Services.
(6) Use of work-order committees. For instance, a small committee of regional
directors and headquarters staff, with definite instructions, could be used to
recommend to you and the Administrator a solution to a specific problem. Maybe
a State man could participate.
(c) Preparation of periodic reports on major projects under way.
(d) A more systematic travel schedule for members of the Administrator's staff.
Mr. Lund referred to efforts which have been made to overcome this recognized
weakness, but pointed out practical difficulties encountered, especially the matter
of timing with respect to development of proposed legislation.
Mr. Thurston expressed the view that consideration of proposed legislative and
other policy matters might well occupy a considerable portion of future regional
director's staff mcr-tings. A conference approach, he felt, is more productive than
a mere accumulp Ion of written comments. Also, the "work-order" committee
idea could be usec' if travel funds were adequate.
In addition to the planning of new programs stress was laid on the importance
of participation in planning for program execution. For example, the allocation
of bureau staff as between Washington and the field is a matter on which regional
directors have viewpoints and facts to offer. Moreover, they can help strengthen
the case for appropriations for field activities. The new performance budgeting
process ought to help in this area.
2. Surplus property utilization
Mr. Lund noted the following problems currently affecting discharge of functions
in this program:
(a) Shortage of staff, with no likelihood of additional staff this fiscal year;
approximately 17 field people are covering the country, with representatives
covering more than one region, in some instances;
(b) Responsibility for screening and making personal property available
requires that the personal property representative be located near the major
sources of property, which may not be in the regional office city;
(c) GSA's delay in releasing their permanent regulations has necessitated the
continuance of temporary PHS and OE regulations; however, an effort will be
made to produce in the next 30 days permanent regulations which will take into
account RD's comments at this meeting.
The situation is admittedly unsatisfactory. Some problems have been insurmountable so far. For example, absolutely no money has been made available for
the PHS activity. At headquarters, two hospital facilities staff members have
been assigned as supervisors and organizers. In the field, the hospital facilities
staff can undertake the additional load only as incidental to their main job. It
must be done on a region-by-region basis. Although an office of education field
man may be called upon occasionally to assist with problems on the health side, he
is already working over 60 hours a week in some instances. It is unfortunate that
the office of education representative must be stationed outside of the regional
office in a good many cases, but the personal property representative has to be
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
39
located at the point where there is an accumulation of surplus property if he is to
get any of it.
The primary load is in the field, and although the number of requests for real
property is relatively small compared with personal property considerable negotiation is involved in what can be a complicated legal procedure. Early decentralization was urged in the light of War Assets experience before decentralization.
GSA reorganization providing for two regions in FSA Region X, Mr. Hunter
thought, would not cause a problem; on the contrary, FSA decentralization should
parallel decentralization by GSA. Mr. Lund said decentralized screening by the
Air Force, now centralized at Dayton, does not seem likely soon. Mr. Willcox
anticipated serious legal problems on real property disposal and on certain enforcement cases, but thought that some decentralization was possible and should be
worked out.
Under the provision relating to Public Health, only real property is transferable.
There is now in Congress a bill proposing that PH have the same rights in personal
property, but limited to certain types of equipment.
Regional directors' comments were primarily focused on the need for staff, instructions, and speedy field action with better coordination of regional surplus
property representatives with the regional office. Mr. Lyle finds himself pretty
much in a vacuum and yet is under pressure to get rapid action on disposal matters. Several directors emphasized the need for closer coordination between PHS
and OE field staff and for avoiding wasteful competition where property may be
used for education and health. Problems of compliance are becoming serious in
some regions.
S. Grant-in-aid audits
This subject recurred frequently, and was discussed in some detail at the closing
session. Consideration related primarily to (a) PHS audit exceptions (b) certifications in audit reports, (c) trends in regional audit backlogs, and (d) possible
fundamental changes in approach to the audit problem.
At the request of Mr. Lund, Dr. Dean reported on work which has been by
PHS with Mr. Bigge's office in an effort to arrive at better understanding of the
question. Examination was first made of the PHS regulations and manual instructions to see if rewording might remove some of the causes of exceptions. It
was found that a large proportion of those taken were not based upon statutory
difficulties; no misapplication of funds or violation of regulations was involved,
but the question related to certain restricted items for which instructions call for
specific authorization by PHS. Understandings arrived at with Mr. Bigge's
office as to the nature of this authorization as intended by PHS, Dr. Dean felt,
would stop approximately three-quarters of the exceptions being taken. The
examination of other causes of exceptions is not yet complete.
Mr. Lyle and Mr. O'Connor expressed dissatisfaction with the practice of the
auditors in making qualifications in their certification concerning a State audit
where they find State records incomplete so that a full determination cannot be
made, or where the audit is restricted to a test check. State administrators are
sensitive to what they feel are implied questions or criticisms in these qualifications.
PHS feels strongly about this.
Mr. Lund and Mr. A'Hearn pointed out the difficulties arising from a degree of
intermingling of program funds in the States, whereas the auditors are required to
check against specific allocations or appropriations. No complete solution has
yet been arrived at, but it should be possible to make certification in more acceptable form, to remove any suggestion of suspicion. The whole area is being given
careful thought.
Mr. Bond urged review of the entire audit process to determine just what form
of audit we really want, and what is feasible with the staff we have. He warned
against allowing the audits to continue to fall behind, and felt that fuller use
should be made of State audits. He questioned the criticisms of State agency
operations sometimes included in the administrative sections of the audit reports.
Agreement with the idea of making greater use of State audits, where these are
acceptable, was expressed by Dr. Harper and Mr. A'Hearn, the joint audit approach being considered preferable. There was difference of opinion among the
regional directors as to whether, or to what extent, the audits are actually falling
behind.
Mr. Thurston noted that this whole question had been repeatedly brought up
before successive conferences, and that a timetable for arriving at an agreed-upon
policy should be set, with every effort made to meet it. He felt that positive
results would be arrived at by the time of the next meeting.
40
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
4. Regional attorneys9 participation on FCU problems
Two aspects of this subject were touched upon, with the following points
emerging:
(a) Although legal work for this program generally is intended to be centralized, consultation by regional credit union representatives with regional attorneys,
and information to the latter on FCU legal matters, are not intended to be precluded. Mr. O'Connor feels this flexibility is not clear from the instructions.
(b) Although the legal aspects of regular FCU work are now well enough known
to make decentralization feasible, the Attorney General has wanted to handle new
Federal criminal prosecution problems exclusively at the Washington level; therefore, until the matter is settled by law or Department of Justice action, Mr. Wilcox
believes legal matters for FCU will continue to flow through headquarters.
V. GENERAL MANAGEMENT
1. Techniques of Coordination were considered at several points, special attention
being given to work planning and staff meetings
(a) Periodic work programs.—A new section of the 6-month work program in
region IX now covers projects involving interrelationships among constituents.
This has stimulated interest and contributed to integration. The service units
find the plans particularly useful in forecasting service requirements. To make
the paper work simple has been a problem which has not yet been solved.
The region X work program, a copy of which was circulated to the group,
lists only major objectives and special projects—not all continuing activities.
It usually names the month during which projects are expected to be accomplished, but does not apportion man-hours. The practice of some headquarters
bureaus of requiring every man-hour to be accounted for in work programing
was referred to by several as unrealistic and overly cumbersome.
The executive assistant finds the region X program adequate for quarterly
stock taking of progress. The majority of representatives find it definitely useful
including several whose headquarters do not require formal work programs.
One, for example, reported that work programing helps him adhere to main
objectives and avoid being diverted by exigencies of the moment. Another
feels it is contributing to a better job despite a small staff. For the first time
in the history of the region, the regional medical director has undertaken a joint
review of all State programs.
The region IV work program is confined entirely to interconstituent collaborative activities. One regional director thought a 6-month period is too long for
realistic planning; that about 2 months would be better. Another suggested
that it would be easier to establish work programing in the regions if the
Washington bureaus required it universally. A countersuggestion, however
was that a local selling approach would be sounder.
Mr. Lund requested that other regions comment on the work-program systems
of region IX and X and consider whether to try out one of them, or a modification. Perhaps a consensus can be arrived at. After a year of experimentation,
it is hoped that a better synchronizing of headquarters and regional plans can
be worked out, minimizing duplication of effort.
(b) Staff meetings.—While there is no question of the value of periodic staff
meetings and no desire on the part of personnel to avoid constructive participation, it may be timely to take stock as to whether they are consuming too much
time in some regions. Current practices range from weekly round-up sessions
to monthly general staff conferences with in-between sessions on special subjects.
This latter may have advantages at the present stage. Where regular meetings
are held more than once a month it may be that special conferences can be
reduced. In any case, they should be well planned and consideration should
be given to ways ot scheduling and managing them for maximum productivity.
2. Management improvement program
In July 1949 the President issued Executive Order 10072 setting up a management-improvement program. This order places definite responsibility on agency
heads for developing a program of management improvement, viz, providing for
periodic and systematic appraisals, and scheduling actions to bring about more
effective operations. Mr. Thurston emphasized that the order gives impetus
to what is a fundamental part of an administrator's responsibility—continuously
doing a better job in managing his agency. Most reasonable people agree to
the idea but it is a little hard to be specific in putting it into effect. How con-
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
41
stituent efforts will be geared to Agency-wide efforts in the regions is not yet
worked out. An FSA Management Improvement Committee has been named
but it is recognized that headquarters should be giving more help. Some of
the regions are doing a good deal on their own.
Mr. A'Hearn reported that under Budget Bureau Circular A-8, the head of
each Agency is responsible for the development of its management-improvement
plan. Separate plans for constituent bureaus are required, because later MIP
reports to the Budget Bureau must tie in with budget estimates. Plans received
from the constituents will be incorporated in an over-all Agency plan and presented to the Budget Bureau for approval early in April.
As another approach to management improvement, Congress authorized
$1,000,000 from agency reserves to be used for special surveys. Among others
is expected to be a basic study of departmental organization with Interior as
the guinea pig.
Of special interest to regional directors is a study aimed at developing general
principles as guides to agencies in organizing their field establishments. Three
operating agencies will be surveyed: The Departments of Labor and Commerce,
and the FSA; also three service agencies: Budget Bureau, Civil Service Commission, and General Services Administration.
Bids from 11 management-consultant firms were considered and FSA participated in interviews with 7. After the firm is selected it will go to work within
about 2 weeks. (George Fry & Associates was selected March 8, 1950.) The
study will have two phases: (1) Planning phase, including a reconnaissance check,
probably in Chicago and Dallas, followed by development of a detailed plan
for the complete study; (2) the detailed study which may require 6 months to
a year. It is not certain whether Dallas and Chicago will be picked up again
in the second phase, but four regions will be selected. Functions of the service
agencies will be followed from Washington into the field, to find out how CSC,
BB, and GSA can give more adequate service to organizations in the field. FSA
regional directors ot the four selected localities will be questioned an these services
as well as their own activities.
Mr. Lund read from an outline some of the problem, areas to. be covered by the
study of agencies and stated that additional areas are mentioned.in. the Hoover
Task Report on Public Welfare (appendix P, pp. 51 and 52). Among the points
to be checked during the first phase are: (a) regional pattern, (6) operating programs and n^ld participation in program and budget formulation, (c) delegations
of authority, (d) directives and instructions, (e) systems of inspection etc. Representatives of the FSA will serve as assistants to the management firm at all
times, particularly in the development of policies. There is. every indication of
a constructive, helpful approach and Mr. Lund urged all concerned: .to be fully
cooperative in providing all facts or ideas requested.
Although regional office management improvement programs were not discussed in detail, indications of progress toward improved, methods were given
throughout the conference and some directors had very stimulating ideas about
how Budget Bureau Circular A-8 might be carried out in the field.
The regional directors want more information on the application of the MIP
to the regional offices. In some regions Budget Bureau field staff are beginning
to discuss with the regional office part of the program with FSA field staff. Anything that can be sent out by headquarters soon will be useful in these discussions.
S. Office services
(a) Regional office orientation directories.—At the request of region III the
Office of Publications and Reports, in cooperation with the Office of Field Services,
has prepared material giving a brief history of FSA and its programs, and a
description of a typical regional oflice. sot-up &ix<\ functions. This may be used
as an introductory and orientation section l"6'r a directory prepared by any regional
office which so desires. A supply of those, introductory inserts will be made
available upon request to the Office of Fielrt Services with only the cost of paper
being charged to the regional allotment. A few copies of the directory as developed in any region should be made available to all FSA offices in the region, and
may be distributed for use, in whole or m part, by students, etc. It should have
value for staff meetings and orientation reading as well as reference purposes.
Dr. Coffey's directory for region III was passed out as a sample. Also distributed was Dr. Miller's new directory for region V. No standard pattern is
prescribed for the localized part of the directory; it may include organization
charts, etc., in addition to a listing of staff. An easily revisable format is recommended.
42
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
(b) Regional filing systems.—Several interrelated aspects of this problem were
discussed at various points with the following considerations emerging:
(1) There is general agreement that a given regional office ought to work
toward a comprehensive, systematic filing plan in place of two or three systems,
or one system for certain files and no orderly system for others. Some regional
offices, such as II, have consolidated files under the Social Security System and
they are reportedly working well. In one (RO III) there was recently installed
the PHS subject-numeric system for PHS material, which some experts claim is
more flexible and simple than the SSA Dewey-decimal system for.itself, or should
it wait for further guidance? Aside from the question of a standard local system
how far should files be centralized in the regional office? Questions of physical
location and method of operation have a bearing on the answer which, after all,
should be worked out primarily in relation to the best over-all services to programs.
(2) Whether a standard system should be recommended or prescribed for all
regional offices is another question which keeps reappearing. Some regional
directors prefer autonomy on this point; others would like guidance, or even think
a Nation-wide standard system would be sensible. However, if the subjectnumeric scheme should be considered, certain bureaus, such as PA, would feel
that lack of consistency between regional and headquarters files would present
difficulties. Moreover, considerable cost would be involved in converting the
large proportion of regional files now under Dewey-decimal, and money for this
is not now available. The whole question is still under central office study.
(c) Subscriptions for periodicals.—This was discussed as an example of central
service problems. Repeatedly it was mentioned that available funds are inadequate for subscriptions to essential professional publications. The conclusion was
suggested that this item might best be left to Bureau determination and to financing from Bureau funds. Professional literature, like professional training, is
intimately related to program supervision. Perhaps this is one thing which does
not lend itself to decentralization to the regions.
On the other hand, the need for avoiding duplication of subscriptions among
constituents in the same region was recognized. A consolidated library should
help. The main problem seems to be inadequate funds for miscellaneous services,
regardless of who spends them. No complete solution is apparent but sympathetic
consideration should be given to the problem in each region.
An ancillary problem is the difficulty of conforming to PHS requirements for
separate reporting to expenditures by objects when PHS funds are comingled
with others in the regional office allotments.
(d) Need for general economy.—More than one regional director felt there is
too much tendency to spend available balances even where there is little if any
need; e. g., there is a tendency to augment travel toward the close of the fiscal
year. One region reduced telephone lines from 39 to 10 and plans to add lines
again only on the basis of well-established need. Judicious economies will be
doubly expected as we move into systematic management improvement programs.
4. Keeping in touch through reporting
The need for more systematic, two-way flow of reported facts was emphasized
by the Hoover Commission. One means of contact is through the regional visiting program of the Office of Field Services. The currently revised outline for this
was distributed but not discussed. It has been developed with the help of regional
contributions, but further individual comments are invited.
Periodic reporting by regional directors has been all long anticipated as an
eventual necessity and, with completion of the initial regional organizational
stage, now seems the appropriate time to begin. The proposed approach outlined in the kit was introduced by Mrs. Evans. It aims to make the regional
director's report a byproduct of a staff process which is useful in and of itself.
It is a "live" reporting process involving a quarterly staff conference on developments and problems which are considered major for the region's own frame of
reference. The purposes of the quarterly staff conference, and, thus, of the report,
are fourfold: to take stock, to interpret, to evaluate, and to project plans for the
immediate future.
The steps suggested are: (a) plan the agenda at a regular regional staff meeting
about 2 weeks in advance of the quarterly conference; (b) arrange for preparatory work looking toward concise, orderly presentations to be followed by free
discussions of the subjects chosen; and (c) take minutes on the discussions in a
form that will be useful to the region; and (d) edit the minutes into a high-light
summary to be sent in as the regional director's quarterly report. Preparing for
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
43
the conference, as well as guiding the discussion, will call for leadership from the
regional director; it should also aid him in program coordination. The appraisal
conference as part of dynamic reporting has been partly tried out in regions I and
X. Although the minutes as forwarded to Washington were too lengthy, the
regional directors think the idea seems to have real merit, and can be developed
through experimentation.
The proposal does not specify subject content, preferring to leave regional
directors free to select what to report on the outset. Washington may sometimes
ask that certain subjects be covered. A given report might not cover all activity
areas, but might center on one or two major matters, with other significant items
reported very briefly. It should not duplicate in detail the program reports
already being submitted to bureaus by regional representatives. It may be
related to an appraisal of progress on the 6-month work program, but a complete
inventory report is not what is envisaged in the regional director's administrative
report. (This in answer to the danger which some regional directors saw in a
conference at which everyone would have to sit through a discussion of everyone
else's problems.)
Regional directors' reports will probably be circulated to appropriate offices
in Washington. They are expected to be analyzed by the Office of Field Services
and either excerpts or a high-light summary prepared for all the regions. After
a year of experience, starting with the first quarterly report at the end of March,
this dynamic reporting technique will be appraised to see if it is really contributing
both to team-work analysis and planning in the field and to fuller understanding
in Washington.
In considering further what kinds of subjects to cover in the reports, Mr. Lund
referred to the "three P's—Progress, Problems, and Proposals." Mr. Bond
recommended (1) public opinion on legislation—grass roots trends; (2) special
matters such as a work committee in program coordination, for instance, medical
care on which OVR, CB, and PHS would join in over-all analysis in terms of the
individual to be served; (3) the status of Federal-State relations; (4) administrative items of special interest; and (5) a comprehensive section on management
improvement. Mr. Johnson suggested that a report might sometimes summarize
the impact of FSA activities upon a typical family. Information as to what is
wanted for top-side planning will help regional directors in selecting subjects.
Examples of what the reports might include are the recent Institute on Government held in collaboration with the University of Texas, the region VII information
program worked out in cooperation with UAW, the region X committee on medical care and major developments in CB or other specific programs.
Regional directors were asked to proceed with quarterly reporting systems
along the lines discussed. Washington may request special information from
time to time, but the selection of subjects, for the present, is left to the regional
director's initiative.
VII. DEVELOPMENTS HEBE AND ABROAD
1. Status of Federal legislation
Mr. Ewing summarized the status and prospects of the following:
(a) Social security legislation.—We have reason to believe that a good bill will
be passed, but it is not possible to predict the specific details of it. Chances for a
permanent disability measure are somewhat precarious, while temporary disability has been pushed aside completely. There seems to be a general feeling that
the Senate will act favorably on broader coverage.
(6) Health insurance.—Predictions here are out of the question—anything can
happen. An article in the recent issue of Time, which was totally unexpected, was
the first in any magazine of wide circulation that has given a fair description of the
objectives of the proposed health program. Fortune for March is expected to
carry a story titled, ''Health Insurance Is Next." The author, Walter Davenport,
submitted the article for factual correction, and while we did review it there was insufficient time for this review and FSA can assume no responsibility for the article's
accuracy. The article is friendly, but takes a position along lines of the Flanders
plan.
(c) Aid to medical education.—Effective support makes prospects good for this
piece of health legislation. Although in theory I think that advisory councils
should be strictly advisory, we may have to make concessions in the direction of
giving them a veto power, which some of the interest groups insist upon.
(d) General aid to education.—The controversy here is on the narrow issue of
whether Federal aid will be made available to private, nonprofit schools for auxil-
44
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
iary activities, especially busses. Feeling is strong on both sides but we hope some
legislation will be forthcoming.
(e) Reorganization proposals.—A Cabinet Department for Health, Welfare, and
Education seems reasonably possible, either by reorganization order or legislation.
Since a plan like the one last year would be turned down again, and one stopping
short of centering power in the Department head would raise questions of policy,
the line of action presents a problem. Legislation along the lines of the TaftFulbright bill is likely to be introduced2. Mr. Ewing's European tour
The State Department and everyone else who had anything to do with planning
our trip did a wonderful job. I can't imagine how I could have derived more
benefit from such a tour.
(a) Health.—On December 2, the day after our arrival, we spent an instructive
morning with Sir Wilson Jamieson and Sir Ernest Rock Carling. The latter heads
planning for the health side of civil defense, e. g., community services, water supplies, and hospital maintenance. Although, to a certain extent, these services are
auxiliary to the military in England, the latter was completely occupied with overseas operations and defenses in World War II. When Coventry was bombed, a
very serious situation would have developed if the health service had not moved
in and done what they did; and they had no remote connection with the military.
For instance, among many things, they laid about a 20-mile water main on the
ground into Coventry in less than 12 hours.
(I don't think similar planning in this country is as far ahead, although the
Public Health Service has done some work. We are handicapped, however, by
the fact that we don't know how far we should go. That difficulty should be
straightened out before long.)
On December 4, we started on intensive conferences which left almost no time
for relaxation or sightseeing throughout the remainder of our trip. Our Monday
morning conference with Dr. Charles Hill, Secretary of the British Medical Association, was a fine start. Dr. Hill, who was very frank and objective, is a conservative candidate for Parliament. We lunched that day with the Ministers of
Health and Education.
Dr. Hill arranged for us to talk with three general practitioners and two specialists to get their :.oint of view on the health services. Similarly, Dr. Walker,
Secretary of the Medical Association in Scotland, arranged for us to see doctors
in that country. And we saw many additional doctors. An excellent schedule
was arranged for us in Scotland, where we visited the Royal Scottish Infirmary
(the biggest hospital in the British Isles), two "surgeries," other infirmaries, etc.
I think you will be interested in some of our observations as a result of talks
with a number of doctors. All the doctors complained about something. I don't
think there's any question that they wish the hospitals had not been nationalized,
for that was the source of many administrative difficulties. No regulations had
been written, so that on July 5, 1948, the day on which the Government took over
the hospitals, none of the hospital executives knew, for example, what purchases
could be made. Every one of the doctors felt that a "tooling up" period of several
years, such as we have in mind, would have been infinitely more desirable.
At the end of these conferences I asked two questions:
(1) If you could turn the clock back to July 4, 1948, before the health service
program, would you do it?
(2) Laying aside your professional problems, do you think that the British
people are better off than they were before?
Only one of all the doctors answered the first question in the affirmative. That
man also said, "However, if they had done it the way you propose to do it in
America, I would have no objections." The answer to the second question was
unanimous—the British people are very much better off. The recent election
testifies to that, for both the Labor and Conservative Parties are for the health
program and would improve it. The specialists are earning more than ever before because their bills get paid.
Dr. Hill had also observed that the things they were most concerned about
originally turned out to be unimportant, while the things they didn't even think
about have turned out to be very important. For instance, a young man now
finds it difficult to get started in the practice of medicine. Previously he might
buy a practice, which is forbidden by the new legislation, or he might assist an
older man. Under the new system of capitation payments, the older doctor is
reluctant to give up patients, so that the young doctor has a hard start financially.
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
45
Another observation is that public health aspects are being badly ignored, not
by design, but due to other pressures. Construction of local health centers, envisaged in the original legislation, were to be the mechanism through which the
health service would act, but practically none have been constructed. The
Minister and others are conscious of this situation.
We went to two very different types of surgery in Edinburgh. A "surgery"
is the doctor's office, which is always located in his home. The first doctor, in a
fairly well-to-do middle-class section, said he had about the same number of
patients (800-900) as before the Health Act. He does not feel he should undertake to serve more. Yet he was of the opinion that he had suffered financially,
because his income per patient is lower. He felt it was an essential part of good
medicine to listen to people's complaints and troubles, and was not willing to
compromise on that. He had only this one major financial complaint.
At the other surgeries, in a heavily populated, working-class neighborhood,
four alert young fellows had formed a team; and each had taken on the limit of
4,000 patients. They said they were making much more money than before.
They felt they were not practicing the type of medicine they would like to practice, since very often they could not give the required time to a case. They
said, however, "The patient isn't suffering. What that means is that we send
a patient to the hospital or to the specialist instead of keeping him ourselves as
we would like to do. We are convinced that we are not overlooking anything
even in our diagnosis. We always take time to pick up symptoms. They get
their routine X-ray examinations for TB, cancer, etc." These doctors are sure
they are not missing anything that should be followed through.
A very simple solution is planned to meet the financial difficulty of the young
doctor as well as the doctor who feels his patient load cannot be increased without
decreasing quality of service. What they have in mind now is a sliding scale of
capitation payments, for example, for the first 1,000 patients, $20 might be the
payment; for the next 1,000, $15; the next, $10, etc. (The figures are purely
hypothetical.) Thus, the more thorough doctor would not lose. The older man
ought to have more incentive to share patients with a younger one, and the fast
worker would get relatively little pay for the excess patients added to his load.
We shall be able to profit by England's experience. One of the things we are
going to do is make a simple change in the language of the bill permitting a
sliding scale of capitation payments.
(The regional directors' comments during the course of Mr. Ewing's report
brought up the following matters. Mileage allowances are made to doctors who
serve rural areas. Dental services will create fundamental problems, as they
have in England; and there is a serious question as to whether such services
should be provided at the outset in this country. In this connection, Mr. Altmeyer referred to dental services in New Zealand where they follow the child
through grade and high school and where dental nurses provide supplementary
services. Mr. Ewing indicated that the British had originally planned to handle
dental services in the same way.
(Mr. Harper noted the fact that the British Medical Association, through its
executive council, had published in January 1949 an appraisal of the operations
in the first 6 months. This report mentioned a few of the weaknesses of the
program, but, by and large, was in support of it. He asked if another report
would be available covering the last year's operations.)
Continuing, Mr. Ewing mentioned an interesting talk with Mr. Davis of the
Royal Medical College in Edinburgh. He had been in Australia and in New
Zealand for a year, studying their systems. There is one important point which
I wish to stress and which Mr. Davis emphasized. If there is a fee-for-service
arrangement, the patient should be required to pay a part of the fee, and pay it
not to the doctor but to the insurance firm. The doctors in New Zealand are
putting in fraudulent claims (through unnecessary visits or simply reporting
extra visits) in order to get additional fees. According to Dr. Davis, a safeguard
would be to require the patient to pay a specified amount, to avoid unnecessary
calls by the doctor
One of the principal reasons for our visiting Sweden and
Switzerland where the systems provide such a sharing was to obtain information
on how this provision is handled administratively.
In Sweden, the patient pays the doctor's bill and, upon mailing the receipt,
receives a reimbursement check The patient pays one-third of the fee but this
will be reduced to one-fourth
Switzerland operates wholly through the voluntary insurance companies which are closely supervised by the Government.
In that country the individual buys health services plus sickness benefits in one
46
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
package. He cannot buy one of them singly. He can purchase sickness benefits
up to a certain percentage of his wage—not more than half, I think. The premium
that is paid determines the size of the sickness benefits from which percentage
is deducted for the doctor's bill.
(Mr. Altmeyer indicated that New Zealand is presently considering another
method of preventing abuse by the doctors. The proposed plan is to assign the
patients of a district to a group of doctors and say "O. K., here is your pot of
gold. Divide it up as you see fit." The lack of professional self-discipline in
that country is upping tremendously the costs of the program through this
"overtreatment.")
There is another important activity which I should report to you. The malariacontrol project being conducted on the island of Sardinia will have an enormous
effect on the development of the island's economy. That island, capable of
taking care of 3,000,000 people, has only 1,000,000, with a very low standard of
living because of the prevalence of malaria. The Rockefeller Foundation asked
both Dr. Bauer, who is supervising the project, and Lee Dayton, No. 2 men in
ECA in Italy which has contributed to this project, to visit the island. Through
the control project the entire island was mapped out and then disinfected with
DDT. As a result, there has been only one new case of malaria in about the
last 15 months.
Another thing on the medical side is the Public Health Service cancer grants
in Israel. We found that a good job is being done there under difficult circumstances.
(b) Education.—As soon as the GI program ends in this country I don't think
there is any question that there will be pressure for aid to the colleges. The
small denominational schools in the Middle West will be particularly hard hit.
We were interested, therefore, in the British program for aid to colleges and
universities. Their program is incredibly simple. It started following World War
I. The Chancellor of the Exchequer has an appropriation for a 5-year period for
use in support of higher educational institutions. He has set up a University
Grants Committee made up of university representatives, professional men, and
leading citizens. The Committee proposes the distribution of funds and recommends the amount he should ask Parliament to appropriate, and the Chancellor
usually follows the Committee's advice.
Scotland has a scholarship system that is probably the most far-reaching in
the world. There, any talented student can get a Government-paid education,
regardless of the family's financial circumstances. Under this system, if the family
is dependent on the student's earnings, the grant will be large enough to replace
what his wages would be. The system is carefully administered and has not been
abused. Scotland is proud of its program, and rightly so.
(c) Administration of Supplementary Industrial Retirement Plans.—One other
point of interest came out of our talk with Arthur Griffith, Minister for National
Insurance in Great Britain. The British Government will do the administrative
work on any supplementary industrial insurances program. Actually, they have
done it for the coal industry only, which has since been nationalized. They think
the additional burden is negligible, since they have the wage record on which the
supplementary plan would be based.
The Social Security Administration is giving thought to the possibility of giving
such a service to industry. I understand, however, that it would be difficult to
do, since our records do not go beyond those needed for social-security calculations.
(Mr. Altmeyer referred to Marjorie Shearon's criticism of Social Security Administration for furnishing information relating to operation of the United Mine
Worker's retirement fund. Mrs. Shearon claimed without basis that there had
been violation of the confidential nature of the records. Social Security Administration does not furnish information affecting individuals unless there is a
written request or authorization from the employee himself. Mr. Altmeyer noted
that there is a community of interest between the Government and the supplementary plans which should be recognized.)
8. Mr. Altmeyer's observations in New Zealand
New Zealand, a very young country, is of volcanic origin, sprung up out of the
sea. So, there were no mammals there of any kind. The result is that they have
flightless birds that stay on the ground because there are no predatory animals
to prey on them. The Maori, a very vigorous, warlike Polynesian group settled
there in 1350. Not until a little over 100 years ago, did any white people settle
there. The people who settled there, of course, were for the most part English
and Scotch.
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
47
They devastated the country. They cut over the timber; they burned it; they
didn't use fertilizer until just a few years ago. They shortcropped the grass. It
is a beautiful country being washed down into the sea. They are trying to recover
lost ground and are making a good job of that now.
The industries are small, comparatively speaking. Ninety percent of the activity
is agricultural—sheep, cattle, and dairy products. Ninety percent of their exports
are to the mother country. Their ties with the mother country are very close.
You feel you are walking down the streets of a British town. There is little news
of the United States of America; but of England, the newspapers are full.
New Zealand is as close to being a classless society as there is in the world
today. The Maoris are in agricultural and city work. There are about 100,000
of them out of a population of 1,800,000. The islanders are very proud of them.
They are always talking about the Maori culture and means of preserving it.
They are very proud of how the natives are developing. Their education and
their health are being looked after very well. It is quite a contrast with what
we are doing for our Indians.
New Zealand has had compulsory arbitration since the turn of the century.
The result is that common labor rates have been upped, and semiskilled and
skilled not to the same extent, so the spread is only about 25 percent from the
wages of a common laborer to the wages of a skilled laborer. I talked with the
chairman of the arbitration court, a very fine man who has been in that field for
11 or 12 years, and he admitted that was true. The result, however, is a classless
society—a lower middle class society. There are few extremely rich people, few
extremely poor people, just more or less a uniform level of wealth.
You have to admit that the people are well clothed, well fed, well sheltered.
They have a wonderful housing program. The houses are nice, tasteful with two
or three bedrooms and rent at about $15 a month in our money. The policy of
the preceding government was not to finance home ownership but to build government houses, and to rent on the theory it was too hazardous for a person with a
small income to own his own home. The new government says that is contrary
to free enterprise, so they are going to sell these houses at a low price to whomever
wants to buy them.
There is a great over-employment there, with more than 30,000 jobs unfilled.
They told me that they didn't know whether they had 16 or 17 workers drawing
unemployment insurance.
There are probably 800,000 gainfully occupied persons. They have a 5-day
week*, 40-hour week. And that actually means 5 days; it doesn't mean staggering.
No stores or factories are operating on Saturday. Even the hotels go on a
skeleton staff. The whole commercial industrial life of the country ceases on
Saturday and Sunday.
Meat is very plentiful. The choice cuts may cost as much as 20 cents a pound.
However, clothing is not cheap.
Their social-security system, of course, is the most developed of any, except
perhaps the British now. They have all types of benefits, including family
allowances. They say the family allowances are increasing in the Maoris
population.
As I say, they have these children's allowances; they have unemployment
insurance; temporary disability; permanent disability; old-age; survivors, and
health insurance. They also have a "catch-all" category called emergency
weekly benefits. If anybody fails to fall in one of the categories, he is taken
care of in that miscellaneous category.
You must bear this in mind in comparing their social-security system with
ours. They collect a 7^2-percent income tax which covers about two-thirds of
the cost of their social-security program. The other one-third is paid out of miscellaneous governmental receipts. All benefits are flat benefits of so much a week.
They have had health insurance since 1938. They started out with a plan for
capitation payment, but the doctors revolted so they permitted fee for service.
The doctors can either bill the Government directly or bill the patient and let
the patient be reimbursed by the Government. About 63 percent bill the Government directly. Dr. Cook, who is in charge for the Ministry of Health, guessed
half of those 63 percent were also being charged extra by the doctor. He thought
that practically all of the 37 percent that charged the patient were charging the
patient more than the Government fee of 7 shillings sixpence.
There are really two health systems in that country. Under the fee-for-service
system the patient is charged anything the doctor wishes to charge. Under the
hospitalization system, however, the service is completely free, and the doctor is
on a salary or fixed-stipend basis. Ninety percent of the hospital beds belong
to the Government.
48
EMPLOYEE UTILIZATION IN EXECUTIVE DEPARTMENTS
This was a phase of the health program that I was not aware of. New Zealand
really does have socialized medicine in the hospitals. The care there is free and
that doesn't mean just hospital maintenance. Everything connected with any
hospitalized case is paid for by the Government; that includes therapeutics,
laboratory, general practitioner, and specialist. Just as in Britain, they have the
general practitioner on full-time salary; and the specialist is paid a stipend not to
exceed $600 in our money. Most of the specialists want to be affiliated with the
public hospitals. It has prestige value and they also have their private practice
outside.
Mr. Altmeyer answered several questions following his presentation. He
indicated that, although British doctors criticized the Government for the shilling
charge for prescriptions, the New Zealand doctors think that the patient should bd
charged a part of the cost of any service he receives. The ratio of physicians to
population is fairly good—about 1 to every 1,200.
Australia is committed to bigger and better social security, effective not later
than January 1, 1951.
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@FedFRASER