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E.D. 'Top-Heavy' With Managers; Too Centralized

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Washington--A panel of business executives appointed by President Reagan to find ways of cutting government costs has concluded that the Education Department is "top-heavy" with managers and should be more decentralized to improve its efficiency and to help solve a serious morale problem among its junior staff members.

"At the core of many of the problems facing the department today is the lack of a financially oriented and thoroughly seasoned management able to deal effectively with the uncertain and rapidly changing environment in which the department operates," noted the education task force of the President's Private Sector Survey on Cost Control in a report released earlier this month.

The task force offered 60 recommendations that, if adopted, could save the department an estimated $3.15 billion over the next three years. Most of the cost savings would come from the consolidation and improved management of the department's National Direct Student Loan (ndsl) and Guaranteed Student Loan (gsl) programs.

Gary L. Bauer, deputy undersecretary for planning, budget, and evaluation, said the department will not comment on the task force's report, which is part of a larger report on the entire federal government, until it is officially presented to the President for his consideration. The group will make its full report to Mr. Reagan later this year.

Dealing With Problems

"The department has a history of being unable to deal effectively with a variety of problems," a situation that has become much more intense in recent years due to difficult operating circumstances, the report said.

First, the report noted, problems associated with the creation of the department in 1980 "could not help but divert management attention from the many trouble spots already present in basic operations."

That situation was made worse by the Reagan Administration's call for the department's abolition and its replacement with a sub-Cabinet-level foundation, it continued. Clashes between the President and the Congress over the abolition plan and other education-policy matters "have combined to seriously inhibit planning processes within the department," the task force said.

The department's focus now "is almost entirely on day-to-day situations. ... Expensive 'band-aid' fixes have pre-empted carefully planned policies and procedures designed to produce a better long-term result at lower cost. [This] lack of planning has substantially reduced the department's effectiveness in influencing the future course of educational policy, and Congress has moved in to fill that void."

Uncertainties about the department's future, furthermore, have also resulted in "low employee morale and correspondingly poor productivity," the task force said.

In addition, the report noted that "steps taken to gain control over the numerous education-related activities" added to the department after its creation in 1980 have resulted in a "top-heavy" organization.

"Nearly 60 percent of [the department's] employees are in a variety of headquarter staff units which control operation of the program offices," it said. "Authority has been highly centralized at the expense of operating efficiency and rapid reactions to the needs of the educational community."

The task force said that several steps should be taken to help solve the department's management problems. The proposals include:

The redefinition of the department's mission and the development of specific objectives for all staff and program units.

The transfer of authority, resources, and freedom of action to program managers in order to let them "get their jobs done on a timely and cost-effective basis."

The development of a comprehensive longer-term planning program with active participation of both program and staff personnel. "Communication channels must be kept open for effective team play," the report said. "This is not the case at present."

The transfer of "unrelated activities" from the department, such as civil-rights enforcement, student-housing loans, and rehabilitative services--in order to free management "to concentrate on operations more directly concerned with educational assistance."

Further Consolidation

The task force also noted that the department could save a total of $45.8 million over the next three years through further consolidation of categorical-aid programs into block grants and through the acquisition of modern automatic data-processing equipment.

Members of the education task force are: Spencer F. Eccles, president, chairman, and chief executive officer of First Security Corporation of Salt Lake City; Alfred H. Kingdon, former editor in chief of Financial World magazine; Nathan R. Owen, chairman and chief executive officer of General Signal Corporation of Stamford, Conn.; and Robert H. Willis, chairman and president of Connecticut Natural Gas Corporation of Hartford, Conn.

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