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Kunin Helps Lead Crusade To Trash Government Waste

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WASHINGTON--She does not carry any props, such as the "ash receivers, tobacco, desk-type''--also known as ash trays--that Vice President Gore uses as his standard example of comically cumbersome federal purchasing guidelines.

But Deputy Secretary of Education Madeleine M. Kunin speaks with the same passion as the Vice President about the decidedly unglamorous topic of government effectiveness. Just as President Clinton tapped his number-two to lead a National Performance Review that is examining ways to improve the operations of the federal bureaucracy, the Education Department's effort to combat waste and inefficiency is Ms. Kunin's domain.

She faces a particularly tough set of challenges in reforming an oft-maligned department that was on the verge of extinction a decade ago and, by most accounts, suffers from a culture of defeatism.

"Probably the most important thing we are doing is taking the management issues very seriously,'' Ms. Kunin said in a recent interview. "We're getting the message that if we are to deliver on our promises, we have to improve the management of the department. We're very aware of the burden of the past, very conscientious of the promises we've made.''

From their first days in Washington, Mr. Riley and Ms. Kunin named improving management at what they called "a demoralized agency'' as one of their priorities.

Vice President Gore's thirst to clean up the federal bureaucracy, which will culminate in a report to be released this week, has given much impetus to Ms. Kunin's efforts.

So have the numerous studies critical of the department that have been issued over the past few years by Congress, the General Accounting Office, and the department's inspector general.

Among other criticisms, these reports have noted that the department lacks a long-term vision, is without qualified employees with financial and accounting backgrounds, and has done a particularly shoddy job of overseeing the Family Education Loan Programs.

The problems, according to current and former department officials, did not occur overnight, but are traceable to the earliest days of the 13-year-old department.

It was carved out of the old Health, Education, and Welfare Department by the Carter Administration in 1980 in fulfillment of a campaign promise to the National Education Assocation.

That origin, said William D. Hansen, who served as the assistant secretary for management and budget under former Secretary Lamar Alexander, meant that the department was "sliced out of other agencies and slapped together like a quilt.''

The process was subject to political pressure from groups that wanted their programs in or out of the new agency, and critics say a lack of coherence resulted.

In addition, the new department was staffed predominantly by educators, and it never acquired the appropriate personnel to keep track of finances and manage student loans.

By the mid-1980's, the loan program was growing so rapidly and the government losing so much money to defaulted loans that Inspector General James B. Thomas spent the lion's share of his office's resources--as much as 80 percent--investigating fraud and abuse among postsecondary participants.

A Debilitating Legacy

Meanwhile, scant months after the department's birth, Ronald Reagan replaced Mr. Carter and issued orders to dismantle it.

That effort failed, but the legacy of the Reagan era--in which the agency's staff was sliced by 40 percent--lingers. The department's workforce has grown since then, to nearly 5,000, but is still smaller than it was in 1980. At the same time, its budget and programs have increased.

The result has been an agency low in morale, a condition that was exacerbated by frequent turnover among high-level political appointees.

"I think they have always been working under a cloud,'' said David T. Kearns, Mr. Alexander's deputy. "I think there was a certain uncertainty about the department and where it would go.''

When Mr. Kearns joined the Bush Administration in 1991, part of his mission was to improve the department's management techniques. The former chief executive officer at the Xerox Corporation, Mr. Kearns was credited with turning around a complacent, sinking company and re-establishing it as a worldwide giant.

He brought with him perhaps the hottest management philosophy in recent years: Total Quality Management.

Focus on Quality

The process aims to instill a sense of purpose in career managerial employees, who often are shut out of management decisions or see the direction of their program areas shift as a result of the resignation of an assistant secretary. It is also an attempt to depoliticize the department.

"I think there is some tension,'' Mr. Kearns said. "I think that the good career people see management coming and going, and I think it's tough, often, to deal with that. That's why I was so interested in total quality.''

The theory is that by bringing civil servants together with political appointees, the department should be better able to draw on the career employees' expertise, and provide continuity when an assistant secretary resigns or an entire administration is replaced.

Indeed, Mr. Riley and Ms. Kunin say they are building upon Mr. Kearns's T.Q.M. efforts, and they have asked their assistant secretaries for a four-year commitment so that career employees can build healthy relationships with them.

Those commitments are not legally binding, however, as Ramon C. Cortines, Mr. Riley's choice for assistant secretary for intergovernmental and interagency affairs, proved by accepting the chancellorship of the New York City schools.

Nevertheless, the new Administration has "formalized'' the T.Q.M. process, as Mr. Thomas put it.

"The important thing is the continuity, which in my long tenure in government I haven't seen too often,'' he said.

Career managers have had extraordinary influence in the development of such legislation as "goals 2000,'' an upcoming proposal for reauthorization of the Elementary and Secondary Education Act, and direct lending, Ms. Kunin said.

One senior career official called the department's outreach "tangible.''

And lower-level, nonsupervisory workers are also being brought into the fold.

"We're getting some good vibes from them, that they want to involve some of the union people in strategic planning and reinventing government,'' said Paul Geib, the president of the American Federation of Government Employees local that represents more than 2,000 department employees. "We may be moving away from a confrontational standpoint, which may have been the case in some instances in the past.''

Total Quality Management also suggests a commitment to customers. That will include, Ms. Kunin said, a greater emphasis on waivers and flexibility for the school districts and other entities that receive federal education grants.

She said it might also mean that department officials will have to call for the politically next-to-impossible--program consolidation.

This flexibility, however, must be combined with new evaluation measures that monitor performance rather than compliance, she said.

While officials are receiving kudos for their T.Q.M. efforts, they have barely begun tackling what may be their single biggest challenge--performing major surgery on the guaranteed-student-loan program.

The Administration plans to gradually convert the loan program, which consistently has been the most scrutinized territory within the department, from one in which lenders and guarantors serve as conduits between students and the federal government to one in which the government makes loans directly to students.

Critics question the department's ability to run a direct-loan program, noting that the current program has been subject to high degrees of fraud and abuse, and arguing that its managers lack the financial expertise to run it correctly.

'Hell of a Challenge'

"I think it's going to be a hell of a challenge, to be honest with you,'' said Jay Eglin, the General Accounting Office's assistant director for higher-education programs. "They have to clean up their act on the known problems, but also gear up for a new program.''

But Ms. Kunin insists the department will negotiate the obstacles.

New employees with financial and accounting backgrounds are being hired to help administer the program, she said, highlighting the recent selection of Donald R. Wurtz, a former G.A.O. director of financial-integrity issues and a department critic, as chief financial officer.

Moreover, the Deputy Secretary said, "Our customers will tell us whether or not they are satisfied.''

Permeating all of these efforts is the development of a strategic plan, which would be the department's first, and the establishment of a coordinating council, a group of political appointees and career managers who will continue the department's reinventing-government effort once the Vice President's report is released.

Department officials, Ms. Kunin said, are developing "a shared sense of mission for the department.''

"We expect to stay here for eight years and make a long-term commitment,'' she said.

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