steps toward a stable future EPA An Assessment of the Budget and Personnel Processes of the Environmental Protection Agency by a Panel of the National Academy of Public Administration May 1984 ------- About the National Academy of Public Administration The National Academy, a nonpartisan collegial society, was formed in 1967 to advance the ef- fectiveness of government at all levels through sound management and counsel on the practical implications of public policy. In its extensive work program the National Academy has con- ducted studies or performed services for state and local governments, the Congress and Judiciary., and nearly every major department and agency of the executive branch. The National Academy's members, elected by their peers, consist of practitioners and scholars of public administration, notably present and for- mer Congressmen, Cabinet members and White House officials, as well as governors, mayors and local leaders, and businessmen and women with significant experience in government service. Congress and the President honored the National Academy with a federal charter in April, 1984. ------- STEPS TOWARD A STABLE FUTURE A Report by a Panel of the National Academy of Public Administration Assessing the Budget and Personnel Processes of the Environmental Protection Agency May, 1984' National Academy of Public Administration 1120 G Street, N.W., Suite 540 Washington, D.C. 20005 202/347-3190 ------- NATIONAL ACADEMY OF PUBLIC ADMINISTRATION 1120 G Street, N.W., Suite 540, Washington, D.C. 20005 202/347-3190 April 20, 1984 Mr. William D. Ruckelshaus Administrator Environmental Protection Agency West Tower, Room 1200 401 M Street, S.W. Washington, D.C. 20460 Dear Mr. Ruckelshaus: On behalf of the National Academy and its Panel—Frank C. Carlucci, chairman, Robert W. Fri, John W. Gardner, Simon Lazarus, Gerald L. McManis, Dale R. McOmber, Robert E. Merriam, Ersa H. Poston, Victoria Tschinkel and William N. Walker—it is my. privilege formally to transmit to you the Panel's final report, entitled "Steps Toward A Stable Future." We commend you and Deputy Director Aim and EPA's new top leadership for initiating programs to achieve the consistent, stable management and capacity for long-term planning that are needed to accomplish the goals Congress has set for the Agency. Further, we agree with your own emphasis on the importance of enhancing the morale and the professionalism of the EPA workforce— recommendations to assist the Agency move toward those objectives are the most sweeping in this Panel's final report. The National Academy expects to follow closely EPA's implementation of the Panel's recommendations. It is our view—which we are pleased to know that you share—that the management reforms introduced under your leadership now must be made a permanent feature of the Agency's operations. I know that I speak for the Panel and its staff in extending our thanks to the hundreds of EPA employees and officials who cooperated with us in conducting this assessment of the Agency's personnel and budget management processes. incerely, Jackson Walter resident Enclosure Affiliates: National Academy of Public Administration Foundation and National Institute of Public Affairs ------- J UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON. D.C. 20460 APR 2 5 1984 THE ADMINISTRATOR Mr. J. Jackson Walter President National Academy of Public Administration 1120 C Street, NW, Suite 540 Washington, DC 20005 t Dear Mr. Walter: Thank you for the Academy's Panel report. Steps Toward a Stable Future, which assesses EPA's budget and personnel processes. Deputy Administrator Al Aim and other senior managers have reviewed the report and join me in complimenting the Panel and the Academy. I will be expressing my personal appreciation to chairman Frank Carlucci and other members of the Panel. We agree with the basic thrust of the Panel's recommendations in both the budget and personnel areas. EPA senior managers are developing implementation plans to achieve the objectives of the principal recommendations in the report. In fact, we are moving quickly to estab- lish a new Office of Human Resources Management at EPA—one of the report's most significant recommendations. On May 1, I will be meeting with the Panel members and Agency managers and staff to launch the new organization. The best way I can express my gratitude for this excellent report is to assure you and the Academy of my personal commitment to institu- tionalizing the best management practices and systems at EPA. I believe carrying out the recommendations of the report will go a long way in fulfilling that commitment. Sincerely, William D. Ruckelshaus ------- PREFACE Why in the world should anyone care about the internal management of an agency of the Federal government—in this instance, the personnel management and budgeting systems of the Environmental Protection Agency? Careful students of environmental affairs detect and report shifts in policy on toxics or changes in the levels of appropriation for the Clean Air Act or an escalation in the politics of acid rain; but very little notice is paid to changes in EPA's executive devel- opment program or the organization of its research labs or any of the other management decisions that substantially determine the capacity of the Agency to protect our environment this year and in the future. EPA's new leadership does care. The obvious question has to be, why? Part of the reason must be a recognition that the ambitious goals of curbing pollution of our land, air and water that Congress has set for the Agency will not be achieved without consistent, stable management and a capacity for long-term planning. The National Academy of Public Administration began its assessment of EPA's personnel management and budgeting systems in the summer of 1983 at the request of the then newly-confirmed Administrator, William D. Ruckelshaus. It is the standard practice of the National Academy that its projects be directed by a Panel of its Members and invited outside experts and that the findings and recommendations be the Panel's. As President, it was my privilege to talk with each of the panelists before his or her appointment. Without exception, each of the ten—Frank C. Carlucci (Chairman), Robert W. Fri, John W. Gardner, Simon Lazarus, Gerald L. McManis, Dale R. McOmber, Robert E. Merriam, Ersa H. Poston, Victoria Tschinkel, and William N. Walker—commented to me that the commitment of the Agency's new leadership to this open, broad-ranging and intensive review of two important aspects of EPA's management would be a constructive initiative that commanded their respect, support and participation. A major emphasis of this Panel report concerns the EPA employees. I have two preliminary comments on this aspect of the Panel's work: first, this assessment of EPA's personnel management and budgeting systems strongly confirms the diagnosis set forth in another recent National Academy Panel Report, Revitalizing Federal Management (November 1983), that Federal managers feel a frustrating loss of relevance and control, that must be turned around if the programs they administer are to succeed; and second, EPA's workforce from top to bottom retains a high commitment to their public responsibilities and the Agency's pro- grams. These two comments are based upon information about EPA employees that was collected by the Panel and its professional staff through extensive in- terviews with EPA's new top leadership, with Agency employees in each of the ten regional offices and its major laboratories and with outside experts, and through a questionnaire survey of more than one-tenth of EPA's 11,000 employees. I want to thank the panelists and staff of this project and, in particular, to cite the work of Frank Carlucci, the Panel Chairman; Betty Bolden and Eldon Taylor, the staff directors of the personnel and budget studies respectively; Alan Dean, immediate past Chairman of the National Academy's Board of Trustees, who worked on this project as a special assistant to Mr. Carlucci; and Robert Haught, our regular and reliable editor. J. Jackson Walter President n ------- CONTENTS Preface ii Steps Toward A Stable Future 1 The Panel's Assignment 1 The Agency and Its Challenges 1 The Panel's Findings 2 Developing the Workforce 3 Creating a Human Resources Director 3 Institutionalizing Career Development 3 Explaining the Basis for Promotion 3 Supporting the Senior Executive Service 3 Reducing Presidential Appointments 4 Encouraging Presidential Leadership and Congressional Support 4 Improving EPA Management 5 Consolidating the Statutes 5 Addressing Fragmentation , 5 Reprogramming for Flexibility 6 Improving a Sound Budget Process 6 Opening the Budget Process 6 Encouraging Long-Range Planning and Regional Input 6 Improving R&D Effectiveness: A Special Case 6 From Contention to Consensus: A Summary of Findings 7 Executive Summary 9 The Panel 9 The Staff 10 Developing the Workforce 11 Policy and Operations 11 Personnel Office Staffing and Services 11 Workforce Planning 11 Recruiting and Staffing 12 Position Classification and Position Management 12 Career Development and Training 12 Performance Appraisal 12 Labor Relations 12 Incentive Awards 13 Equal Employment Opportunity 13 Development and Utilization of Executives 13 Morale and Motivation of EPA Staff 14 Program Evaluation 14 Automated Personnel Systems 14 Improving EPA Management 15 Statutory Complexity 15 Strategic Planning 15 Complexity and Detail in the Budget Document 15 Regional Office Participation in the Budget Process 15 EPA Use of Resource Distribution Models 15 Confidentiality of Budget Estimates 15 Flexibility in Budget Execution 16 EPA Management Accountability Systems 16 Budgeting for Superfund Administrative Expenses 16 Administrative. Information Systems 16 Communication and Training 16 Improving R&D Effectiveness: A Special Case 17 Budgeting for Research and Development 17 Human Resources Management in Research and Development 17 iii ------- STEPS TOWARD A STABLE FUTURE A Report by a Panel of the National Academy of Public Administration Spurred by strengthened leadership and internal management reforms during the past nine months, the Environmental Protection Agency is bounding back strongly after a drop in public confidence and a period of low employee morale. In our view as public administrators, the Agency today is moving on its own initiative in the right direction. To hasten EPA's recovery as an effective agency and to provide right now for a future of consistent and stable administration, we offer additional recommen- dations. Because the Agency's workforce from top to bottom demonstrably retains a high commitment to their public responsibilities and EPA's programs and because events have established that a strong bipartisan consensus supports those programs, we urge prompt attention to the processes of implementation. , THE PANEL'S ASSIGNMENT The Agency's new leadership asked us to concentrate on EPA's internal man- agement rather than public policy. Government agencies operate with two principal resources—employees and dollars—and while budget and personnel procedures rarely attract sustained public scrutiny, they do contribute substantially to the capacity of an institution to provide leadership and implement public policy. When the National Academy invited us to join together on a Panel to undertake this review last summer, each of us agreed to participate because we believed the Agency's leaders were displaying good faith in requesting an outside assess- ment of EPA's internal operations and that they were prepared to accept and implement good counsel. We were told that our independent appraisal of pro- cedures was meant to be an important additional step toward confirming man- agement's readiness to work for the restoration of employee and public confidence. Given this favorable climate, we believe that a virtually unprecedented opportunity now exists to achieve and preserve a new and higher level of professional and technical competency in EPA. It is our overriding concern that the Environmental Protection Agency should be protected from the vacillations in management and approaches to public policy that have taken place in recent years and that it be encouraged to pursue a permanent mission that transcends partisan politics. Accordingly, while we applaud reforms already initiated by the Agency and propose additional internal improvements, we believe a stable future requires presidential support and consistently high- quality appointments to leadership within the EPA. No formula for administrative reform can substitute for strong support and leadership at the top, which must come from the President. A stable future requires presidential support and consistently high-quality appointments to leadership within the EPA. EPA has attracted a bright, aggressive, talented and committed workforce . . . THE AGENCY AND ITS CHALLENGES Our review of the qualifications and experience of the Agency's workforce spotlighted its great variety and professional diversity. EPA is the workplace of industrial hygienists, chemical, physical and electrical engineers, aquatic biolo- gists, nuclear physicists, epidemiologists, meteorologists, atmospheric chemists, lawyers and public administrators, among many others. In this respect, it resembles a university, except that its campus covers the Nation and it must carry out its assigned missions in the unrelenting glare of public scrutiny. The Agency was created in 1970 by a presidential reorganization plan rather than by a legislative act of Congress. Lacking the advantages of a generic statute, the Agency instead inherited the disparate programs, responsibilities, facilities and personnel of other Federal organizations and agencies. Its immediate challenge ------- The Agency today is moving on its own initiative in the right direction. EPA leadership must cope with the changing nature of its statutory mandates and public policy responsibilities. was to meld a diverse and inherited workforce into an effective organization. Today there is still no single overriding congressional directive driving EPA. Instead, it has absorbed the missions prescribed in 11 different statutes. These laws fall under the jurisdiction of numerous committees of the Congress. Not surprisingly, the statutes affecting EPA are not always consistent—either in detail or in overall trust—with each other. To illustrate the challenges confronting the Agency from the Congress is the fact that as we prepare this report, 9 of the Agency's 11 major statutes have expired. Yet the Agency is expected to pursue the mandates in those statutes and be able to handle new environmental issues as yet unrecognized. EPA leadership must cope with the changing nature of its statutory mandates and public policy responsibilities. It must also lead a complex intergovernmental system in which many environmental protection activities are carried out by state and local public agencies. While addressing long-term and persistent problems such as water and air pollution, the Agency must at the same time respond to more immediate environmental emergencies such as those involving specific chemical pollutants. Yet another challenge to effective administration is the tension between technical and scientific issues and public policy considerations. The blending of technical and policy considerations at EPA—critical to rulemaking—is complicated by the fact that much of the science on which the policies must be based is at the frontiers of knowledge. Within this distinctive Agency, EPA research and development activities serve special roles. Unlike the individual programs EPA administers, R&D cannot be isolated but must serve the entire Agency as a resource. Responsibility for long- term basic research as well as for work under deadlines in specific programs creates tension. Accordingly, R&D merited special attention from the Panel to ensure its ability to pursue this dual role effectively. Aggravating these challenges, the Agency suffered a crisis in public confidence until last spring. The entire leadership of the Agency was replaced by a new team. We are persuaded that the management initiatives of this new team's leadership are sound and deserving of support. THE PANEL'S FINDINGS Environmental.protection is a permanent public responsibility. Accordingly, we support steps in the direction of permanence and stability at EPA. Agency leadership should complement its management reforms with initiatives toward institutionalizing the professionalism needed in so complex and critical a field. Rather than proposing sweeping reforms, however, we recommend a number of moves in the direction of more effective management, confident that they will be steps toward a stable future. EPA does not need to be insulated from politics, but it does need the management structures and procedures and the high quality personnel necessary to accomplish the ambitious goals the political process has set for the Agency. Accordingly, we recommend against conversion from its current status within the Executive Branch to a multi-member commission purportedly independent of presidential direction. The electorate supports environmental protection and EPA is far more likely to benefit from having the President directly responsible for its performance than from any illusory insulation from partisan politics. Congress, the President and EPA should work together to overcome the frag- mentation of the Agency's basis in law and accountability to Congress. The ultimate goal of this cooperation should be an organic act for the EPA. In the process, common administrative strategies—for example, permitting, enforcement and other administrative procedures—should be devised and adopted whenever ------- Congress and the Executive Branch identify recurrent issues in existing environ- mental statutes. We provide a blueprint for further refinement of EPA's budget and personnel processes. We were not asked to determine whether the Agency now has adequate funding or sufficient staff assigned to its various programs but rather to concentrate our investigation on identifying ways in which the budget and personnel processes can be improved to serve Agency needs. EPA needs both a high-quality career workforce and competent, professional leadership. DEVELOPING THE WORKFORCE Since its creation and in part because of the broad public support for its programs, EPA has attracted a bright, aggressive, talented and committed workforce, many of whose members are also intellectually and emotionally involved with the cause of environmental protection. As we and our staff spoke with EPA civil servants, a common theme emerged: many entered public service solely, or primarily to work for EPA. The strong overall commitment of EPA's career employees to its mission has been of critical importance to an Agency that is inherently difficult to manage. Administrator William D. Ruckelshaus appears to recognize this. "I will make a special effort to harness the energies and talents of the people at EPA toward the Agency's mission," he told the Senate Environment and Public Works Com- mittee in May 1983, responding to senators' concerns that the EPA workforce was seriously demoralized. "EPA's greatest resource today is the same as when we started—its people." Throughout all of the Agency's activities—in research, enforcement, air and water pollution control, hazardous waste management, and external affairs— assuring continued high-quality performance on the part of EPA employees is critical to Agency effectiveness. To provide incentives for that optimum perfor- mance, the Panel firmly believes that EPA personnel and human resources ac- tivities need to be substantially enhanced and given greater emphasis within the Agency. Creating a Human Resources Director. We recommend that the personnel function in the Agency be strengthened and redirected to stress career development within the EPA workforce. Toward that end we urge the creation of a new position, Director of Human Resources, reporting directly to the Assistant Administrator for Administration and Resource Management, to emphasize that career devel- opment involves much more than routine personnel services. Institutionalizing Career Development. We further recommend that EPA undertake a comprehensive and coordinated career development and executive development effort on behalf of its employees. Such an effort not only will improve morale but will create an even more capable career workforce to meet the Agency's goals. Many EPA employees are currently prisoners of their career specialties and their geographic location. A fundamental objective of the Agency's career de- velopment and training should be the removal of barriers to functional and geo- graphic mobility. We found that EPA does not encourage aggressively enough the Agency-wide experience that is needed in top career managers. Explaining the Basis for Promotion. We recommend that professional and geographical diversity of experience be required for promotion into the Agency's Senior Executive Service (SES). We also recommend that the Administrator clearly establish and announce this policy to EPA employees. Supporting the Senior Executive Service. We believe that the EPA thus far has missed an opportunity to institutionalize continuity and stability in its programs by inattention to its SES. We found that personnel services, functions and com- munications activities with SES employees need strengthening. Among our rec- Progress toward a comprehensive environmental protection statute may be slow, but it is worth the effort. ------- EPA's statutory fragmentation leads to budgeting rigidities, impedes efficient administration, and causes confusion. Congress, the President and EPA should work together to overcome the frustration of the Agency's basis in law and accountability to Congress. ommendations to improve SES program management is to have those responsi- bilities specifically assigned to a senior officer within the jurisdiction of the Director of Human Resources. By this means, senior EPA personnel will be assured of resourceful direction and support no matter where they serve in the Agency. Reducing Presidential Appointments. The Agency has 13 political officers whose posts are subject to presidential appointment and Senate confirmation. That number is extremely high compared to other large Executive Branch agencies (though not Cabinet departments) and impedes continuity.* We urge that the number of presidentially-appointed/Senate-confirmed positions at EPA be cut back to be more in line with comparable agencies. We recommend the EPA Assistant Administrator for Administration and Re- source Management—the key headquarters position in terms of assuring stability through transitions in top management—be designated as an SES career-reserved position, effectively removed from the political appointee category. To isolate environmental R&D from partisan political considerations and to support the long-range nature of environmental research, we recommend that the EPA Assistant Administrator for Research and Development either be designated as an SES career-reserved position or be nominated by the President and confirmed by the Senate for a fixed term of not less than five or six years. Such action will help the Agency institutionalize and stabilize the kinds of research management initiatives needed to improve program implementation. In keeping with our general view that there are too many presidentally-ap- pointed/Senate-confirmed positions at EPA, we recommend that the Agency's new leadership cooperate with the White House and the Congress in identifying positions that could be filled on a different basis that would promote the long- term interests of the Agency. Our concern here is to encourage and enable EPA to attract and retain competent professional managers who will achieve the con- sistent, stable administration that we believe the Agency needs. Encouraging Presidential Leadership and Congressional Support. It is im- portant to note that in promoting stability, we are not aiming at "depoliticizing" the Agency in any way that would isolate it from the Administrator, the President or the Congress. For instance, we agree with many of the EPA employees in- terviewed who endorsed the appropriateness of regional administrators being either career or non-career appointees of the Administrator. However, we do urge that Deputy Regional Administrators and Deputy Assistant Administrators be desig- nated explicitly as "career-reserved" positions, a recommendation which in effect affirms the Agency's historic practice of keeping those positions largely free from political influence. To ensure that the Agency continue to develop and retain qualified employees, the President must make and the Congress approve political appointments of the highest quality. Truly competent and qualified managers and professionals—in career and non-career and presidentially appointed/Senate-Confirmed jobs alike— clearly can be attracted to policy leadership positions at the EPA, as the Agency's current management team illustrates. It is important to note that, based on our professional staff's interview findings, EPA employees endorse this characteristic of their current political leadership. But finding, attracting, and confirming such individuals is a joint responsibility warranting vigorous and demanding attention from both the President and the Congress. To continue to develop popular bipartisan support for the programs of the Agency, we observe that EPA needs both a high-quality career workforce and *E.g., the largest Executive Branch independent agency—the Veterans Administration—has three such officials, the National Aeronautics and Space Agency has three, the Federal Aviation Ad- ministration (as an independent agency and as a part of the Department of Transportation) has two. ------- competent, professional leadership. It is the responsibility of the President and the Congress to see to it that these conditions are met. IMPROVING EPA MANAGEMENT The history of the Environmental Protection Agency and the history of modern pollution control at the Federal level are the same. Established by Presidential Reorganization Plan No. 3 on December 2, 1970, EPA was made responsible for administering all but one of the major pollution control statutes.* EPA is responsible for carrying out provisions of: • The Clean Air Act; • The Federal Water Pollution Control Act, also known as the Clean Water Act; • The Noise Control Act; • The Federal Insecticide, Fungicide and Rodenticide Act; • The Environmental Research, Development and Demonstration Authoriza- tion Act; ' • The Marine Protection, Research and Sanctuaries Act; commonly known as the Ocean Dumping Act; • The Safe Drinking Water Act; • The Resource Conservation and Recovery Act; • The Toxic Substances Control Act; and • The Comprehensive Environmental Response, Compensation and Liability Act, commonly known as "Superfund." Consolidating the Statutes. In our investigation of EPA's budget and personnel procedures, we were struck by the extent to which they mirror the disjointed legal structure of the Agency. At a time when the general public understands that environmental problems comprise a seamless web, the Agency is left to administer statutes that do not reflect the interrelationships between land, air, and water. Since EPA is responsible for administering laws that originated in many congres- sional committees and subcommittees, the Agency has expressed frustration over the need to testify before 19 House committees and subcommittees plus seven Senate panels. Agency officials appear before Congress as often as 90 times a year to deliver similar reports. Redundant testimony aside, EPA's statutory fragmentation leads to budgeting rigidities, impedes efficient administration and causes confusion. Statutory frag- mentation, moreover, costs more money than would consistency. Congress and the EPA should begin to develop an organic law covering pro- tection of earth, air, and water. Progress toward a comprehensive environmental protection statute may be slow, but it is worth the effort. Addressing Fragmentation. Despite prevailing overlap of congressional ju- risdiction over federal environmental laws, there still are opportunities for EPA to address its responsibilities in a comprehensive and consistent manner. We recommended that EPA, the Executive Branch, and Congress work closely to identify common approaches implicit in the environmental laws. Common administrative strategies can be devised for all of them. We recommend further that state program grants, research and development, administrative procedures, enforcement, and permitting in many cases be made consistent among the enabling laws. The resulting uniformity—even if limited to procedures—could improve Agency management, public understanding and long- term environmental success. Many EPA employees are currently prisoners of their career specialties and their geographic location. In our judgment, EPA must undertake major efforts to improve the management of its people. *The Council on Environmental Quality was assigned primary jurisdiction over the National En- vironmental Policy Act and the Department of the Interior is responsible for administering much of the resource- and conservation-oriented legislation regulating protection and development of the nation's minerals and other natural resources. ------- That the Agency works as well as it does is a tribute to its people. We recommend enhancing the role of EPA's regional offices in overall budget preparation. Reprogramming for Flexibility. The House and Senate appropriations com- mittees have established ceilings of $500,000 and $250,000 respectively for the reprogramming of Agency funding. Because committees of both Houses must approve reprogrammings, Agency flexibilty in shifting funds in fact is limited to $250,000, and that limitation unreasonably restricts the kind of flexibility essential to good management. We recommend the reprogramming ceiling in both House and Senate appropriations reports be set at $1 million, with reprogrammings above the amount subject to Congressional consent. Improving a Sound Budget Process. We found in the Environmental Pro- tection Agency a well-established and fundamentally sound budget process which, on the whole, satisfies the needs of Agency managers, administration officials and congressional committees. The system provides timely and accurate man- agement information. Nevertheless, it can be improved. W^ note that the EPA was introducing reforms before we began our review. They promise to strengthen the Agency's budgeting process. We recognize that difficulties encountered in budgeting at EPA largely reflect problems inherent in the Federal budget process. That process can become so time-consuming and so resource-intensive that it comes to be viewed as an end in itself. We strongly agree that zero-based budgeting, formerly required through- out the Executive Branch, was inordinately time-consuming and that the end product at the Agency was not improved. With the abandonment of zero-based budgeting, EPA managers and employees are in a much better position to focus on budgeting as a management activity that profits from experience in building a predictable future. Opening the Budget Process. We applaud the initiatives being taken to open the budget process within the Agency. EPA managers are moving to include in budget deliberations all key parties at headquarters and in the regions. We strongly endorse this opening up of the budgeting process to input from across the Agency as an integral component of comprehensive environmental management. We recommend enhancing the role of EPA's regional offices in overall budget preparation. To this end we approve the current practice of having a "lead" region represent EPA regional interests in coordinating with headquarters national program managers. However, overall responsibilities of both the lead regions and of the national program managers need to be better defined. We recommend expanding the process by which lead regions are selected to participate in program budget planning so that regional offices themselves are included in the lead region selection process. Encouraging Long-Range Planning and Regional Input. We endorse the Agency's recent adoption of a two-year planning document that addresses upwards of 35 priority activities for the next operating year and the following budget year. That document will help the Agency arrive at budgets driven by decisionmaking needs, avoiding the trap in which decisionmaking becomes the captive of prior budget constraints. While endorsing the two-year planning approach as reasonable for all EPA programs, we encourage EPA to draw up longer-range plans in certain select areas. We also support the notion that key management commitments arising from the Agency's Administrator's Strategic Planning and Management System be applied to Agency officials' performance evaluations. Accountability supports priority-setting, decisionmaking and program execution. IMPROVING R&D EFFECTIVENESS: A SPECIAL CASE Public policy in the environmental, pollution control, and natural resources fields requires marrying technical sciences with the social sciences and politics. ------- In few areas of American life must science and policy work so closely to achieve overall benefits for society. Within EPA the R&D activities are fragmented in ways we conclude are not productive. This function should be accorded greater prominence and permanence, as our recommendation concerning the Assistant Administrator for R&D makes clear. The R&D organization does not make sense. The Agency inherited laboratories scattered across a dozen states. Unfortunately past recommendations to consolidate the Agency's 14 laboratories have met resistance from EPA's research employees and from Congress. Although we believe that consolidation is but one avenue to improving R&D management, we do favor appropriate consolidations as circum- stances permit. Specifically, we favor concentrating EPA's multi-discipline re- search activities at the Agency's Cincinnati, Ohio and Research Triangle Park, North Carolina centers, with center directors reporting directly to the Assistant Administrator for Research and Development in Washington. We believe that R&D should have its own budget, should 'be directed to concentrate on broader problems and pursue science beyond the narrow needs of individually funded programs, and should constitute an integral component of the Agency. Moreover, we recommend that Congress pass enabling legislation spe- cifically authorizing basic and interdisciplinary environmental research within EPA to serve the Agency as a whole and the permanent interests of environmental protection across the nation. FROM CONTENTION TO CONSENSUS: A SUMMARY OF FINDINGS Our review of EPA's budget and personnel processes has confirmed what its Administrators have claimed—that it is a complex and difficult Federal agency to administer. It has no coherent legislative base, only a collection of complex and sometimes inconsistent statutes to administer. It is intensely political—in the sense that virtually everything it does directly touches the public—yet its actions must be scientifically and professionally above reproach. And EPA has a major leadership role in devising and installing innovative administrative arrangements that permit and encourage a shifting to state and local governments of more of the responsibility for implementing national environmental policies and programs. These are difficult assignments. That the Agency works as well as it does is a tribute to its people. We were consistently impressed by the talent and dedication of EPA's employees. They clearly want to be where they are, and doing what they are doing. EPA's effectiveness in its complex mission will continue to depend on its employees. It is accordingly a matter of highest priority that talented employees continue to be attracted, motivated, and retained. They also must be developed and managed along lines supportive of the Agency's programs, which increasingly involve the coordination and oversight of complex intergovernmental regulatory arrangements in which state and local officials make the site-specific decisions. They must be led, at the senior career level, by managers sensitive both to the professionalism and objectivity the public demands of EPA and to the legitimate policy views of elected political leadership. And EPA must have personnel and budget processes consistent with these needs and with the need to translate policy into specific goals and resources that give direction to its talented staff. In our judgment, EPA must undertake major efforts to improve the management of its people. We cannot state this conclusion too strongly, for it should impart a real sense of urgency in adopting programs to correct these weaknesses. Having said that, however, we offer no simple solution. The answer is not a closed "service" like the IRS, Forest Service, or other models. The answer is to do many things better than they are now being done. That is why we make many recommendations on personnel matters and that is why we think each of them Despite its youth, [EPA] is already evolving from the contentiousness that characterizes new experiments in government to the spirit of consensus surrounding many older public institutions. R&D should have its own budget, should be directed to concentrate on broader problems and pursue science beyond the narrow needs of individually funded programs. . . ------- The new leadership at EPA has been notably successful to date in restoring direction and morale. deserves prompt and sustained attention. We do not mean to set forth a menu from which to choose. Good progress already has been made regarding budgetary matters. EPA's budget system, while complex and laborious, is about as sensible as the law and review needs allow. It can be improved, and we add several recommendations to actions already underway to that end. Three of our chief recommendations fall outside purely budget and personnel matters. But they set a framework of some importance: 1. We encourage rationalization of EPA's statutory base over the long run. It cannot but help matters, although legislative change alone will not insure improved management. 2. We urge a number of long-range management changes in the R&D function, which must be pursued vigorously for several years to be effective. These are management, not organizational, changes. 3. We believe that no formula for administrative reform can substitute for strong support and leadership from the President, who has the central re- sponsibility for appointing consistently high-quality, competent management officials who can earn the public's confidence and the respect of EPA employees. The new leadership at EPA has been notably successful to date in restoring direction and morale. Our recommendations are intended to identify opportunities for further improvements in Agency management and long-range planning. Within the Federal establishment, EPA is a virtual newcomer, barely 13 years old. Despite its youth, it is already evolving from the contentiousness that char- acterizes new experiments in government to the spirit of consensus surrounding many older public institutions. We intend our recommendations to advance that gradual, but inevitable, evolution, and to build upon broad public support of the Agency's goals. ------- EXECUTIVE SUMMARY Steps Toward a Stable Future A Report by a Panel of the National Academy of Public Administration The Environmental Protection Agency, under contract 68-01-6778, commis- sioned the National Academy of Public Administration in July, 1983 to undertake intensive studies of the Agency's personnel management and budgeting systems. The purpose of these studies was to identify strengths and weaknesses in the management and utilization of EPA's people and its resources, and to recommend improvements to enable the Agency to administer more effectively the laws enacted by Congress to protect and enhance the environment. To conduct these studies, the National Academy assembled a 10-member Panel of Academy members and other individuals who have had distinguished public service careers. Members of the Panel* were: < * Frank C. Carlucci (Chair). President, Sears World Trade, Inc. Former Deputy Secretary of Defense; Deputy Director, Central Intelligence Agency; Ambassador to Portugal; Under Secretary, Department of Health, Education and Welfare; Deputy Director, Office of Management and Budget. Robert W. Fri. President, Energy Transition Corp. Former Head, U.S. Delegation to the International Atomic Energy Agency; Deputy Administrator, Energy Research and Development Administration; Deputy Administrator and Acting Administrator, EPA. * John W. Gardner. Chairman and founder, Independent Sector; Former Chairman, Common Cause; Secretary, Department of Health, Education and Welfare; President, Carnegie Corporation of New York and the Carnegie Foundation for the Advancement of Teaching. Simon Lazarus. Partner, Powell, Goldstein, Frazer & Murphy. Former As- sociate Director, White House Domestic Policy Staff; Attorney, Arnold & Porter. Gerald McManis. President, McManis Associates. Former Senior Associate, Cresap, McCormick and Paget; Department of Defense executive responsible for application of systems analysis techniques to management problems. Dale R. McOmber. Former Assistant Director for Budget Review, Office of Management and Budget. * Robert E. Merriam. Partner, Alexander Proudfoot Co. Former Chair, Ad- visory Commission on Intergovernmental Relations; Deputy Assistant to Pres- ident Eisenhower; Deputy Director, Bureau of the Budget. * Ersa H. Poston. Former Vice Chair, Merit Systems Protection Board; Pres- ident, New York Civil Service Commission; Member, International Civil Service Commission. Victoria Tschinkel. Secretary, Florida Department of Environmental Reg- ulation, and Member of the Energy Research Advisory Board, U.S. De- partment of Energy. William N. Walker. Partner, Mudge Rose Guthrie Alexander & Fredon. Former Deputy Special Representative for Trade Negotiations, Geneva; Di- rector, Presidential Personnel Office; General Counsel, Federal Energy Office and Cost of Living Council. * Indicates member of the National Academy. ------- The Panel selected as director of the personnel management study team Betty Bolden, Deputy Assistant Secretary of Labor for Administration and Management, on assignment to the National Academy. She was assisted by John Campion, Jack Sante, Joan Anderson, Kathleen Warren, Maureen M. Yagodka, and Kathel Carroll. Staff director for the budget process study was El don D. Taylor, former In- spector General of the National Aeronautics and Space Administration and a former top administrative officer both for EPA and the National Science Foun- dation. He was assisted by George Pilarinos, Patricia L. Foreman and Darlene Pilarinos. The teams carried out an extensive interview program, contacting EPA per- sonnel in the Washington, D.C. headquarters, in the 10 regional offices, and four of the Agency's research and development laboratories. The project also involved interviews with officials of other federal agencies and with union officials, and review of numerous EPA task force reports, guidance documents and other man- agement information. Comments were solicited from members of Congress. The personnel study team utilized a seven-page questionnaire to analyze em- ployee and supervisor attitudes. The voluntary participation survey produced 1,033 responses, a 60 percent return rate of the 1,730 questionnaires originally distrib- uted. Individual Panel members reviewed and commented on drafts of the budget and personnel staff reports, and the Panel met six times for group discussions of the findings and recommendations and for discussion with top EPA officials. Following is a summary of the Panel's recommendations as they appear in the two extensive staff papers: 10 ------- DEVELOPING THE WORKFORCE The Panel's Recommendations as detailed in the Staff Report on the Personnel System Policy and Operations • EPA leadership should communicate to all concerned its high standards for management of the Agency's human resources. • The personnel function should be given a higher level of organizational stature, conceptual scope and top management support. Specifically, the function should be elevated to the Office level, comparable to the Comptroller. The Director of Personnel should be retitled the "Director of Human Resources Manage- ment," or some similar title, to demonstrate responsibility for planning and programming, over and above day-to-day "personnel administration." • The proposed Director of Human Resources Management should be insulated to the extent practicable from involvement with day-to-day operating personnel matters. • The proposed Director of Human Resources Management should consciously reorient the personnel function to an interventionist role, identifying and pur- suing needed personnel initiatives. Personnel Office Staffing and Services • The proposed Director of Human Resources Management should reexamine the distribution of resources among essential programs in the staff-level func- tions. • A workload model should be developed as a guide for the staffing of field personnel offices. • The Agency should provide a structured career system for those engaged in personnel office occupations. • EPA should review the field servicing pattern and realign it to best meet the Agency's needs for providing responsive personnel services. Workforce Planning • EPA should begin a workforce planning process. • In the process EPA should analyze the numbers of personnel in existing job categories by program, headquarters and field, and determine if these categories are currently appropriate. • The Agency should analyze current technical expertise and develop and maintain a list of Agency-wide and regional technical experts. • A policy should be developed on current hiring which will address future needs of the Agency. • The Agency should analyze Headquarters/Regional workload proportions and staffing allocations and determine if they are appropriate in light of further delegation. • EPA should install a comprehensive personnel management information system which will permit the Agency access to information on each member of its workforce which is both current and accurate. • On the basis of present and projected skills needs, the personnel management information system should be used to plan for the acquisition of skills for now and the future, and the necessary training and development required in light of Agency needs. 11 ------- Recruiting and Staffing • The Personnel Management Division should carefully and thoroughly assess the adequacy of present means for bringing employees aboard from the outside. • EPA should develop a systematic strategy for both identifying needs and for filling positions. • The personnel offices at both staff and operating levels should reorder their priorities to give immediate attention to filling of vacancies. Position Classification and Position Management • The Personnel Management Division should define the minimum classification program required of field activities, and top EPA management should assure that they have the resources to carry it out. • EPA should broaden the planned reinstatement of regular periodic surveys in Headquarters to cover the entire Agency and to deal with other kinds of position management problems. Career Development and Training • The Administrator should advise all employees of his commitment to an im- proved career system at all levels of the Agency with heavy emphasis on his intention to develop and maintain a workforce sufficient to meet the challenges of the future. • EPA should design and schedule the implementation of a comprehensive pro- gram of career development and training for both its present and future work- force. • The Agency should take appropriate means to reduce the over-ceiling condition present in some laboratories by offering reassignments to other locales, thus permitting a better balance of skills and providing for the infusion of new blood. • To introduce an infusion of new blood into the workforce, EPA should consider establishing an Agency-oriented successor to the PACE as well as using existing means as represented by the Presidential Management Intern Program. Performance Appraisal • EPA should continue to stress, at all levels, the coordination of systems to manage programs and measure success with the content of individual perfor- mance standards. • Standards should be developed from the top down and each level should have some knowledge of the performance requirements of their superiors. • The standards set at each level should be used to actually manage the work, rather than just to evaluate performance. • Any changes which must be made in the merit pay and performance appraisal instructions from year to year should be kept to a minimum and should be fully explained to all concerned in order to promote employee feelings of stability and predictability. • EPA management should redouble its training and communication efforts with managers, supervisors and employees about the systems and their interrela- tionships. Labor Relations • EPA should continue to develop and apply labor-management relations policies and practices which take advantage of the opportunity to enlist union partner- ship, as representatives of employees, in achieving management's goals for a motivated, satisfied and participative workforce. 12 ------- Incentive Awards • The Agency should establish mechanisms and processes for analysis, oversight and review of the program, as well as guidance to improve the program in terms of consistent use and equity. • The Agency should establish or use more non-monetary methods of recognition of employee contribution and performance. • The Agency should make greater use of the employee suggestion program to help counter the perception that management is not interested in employee ideas on improving work operations. Equal Employment Opportunity • EPA should maintain the current field organizational structure, but establish the EEO Officer position as full time; disseminate program goals, policies and responsibility for the Assistant Regional Administrators/Management Division Directors to whom the EEO Officer reports; and provide sufficient resources to support attainment of EEO goals. • Accountability for the recruitment and development of minorities, women and handicapped should be included in the Strategic Planning and Management System and in the performance standards of senior managers. • EPA should split the Affirmative Action/Special Emphasis function in Head- quarters, assign one person to each function, and reorganize the staff to reflect the policy and oversight role. • The Agency should establish a feedback process to make certain that the Office of Civil Rights is aware of Administrative Law Judges' efforts to resolve complaints, both informally and formally. • The Agency should establish performance standards and a range of permitted time for persons assigned collateral duty responsibilities for Special Emphasis Programs. • Visible support should be provided to Special Emphasis Programs by all levels of EPA management. • In conjunction with the reemphasis to be given to supervisory development in structuring an EPA career system, the Agency should develop mandatory courses which focus on supervisory responsibility in equal employment opportunity. • The Agency should establish program manager targets for both upward mobility and bridge positions; personnel should review selection criteria to assure no unwarranted emphasis is placed on formal college training. • EPA should reinstitute the recruitment program at historically black colleges under the joint leadership of the Directors of Personnel and Civil Rights; the program should aim at more use of cooperative education appointments which will lead to permanent EPA appointments as opposed to providing short-term employment or temporary solutions to ceiling problems. Development and Utilization of Executives • A career-reserved SES position should be established in the Office of the proposed Director of Human Resources to manage the SES programs of EPA, including intake, development, assignment, policy development and imple- mentation. • The Agency should establish SES personnel policies and communicate them to the EPA SES corps. • SES bonus information should be publicized in sufficient detail to take some of the mystery and suspicion out of the process. • The Agency should finalize SES R1F procedures and publicize them to the staff. 13 ------- • The Agency should establish a system for communicating directly with SES members on matters that affect them, such as SES vacancies, personnel policies, and executive development seminars. • The Panel recommends increased use of short-term seminars (one day or less) which would have both programmatic and management topics. • Orientation programs should be developed for new political executives which clearly explain the SES in general and the EPA program specifically; one objective of the orientation should be to foster, at an early date, a respect for the career executives who will implement the policies that the political exec- utives will establish. • EPA should seek administration approval and congressional authorization to establish the Assistant Administrator for Administration and Resources Man- agement as a career-reserved position in the SES. • EPA should seek administration approval and congressional authorization to establish the Assistant Administrator for Research and Development either as an SES career-reserved position or a PAS position with a fixed term of not less than five or six years. • The Deputy Regional Administrator and Deputy Assistant Administrator po- sitions should be changed from general to career-reserved. • The SES candidate program can be improved by (1) structuring the future program to include preferred work experiences which reinforce the Agency's new career development approach; (2) providing for GS-14 eligibility to en- courage a greater number of field applications; and (3) making candidate as- signments which reflect the Agency needs for more broadly based managers. Morale and Motivation of EPA Staff • EPA should give Agency-wide publicity to task force recommendations which will be implemented emphasizing those which will address communication and coordination problems. The Agency should use the Strategic Planning and Management System to track progress in implementing selected EPA Task Force Report options, and issue periodic progress reports to staff. • The Agency should explore—within current OMB publication restrictions— how it can improve communication both within EPA and with its constituencies: state and local government/industry/environmental groups. • All levels of management should be encouraged to establish formal and informal methods of employee communication. Program Evaluation • The proposed Director of Human Resources Management should institute an aggressive program evaluation program to assure compliance with programs and guidance and keep managers informed of the status of personnel manage- ment in their organizations. Automated Personnel Systems • EPA should actively pursue the analysis of personnel ADP alternatives already tentatively begun, and select the approach which best meets its needs. • The effort to revitalize the personnel data system should be led by the users. 14 ------- IMPROVING EPA MANAGEMENT The Panel's Recommendations as detailed in the Staff Report on the Budget Process Statutory Complexity • The EPA and the authorizing committees of the Congress should work together to enact legislation that provides consistent language in the environmental statutes for such common functions as state assistance, research and devel- opment, permitting, standard-setting, enforcement, and administrative proce- dure. Strategic Planning • The Panel endorses implementation of the Guidahce and Strategic Planning changes outlined in the Deputy Administrator's Memorandum of November 2, 1983 and recommends that several strategies be selected annually for analysis of longer term (3- to 5-year) trends. Complexity and Detail in the Budget Document • The Panel endorses the Agency's decision to eliminate the implementation of zero-based budgeting. • The Agency should continue to base its budget formulation on functional analysis so as to retain the management benefits that accrue therefrom. • The Agency should continue to move toward fewer program elements in the budget structure, more concise budget narratives, and a somewhat higher level of aggregation of activities and accomplishments in the budget pricing analysis. Regional Office Participation in the Budget Process • The budget process improvements suggested in the Headquarters/Regional Re- lationships Task Force Report should be implemented. • The Deputy Administrator should serve as the focal point for evaluation of the proposed balance between Headquarters and Regional funding in the formu- lation of initial budget estimates. • The Agency should provide a conflict resolution mechanism, with the Deputy Administrator as the focal point, to moderate disputes that may arise as part of the Lead Region budget collaboration process and assure that positive Head- quarters-Regional relationships are not disrupted by the process. EPA Use of Resource Distribution Models • The continued use of workload models for Regional resource allocation is recommended. When used effectively, models can yield substantial related benefits such as more realistic budget justifications, improved staff commu- nication, and enhanced program accountability. • The Agency should develop a formal policy on resource models that addresses the question of consistency in design approach and technical validity of model construction. • The Agency should clearly define the function of resource model design and modification as a joint Headquarters/Regional responsibility and that the policy require the full participation of the regions in the process. Confidentiality of Budget Estimates • The Agency should open its budget formulation process to permit the sharing of estimates between the major programs and the regions, recognizing that the benefits of openness outweigh the costs of possible information leaks. 15 ------- Flexibility in Budget Execution • The Congress should provide the Agency with increased reprogramming flex- ibility by raising the present $250,000 and $500,000 thresholds to $1,000,000. • The Agency should conduct a review of internal control systems to insure that managers are delegated the maximum flexibility possible. EPA Management Accountability Systems • The Panel endorses the Agency's approach to program and management ac- countability and recommends that the systemic improvements initiated during the Budget Study be implemented. • The Agency should review the impact of data collection requirements that have accumulated in recent years to reduce the load and provide a review mechanism for proposed new requirements. Budgeting for Superfund Administrative Expenses • OMB, EPA and the appropriate authorizing committees in Congress should consider a revision of CERCLA which would permit funding of EPA admin- istrative expenses within the regular Salaries and Expenses appropriation and eliminate them from the site cleanup cost recovery process. • As an alternative, the Panel recommends legislation that would permit funding of EPA administrative expenses within the S&E appropriation and would pre- scribe a statutory formula for recovery of the administrative expenses on a site- specific basis. Administrative Information Systems • EPA should establish an Agency objective to achieve horizontal integration of administrative ADP systems for grants, contracts, personnel, payroll budget and accounting. • EPA should establish an Information Systems Steering Committee composed of representatives from both line and staff user organizations, to advise on the development of administrative ADP systems, stressing horizontal compatibility and a view of information systems as an Agency-wide resource. • EPA should conduct a cross-system study of administrative processes to provide a strong foundation for software design. Communication and Training • EPA should develop a new budget manual and implement a procedure that assures the issuance of regular, periodic updates. • A training course should be designed for EPA personnel covering the EPA planning, budgeting and accountability processes. ------- IMPROVING R&D EFFECTIVENESS: A SPECIAL CASE The Panel's Recommendations as detailed in the Staff Reports on the Personnel System and the Budget Process Budgeting for Research and Development • "R&D Program Manager" staff positions should be established in the Head- quarters R&D complement, with responsibility for media-based planning and budgeting, liaison with national program managers, and operation of R&D management accountability systems. • Multi-discipline Research Centers should be formed at Cincinnati and at Re- search Triangle Park, with the center directors reporting to the Assistant Ad- ministrator for R&D. • The Agency should seek enabling legislation and support from OMB for its basic research and interdisciplinary research activities. • The Agency should work with OMB to develop a more coherent approach to the presentation of the R&D program in the budget document. Human Resources Management in Research and Development • The Assistant Administrator for Research and Development should be either an SES career-reserved position or a PAS position with a fixed term of not less than five or six years. • The Personnel Division should conduct a review of ORD labs that receive personnel services from Las Vegas to determine quality and responsiveness of personnel management services, and corrective action taken if necessary. • EPA should assign resource management responsibility at ORD headquarters and multi-lab sites whose focus would include (a) development of ORD staff across laboratory lines; (b) retraining of employees whose skills are not being utilized fully due to changes in EPA research priorities; (c) assuring supervisors have the necessary skills to develop, motivate, and direct subordinate staff; and (d) provision of central direction for optimum utilization of equipment. • The Agency should establish an ORD-wide career development perspective which focuses on (a) the functional cross-development of its professional staff as opposed to the development within a single media; (b) the upgrading of the skills of supervisors; and (c) retraining employees whose current skills are out of alignment with EPA's program priorities. • Both the lab directors and the Assistant Administrator should periodically communicate to ORD staff regarding local and national program goals, strat- egies for reaching the goals, and how employees' duties relate to such goals and strategies. 17 U.S. GOVERNMENT PRINTING OFFICE : 1984 0 - 441-469 ------- National Academy of Public Administration Officers Phillip S. Hughes, Chairman of the Board J. Jackson Walter, President S. Kenneth Howard, Treasurer Sheldon S. Cohen, Secretary Board of Trustees Phillip S. Hughes, Chairman Under Secretary The Smithsonian Institution Anita F. Alpern Distinguished Adjunct Professor in Residence The American University Robert P. Biller Vice Provost University of Southern California Hale Champion Executive Dean John F. Kennedy School of Government Harvard University Sheldon S. Cohen Cohen & Uretz Washington, D.C. Morris W.H. Collins, Jr. John C. Stennis Chair in Political Science Mississippi State University Lyle C. Fitch Chairman of the Board Institute of Public Administration Arthur S. Flemming Director Coalition for Quality Integrated Education S. Kenneth Howard Executive Director Advisory Commission on Intergovernmental Relations Thomas D. Morris Consultant Washington, D.C. Sylvester Murray City Manager City of Cincinnati Elsa A. Porter Distinguished Practitioner in Residence Washington Public Affairs Center University of Southern California Rocco Siciliano Chairman, Chief Executive Officer TICOR Elmer B. Staats President Harry S. Truman Scholarship Foundation Richard A. Wegman Wellford, Wegman, Krulwich, Gold & Hoff Washington, D.C. ------- |