OPENING STATEMENT OF FORDYCE W. LUIKART, DIRECTOR OF ADMINISTRATION DAVIS COMMITTEE HEARINGS ON MANPOWER UTILIZATION HOUSE OF REPRESENTATIVES - 11/3/55

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP60-00213A000100030009-3
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 7
• Document Creation Date: December 9, 2016
• Document Release Date: August 3, 1998
• Sequence Number: 9
• Publication Date: November 3, 1955
• Content Type: STATEMENT

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O Y - N G S E N OF- FORD W. LWIKART, DIRECTOR OF? " STt TION
MAVIS SUBCOMET-M H WINGS ON MAZ POWER UTIIIZTION
HOW OF REPRESEITATIVES - 11/3/55
W. C~rmn and Members of the Committee:.
v. Folsom., Secretary of the Department of Health., Education., ar_i
6telf'a;t ee, bas asked me to represent him at this hearing in response to
your request of October 15.
I think it might be helpful to the Committee if IT ,re to do two
things: to read., for the benefit of any who are present who may not
&ave had the opportunity to read it, Mr. Folsom's letter of October 26
to your Committee, and then to supplement this statement of the
Se cretary with a number of comments which will help to put in perspect Un;
thx,-: various activities of the Department.
Foflowi is Mir. F'olsom's letter of October 26, 1955:
"Dear- Mx. Chairman:
This is in response to your letter of October 13, 1955,
asking for information as to actions taken by this Department
on the uggested steps for manpower control contained in your
arse-mora um entitled, 'Seminar on Manpower Utilization in the
Federal Gin rernment . '
"The principal objective which you and your Subcommittee
have before you, as I understand it, is that the programs of
'the Federal. Goverment should be administered in the most
efficient and economical manner to the end that there be no
waste of manpower or money.
"I subscribe fully to that objective. Since assuming
the post of Secretary of this Department on August 1, 1955,
1 ,ve e?essed repeatedly to the people here my desire
that we do everything possible to insure that the programs
for which we are held accountable are administered at the
lowest possible cost to achieve the established objectives
as authorized and directed by the Congress without Impair-
ment of services to the people of this country.
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"To attain that goal, in addition to the established
programs of budget review and management improvement, I
have requested that certain steps be taken. Those steps
may be described collectively as a request on the principal
officers of the Department for a continuing review of acti-
vities and solution of major organization and management
problems within their jurisdictions so that administrative
costs may be kept at an economic minimum.
"Specifically, as a part of the measures taken, I have
authorized the establishment of an office of Internal Audit
and an office of Management Policy. Each of these offices
with a very small staff in the office of the Secretary will,
be of assistance to our program managers throughout the
Department in achieving the best possible management of their
responsibilities and will, together wit h other established
management review processes, provide assurance to me that
management throughout this Department is as efficient as
possible.
"In addition, we are instituting personnel utilization
audits in selected parts of the Department. Certain opera-
tions of the Department already have established ratios of
people needed for specific operations. These have been care-
fully developed over the years and are being applied. I refer
specifically to such staffing ratios in many repetitive
processes in the Bureau of Old-Age and Survivors Insurance,
in certain personnel operations, in voucher examination, and
In Public Health Service hospitals. In certain other opera-
tions where we do not have such staffing ratios, personnel
utilization audits may be helpful in developing them.
"This specific program, the conduct of personnel
utilization audits, is, I believe, in tune with the objectives
and methods of improving management which your Committee has
in mind.
"Having recently assumed office as Secretary of this
Department, it is incumbent upon me to proceed wisely in
reviewing programs and in taking steps to strengthen the
management of our programs. The programs of this Department,
some of which are expanding, are staffed within appropria-
tions authorized by the Congress after careful review of the
need by both the Executive and Legislative Branches. To
take action precipitously to reduce or "freeze" personnel
without careful re-appraisal of need might seriously impair
vital services which Congress has directed to be rendered to
the people of our country. The program I have outlined above
seems to me to be a sound course of action and not out of
line with the basic objectives of your Committee.
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"Speaking specifically to the four suggested steps in
your memorandum, I have the following comments:
"l. Freeze Order: The immediate issuance of a 'freeze
order on personnel hirings without the 'acts as to
personnel. need and use of present staff would be an
action which presumes that we have more people on the
roll than, ar?e required to discharge the responsibilities
assigned. This is a particularly risky step to take in
connection with our, health, education, and welfare pro-
grams which have been given specific mandates to expand
by recent actions of Congress. Expanded medical research,
improved Indian health services, and expanded services
under the Old-Age and Survivors fiance law are examples
of such specifically authorized and essential increases.
These are programs which touch the lives of all our citi-
zens and any impairment of ser ices, especially recently
authorized ended services, would be undesirable.
" 2. Review of Delegations of Authority: It is my under-
standing that this Department has arrived at the present
system of delegations of authority, particularly for
hiring people, after considerable experience and study
extending over a number of years. Nevertheless,, I am
having farther studies made of this subject with the
hope of further improving the delegation arrangements
affecting my office and the operating units throughout
the Department. E :rienee dictates, howevere that good
personnel utilization does not necessarily result from
highly centralized control of operations r?e1 ;ing to
hiring people. Good utilization basically is the product
of good supervision at each level. In the conduct of our
utilization audits, it is our hope that supervisors will
be given additional help in this area, of management.
"3. Establishment of apecific Numerical. Goal for the
Reduction of Manpower: As stated previously, this
Department already has established in some areas ratios
of people needed to an certain operations. In other
operations that is not true but we hope that our personnel
audits will give us greater guidance in this respect.
"i+. Functional and Personnel Utilization Audits: As
indicate above, vwe have already decide to conduct
personnel utilization audits on a selected basis
throughout the Department.
"Again I should like to assure you of my wholehearted agr'e-
anent with your objective that the Post of doing the business of
vernment represented by the number of people on the payroll
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should be career scrutinized on a continuing basis.
The efficient utilization of manpower has been under
continuous resew in this Department for a number of
years. The president himself has often urged all
Departments and agencies of the gover ae: t to censer -?e
funds to the utmost of their ability by careful utiliza-
tion of manpo mr. F rthermore it is my objective that
no part of the to r rs ' dollar authorized. for programs,
of this Depart be spent for any unnecessary personnel
or other lmi strat-lve costs. On the other hand, I am
equally Tigoroue, in my position that the programs assigned
by the Congress to this Department shall be fully executed."
Sincerely yours,
/s/ M. B. bl.som
Secretary
"Hon. J ea C. pis
Chairman, Subcommittee on -MknW~-x
Utilization and Departmental
Personnel m, ement
Co ..ttee on Post Office and Civil Service
House of Rep egentative
As I indicated pre outsiy, Mr. .ran, I think, ft would be
helpful to the C ttee if I were to indicate in approydmte terms
how the pers ornel of our Depart nt is now d,ep1oyd to ac mpii$k our
very numberous missions.
Of the 44,100 persons employed in oar Dement, approxinately
90% are engaged in two t ypea of programs -d health programs aai the
operation of the world's largest insurance exaterpriae, "Old Age
Survivors Insurance." About 52% are engaged in health a,~tivit: es, and.
38% in the insurance program. Let me describe each of these brie.
As I have used the term ahealth aetisties", it inol L des all thr,
activities of the Public Health Service and Scent Eliz&bceths and
Freedmen's Hospitals here in the District of Columbia. The rage of
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health activities is tremendous. In the Publ*Q -alth Service we base
70 hospitals, the largest medical research institution in the world,
programs which seek to find solutions to water and air pollution
problems, and numerous other activities. I think it would be helpful
to describe two of these more specifically as illustrations of the
Department's growing programs.
Responsibility for improving the health of Indians was trans-
ferred to our Department on last July is with the clear expectation
that very substantial efforts would be made to improve the poor
health conditions among the Indian population. The average age-at
death of Indians is only 36 years as compared with 61 years for the
general population. This situation obviously calls for a considerably
expanded health program for Indians to not only raise the level of
the present medical care program but also to embark on greater pre-
ventive measures looking to the reduction in morbidity. Since taking
300
over the program on.Jial.y 1, we have added approximately #W people.
The needs for expanded services are great. Our purpose in this
program is. to use every Federal dollar available to provide the maximtaa
degree of increased health services for Indians.
Similarly, in medical research, there is an ever-growing need
and opportunity for expanding the research work on cancer, heart
disease, mental health, and so on. Our program in this area has
been expanding. continuously for many years and we have not yet reached
the stopping point. Our job here, as well as in most other programs
of the Department, is one of rendering the maximum return for every
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Federal dollar spent. The majority of the employees of the Public
Health Service are in these two aetiflt.es and fourteen other hospitals.
As I indicated, 38% of our employees are in the Bureau of Old-
Age and Survivors Insurance which has developed a well-deserved reputa-
tion for being one of the most efficient insurance operations in the
world. Most of the operations of that Bureau are conducted on the
basis of careful workload analyses and projects. As an example,, the
Bureau knows from long experience just how many wage items can and
should be posted by machine operators per day and per week, and they
see that efficiency standards are maintained. The job of the Bureau
was greatly increased a year ago by the 1954 amendments to the Social
Security Act, adding upwards of 10 million more covered workers,
changing the benefit formulae and other provisions of the Act. The
Bureau is barely able to meet their present heavy workload but is
constantly working toward improving the efficiency of their operation.
The Commissioner of Social Security, )r. Schottland, would be very
happy to have members or staff representatives of the Committee visit
the headquarters of the Bureau in Baltimore, where there are more that
5,000 employees, to examine at firsthand the extraordinarily effective
methods of management and efficiency used by the Bureau of Old Age ex ,
Survivors' Insurance.
With 90% of the Department's operations engaged in health and,
insurance activities, this leaves less than 4,500 employees to perform
all other functions of the Department: the Office of Education, the
Office of Vocational Rehabilitation, the Children's Bureau., the
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Bureau of Public Assistance, the Food and. Drug Administration, and a
number of other functions. While the opportunity for manpower savings
can always be said to be present, the opportunity for large savings
in these programs, where the demands for services far outstrip the
capacity of our organizations to provide the services, is obviously
not great.
In spite of the fact that the opportunities for manpower
savings -- either numerically or percentage-vise -- cannot compare
with some other Departments, Mr. Folsom is deeply interested, in the
purpose of achieving the most effective use of manpower and the
eUmination of. all unnecessary red tape. We are proceeding in accord-
ance vith the plan which was outlined in the Secretary's letter. We
shall continue along these lines. We are confident that the results
will be to raise the level of usefulness and efficiency of the various
operating units within the Department.
Thank you very much for the opportunity to present this
statement. I will be glad to attempt to answer any questions which
you may have.
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