In order to assist the components of the Office of the Secretary in decentralization planning, particularly for the strengthening of those functions remaining in headquarters; and to foster efforts to develop within headquarters sophisticated, evaluative and reporting mechanisms which will facilitate effective regional operations, Dr. Marik is preparing additional and more definitive guidelines for these components. In this connection, the OS staff is expected to enhance its staff support and technical assistance to the regions, and to involve the latter more actively in departmental planning. An important integrant to the decentralization effort is the regionalization of financial management. Toward this end, the Assistant Secretary, Comptroller has already started the deployment of regional comptrollers. They will play a key role in facilitating financial decision-making in the regions. DHEW has a total of 184 numbered programs listed in the 1973 OMB Domestic Assistance Catalog. These are generally the programs which are to be funded in FY 1974. DHEW programs which have been fully or partially decentralized through FY 1973 are listed in Appendix 4. The preliminary decentralization plans now being reviewed indicate tentatively that the programs listed in Appendix 5 are being considered for decentralization in FY 1974. In the current thrust for decentralization, deployment of personnel alone is not considered sufficient; the personnel in the regions should have adequate decision authorities delegated to them. In view of the present DHEW policy assumption that all department programs are subject to decentralization unless the agency head could justify continuance of centralization, DHEW decentralization program targets will remain open-ended. THE SECRETARY OF HEALTH, EDUCATION. AND WELFARE March 6, 1973 MEMORANDUM FOR ASSISTANT SECRETARIES AND AGENCY HEADS SUBJECT: Decentralization I have observed that public organizations function best when decision making authority is placed as close as possible to the point where services are actually being performed. This is particularly true of large agencies such as the Department of Health, Education, and Welfare that administer national programs through field organizations. In his directive of February 29, 1969, and in subsequent statements, the President has urged that departments and agencies engaged in the administration of social programs or the provision of assistance to State and local governments decentralize their management so as to improve their effectiveness and to facilitate the coordination of Federal activities in the field. While important progress has been made in achieving the decentralization sought by the President, much remains to be done. This is especially true in the Department of Health, Education, and Welfare. The Department must step up its efforts to make decentralization a reality. By decentralization, I mean the placement of authorities heretofore retained at headquarters in the hands of regional officials of the Department so that those officials can deal directly and significantly with State and local governments and others who do business with NEW. There is also a need for effective collaboration with the regional representatives of other departments and agencies. This can take place only when the people working on the scene can act definitively in the names of their agencies. We should not impose upon those who seek to decentralize the burden of proving its efficacy. It will be the policy of the Department to decentralize unless there is convincing evidence that such decentralization is incompatible with law or effective administration. In this regard, I plan to assure that the authority of the Secretary is delegated within the Department to the maximum extent compatible with law and effective direction and control. Generally, this will entail initial delegations to the Assistant Secretaries and to the heads of the program agencies of the Department. These officials in turn will be expected to effect redelegations to the appropriate field officials wherever practicable. Exceptions will be made only where the nature of the function does not lend itself to decentralized administration. For example, it may be necessary to exempt certain types of research and development or other processes that, by their nature, are most efficiently performed in a single location and, thus, do not lend themselves to decentralized management. When an Assistant Secretary, Agency Head, or program manager exercises direct supervision over a regional activity or organization, delegations will be made to the appropriate field level under the supervision of the agency. At the same time, we will be reviewing the authority of the Department's Regional Directors to identity functions which can be best administered through field officials reporting to the Secretary. Under a decentralized management system, the headquarters staff will be able to focus attention on the development and evaluation of policies and programs associated with the mission of the Department. Each official concerned with the implementation of decentralization should, therefore, make certain that the headquarters staffs are streamlined and redirected to reflect the changes in functions being performed. The field offices are to be given the staff, grade structure, and other resources which they will need to exercise their enhanced authority. I recognize that a number of programs have already been decentralized and that additional actions are underway. We must, however, accelerate our efforts. I shall expect that the programmatic and administrative authorities of the Department shall be lodged in regional officials as rapidly as orderly administration will permit, except where an exception is specifically granted by the Secretary. Each Agency Head and Assistant Secretary is to provide me not later than May 1, 1973, with a plan of how he intends to implement this program. This plan should also include provision for the reallocation of resources to the regions commensurate with the realignment of programs and workloads. We cannot afford to place decentralization low in the order of our management priorities or permit it to become a subject of debate and inaction. For this reason, the progress which you make in the months ahead to foster meaningful decentralization will be one of the primary indicators by which your effectiveness as managers will be judged. I shall look to the Under Secretary, assisted by the Assistant Secretary for Administration and the Deputy Under Secretary for. Regional Affairs, to provide more detailed guidance and to work with you in assuring the timely execution of the decentralization program. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE In his March 6 memorandum, the Secretary communicated his position on decentralization policy and strategy. The purpose of my memorandum is to clarify what will be expected from you, particularly in completing your May 1 implementation plan for decentralization. PROGRAMS Every program, indicated by its OMB number, should be In developing decentralization plans, the following definitions should be understood. Regionalization is the strengthening of the Office of the Regional Directors to accomplish overall effective management and coordination of Federal activities in the field. Decentralization is the movement of the federal role to the Regional Offices or, more specifically, the transfer of certain headquarters functions, authorities and resources to their field counterparts. In formula programs where state participation is legislated, these programs are not considered decentralized until appropriate federal responsibilities have been transferred from headquarters to the regions. It is important to recognize that decentralization is not simply the movement of functions to the regions, but is also the strengthening of those functions remaining in headquarters. For an example, efforts should be made to develop within headquarters sophisticated, evaluative and reporting mechanisms which will facilitate effective regional operations. 97-228 73 10 pt. 4 FULL DECENTRALIZATION A fully decentralized program generally conforms to the following model: Discretionary Programs Headquarters Responsibility: national long-range planning legislative development and Congressional establishment of broad policies and priorities overall program monitoring and evaluations criteria for funding and resource allocation determination and allocation of personnel collection of information of national significance, issuance of reports, dissemination training and developmental assistance to regions Field Office Responsibility: review and processing of applications (new and continuations) response to inquiries regarding specific projects input into training plans final grant application or loan approval/disapproval final funding approval/disapproval authority services integration and coordination at the settling audits and monitoring flow of funds provision of technical assistance and other provision of information and dissemination input into headquarters budget formulation, Formula Programs Headquarters Responsibility: long-range planning legislative development and Congressional establishment of national policy, program |