The Streets Were Paved with Gold - Ken Auletta [105]
Good management requires a clear, carefully defined structure. Is the manager given authority as well as responsibility? Does he know whom to report to? To fix responsibility, Mayor Lindsay grouped agencies into a superagency structure. Commissioners complained that they lost authority. Mayor Beame promised to return power to the sixty agency heads, with each reporting directly to the mayor. This tended to confuse responsibility. Mayor Koch came in vowing to have not one preeminent first deputy but seven co-equal deputy mayors. This risks deluging the mayor with both too much authority and responsibility, forcing the mayor to mediate minor disputes and bogging him down in minutiae.
Good management requires good employee morale, something that is clearly absent. “If you’re in a war,” says teachers’ union leader Albert Shanker, “you need a goal, a terminal point, some overall plan … a sense of shared sacrifice. There is poor morale because people don’t know there is a plan. And they don’t know there is a plan because there isn’t one.” That requires sensitivity and leadership, and not just from commissioners and middle managers. If New York is in a wartime-like crisis, only the chief executive can inspire people to “shared sacrifice.” Only the mayor can command people’s attention, define the challenges, set the goals. Only the mayor can hire and fire commissioners. Only the mayor receives a mandate from the electorate.
Good management also requires a system of measuring managers. Goaded by the Emergency Financial Control Board and the Management Advisory Board—not to mention the new City Charter passed in 1975—the city initiated a management-by-objectives program. Each agency was to commit to paper its yearly and monthly goals, and be measured by their results. This is the program Lee Oberst was asked to direct and monitor in 1977. Such a program represented a dramatic departure for government. “There were bright guys in previous administrations,” says Ukeles. “Why were they not successful, and why do I believe we will be? Historically, the criterion for success in the public sector was not performance. It was not how much we’re getting for how much. It was responsiveness. In other words, if I had a pothole in front of my house and I called the department and it was fixed the next day, I felt government was succeeding. There was no balance sheet.” That was political management.
Bad management costs money. Comptroller Goldin has reported, for instance, that “940 dead New Yorkers are continuing to be issued Supplemental Security Income checks four or more months after their deaths” at an annual cost of $1.7 million. The Board of Education, his auditors found, spent 59 percent of its $2.8 billion budget on administration; the national average was 43 percent. The city’s welfare fraud rate was 13.6 percent, compared to a national average of 8.6 percent and California’s 3.5 percent. Approximately $60 million could be saved, says the State Department of Social Services, by eliminating double billing on Medicaid claims. The federal government says almost 25¢ of each Medicaid dollar is misspent due to fraud, waste or mismanagement. In early 1978, the Inspector General’s office reported that the federal Department of Health, Education and Welfare misspent $6.3 to $7.4 billion—largely through waste and mismanagement—in fiscal 1977. One small federal agency, the General Services Administration, admitted to Congress that it wasted more than $100 million of its $5 billion budget. In his first four-year financial plan, Mayor Koch said “management improvements to reduce costs” would save city taxpayers $174 million in fiscal 1979, $337 million in 1980, $452 million in 1981, and $544 million in 1982. These are annual savings, and when pressed by Treasury Secretary Michael Blumenthal, Koch conceded the city could do even more.
The value of good management can be seen by comparing the police