The Office of Management and Budget has decided to examine each agency's management procedures this year as part of its annual budget review.
What that means, said OMB Deputy Director Joseph R. Wright, is that "management review examiners" will be joining the OMB's usual crew of budget reviewers to find additional ways to cut each agency's fiscal 1985 budget.
A department that wants $20 million for a new payroll system, for example, will have to answer a number of non-budget questions first:
* Will the new system be compatible with other agencies' systems?
* Could the agency save money if it used a system already being used by another agency, rather than developing a new one?
* And if the new system saves money, have the savings been deducted from the agency's budget?
In the past, Wright said, the OMB reviewed management and budget issues separately, if it reviewed management procedures at all.
But as part of the Reagan administration's "Reform '88" effort, the OMB wants to "lock in" good management practices by tying them to the budget.
"We visualize that this year, the OMB decision on budget requests will really have two pieces to it," said Donald W. Moran, executive associate director for budget and legislation. "One will be the normal budget remarks . . . . In addition, . . .we will pass back questions about management issues."
The OMB management reviewers will have three priorities, Wright said. They will make sure each agency is being managed according to administration policies, ensure that each agency handles management problems in a uniform way and track projected savings to make sure that they reduce an agency's budget and simply don't "disappear."
It hasn't been unusual, Wright explained, for agencies to tell the OMB that if it implemented some management scheme that cost $5 million, the agency would net $10 million or more in savings.
Most of the time, such claims were never monitored, Wright said, and if such a savings did occur, it wasn't deducted from an agency's overall budget--as it will be now.
Because of the size of the government, Moran said, "we tend to come out with great generalizations and attitudes about management and often never provide any specific guidance that allows an individual or program officer . . . in a large agency . . . to know enough about what we are talking about to actually implement a policy. Our notion here is that our management recommendations should be very concrete, should provide direct leadership."
That doesn't mean the OMB "will sit in a closet, think for several months and then come out with a very concrete impression and say it's the answer," Moran said. Rather, the management reviewers will identify problems and ask an agency if it has any ideas about how to solve them.
"We might look at the Public Health Service, for instance, and decide it is spending too much on overhead because the way in which it staffs offices in one department produces excessive duplication and personnel. In that case, we might suggest an alternative formation, a reorganization of staff offices."
The OMB reviewers also will ask questions about payroll costs, debt collection efforts and cash management, and determine whether agencies have begun implementing cost-cutting recommendations made by the President's Private Sector Survey on Cost Control, also known as the Grace Commission.
"After spending 2 1/2 years of really pushing hard to squeeze as much money out of the agencies as possible . . . , " Moran said, "now is the perfect time to examine the management side."