Whereas, categorical Federal Aid is looked upon by many educators and zens as a valuable resource for reducing the disparity in the scholastic achi ment between middle class and economically disadvantaged children, and

Whereas, a comprehensive systematic program of research and evaluation never been undertaken to determine the most cost-effective approaches to re this disparity, although billions of dollars in Federal funds has been s] nation-wide since 1965, now therefore be it

Resolved, that the Board of Education of the Dallas Independent School: trict urge the Congress to pursue national legislation insisting on the inclu of standard accountability and independent educational audit components all existing federal categorical aid programs, and institute systematic eva tion of pilot research and development programs to build a body of resea and disseminate its findings so that all school districts across the Nation I benefit by these studies.

d

Mr. SCHNEEBELI. Congratulations on your sense of perception. took most of us a lot longer to reach the same conclusions that you You might also be interested that Senator Nunn this morning sa he and 13 other freshmen Senators wrote a letter to Senator Mansfi asking that no Appropriations Committee actions be taken until the is some resolution of this question that you raised.

I foresee a great future for you in Congress if you continue in t way you started.

Mr. MILFORD. Has the committee come across the letter that w written by the freshmen Members of the House?

Chairman ULLMAN. I heard of it, but we would like to have a co of it.

Mr. MILFORD. I will send you a copy for the record. If I recall contained a vast majority of the freshmen class who made essential the same proposal.

Chairman ULLMAN. Good.

[The letters follow:]

HOUSE OF REPRESENTATIVES, Washington, D.C., March 7, 1973.

RESOLUTION

Whereas a Joint Study Committee on the Budget has been established in t United States Congress; and

Whereas, that bi-partisan Committee of Democrats and Republicans, Senato and Representatives, has completed its interim study, issued a report and ma tentative recommendations favoring an overall ceiling on expenditures a budget authority; Therefore, be it

Resolved, That the undersigned freshmen members of the 93rd Congress hereby express their support for the tentative work of that Committee, and further strongly urge their senior colleagues to take all possible steps to bri about at the earliest possible date Congressional Reform of the Budgetin Process-including an overall spending limit and provision for the necessa committee structure, staff and resources by which Congress may review an control expenditures.

John B. Conlan, James P. Johnson, W. L. Armstrong, Angelo Roncall
Robin Beard, Joel Pritchard, Ed Young, David Towell, Ralp
Regula, William M. Ketchum, L. A. (Skip) Balfalis, Georg
M. O'Brien, Donald J. Mitchell, Majorie S. Holt, Samuel I
Young, David C. Treen, James G. Martin, Alan Steelman, Clair W
Burgener, Bud Shuster, Benjamin A. Gillman, Paul W. Croni
William F. Walsh, Carlos J. Moorhead, Andrew J. Hinshaw, Ma
thew J. Rinaldo, James Abdnor, Stan Parris, Robert J. Hube
William H. Hudnut III, Gene Taylor, Trent Lott, Harold V. Froehlic
M. Caldwell Butler, Dale Milford, Edward Madigan, Thad Cochra
William S. Cohen, Joseph J. Maraziti, Robert W. Daniel, Jr., Robe
Hanrahan, Ronald A. Sarasin, Tennyson Guyer.

HOUSE OF REPRESENTATIVES,
Washington, D.C., March 7, 1973.

RESOLUTION

Joint Study Committee on the Budget has been established in the s Congress; and

that bi-partisan Committee of Democrats and Republicans, Senpresentatives, has completed its interim study, issued a report and ve recommendations favoring an overall ceiling on expenditures and -rity; Therefore, be it

That the undersigned freshmen members of the 93rd Congress do ess their support for the tentative work of that Committee and do ngly urge their senior colleagues to take all possible steps to bring e earliest possible date Congressional Reform of the Budgeting luding an overall spending limit and provision for the necessary tructure, staff and resources by which Congress may review and contures.

BILL GUNTER.

JERRY LITTON.
CHARLES ROSE.
DAVID R. BOWEN.

STEVEN D. SYMMS.

HOUSE OF REPRESENTATIVES,
Washington, D.C., March 7, 1973.

RESOLUTION

, a Joint Study Committee on the Budget has been established in the tes Congress; and

, that bipartisan Committee of Democrats and Republicans, Senators sentatives, has completed its interim study, issued a report and made recommendations favoring an overall ceiling on expenditures and thority;

re, be it Resolved, that the undersigned freshmen members of the 93d do hereby express their support for the tentative work of that Comd do further strongly urge their senior colleagues to take all possible ring about at the earliest possible date Congressional Reform of the Process-including an overall spending limit and provision for the committee structure, staff and resources by which Congress may review ol expenditures.

JAMES R. JONES.
WAYNE OWENS.
PAT SCHROEDER.
BO GINN.

HOUSE OF REPRESENTATIVES,
Washington, D.C., March 7, 1973.

RESOLUTION

is, a Joint Study Committee on the Budget has been established in the tates Congress; and

as, that bi-partisan Committee of Democrats and Republicans, Sen1 Representatives, has completed its interim study, issued a report and itative recommendations favoring an overall ceiling on expenditures et authority; Therefore, be it

ed, That the undersigned freshmen members of the 93rd Congress do xpress their support for the tentative work of that Committee, and do strongly urge their senior colleagues to take all possible steps to bring the earliest possible date Congressional Reform of the Budgeting -including an overall spending limit and provision for the necessary ee structure, staff and resources by which Congress may review and conenditures.

Mr. SCHNEEBELI. I would assume you have a considerable amo of influence in the freshman class. It is very large and we need help of everybody in trying to pass a bill of this nature. So we looking to you for some leadership on passing this.

Mr. MILFORD. I will give you my help including emptying wastebaskets. Just call me, sir.

Mr. SCHNEEBELI. Thank you.

Chairman ULLMAN. Thank you very much.
Just one technical point.

It is our judgment that the procedures will work better at congressional level with separate budget committees rather tha joint committee.

The joint committee procedures have some limitations that mi nullify what we are trying to accomplish. If we can bite the bullet the House on a ceiling, and the Senate does the same, and we resolve the differences and conflicts in the normal legislative w we think separate committees are the best mechanisms for maki these hard decisions.

Mr. MILFORD. My use of the term "joint committee" is to infe wish it to be done in both Houses. Whether it is done by separ committees in each house, I would have absolutely no objection. I wo just like to see it done in this entire Congress, and I would defer the wisdom of those who are senior to me in figuring out how best do it as long as we are following the principles outlined here.

Chairman ULLMAN. Thank you. You have been very helpful and commend you as a freshman for coming before this committee, a I congratulate you for having done a fine job.

Mr. SCHNEEBELI. An auspicious start.

Chairman ULLMAN. Our next witness is Mr. David Linowes. Mr. Linowes, we are happy to have you before the committee. Y come well recommended as somewhat of an expert in this field a we very much welcome your expertise.

You may proceed, sir.

STATEMENT OF DAVID LINOWES, C.P.A., NEW YORK

Mr. LINOWES. Thank you very much, Mr. Chairman.

By way of introduction my name is David Linowes, partner in th International Accounting and Management Consultant Firm Laventhol, Krekstein, Horwath & Horwath based in New Yo City, and I am a former vice president of the American Institute Certified Public Accountants and adjunct professor of manageme at New York University. In recent years, I have also undertaken mi sions abroad for the U.S. Department of State and the United Nation I am particularly appreciative of being permitted to appear befor you at this hearing today because for several years I have been ver much concerned with the direction of our budgetary process and th great voids which have existed in its approach to the affairs of ou Nation.

The social ills besetting America are well known to all of us. Thei urgency too has been made clear. A recent mayors' meeting, for exam ple, cited the crisis of the cities as "The major threat to the securit of the Nation."

extensive Gallup survey showed one out of two respondents our present unrest is likely to lead to a "real breakdown in

y."

is the wealthiest of nations, but it is poverty-stricken in it has failed to marshal its great resources to cure spreading Nor, in my opinion, can we expect the surpluses now being State treasuries, or the flow of Federal revenue-sharing solve our growing domestic problems.

ile we tend to see the solution to crime in the streets, aid to - spreading drug abuse, in terms of more dollars, it just

tion, our answer to society's most crucial problems has been priate more money. That is what we have been doing for nd our national problems still remain largely unsolved. he proposed cutbacks in Federal funds for a number of social , it is my judgment that we need a totally new approach for oblem solving. One that the Nation can and is willing to believe the Federal budgetary mechanism can be so modified -t such a new approach.

ct, in the past, our approach in the management of governtitutions has been to reward inefficient administrators at the of efficient administrators. The fact of the matter is the less ve a program administrator, the more money he receives to is operations because we equate spending money to getting

one.

alone will not resolve our Nation's turmoil. The arbitrary of programs in the HEW and HUD budgets will not in my at set our Nation on the right course. Revenue sharing will ve our dying city services. Greater welfare expenditures will e a dent in urban poverty.

noney must be spent. But to achieve meaningful change we ok beyond the simple application of more dollars. We must hat funds are applied correctly to solve the right problems. = we need to add an important new dimension to our budgetary a qualitative measurement standard.

entally, implicit in several comments made this morning by sman Rees of California was the same point, but he did not it separately.

etary authorities should require government and social instituo take a page from business organizations which effectively agement control and evaluating policies to determine both the res and performance of various programs.

means of the purse strings we should require administrative hip which will demand qualitative standards, meaningful for blishing the true agency objectives. I call this approach Socionic Management.

overty programs, Congress tallies the number of people we othe, house, or how many dollars we give away. Of course, these portant on an emergency basis. But, our objective in poverty tions really is making ablebodied people self-sufficient, employappier through self-respect.

se responsible for the purse strings never apply this kind of rd to our outputs. Yet, this is what we should evaluate for our

poverty dollar spent. These results are measurable. Many standards such measurement already exist, and in those areas where none a available, they can be established by interdisciplinary teams of s ciologists, economists, psychologists and accounting experts worki together.

In our prison and penal programs we measure the number of pris cells maintained, the number of prisoners housed, and use this mea urement for determining the size of fund allocations.

What we should give at least equal consideration to is measuri how many men were rehabilitated for the funds spent last year. Ar how many we expect to rehabilitate for the funds to be spent th

year.

Legislators should ask the kind of questions which will bring o whether or not administrators of the penal institutions should chang the input combinations, the way they combine the resources in main taining the prison programs, to get the best results. What combinatio will give the greatest number of rehabilitated prisoners.

I am afraid too many of our funding authorities do not ask th right questions. The nature of their questions make them satisfie with the easy answers, by the numbers. Value judgments should b placed at least on a par with number judgments.

Government agencies should tune in on a more comprehensiv awareness of the need for fuller reporting. Along with each financia report should be a social report for submission to legislators, budge tary authorities, and supervising officials. For example, the number of poverty recipients who have been made self-sufficient during the year should be reported, along with the financial data for that same

agency.

When government applies standards in the public sector, they are usually the least relevant ones. The accent is on the quantitative, the old numbers game is being played. As a result of confused goals, too many educational institutions are diploma mills, too many correction facilities are cell blocks, and too many poverty agencies are mainly food and shelter distributors.

I strongly believe that quantitative standards in dollars are no longer adequate. Qualitative standards should also be used to establish budgetary accountability and funding should be directly related. In the many public agencies I have known in the past 25 years, I have found that administrators often get all mixed up in their objectives.

Several years ago as a consultant to the Secretary of the Department of Health, Education, and Welfare I learned that a unit of the Department which received massive sums of money to improve the health of children, never even determined whether or not its activities accomplished what it was charged to do.

They knew the number of medical checkups given, and the number of treatments but they simply did not know whether the children's health improved.

There was no built-in qualitative measurement procedure to make this determination and to report it to the budgetary authorities.

I urge the adoption of qualitative accountability requirements for all our Government agencies, so that Congress may have available meaningful data from which to establish its own priorities.