Archive

Improving Regulatory Systems

Recommendations and Actions

REG10: Provide Better Training and Incentives for Regulators

BACKGROUND

A regulatory system is only as good as the people implementing it. A well-trained and informed cadre of regulatory officials is crucial for an efficient, innovative regulatory system, that emphasizes choice of the appropriate regulatory approach. Inadequate training can result in errors, no matter how intelligent and well-meaning the officials may be. No current programs provide the training necessary to effect the needed major changes in the federal government's regulatory culture.[Endnote 1] Proper training and performance incentives are needed to ensure that the agency officials involved in regulatory activities are as effective as possible.

As is well known, presidential appointees have widely diverse backgrounds and familiarity with the federal government. Many (but not all) are well-versed in their agency's substantive program, but few appointees can be expected to know, at the time of their appointment, the details of the arcane statutes and rules that govern the agency's rulemaking procedures.[Endnote 2] Yet a lack of understanding of these rules can slow and possibly trip the most eager of new appointees. It is crucial that this blank slate be filled quickly since studies show that nearly half of all presidential appointees leave office within two years--hardly enough time for them to develop a meaningful understanding on their own.[Endnote 3]

There have been some attempts in the past to furnish training to presidential appointees. Based on a 1975 recommendation, the Administrative Conference of the U.S. (ACUS) provided a three-day seminar for commissioners of the independent regulatory agencies in 1977.[Endnote 4] It covered a broad range of topics relating to regulation.[Endnote 5] No such systematic programs have been held since. ACUS has also more recently provided shorter, day-long or half-day programs on various aspects of administrative law and procedure relevant to regulatory commissioners. A continuing, comprehensive approach is needed, however.

Some limited training opportunities do exist for career staff. The Legal Education Institute (LEI) within the Department of Justice's Office of Legal Education presents courses for government lawyers. The Federal Executive Institute provides management training for the Senior Executive Service (SES), and some federal officials have attended courses at the Kennedy School of Government at Harvard University. A few outside firms also provide training courses. These opportunities are limited, both in number and in scope, and fall short of ensuring that all relevant personnel are familiar with the pertinent laws and processes.

Career regulators and Hill staff often lack a broad perspective about the regulatory process because career paths are often confined to one agency. Rotational assignments among agencies in the executive branch and among the branches are not common. Although some programs accomplish some of these goals for entry level officials, such as the two-year Presidential Management Intern program, there are no established inter-agency or inter-branch career paths for regulatory professionals.[Endnote 6] Such officials do not have any real incentive to seek rotational assignments, since it is the person's "home-base" agency that continues to conduct performance appraisals and absence is not likely to "make the heart grow fonder." Members of the SES also theoretically have this opportunity but they are often in such high-level positions that there is little incentive for them to seek or be permitted to accept rotational assignments.

NEED FOR CHANGE

Despite the increasing complexity of the regulatory process, little or no relevant training is currently available for regulatory officials. High-level policymakers, particularly those who are Presidential appointees, are often provided no training or background in the laws and processes they must follow, and career staff have access only to limited, and often inadequate, training opportunities.

The lack of training for presidential appointees is all the more glaring given the availability of intensive orientation to members of Congress and the federal judges.[Endnote 7] Indeed, a survey by the National Academy of Public Administration (NAPA) reported that 79 percent of presidential appointees received no orientation of any kind.[Endnote 8] As NAPA has concluded:

It is hard to imagine that anyone could regard this disinterest in the orientation of new presidential appointees as a sound way to run the federal government. We believe the historical absence of such programs is a matter of great concern, a problem that should be permanently corrected.[Endnote 9]

With respect to career regulatory staffs, the situation is only somewhat better. Training for non- lawyer career staff is hit-and-miss. The Legal Education Institute (LEI) does an excellent job of training agency lawyers on a variety of issues, a number of which relate to agency rulemaking and regulation. These courses have typically been one-day courses held in Washington, D.C. About 95 percent of the roughly 4,000 LEI attendees in 1991 were from Washington, D.C.[Endnote 10] Rather than having its own paid teaching staff, the institute typically relies on professionals from throughout the government to volunteer to teach courses in their areas of expertise.

Unfortunately, recent Department of Justice appropriations legislation required the Institute to be moved to Columbia, South Carolina, as part of a move of the entire Office of Legal Education.[Endnote 11] As a result, it is expected that either attendance by agency staff lawyers will drop significantly or training costs will rise significantly to cover the increased travel costs to send personnel to South Carolina (as opposed to across town).[Endnote 12] Moreover, LEI's travel expenses for faculty would increase, since almost 95 percent of the faculty were from Washington, D.C., and it is unlikely that as much of the necessary administrative law and regulatory expertise would be locally available in South Carolina.

In addition to training, a broad outlook on regulatory issues and first-hand awareness of a variety of perspectives can be extremely useful in developing regulatory programs. Providing select mid- level career staff an opportunity to spend time at different agencies, on Capitol Hill, at the Office of Management and Budget (OMB), and/or in the judicial branch would provide those people and their agencies with extremely useful expertise for effective implementation of regulatory programs. They would discover how other agencies approach similar problems, what Congress' perspectives are, how the judiciary looks at regulatory issues as they come before the courts, and how OMB approaches problems of regulation. In addition, the quality of communication and coordination among agencies, Congress, and OMB might be improved through increased and ongoing contact. Also, the Office of Information and Regulatory Affairs (OIRA), as a centralized locus for regulatory review, could be a place to train agency staff. Agency staff could learn not only what Presidential review entails and the technical skills involved in regulatory analysis, but also how other agencies address various regulatory problems.

The need for this type of rotation has been increasingly recognized. Judge Stephen Breyer, in his new book on improving risk regulation, called for a "circulating career path" for "(eventual) high level executives," modeled on France's Conseil d'Etat.[Endnote 13] As Judge Breyer visualized it, an OMB "special group" could be created with a special civil service career path leading though agencies, congressional committee staffs, back to OMB, with possible presidential appointments for the most successful members. Such a concept would not only augment OMB (especially OIRA's capabilities), it would "seed" the government with experts in broader regulatory issues.

ACTIONS

1. Establish a basic training program for Presidential appointees to regulatory agencies. (2)

The President should direct political appointees to regulatory agencies to attend a comprehensive training program on the issues and processes involved in regulatory development. The President should direct ACUS, which has expertise in the administrative adjudication and rulemaking processes and access to experts across the federal government and academia, to establish such an ongoing training program for presidential appointees. Among the topics that should be included in the curriculum are:

--role and organizations of regulatory agencies,

--personnel management,

--alternative regulatory approaches,

--the budget process,

--program evaluation,

--policy formation and the rulemaking process,

--the Administrative Procedure Act and various other applicable statutes and executive orders,

--the relationship between agency rulemaking and settlement,

--the relationship between regulatory agencies, the White House and OMB,

--cost-benefit analysis use (but not abuse),

--judicial review,

--relationships with the public, the press, and the state and local governments,

--regulatory reform, and

--alternative dispute resolution.[Endnote 14]

Faculty could include representatives. from the White House, Congress, various federal agencies, the federal judiciary, OMB, academia, and industry. Training programs should ideally be held at a site outside of Washington and should last for at least three days. They should be organized on a periodic basis, most frequently in the first half of the administration as new appointees are nominated or confirmed.

2. Move training programs for agency regulatory lawyers back to Washington, D.C., and expand to cover other career staff. (3)

Legislation should be enacted to move the Legal Education Institute (LEI) back to Washington, D.C. LEI should be expanded to non-lawyer career staff. Moving LEI back would generate substantial cost savings, some of which could be used to expand the program.[Endnote 15] Moreover, the administration should consider whether to incorporate LEI into ACUS, since a large portion of LEI's courses relate to various aspects of administrative law and process, which are ACUS's areas of expertise. In fact, ACUS currently coordinates several LEI courses. LEI's existing courses, supplemented with more focused ones on, for example, alternative dispute resolution techniques, could provide some of the necessary training for federal career regulatory officials.

3. Establish an "honors" rotation program for select mid-level career staffers. (1)

As the Carnegie Commission recently recommended:

The federal government should use its existing personnel authority to create opportunities for selected individuals to rotate in the early years of their career through environmental and risk-related regulatory agencies, Congress, the Executive Office of the President, and, in some instances, administrative offices of the Judiciary.[Endnote 16]

The Chair of the Regulatory Coordinating Group, in coordination with the Office of Personnel Management, should be charged by the President with developing an "honors" rotation program for select mid-level agency and congressional career staff involved in regulatory programs. In the meantime, key agencies with cross- government mandates like OIRA in OMB should develop, on their own, strategies for rotating and exchanging staff with regulatory agencies.

4. Reward innovative regulators. (1)

The heads of regulatory agencies should ensure that achievements by federal officials in performing regulatory functions are rewarded, through performance appraisals, bonus systems, and awards. Performance appraisals and bonus systems within agencies should recognize achievements in innovative, consensus-based, and effective regulation.

CROSS-REFERENCES TO OTHER NPR ACCOMPANYING REPORTS

Reinventing Human Resource Management, HRM04: Authorize Agencies to Develop Incentive Award and Bonus Systems to Improve Individual and Organizational Performance; and HRM11: Strengthen the Senior Executive Service so that It Becomes a Key Element in the Governmentwide Culture Change Effort.

Creating Quality Leadership and Management, QUAL02: Improve Government Performance Through Strategic and Quality Management; and QUAL03: Strengthen the Corps of Senior Leaders.

Streamlining Management Control, SMC04: Increase the Effectiveness of Offices of General Counsel.

ENDNOTES

1. See generally Adler, Robert S., Stephen H. Klitzman, and Richard A. Mann, "Shaping Up Federal Agencies: A Basic Training Program for Regulators," Journal of Law & Politics, vol. VI, no. 2 (Winter 1990) [hereinafter "Shaping Up Federal Agencies"].

2. For a description of 18 such statutes, see Administrative Conference of the U.S., Federal Administrative Procedure Sourcebook, 2nd ed. (Washington, D.C., 1992).

3. National Academy of Public Administration (NAPA), "Leadership in Jeopardy: The Fraying of the Presidential Appointment System," November 1985, pp. 4-5, as cited in "Shaping Up Federal Agencies," supra note 1, p. 351.

4. Administrative Conference of the U.S., "Statement on Strengthening Regulatory Agency Management Through Seminars For Agency Officials" (adopted June 5-6, 1975), 1 C.F.R. 310.4 (1988 ed.).

5. Discussions with officials of ACUS. The program was discussed in "Shaping Up Federal Agencies," supra note 1, pp. 360-364.

6. See discussion in Carnegie Commission on Science, Technology, and Government (Carnegie Commission), Risk and the Environment: Improving Regulatory Decision Making (Washington, D.C., June 1993), pp. 94-95.

7. In this environment, regulatory appointees need and should be provided an orientation, as early as possible, in the basics of administrative law. Newly elected Congressmen are offered intensive orientation courses by the congressional leadership, by outside seminars at Harvard's John F. Kennedy School of Government or by other non-governmental organizations (NGOs). Newly appointed federal judges have similar offerings available to them at the National Judicial College (located at the University of Nevada - Reno) and by the Federal Judicial Center. Even career civil servants have at least some opportunities for intensive training (at OPM's Federal Executive Institute and the USDA Graduate School, or the Harvard JFK School). Presidential appointees, ironically, are the only major regulatory actors who do not receive orientation and basic training.

8. NAPA, p. 20, as cited by "Shaping up Federal Agencies," supra note 1, p. 364.

9. Ibid.

10. Information is provided in unpublished data sheet prepared by Legal Education Institute (LEI).

11. See H.R. 2608, 102d Cong., 1st Sess., p. 14. The Office consists of LEI and the much larger Attorney General's Advocacy Institute (AGAI) which trains assistant U.S. Attorneys drawn from all over the country. In 1991, LEI had 9 employees and an annual budget of $1.5 million while AGAI had 14 employees and a budget of $9 million. While an argument can be made for relocating AGAI, moving LEI was perhaps inadvertent. Because AGAI and LEI do not overlap and have separate staff, it would be a simple matter to separate them.

12. Travel costs from Washington, D.C. to Columbia, South Carolina, amount to approximately $400 per student (airfare plus one day's per diem). Assuming that 4,000 students from Washington, D.C. continue to attend courses in South Carolina each year, annual additional costs would amount to $1.6 million.

13. Breyer, Stephen G., The Vicious Circle: Toward Effective Risk Regulation (Cambridge: Harvard University Press, 1993).

14. Discussion with officials of ACUS. The list is derived from the 1977 ACUS program discussed in "Shaping Up Federal Agencies," supra note 1, at pp. 360-64.

15. See note 12, above.

16. Carnegie Commission, p. 94.

Return To Report Index