In 1969, a study showed that of the 80,000 pupils leaving New York City's high schools annually, some 30,000 were dropouts, about 20,000 received "general" (or "attendance") diplomas, and only 30,000 finished with academic, vocational or commercial diplomas signifying successful completion of four full years of study. More recently, a survey indicated that a disproportionately large percentage of New York's public school pupils read below the national average and that the trend is getting worse from year to year.

Roughly 4 years ago, the Economic Development Council determined that, while there were a multitude of complex causes for the deterioration of student performance and the quality of education in New York, the business community could make the most effective contribution to improved public education if it concentrated its resources on the organization, management and operation of the system. Towards this end, over the past 4 years EDC has undertaken 2 major efforts, the High School Partnership and the Board of Education Task Force. It is a pleasure to be able to report to you on progress to date.

EDC's "School Partnership" program was begun in 1969. It is now going forward in four city high schools in disadvantaged areas where overcrowding and high absentee and dropout rates are common problems. In each school, EDC teams of young executives, "on loan" from Member Companies, are working daily with administrators, teachers, students, and parents on a wide range of projects aimed at making the educational process more effective.

The objective is to develop those projects having the greatest potential "multiplier effect." Literally scores of such projects have been tested, and there has been a notable quickening of spirit in all four schools, as their principals have often testified. I only wish time permitted me to describe some of them in detail for I am sure you would find them exciting and heartening.

Here, at any rate, are a few examples of projects at or near the "multiplier" stage: The Educational Application and Assistance demonstration at James Monroe High School now federally funded for possible adaptation on a national scale; the "Looking Into Future Employment" (LIFE) program at Bushwick High School; the "English as a Second Language" program at George Washington High School; and the development of an automated attendance control system at Brandeis High School which will report not only on absence from school but on "cuts" and lateness in the individual classrooms. The student-led drug abuse education program initiated at James Monroe has been made a model for use in 18 other schools.

Suffice it to say, then, that EDC's Board of Directors recently voted unanimously to continue the Partnerships another year and extend them into two junior high schools. The preparation of a "How to Do it" manual, based on the "Partnership" experience, for use by business organizations and urban educators in other cities has also been authorized.

This denotes real progress in the classroom -- at least within the orbit of the "Partnership" program. But here we encounter, head-on, the realities of big city school organization and administration. You may have heard of the stupendous bureaucracy in the Central Headquarters of the New York City Board of Education at 110 Livingston Street in Brooklyn. Here red tape, duplication, and delay throw massive roadblocks in the path of educational effectiveness at every turn.

Lack of clear lines of authority, responsibility, and, above all, accountability is aggravated by the almost total absence of the simplest tools of administrative efficiency. Leadership is stifled at the very point where it is needed most. Here we have an immense establishment serving 1.1 million pupils in 964 schools with between 107,000 and 130,000 employees (depending on how you count them), and an annual budget of $2.4 billion. During the last six years, the budget has increased by 80 percent, the number of employees by 25 percent -- and the number of pupils by only 7 percent. Yet the system is "flunking" abysmally in its responsibility to the city's young people.

For all these reasons, EDC was forced to conclude that the "multiplier effect" of its projects could not be realized until "110 Livingston Street" is reorganized, revitalized, and given the best in educational leadership and highly competent administrators.

At the specific request of the Chancellor and the Board of Education, an EDC Task Force began work in 1971 on an intensive analysis of the structure and operations of the entire school system. Under the chairmanship of EDC Vice President Edward A. O'Rourke, this program has so far utilized 22 man--and woman-- years of specialized management services "on loan" from Member Companies. The value of these services is estimate at approximately $600,000 and their effect may in part be assessed by reviewing the work of the Task Force to date:

First, a comprehensive Reorganization Plan was presented by EDC and unanimously approved by the Board of Education on March 12 of this year. The Plan has since been modified and, while not ideal, we believe it will prove workable. Essentially, it regroups all Headquarters functions into two main areas -- Educational Services, under the Chancellor, and Management, under the Deputy Chancellor. A multitude of educational bureaus and units are consolidated under three new Executive Directors, reporting to the Chancellor. This creates clear, two-way channels of educational action and communications between Headquarters and the field. At the same time, all management functions are brought together under the Deputy Chancellor who reports to the Board.

Second, at the request of the Board, EDC is participating actively in the recruitment, screening, and referral of candidates for key positions in the new organization. The search is for senior executives with the competence and experience so vitally needed to make the reorganization effective.

Third, the Board of Education Audit Group has been completely reorganized, appropriate functions of each unit have been identified, and accountability has been fixed for the proper use of immense sums of money. Concurrently, a reorganization of the Personnel Department structured to encourage the staff at all levels for self-improvement and advancement is being undertaken.

Fourth, the payroll operation has been reorganized with substantially improved efficiency. Many problems have been identified and resolved: for example, new employees generally had to wait from six to nine months before their salary checks reflected amounts to which they were entitled for experience and education-- and even then a substantial portion were incorrectly made out. Moreover, new controls have eliminated the continued payment of teachers who were actually off the payroll--a practice which resulted in overpayments of an estimated $8 million in 1971.

Fifth, an overall study has been launched to clarify the relationships and operations of 32 Community School Districts with those of the Central Board under the School Decentralization Law of 1969.

For 1973 the need is seen for 19 additional man years of specialized Task Force assistance. Like many others, Citibank will lend executive talent on both a full time and part time basis to this exceedingly important effort, since, from where we sit the goal is clear and worth pursuing -- a school system that energizes the educational process from top to bottom, reaching every classroom with a new spirit of achievement, progress, and hope.

In dollar terms, the operational economies achieved to date are estimated by Chairman O'Rourke at $10 million a year. These can eventually reach 10 percent of budget or approximately $250 million a year. In more-than-dollar terms, the stakes are even higher. Only an educated electorate can maintain the system of self-government by majority rule which has so far given Americans such a rare degree Thomas Jefferson, advocating general public education, said: "No other sure foundation can be devised for the promotion of freedom and happiness."

America is the scene of the greatest experiment in mass education in history and we, as business citizens, must accept our share of accountability for its success.