Human Capital: Taking Steps to Meet Current and Emerging Human	 
Capital Challenges (17-JUL-01, GAO-01-965T).			 
								 
This testimony discusses GAO's three-stage approach for 	 
addressing the federal government's human capital challenges.	 
First, agencies must take all administrative steps available to  
them under current laws and regulations to manage their people	 
for results. While much of what agencies need to accomplish these
steps is already available to them, they will need the sustained 
commitment from top management and the support from both the	 
Office of Management and Budget and the Office of Personnel	 
Management to do so. Second, the Administration and Congress	 
should pursue selected legislative opportunities to put new tools
and flexibilities in place that will help agencies attract,	 
motivate, and retain employees--both overall and, especially, in 
connection with critical occupations. Third, all interested	 
parties should work together to determine the nature and extent  
of more comprehensive human capital (or civil service) reforms	 
that should be enacted over time. These reforms should include	 
placing greater emphasis on skills, knowledge, and performance in
connection with federal employment and compensation decisions,	 
rather than the passage of time and rate of inflation, as is	 
often the case today.						 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-01-965T					        
    ACCNO:   A01402						        
  TITLE:     Human Capital: Taking Steps to Meet Current and Emerging 
             Human Capital Challenges                                         
     DATE:   07/17/2001 
  SUBJECT:   Federal employees					 
	     Human resources utilization			 
	     Personnel management				 
	     Merit compensation 				 
	     Personnel evaluation				 
	     GAO Executive Candidate Development		 
	     Program						 
								 

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GAO-01-965T
     
Testimony Before the Subcommittee on Oversight of Government Management,
Restructuring, and the District of Columbia, Committee on Governmental
Affairs, U. S. Senate

United States General Accounting Office

GAO For Release on Delivery Expected at 2: 30 p. m., EST Tuesday July 17,
2001 HUMAN CAPITAL

Taking Steps to Meet Current and Emerging Human Capital Challenges

Statement of David M. Walker Comptroller General of the United States

GAO- 01- 965T

Page 1 GAO- 01- 965T Human Capital: Taking Steps To Meet Current And
Emerging Human Capital Challenges

Mr. Chairman and Members of the Subcommittee: I appreciate this opportunity
to discuss with you and the members of the subcommittee our approaches to
managing our most important asset- our people, or human capital. Human
capital issues have been a top priority at GAO during my tenure as
Comptroller General. We have undertaken a wide array of initiatives in this
area and are investing considerable time, energy, and financial resources to
make them work. Our reason for doing so lies in a fundamental decision we
have made as the new century begins, to focus not just on living for today,
but on positioning GAO for the future and investing more in our people. Our
goal is to enhance the value of our human capital and thereby enhance the
value of GAO to the Congress, the country, and the American people.

Simply stated, the aim of these efforts is to enhance our performance and
assure our accountability by attracting, retaining, and motivating a
topquality workforce. The more skilled and capable our workforce, the more
capable our organization will be to perform its mission. Our mission is to
support the Congress in meeting its constitutional responsibilities and to
help improve the performance and accountability of the federal government
for the benefit of the American people. Today, GAO conducts a wide range of
financial and performance audits, program evaluations, management reviews,
investigations, and legal services spanning a broad range of government
programs and functions. GAO?s work covers everything from the challenges of
an aging population and the demands of the information age to emerging
national security threats and the complexities of globalization. We are
committed to federal management reform- to helping government agencies
become organizations that are more results oriented and accountable to the
public. We are also committed to leading by example in all major management
areas.

No management issue facing federal agencies could be more critical to their
ability to serve the American people than their approach to attracting,
retaining, and motivating their employees. High- performing organizations in
the private and public sectors have long understood the relationship between
effective ?people management? and organizational success. However, the
federal government, which has often acted as if federal employees were costs
to be cut rather than assets to be valued, has only recently received its
wake- up call. As our January 2001 Performance and Accountability Series
reports made clear, serious federal human

Page 2 GAO- 01- 965T capital shortfalls are now eroding the ability of many
federal agencies- and threatening the ability of others- to economically,
efficiently, and

effectively perform their missions. 1 The problem lies not with federal
employees themselves, but with the lack of effective leadership and
management, along with the lack of a strategic approach to marshaling,
managing, and maintaining the human capital needed for government to
discharge its responsibilities and deliver on its promises. To highlight the
urgency of this governmentwide challenge, in January 2001 we added strategic
human capital management to our list of federal programs and operations
identified as high risk. 2

Ever since we added strategic human capital management to that list, we have
been asked what would need to happen for it to be removed. Clearly, we will
need to see measurable and sustainable improvements in the economy,
efficiency, and effectiveness with which the government as a whole and the
individual agencies manage their workforces to achieve their missions and
goals. I believe that hearings such as this one demonstrate that the
momentum for these improvements is building, but the process will
undoubtedly take time.

At GAO, we believe a three- stage approach is appropriate to addressing the
federal government?s human capital challenges. First, agencies must take all
administrative steps available to them under current laws and regulations to
manage their people for results. Much of what agencies need to accomplish by
way of focussing on human capital management is already available to them.
They will, however, need the sustained commitment from top management and
the support from both the Office of Management and Budget (OMB) and the
Office of Personnel Management (OPM) to do so. Second, the Administration
and the Congress should pursue selected legislative opportunities to put new
tools and flexibilities in place that will help agencies attract, motivate,
and retain employees- both overall and, especially, in connection with
critical occupations. Third, all interested parties should work together to
determine the nature and extent of more comprehensive human capital (or

1 Performance and Accountability Series- Major Management Challenges and
Program Risks: A Governmentwide Perspective (GAO- 01- 241, Jan. 2001). In
addition, see the accompanying 21 reports, numbered GAO- 01- 242 through
GAO- 01- 262) on specific agencies.

2 High- Risk Series: An Update (GAO- 01- 263, Jan. 2001). In addition, see
Human Capital: Meeting the Governmentwide High- Risk Challenge (GAO- 01-
357T, Feb. 1, 2001).

Page 3 GAO- 01- 965T civil service) reforms that should be enacted over
time. These reforms should include placing greater emphasis on skills,
knowledge, and

performance in connection with federal employment and compensation
decisions, rather than the passage of time and rate of inflation, as is
often the case today.

Today, I will discuss some of the administrative steps GAO has taken under
its existing authorities to better manage its people. We have identified and
made use of a variety of tools and flexibilities, some of which were made
available to us through the GAO Personnel Act of 1980 and our 2000
legislation, but most of which are available across a broad spectrum of
federal agencies. I will also discuss our specific mission needs and human
capital challenges and how these helped us identify and make a sound
business case for additional flexibilities. We feel it is critical to remain
alert to further opportunities to improve the federal government?s
competitiveness in the market for talent, and as a result, I will raise for
discussion some additional flexibilities that would require legislation for
the Congress to consider.

We believe that every agency should begin assessing its own human capital
situation and pursue adoption of prevailing best practices. To this end, we
developed our human capital self- assessment checklist for agency leaders,
and have studied the private sector for selected human capital principles
and practices that may have applicability in the federal government. 3 Since
maximizing performance and assuring accountability are at the heart of our
mission at GAO, we believe it is our responsibility to lead by example,
especially in the human capital area. By managing GAO?s workforce
strategically, by focusing on results, and by taking opportunities such as
the one you are providing today to tell our story, we hope to demonstrate to
other federal agencies that if they put their minds to it, they can improve
their performance by improving the way they treat and manage their people.
However, don?t get me wrong. We aren?t perfect at GAO and we never will be.
In addition, this is a work- in- progress for us as it is for others.
Finally, I would add that GAO?s approaches are not the only way for agencies
to proceed, but they can help others to see their way forward to addressing
their individual human capital issues.

3 See Human Capital: A Self- Assessment Checklist for Agency Leaders (GAO/
OCG- 00- 14G, September 2000) and Human Capital: Key Principles From Nine
Private Sector Organizations (GAO/ GGD- 00- 28, January 2000).

Page 4 GAO- 01- 965T Addressing the government?s human capital challenges is
a responsibility shared by many parties, including the President, department
and agency

leaders, OMB, OPM, the Congress, and even the press (see attachment I).
Agency leaders must commit their organizations to valuing and investing in
their employees and focussing their employees? efforts on achieving stated
agency missions and goals. The essential ingredients for progress in this
area are leadership, vision, commitment, persistence, communication, and
accountability.

Our ongoing experiences managing human capital at GAO have yielded a number
of guiding principles or ?lessons learned? that will frame my remarks this
afternoon:

 Strategic planning, core values, and organizational alignment. An agency
that wishes to design policies and programs to maximize the value of its
human capital must have clear expectations for itself, strong core values,
and an accurate understanding of its evolving circumstances. Sound strategic
planning and proper organizational alignment provide the essential context
for making sensible, fact- based choices about designing, implementing, and
evaluating human capital approaches.

 Tailoring human capital approaches. Agencies? varied missions, core
values, and circumstances require custom- tailored approaches to managing
people. Agencies must remain constantly alert to emerging mission demands
and human capital challenges, and make full use of the management tools and
flexibilities available to meet them. If an agency determines that its
available tools, flexibilities, and resources do not allow it to pursue
needed human capital initiatives, then it must support any proposal for new
flexibilities with a sound business case.

 Employee involvement. Regardless of the approach an agency takes to

?people management,? the involvement of employees both directly and through
their employee organizations will be crucial to success. Agency leaders need
to clearly and consistently tell their people at all levels their agency?s
mission, core values, goals and objectives, and strategies. Moreover,
leaders need to empower employees and work constructively with employee
organizations. As in many cases, in the human capital arena, how you do
something is as important as what you do. The human capital management tools
and flexibilities available to other agencies will differ from ours, and
these agencies may need to develop approaches to fit their own situations.
However, the need to recognize employees as vital assets for organizational
success, and to develop approaches for managing human capital that best
support mission accomplishment, should be a consistent focus across the
federal government. In this regard and at the subcommittee?s request, I will
also

Page 5 GAO- 01- 965T briefly discuss recent human capital management
experiences at two other federal entities: the Department of Defense and the
Internal Revenue

Service. Before moving on to my three main points, I would like to provide
some background on the changing nature of GAO?s workforce, its current human
capital challenges, and some of the specific tools and flexibilities that we
have used in addressing this area.

Today?s GAO is far different from the organization that opened its doors in
1921. For the first 3 decades of GAO?s existence, its workforce consisted
primarily of accounting clerks, whose job was to audit agency vouchers for
the legality, propriety, and accuracy of expenditures. In the 1950s, when
GAO?s statutory role shifted to comprehensive auditing of government
agencies, the agency began to hire accountants. Later, GAO?s role expanded
further, to include program reviews, policy analysis, investigations, and
legal adjudications. As a result, today GAO is a multidisciplinary
professional services organization, whose staff reflects the diversity of
knowledge and competencies needed to deliver a wide array of products and
services to support the Congress. Our mission staff- at least 54 percent of
whom are Masters or Ph. D. graduates- hold degrees in a variety of academic
disciplines, such as accounting, law, engineering, public and business
administration, economics, and the social and physical sciences. I am
extremely proud of the talent, dedication, and service to our nation that
GAO employees- both mission staff and mission support staff alike- exhibit
every day. They make GAO the world- class accountability institution that it
is, and I think it is fair to say that while they account for about 80
percent of our costs, they constitute 100 percent of our real assets.

It must be said, however, that the 1990s were a difficult period for
ensuring that GAO?s workforce would remain appropriately sized, shaped, and
skilled to meet its mission demands. Severe downsizing of the workforce (see
figure 1), including a suspension of most hiring from 1992 through 1997, and
constrained investments in such areas as training, performance incentives
and rewards, and enabling technology, left GAO with a range of human capital
challenges that we have begun to address. Background: Changes

In GAO?s Mission And Workforce Led To The GAO Personnel Act Of 1980

Page 6 GAO- 01- 965T Figure 1: GAO Staff Levels

For example, we face significant structural issues: Our workforce is
relatively sparse at the entry levels and relatively large at certain higher
levels (see figure 2).

Figure 2: GAO?s Human Capital Profile

1 FY 2001 data are as of June 30, 2001. 2 Eight of 108 mission SES/ Senior
Level staff in FY 2001 are Senior Level. In October 2000, GAO was granted
authority to appoint scientific, technical or professional staff to senior
level positions with the same benefits and attributes as members of SES.

4,136 5,182

3,155 0 1000

2000 3000

4000 5000

6000 1966 1981 2001 Number of Full- time equivalent staff

Fiscal year

Band III Band II Band I Other 4 Mission Support 5

Number of staff

2.4% 3.1% FY 1989

8.0% 5,204

34.1% 25.6%

3.5% 2 4.5% FY 2001 Est. 1

13.7% 3,118

43.1% 21.2% Mission

(FY 1989 - 74. 4%) (FY 1997 - 77. 9%) (FY 2001 - 78. 8%)

26.8% 14.0% 3 3.1%

4.0% FY 1997

11.9% 3,273

45.2% 22.1%

13.7%

Page 7 GAO- 01- 965T 3 With the additional new hires expected onboard by the
end of FY 2001, the number of Band I?s as a percentage of all staff is
expected to increase to about 17 percent.

4 Attorneys and criminal investigators 5 FY 1989 includes 20 SES, or .38
percent of all staff; FY 1997 includes 15 SES, or .46 percent of all staff;
and FY 2001 includes 12 SES, or .38 percent of all staff.

Note: Total SES and Senior Level staff in mission and mission support
represent 2. 8 percent, 3.6 percent, and 3.8 percent of all employees in FY
1989, FY 1997, and FY 2001, respectively.

We face certain skills imbalances that include a pressing need for- among
other things- accountants, information technology professionals,
statisticians, economists, and health care analysts. Further, we face a
range of succession planning challenges. Specifically, by fiscal year 2004,
55 percent of our senior executives, 48 percent of our management- level
analysts, and 34 percent of our analyst and related staff will be eligible
for retirement. Moreover, at a time when a significant percentage of our
workforce is nearing retirement age, marketplace, demographic, economic, and
technological changes indicate that competition for skilled employees will
be greater in the future, making the challenge of attracting and retaining
talent even more complex.

These human capital challenges will not be solved overnight. But
fortunately, from a structural standpoint, GAO has an advantage that other
agencies might envy. Unlike executive branch agencies, where turnover of
chief executives and other top managers is commonplace, GAO?s chief
executive officer- the Comptroller General- is appointed for a 15- year
term. This lengthy tenure ensures that governmentwide and internal
management challenges such as those involving human capital can receive the
sustained and consistent attention from the top that they demand. A good
example of how this has worked at GAO is my immediate predecessor,
Comptroller General Charles A. Bowsher, who helped lead the federal
government?s growing emphasis on financial management issues, and whose
attention to improving financial management both at GAO and governmentwide
was unwavering throughout his 15- year tenure.

At GAO, we have certain human capital tools and flexibilities available to
us that are broader than those available to most other federal agencies. The
main difference has been that we have been able to operate our personnel
system with a degree of independence that most agencies in the executive
branch do not have. For example, we are excepted from certain provisions of
Title 5, which governs the competitive service, and we are not subject to
oversight by OPM. The roots of these differences are 2 decades old. Until
1980, our personnel system was indistinguishable from The GAO Personnel Act
of

1980

Page 8 GAO- 01- 965T those of executive branch agencies- that is, GAO was
subject to the same laws, regulations, and policies as they were. But with
the growth of GAO?s

role in congressional oversight of federal agencies and programs, concerns
grew about the potential for conflict of interest. Could GAO conduct
independent and objective reviews of executive branch agencies such as OPM
when these agencies had the authority to review GAO?s internal personnel
activities? As a result of these concerns, GAO worked with the Congress to
pass the GAO Personnel Act of 1980, the principal goal of which was to avoid
potential conflicts by making GAO?s personnel system more independent of the
executive branch.

Along with this independence, the act gave GAO greater flexibility in hiring
and managing its workforce. Among other things, it granted the Comptroller
General authority to

 appoint, promote, and assign employees without regard to Title 5
requirements in these areas;

 set employees? pay without regard to the federal government?s General
Schedule (GS) classification standards and requirements; and,

 establish a merit pay system for appropriate officers and employees.
Clearly, by excepting our agency from many competitive service requirements,
the GAO Personnel Act of 1980 allowed us to pursue some significant
innovations in managing our people. However, I must emphasize that in
important ways, our human capital policies and programs are very much in the
mainstream of the larger federal community since, despite the GAO Personnel
Act of 1980, we continue to support certain important national goals. For
example, we are philosophically committed and legally subject to federal
merit principles. Our employees continue to be protected from prohibited
personnel practices; while they do not have access to the more widely
applied federal employee administrative redress system, our 1980 legislation
created an independent entity, the Personnel Appeals Board, to hear our
employees? complaints. Also, we apply veterans? preference consistent with
the manner in which it is applied in the executive branch for appointments
and all appropriate reductions- in- force. Our pay system must be consistent
with the statutory principle of equal pay for substantially equal work; we
make pay distinctions on the basis of an individual?s responsibilities and
performance. We are covered by Title VII of the Civil Rights Act, which
forbids employment discrimination. We emphasize opportunity and
inclusiveness, and have zero tolerance for discrimination of any kind. We
take disciplinary action when it ?will

promote the efficiency of the service?- which for us includes such things

Page 9 GAO- 01- 965T as GAO?s ability to do its work and accomplish its
mission. Further, while we currently do not have any bargaining units at
GAO, our employees are

free to join employee organizations, including unions. In addition, we
engage in a range of ongoing communication and coordination efforts to
empower our employees while tapping their ideas.

The most prominent change in human capital management that GAO implemented
as a result of the GAO Personnel Act of 1980 was a broadbanded pay- for-
performance system. I will discuss this below at some length. However, it
should be remembered that our authority to introduce broadbanding was only a
subset of a body of new authorities that allowed GAO to develop important
initiatives in other areas as well. For example:

 Recruiting and hiring. The independent appointment and examination
authority in the 1980 act allowed us to establish more flexible recruiting
and hiring processes. Although many of the recruiting and hiring programs we
initiated during the 1980s had to be abandoned during the near- freeze in
GAO hiring from 1992 to 1997, today we make significant use of the
recruiting and hiring flexibilities that the 1980 legislation provided. For
example, our student intern program includes a feature that we- unlike most
federal agencies- were able to adapt from federal student cooperative
education programs: noncompetitive conversion to permanent status. This
provision allows us to offer permanent positions to GAO interns with at
least 10 weeks of successful work experience, without the requirement for a
job announcement and competition. We are making extensive use of this
flexibility as an important element of our aggressive recruiting efforts.

 Compensation. Besides allowing us to introduce the broadbanded pay-
forperformance system discussed below, our 1980 legislation helped us take
additional steps to improve our ability to compete for the multidisciplinary
skills we would need to address our increasingly complex and congressionally
driven responsibilities. In addition to adopting OPM?s governmentwide
special pay rates established to address certain significant recruitment and
retention problems, we developed GAOspecific special pay rates to recruit
and retain employees in critical occupations, such as accountants, auditors,
and economists. Further, we established policies to permit paying certain
job applicants salaries above the minimum rate of the grade or band level at
which they were hired. As other agencies may do, we also now offer
recruitment bonuses and retention allowances to help attract or keep
employees with specialized skills. Innovations Under the

GAO Personnel Act of 1980

Page 10 GAO- 01- 965T  Promotions. Using the authority contained in our
1980 legislation, in 1983 we instituted an annual merit promotion system for
our analysts (known

at the time as evaluators) and related occupations. This promotion system is
still in place. Each year, GAO?s senior management determines the number of
promotion opportunities available. Within each home unit, a panel of at
least three managers assesses interested staff for promotion opportunities.
For each applicant, the panel reviews 3 years of performance appraisals and
employee?s contributions, and an employee statement of qualifications.
Candidates within each home unit are ranked against one another for
positions at the next level, based on their knowledge, skills, and
abilities. Those designated as ?best qualified? are automatically considered
for opportunities within the unit. The head of the unit is the selecting
official. Employees who are interested in generalist positions outside their
home units can apply for them. GAO?s mission support staff are not included
in the annual promotion system. Instead, we currently operate a conventional
competitive promotion process for mission support positions.

In 1989, GAO converted its analyst and analyst- related staff, as well as
its attorneys, to a broadbanded pay- for- performance (PFP) system. This
system was implemented following years of study that involved task forces of
managers and staff at all levels. The system remains in place today. While
it has undergone few changes since its initial implementation, we are
currently engaging in a comprehensive review and reassessment of our
broadbanded PFP system to identify opportunities for improvement.

The primary goal of PFP is to enable GAO to base employee compensation
primarily on knowledge and performance of individual employees. Broadbanding
provides certain managers additional flexibility to assign and use employees
in a manner that is more suitable to multitasking and full utilization of
available staff. Given our unique role in serving the Congress, GAO needed a
system with more flexibility- similar to what exists in private sector
knowledge- based professional services organizations.

Under GAO?s broadbanded system, analyst and analyst related staff in Grades
7 through 15 in the General Schedule (GS) system, were placed in 3 bands.
Staff were converted into bands, as shown in table 1. Broadbanding and Pay-
forPerformance

Page 11 GAO- 01- 965T Table 1: GAO?s Broadbanded Pay- for- Performance
System General Schedule GAO Broadbanding

GS- 7, GS- 9, GS- 11 Band ID (Developmental level) GS- 12 Band IF (Full
performance) GS- 13, GS- 14 Band II GS- 15 Band III

Note: Senior Executive Service (SES) members were not included in this
system.

The pay ranges for each band closely approximate the GS- equivalents. For
example, Band II ranges from about GS- 13, step 1 to GS- 14, step 10.

When staff were converted from the GS system to broadbanding, there needed
to be a means to move them through the salary ranges in their bands. Under
the GS system, movement through the salary range for each GS grade is
largely based on the passage of time. For example, assuming satisfactory
performance, staff are given within- grade step increases (WGIs) after a 1,
2, or 3 year waiting period, depending on how long they have been in grade.
The within- grade increase is a fixed amount- 3.3 percent of the step 1
salary for the employee?s GS level- and is virtually automatic.

In contrast, GAO wanted a system in which pay increases depend upon the
performance and contributions of the individual, rather than the passage of
time. Therefore, we chose to adopt a PFP system concurrent with the
implementation of the broadbanded classification system. Under PFP, staff
members are evaluated each year by a panel of managers from their units who
are familiar with the work of the individuals being assessed and the unit as
a whole. The panels consider each employee?s performance appraisal, prepared
by the supervisor, and an employee- prepared

?contributions statement,? in which the employee describes his/ her
contributions during the year. Finally, the panel discusses the relative
performance and contributions of each employee being assessed. Based on the
paperwork review and the panel discussion, the panel places each individual
into a pay category, ranging from acceptable to commendable, meritorious,
and exceptional. It is important to note that this is a relative system
under which staff are assessed against each other, rather than against
standards.

Under our PFP system, a staff member?s pay category determines the
percentage of his/ her salary increase. The lowest salary for the employee?s
band level (? band base salary?) is used to calculate the actual amount of

Page 12 GAO- 01- 965T the raise. As required by current law, our employees
receive cost of living and locality pay adjustments. Employees in the
?acceptable? category

receive no incremental raise, while employees in the commendable,
meritorious, and exceptional categories receive percentage raises linked to
their category, band level, and where they stand in the salary range for
their pay bands.

One of the concerns we have encountered with the PFP system is that
employees who are at the top of the pay scale for their pay band- that is,
those who have reached their salary cap- are not eligible for PFP increases
that would put their pay above the cap. This can lead to situations that are
not in keeping with the spirit of the PFP system. For example, it is common
in GAO for employees who are in the commendable or meritorious categories to
receive PFP salary increases while their coworkers in the same or higher
categories receive no PFP salary increase, simply because they are already
at the salary cap for their band level. At GAO, where many mission staff
have been in their band for a long time, many are no longer eligible for PFP
salary increases, and therefore cannot be expected to respond to the
incentives for which the program was designed. Currently, about 42 percent
of our Band III, 12 percent of our Band II, and 26 percent of our Band I
analyst and analyst- related staff are at their salary cap.

One solution we are considering to surmount the salary cap problem for
employees in the PFP system is to create a more robust performance bonus
program. Our PFP system was designed to include performance bonuses, but
with the budgetary constraints GAO experienced in the 1990s, performance
bonuses for banded staff were discontinued.

Advantages and disadvantages. While currently undergoing review and
refinement, our broadbanding and PFP systems certainly have had more pros
than cons. The salary cap problems notwithstanding, our best performing
staff are clearly being rewarded more than before for their performance and
contributions. We are able to vary rewards annually rather than granting an
?automatic? step increase based on the passage of time. In addition,
managers have much greater flexibility to make staffing decisions based on
both institutional needs and individual desires. However, in order for
broadbanding and PFP to meet current and emerging needs, an organization
like ours needs to use its PFP scheme in some combination with a modern,
transparent, competency- based performance appraisal system to determine
employee pay, promotion, and reward decisions. Further, our broadbanding and
PFP system need to be used in conjunction with other mechanisms to let us
clearly differentiate

Page 13 GAO- 01- 965T among employees? varying skills, roles, and levels of
responsibility within the bands. Finally, although broadbanding allows for
greater flexibility in

making staffing assignments, managers should have access to additional tools
such as the results of the automated employee knowledge and skills inventory
that we recently performed, and should also follow a modern and transparent
organizational staffing model.

There are, however, some negatives associated with a PFP system. The annual
process is labor intensive and produces stress, both on the managers making
the pay decisions and the staff who await them. Staff naturally do not
always agree with panel decisions- creating some tensions as well. The panel
evaluation process takes a full day or two, and is viewed by some managers
as too- time consuming and burdensome. Further, the PFP system has been
somewhat more expensive than the General Schedule system. Nonetheless, we
believe it is cost beneficial.

In early calendar year 2000, GAO issued its first strategic plan for the
21st century. This document is the blueprint for how GAO will support the
Congress in addressing an increasing range of complex issues and challenges.
It describes our mission, and acknowledges our core values. It recognizes a
range of global and domestic trends that are affecting society on every
level, and is built on a comprehensive and focused structure of long- term
goals and objectives to support the Congress in its legislative, oversight,
and investigative roles. We worked closely with legislative and committee
leadership, individual members, congressional staff, a range of outside
parties, and our own employees in developing our strategic plan. Thus, it
not only incorporates congressional views of what constitute important and
emerging issues, but establishes a framework for addressing the Congress?
constitutional responsibilities in the context of current and emerging
challenges in the coming years. (See attachment II.)

Three words sum up the ways in which we serve the Congress and the American
people: oversight, insight, and foresight.

 Oversight: reexamining existing federal roles, missions, programs, and
processes.

 Insight: providing sound policy analysis and crosscutting perspectives and
identifying best practices.

 Foresight: identifying future policy and operational challenges before
they reach crisis proportions. Strategic Planning,

Core Values, And Organizational Alignment Set The Direction For Managing
GAO?s Human Capital

Page 14 GAO- 01- 965T Our strategic plan also describes our role and mission
in the federal government; the core values of accountability, integrity, and
reliability that

guide our work; the trends, conditions, and external factors underlying the
plan; and our goals, objectives, and strategies for serving the Congress. We
intend to update the strategic plan every 2 years for each Congress, and
have an update of the original plan under way. In addition, we will develop
annual performance plans- our fiscal year 2001 plan was our first- as well
as annual Accountability Reports to the Congress, which we began with fiscal
year 1999. We have combined our annual performance plans and accountability
reports into a single document to provide our clients and other readers a
more consolidated and user- friendly format.

From a human capital standpoint, our strategic plan and core values are our
touchstones for designing, implementing, and evaluating our approaches to
managing our people. These two vital elements will also be the foundation
for our revised institutional and individual performance measurement
systems.

We believe that any agency that wishes to design policies and programs to
maximize the value of its human capital must have clear expectations for
itself, strong core values, and an accurate understanding of its evolving
circumstances. The rigorous self- assessment, outreach to our clients, and
broader scan of our external and internal environments that have gone into
our strategic planning process provide these kinds of insights. Because we
have identified the kind of organization we want to be and where we want to
go, we can make informed judgments about our human capital needs and
reasoned decisions regarding the choice of human capital strategies.

We are moving toward a balanced scorecard approach to evaluating our
performance as an organization. We take into account (1) feedback from our
clients, (2) the views of our employees at all levels of the organization,
and (3) our results. For the latter, we depend on a variety of key
performance indicators. Some of these are quantitative, such as the direct
financial benefits produced as a result of our work in such areas reducing
unnecessary spending or enhancing asset revenues. Most of our others are
qualitative, such as the numerous improvements in government operations and
services resulting from our recommendations, including better oversight of
nursing homes, more stringent safety standards for high- speed passenger
rail service, and enhanced computer security in connection with defense
information systems. We also track intermediate indicators, such as the
number of times we have testified before the Congress or the percentage of
GAO recommendations that agencies have implemented,

Page 15 GAO- 01- 965T that while not directly indicative of results,
nevertheless help us monitor our productivity and ensure accountability for
our day- to- day

performance. Not long ago, we developed a tool to help federal agencies
integrate their human capital management with their strategic and
programmatic planning. 4 Our human capital self- assessment framework,
published in draft form in September 1999 and finalized in September 2000,
allows agency leaders to perform a quick assessment of their agencies? human
capital approaches to see if they conform with widely accepted human capital
management practices and align with their agencies? ?shared

vision?- that is, their mission, vision for the future, core values, goals
and objectives, and strategies. The framework lays out five areas for
assessment: strategic planning, organizational alignment, leadership,
talent, and performance culture. We have used this assessment framework
during the past 2 years to scan our own human capital efforts and ensure
their linkage to our strategic plan.

In the fall of 2000, we realigned our mission related functions to better
support the Congress and prepare ourselves, with current and expected
resource levels, to meet the future challenges outlined in our strategic
plan. We reorganized both our headquarters and field mission operations.
These changes included eliminating a layer of managerial hierarchy, reducing
the number of organizational units (from 35 to 13 at headquarters and from
16 to 11 in the field), increasing internal and external coordination
activities between GAO units and the Congress and other accountability
organizations, clarifying the roles and responsibilities of management,
increasing the number of employees who perform rather than manage or review
work, and enhancing the critical mass and flexibility of our field
resources. (See attachment III.)

As an additional element of our realignment, we are currently reorganizing
GAO?s mission support functions. As part of this effort, and to more
effectively integrate our human capital management with our strategic and
program planning, we are reorganizing our human capital office to position
resources where they can best support our mission. To help ensure the
success of this effort, this year we established and filled the

4 Human Capital: A Self- Assessment Checklist for Agency Leaders (GAO/ OCG-
00- 14G, September 2000). Organizational

Realignment at GAO

Page 16 GAO- 01- 965T position of Human Capital Officer as a part of our
senior management team.

Further, this year we absorbed the functions of our previous civil rights
office into our new Office of Opportunity and Inclusiveness. The new office,
whose managing director reports directly to me, will play an important role
in achieving our strategic goal of being a model employer. The office will
take a proactive, rather than reactive, approach to fostering a GAO
environment that ensures that applicants for employment and all members of
its diverse workforce are treated fairly, their differences are respected,
and that reinforces our policy of having zero tolerance for discrimination
of any type.

As with strategic planning, organizational alignment is crucial if an agency
is to maximize its performance and assure its accountability. The choices
that go into aligning an organization to support its strategic and
programmatic goals have enormous implications for further decisions about
human capital management, such as what kinds of leaders the agency should
have and how it will best ensure leadership continuity, how skill needs will
be identified and filled, and what strategies the agency will use to steer
the organizational culture to maximize its results. As our ongoing
experiences have demonstrated, sound strategic planning and proper
organizational alignment provide the essential context for making sensible,
fact- based choices about designing, implementing, and evaluating human
capital approaches.

Our choices about human capital management have all been made to support our
strategic plan, core values, and recent organizational realignment. These
efforts also reflect the fact that we have made strategic human capital
management a top- priority management issue at GAO, one that we know will
require our sustained attention and commitment over an extended period of
time.

Other agencies have different missions to pursue and alternative sets of
management tools and flexibilities available to them. However, we believe
that the vast majority of actions that federal agencies need to take in
order to maximize the value of their human capital can be taken as
administrative actions under current law. There is no single approach to
strategic human capital management that would work in every federal entity.
Clearly, agencies must custom- tailor their human capital efforts to focus
on their specific strategic and programmatic goals and core values. But most
of the steps that we have taken to strengthen human capital at GAO Tailors
Its

Human Capital Approaches To Its Mission And Emerging Circumstances

Page 17 GAO- 01- 965T GAO since I became Comptroller General in November
1998 can be taken by agencies across the federal government. The following
is a description

of some of the initiatives and targeted investments we have made, all of
which link back to our strategic plan, core values, and organizational
realignment.

First, it should be noted that as we assessed GAO?s human capital challenges
at the start of the new century, we recognized that some of the steps needed
to meet these challenges would require additional statutory authorities. I
will discuss the new tools and flexibilities that the Congress provided GAO
in calendar year 2000. The point worth making now is that our strategic,
results- oriented, fact- based approach to human capital management is what
allowed us to make a sound business case for these new tools and
flexibilities. I believe there is a lesson here for other agencies. Namely,
in the absence of comprehensive legislative human capital reform, agencies
must first do everything they can administratively to address their human
capital issues, and seek new legislative flexibilities only when necessary
and based on a sound business case.

 Human Capital Profile/ Needs Assessment. Sound data are critical to making
fact- based human capital management decisions. Working with GAO?s senior
managers, our Human Capital Officer reviewed the data that in aggregate
constitute our human capital profile, covering such indicators as the
distribution of employees by band level, the ratio of managers to employees,
projected retirement and attrition rates, and the diversity of our
workforce. This information, coupled with our knowledge of the kinds and
numbers of resources needed to achieve our strategic and program goals, has
helped us assess our human capital needs and create revitalized strategies
for filling them- particularly in the area of recruiting and hiring. Our
senior leaders regularly review management analyses of these data to track
trends and guide GAO?s human capital decisionmaking.

 Employee Survey. It is important to the health of any high- performing
organization that its senior leaders hear the concerns and suggestions of
employees at all levels. Later this calendar year, we intend to conduct a
new, confidential and automated employee feedback survey. This will be a
follow- up to our initial 1999 survey where 87 percent of our employees
participated and 80 percent of respondents provided at lease one narrative
response. The survey highlighted our strengths and those areas in which we
need to improve. We have used the survey results as a tool in our human
capital improvement efforts and we will continue to do so.

 Skills/ Knowledge Inventory. An important tool for determining how well
our human capital can be expected to meet our mission requirements is our
knowledge and skills inventory. In the summer of 2000, we

Page 18 GAO- 01- 965T administered an automated knowledge and skills survey
that was completed by all GAO managers and staff. Developed jointly by a GAO

team and an outside contractor, the inventory provided an automated database
medium for determining where we are long or short on the knowledge, skills,
and experience needed to accomplish our strategic and program plans.
Additionally, the knowledge and skills inventory is one of several
management tools that will help us to effectively implement the

?early out? programs that we will be using to better align our workforce
with our organizational needs and improve our engagement staffing model.

 Employee Preference Survey. We believe that, to the extent possible, our
employees should be given the opportunity to work in the areas that interest
and energize them most. Last fall, we instituted an automated and
confidential employee preference survey. About 11 percent of our mission
staff expressed interest in changing assignments within GAO. Our Chief
Operating and Chief Mission Support Officers, in partnership with our other
senior managers, are using this information to help make redeployment
decisions. As GAO?s program challenges and human capital needs change, this
initiative provides the agency with a flexible tool for identifying employee
preferences and better aligning our human capital with ongoing and emerging
organizational needs. We anticipate administering additional preference
surveys to refresh our database every 2 years.

 Executive Development/ Succession Planning. After a hiatus in the 1990s,
we have reinstated our Executive Candidate Development Program, through
which candidates selected through a rigorous competitive process are
prepared for assignments at the SES level. During their time in the program,
candidates pursue varied developmental assignments and graduate- level
academic training at institutions such as the John F. Kennedy School of
Government at Harvard University. We also make a point of giving our
executive candidates exposure to the workings of GAO?s executive team, since
many of these candidates may someday join it.

Because candidates are drawn primarily from GAO?s own Band III (Assistant
Director) ranks, it is important for us to ensure continuity as they leave
to take their new assignments. This is where our recent employee preference
survey gives us an additional tool; the survey results can help us fill the
gaps in knowledge and experience that may be created as our mid- level
managers move into senior executive positions.

 Recruiting and College Relations. After a 6- year hiatus, GAO began hiring
entry- level professional staff again in 1998. This year, we will bring on

Page 19 GAO- 01- 965T board more than 300 new hires (224 entry- level
analysts and 135 interns) that will join GAO at our headquarters and in our
field offices. Recruiting

the best talent from the broad array of disciplines we need to meet our
mission is one of our highest priorities. Although the job market for these
professionals has made recruiting and hiring highly competitive, we feel we
have a competitive advantage in some important areas. Foremost is our
mission. Simply stated, we offer the opportunity to make a difference. In
fact, when we surveyed our new hires to ask why they joined GAO, the top
three reasons given were (1) the opportunity to make a difference, (2) the
nature of GAO?s work, and (3) GAO?s people. We are taking every opportunity
to market the GAO brand name on campuses across the country. Further, to
increase our competitiveness on campus, we recently began recruiting and
making job offers during the fall semester to new employees who will
actually come on board the following spring and summer- an action that
allows us to better compete with the private sector for students who are
anticipating spring graduations. Moreover, we are building and maintaining
an active and extensive campus presence of both senior- level GAO executives
and recent graduates. We have a new recruiting video and accompanying
recruiting materials. With the importance of a diverse and inclusive
workplace in mind, we have made special efforts- myself included- to visit
and build ongoing relationships with historically black and Hispanic
colleges and universities, and other universities with large minority
populations. Additionally, we are awaiting OPM?s revisions of its
regulations regarding the repayment of student loans in order to develop our
own student loan repayment program, for which we hope to receive sufficient
funding to allow us to better compete with the private sector for highly
qualified recruits.

Additionally, we are fortunate to have the participation of our Educators
Advisory Panel (EAP), whose members include some 20 leading deans and
professors from key public and private academic institutions and
representatives of related professional organizations. EAP gives us advice
on making GAO a model for the federal government, including strategies, best
practices, operations, and emerging human capital issues and trends related
to recruitment, hiring, development, and retention of a diverse, talented,
dedicated, and results- oriented workforce. In particular, EAP members can
be valuable resources in our recruiting efforts, working with our campus
coordinators to increase the effectiveness of our presence on campuses.

Further, the student intern program we began in the 1980s has resumed in
full swing. The student intern program allows our hiring officials a chance
to closely observe these students to see how they perform in the GAO

Page 20 GAO- 01- 965T environment. Our managers work hard to encourage the
most promising interns to apply for entry- level positions upon completion
of their

academic careers, and today many of our recent interns are returning to GAO
as permanent hires. As I mentioned earlier, our independent appointment and
examination authority has allowed us to offer permanent positions to
successful interns with at least 10 weeks of work experience, without the
requirement of a job announcement and competition. We have found that the
intern program contributes to our recruiting efforts in another way as well.
Those interns returning to campus after an interesting and challenging GAO
assignment make excellent ?goodwill

ambassadors? for the agency, and their on- campus relationships often lead
to additional interns and other recruits for GAO.

 Professional Development and Mentoring Programs for Entry- Level Staff.
GAO?s new employees constitute a crucial human capital investment.
Recognizing this, we developed a comprehensive professional development
program for newly hired Band ID staff. The program includes a combination of
formal and on- the- job training, individual development plans, rotational
assignments, periodic consultations with senior GAO managers, and periodic
formal assessments and clearly defined and consistently applied criteria for
Band IF certification and program completion. We also make every effort to
provide rich and challenging experiences to our newly hired staff, who
typically join new or ongoing engagements and become active team members as
soon as they come onboard.

We have instituted a mentoring program for our newly hired staff. GAO?s
senior managers are directly involved in and responsible for the mentoring
program for staff in their units. Further, mentoring training is offered to
managers to help make the program work. In addition to a mentor, a ?peer

buddy? is arranged for each newly hired Band I to help make the transition
to GAO easier and more rewarding.

 Employee- Friendly Workplace. To further enhance our productivity and our
competitiveness as an employer, we have taken many steps to help our
employees balance their personal and professional lives. One example is our
extensive alternative work- scheduling program, or flexitime. Employees may
complete their biweekly work requirement in less than 10 working days, vary
their times of arrival and departure, and vary the number of hours worked
each day. All GAO employees, including members of the SES, may participate
in the program. Further, some 112 career GAO employees spanning a wide range
of grades and occupations participate in our part- time employment program.
Moreover, in 1993 we

Page 21 GAO- 01- 965T implemented a permanent flexiplace program (now
commonly called telecommuting or telework), under which our employees may
arrange to

work at approved locations away from the regular office. Flexiplace may be
used to help attract and retain employees in critical occupations such as
those in the information technology area. However, I must emphasize that, as
advantageous as telecommuting may be under some circumstances, it is not
appropriate for every employee or every job. As we do, agencies need to
consider whether telecommuting is in the best interests of both the employee
and the agency.

About 995 GAO employees who take public transportation or authorized
vanpools to work, both at headquarters and our field offices, currently have
access to a pre- tax benefit plan to help cover the costs. Along with other
agencies, we are authorized to pay direct benefits through vouchers to
encourage employees? use of public transportation. However, funding
constraints have forced us to choose among the benefits we can provide, and
thus far we have had to forego this one. We have included a request in our
fiscal year 2002 budget request for the funds to enable us to offer the
direct public transportation benefits.

A cost- free benefit we offer our employees is business- casual dress, which
we phased in over a year- long period and has been a great success. Another
low- cost benefit we provide our mission staff is business cards, which
prominently feature GAO?s core values of accountability, integrity, and
reliability and include a professional title chosen by each staff member-
from among a list of approved titles- to convey his or her unique role or
area of expertise in GAO.

We are particularly proud of two of the facilities we offer our headquarters
employees. ?Tiny Findings,? GAO?s on- site childcare center, was one of the
first such facilities in the federal government when it opened in 1990. A
year earlier, the GAO Wellness and Fitness Center was opened after we
renovated space and purchased the original equipment for the facility.
Currently, some 807 employees are members of the GAO Wellness and Fitness
Center. These and other efforts to create an employee- friendly workplace
were recognized in 1998, when we received the OPM Director?s Award for
Outstanding Work and Family Programs.

 Competency- Based Performance Appraisal System. Early in my tenure, it was
apparent that GAO?s performance appraisal system- first implemented in the
mid- 1980s- no longer met our organizational needs. We needed a performance
appraisal system that would create a clearer linkage between employee
performance and GAO?s strategic plan and core

Page 22 GAO- 01- 965T values. Further, it would need to meet three
objectives: (1) give staff candid and constructive feedback designed to help
them maximize their

potential and contributions to the agency, (2) provide management with the
information needed to recognize and reward top performers, and (3) provide
the information and documentation needed to deal with poor performers.
Working with an outside contractor, we are developing a new competency-
based performance appraisal system, which will be implemented for GAO
analysts beginning October 1, 2001. It includes from 9 to 12 competencies
that our employees have validated as the keys to meaningful performance at
GAO. The important thing to note is that when we surveyed GAO employees in
the course of development, they overwhelmingly validated these competencies
as important. In short, this is their system. (See figure 3.)

Figure 3: GAO?s Competency- Based Model

Achieving Results Maintaining Client and Customer Focus

Developing People Thinking Critically Improving Professional Competence

Collaborating with Others Presenting Information Orally Presenting
Information in Writing Facilitating and Implementing Change

Representing GAO Investing Resources

Leading Others

Page 23 GAO- 01- 965T The new competency- based performance appraisal system
should help us across a range of human capital considerations. It is keyed
to results and

creates a clear linkage between employee performance and GAO?s strategic and
programmatic goals. It will help us achieve important cultural changes, such
as a needed shift from a hierarchical, processoriented,

?siloed? and internally focussed culture toward a flatter, more partnerial,
results- oriented, matrix management- oriented, integrated and externally
focussed culture. It will promote open and constructive dialogue between
employees and supervisors, and discussions that encourage and reward
multidimensional team building. It will help us achieve a better balance
between people and products. Further, it will promote honest and
constructive feedback to individuals and managers on performance
expectations and results.

To support this new competency- based performance appraisal approach, we
intend to reexamine our incentives system, through which we hope to provide
meaningful, performance- based rewards to both individuals and teams who
make important contributions to GAO?s mission.

 Training Programs. Our competency- based performance appraisal/ management
system will also be closely linked to our training and professional
development efforts. We recently reinvigorated our agencywide training
efforts through our Center for Performance and Learning (P& L). P& L is
instituting, among other things, an extensive curriculum update. P& L?s goal
is to move to a needs- based, demand- driven learning system that blends
both e- learning and facilitated classroom training and that is informed by
data from the performance management process and employees? individual
development plans. In the next 6 to 12 months, P& L will focus on three
priority areas: (1) implementing our new competency- based performance
management system for analysts and analyst- related staff, (2) supporting 6
of the 12 competencies that represent the most significant changes in GAO?s
historical culture (e. g., developing people, collaborating with others,
facilitating and implementing change, leading others, improving professional
competence, and investing resources) and, (3) enhancing selected client and
external relations efforts.

Another recent step we have taken is to make training for new hires more
effective. We have developed a streamlined training program on GAO work
processes and resources for newly hired staff, reducing nearly 2 weeks of
classroom training to a 4- day interactive case study with other new staff,
preceded by 12 hours of online training.

Page 24 GAO- 01- 965T  Retention and Reward Programs. As I mentioned
earlier, we offer recruitment bonuses and retention allowances, similar to
those offered by

executive branch agencies, to attract and retain employees with specialized
skills. We also make every effort to recognize in both tangible and
intangible ways employees who make special contributions to the
organization. These awards range from individual and team cash spot awards,
time off, and training opportunities, to yearly unitwide awards, to
agencywide recognition of sustained contributions to GAO- Meritorious
Service Awards and Distinguished Service Awards- presented at an annual
agencywide Honor Awards ceremony in Washington, D. C.

 Employee Suggestion Program. An important tool for us to tap into the
ideas and ingenuity of our staff has been our employee suggestion program.
Since the inception of the employee suggestion program in October 1999, we
have received approximately 1,300 suggestions. A number of these suggestions
have been adopted and many are still under consideration. Using GAO?s
Intranet, employees can e- mail their suggestions to my office, after which
they are reviewed and analyzed by the appropriate program staff. We
encourage employees to focus on ways to improve the quality of GAO?s
products and services and on ways to improve the economy, efficiency, and
effectiveness of our job and administrative processes. Employees whose
suggestions are adopted receive some tangible reward for their time and
effort, but the biggest payoff in a program such as this is not the award,
but rather the satisfaction of seeing an idea put to use in a way that
improves GAO.

What makes all the initiatives I have just discussed important is that we
are getting results. The performance of our organization, as reflected in
our first two Accountability Reports to the Congress, is the best indicator
of our effectiveness in maximizing the value of our people. We have found
that many of the management tools and flexibilities we needed to pursue
these modern human capital management approaches are already available to
us, and we are committed to using them, subject to the overall limit in our
financial resources. But clearly, we have also found that we have to stay
alert- to think strategically and proactively- in order to identify
additional authorities that may be needed to prepare our organization for
the challenges of the new century. For example, as I discussed earlier, our
organization faces significant human capital challenges in such areas as its
size, shape, skills imbalances, and succession planning challenges. The past
decade?s dramatic downsizing (approximately 40 percent from 1992 through
1997) and the accompanying inability to hire the new talent we needed
combined with the demographics of an increasingly retirement- eligible
workforce threaten GAO?s New Human Capital

Authorities Will Help It Address Current and Emerging Challenges

Page 25 GAO- 01- 965T our ability to perform our mission in the years ahead.
We found that our preexisting personnel authorities would not let us address
these

challenges effectively. Therefore, using the comprehensive workforce data we
gathered and analyzed to make a coherent business case, we worked with the
Congress last year to obtain several narrowly tailored flexibilities to help
us reshape our workforce and establish senior- level technical positions in
certain critical areas.

The legislation, passed in October 2000, gave us additional tools to realign
GAO?s workforce in light of overall budgetary constraints and mission needs;
to correct skills imbalances; and to reduce high- grade, managerial, or
supervisory positions without reducing the overall number of GAO employees.
To address any or all of these three situations, we now have authority to
offer voluntary early retirement (VER) to up to 10 percent of our employees
each fiscal year until December 31, 2003. We also have the authority to
offer voluntary separation incentive (VSI) payments to up to 5 percent of
our employees during each fiscal year until December 31, 2003. Further, in
the case of a reduction- in- force (RIF), we have the authority to place a
much greater emphasis in our decisionmaking on our employees? knowledge,
skills, and performance, while retaining veterans? preference and length of
service as factors to consider in connection with applicable RIFs.

Since the legislation was enacted, we have established agency regulations
for implementing the VER program. We are in the process of analyzing
workforce data in preparation for offering voluntary early retirements later
this summer and into fiscal year 2002. The development of regulations to
cover VSIs and RIFs is still in progress. We have no plans to offer VSIs,
nor do we intend to pursue any involuntary layoffs during this or the next
fiscal year.

Another provision of the legislation was the authority to establish Senior
Level positions to meet critical scientific, technical, or professional
needs and to extend to those positions the rights and benefits of SES
employees. This authority will help us address positions in such highly
competitive areas as economics and information technology.

We believe that three of the authorities provided in our 2000 legislation
may have broader applicability for other agencies and are worth
congressional consideration at this time. The first two- voluntary early
retirement and voluntary separation incentives- could give agencies
additional flexibilities with which to realign their workforces; correct
skills imbalances; and reduce high- grade, managerial, or supervisory

Page 26 GAO- 01- 965T positions without reducing their overall number of
employees. The third authority- to establish Senior Level positions- could
help agencies

become more competitive in the job market, particularly in critical
scientific, technical, or professional areas.

The Administration and the Congress should consider other legislative
actions that would help federal employers address their human capital
challenges. As demographics change, as the marketplace continues to evolve,
we will continue to think strategically and proactively to identify areas in
which new innovations would make good business sense. In this regard, we
believe it is worth exploring selective legislative proposals to enhance the
federal government?s ability to attract, retain, and motivate skilled
employees, particularly in connection with critical occupations, on a
governmentwide basis. The following represent areas in which opportunities
exist to better equip federal employers to meet their human capital needs:

 Critical occupations. Although agencies generally have more hiring and pay
flexibilities today than in the past, further innovations might be explored
to help federal agencies recruit, retain, and reward employees in such
critical fields as information technology, where there is severe competition
for talent with other sectors.

 Recruiting funds. In order to help attract and retain employees,
consideration should be given to authorizing agencies to use appropriated
funds for selective recruiting, recognition, and team building activities.

 Professional development. To encourage federal employees in their
professional development efforts, consideration should be given to
authorizing agencies to use appropriated funds to pay for selected
professional certifications, licensing, and professional association costs.

 Pay compression relief. Executive compensation is a serious challenge for
federal agencies, which to an increasing extent must compete with other
governmental organizations, and with not- for- profit and private sector
organizations, to attract and retain executive talent. In this regard, the
existing cap on SES pay has increased pay compression between the maximum
and lower SES pay levels, resulting in an increasing number of federal
executives at different levels of responsibility receiving identical
salaries. Further, pay compression can create situations in which the
difference between executive and nonexecutive pay is so small that the
financial incentive for managers to apply for positions of greater
responsibility may disappear. Congress needs to address this increasing pay
compression problem. It could do so, perhaps, by delinking federal Further
legislative reforms

should be explored

Page 27 GAO- 01- 965T executive compensation from congressional pay, or by
raising the cap on executive performance bonuses.

 Cafeteria benefits. Federal employees could be provided with flexible
benefits like many private sector workers under Section 125 of the Internal
Revenue Service Code. This would give federal employees the ability to pay
for such things as childcare or eldercare with pre- tax rather than aftertax
dollars.

 Frequent flyer miles. Employees who travel on government business should
be allowed to keep their ?frequent flyer? miles- a small benefit but one
that private sector employers commonly provide their people as part of a
mosaic of competitive employee benefits. Let?s face it, flying is not fun
anymore. Allowing federal workers to keep these miles, as employees
elsewhere can, is a small price to pay. In addition, federal agencies could
still use gainsharing programs to reward employees and save the government
travel costs.

 Phased retirement. It may be prudent to address some of the succession
planning issues associated with the rise in retirement eligibilities by
pursuing phased retirement approaches, whereby federal employees with needed
skills could change from full- time to part- time employment and receive a
portion of their federal pension while still earning pension credits.

 Fellowships. Congress should explore greater flexibilities to allow
federal agencies to enhance their skills mix by leveraging the expertise of
private and not- for- profit sector employees through innovative fellowship
programs, particularly in critical occupations. Through such fellowships,
private and not- for- profit professionals could gain federal experience
without fully disassociating themselves from their positions, while federal
agencies could gain from the knowledge and expertise that these
professionals would bring during their participation in the program.
Obviously, appropriate steps would have to be taken to address any potential
conflicts.

Successful human capital approaches require the involvement of employees at
all levels of the organization. Agency leaders need to communicate clearly
and consistently to their people at all levels their agency?s mission, core
values, goals and objectives, and strategies. They need to empower employees
and work in a constructive manner with employee organizations. Moreover,
leaders need to provide plentiful opportunities for employees throughout the
organization to give feedback and make their suggestions. In the human
capital arena, how you do something is as important as what you do. Employee

Involvement Is Critical To Successful Human Capital Management

Page 28 GAO- 01- 965T I hold ?CG chats? over our closed- circuit television
network for both our headquarters and field staff, at least quarterly and as
events dictate, to

address particularly current and emerging issues affecting our employees,
such as our organizational realignment or voluntary early- out program. In
addition, members of our Executive Committee and I give numerous
presentations, hold employee forums, and visit field offices to exchange
views on a regular basis. Many of my CG chats have featured Q& As from
members of our Employee Advisory Council, with the opportunity for staff
around GAO to e- mail their questions for on- air answers. In addition, each
week our Office of Public Affairs produces our comprehensive newsletter,
Management News, which is made available online to all our employees.

We have made sure to follow an approach to ?change management? that is
transparent and highly participatory. Recently, we have taken additional,
far- reaching steps to formalize the involvement of our employees and have
used technology to make it easier for them to participate in the process.
One of our key steps has been the creation of our Employee Advisory Council
(EAC). Comprising employees who represent a cross- section of the agency,
the EAC meets quarterly with me and members of our senior executive team.
The EAC?s participation is an important source of frontend input, and
feedback on, our human capital and other management initiatives.
Specifically, EAC members convey the views and concerns of the groups they
represent, while remaining sensitive to the collective best interests of all
GAO employees; propose solutions to concerns raised by employees; provide
input to and comment on GAO policies, procedures, plans, and practices; and
communicate agency issues and concerns to employees.

Creating transparency is a key element of our employee involvement efforts.
We typically get extensive front- end input, issue straw proposals, and make
extensive use of surveys and focus groups to obtain feedback. For example,
before we finalize any major human capital proposal or other significant
agency policy, we notify all of our employees via e- mail that a new GAO
order or policy is out for comment. We post these materials on our Intranet
in a format that allows our employees to comment online. After due
consideration of the comments, many of which may lead to changes in the
original proposal, we inform the staff of the results of the process. Recent
materials that have been provided for comment in this fashion include our
strategic plan; our congressional protocols; the procedures for our
Professional Development Program; proposals for new titles for mission
positions; and all of our GAO orders, including those on the reasonable use
of computers and other equipment,

Page 29 GAO- 01- 965T our employee parking program, adverse actions,
Voluntary Early Retirement offers, and Senior Level positions.

We have noted in the past that there is no single recipe for successful
human capital management. 5 At GAO, we are making significant progress by
using the management tools and flexibilities available to us and tailoring
our human capital approaches to support our mission and other evolving
needs. However, the tools and flexibilities available to other agencies will
differ from ours, and so will the specific human capital approaches these
agencies may develop to fit their own situations. The important point to
remember is that the principles of modern strategic human capital
management, drawn from high- performing organizations in the public, not-
for- profit, and private sectors alike, are widely known and widely
applicable. Every agency needs to recognize that its people are vital assets
for organizational success and, to develop approaches for managing human
capital that best support the agency?s mission, vision, core values, goals
and objectives, and business strategies.

While I have focused so far on GAO?s experience, I would like to remark
briefly on those of two other federal entities, the Department of Defense
(DOD) and the Internal Revenue Service (IRS).

The human capital issues facing the Department of Defense are not
fundamentally different from those facing other federal agencies today. In
the wake of extensive downsizing over the last decade, DOD is experiencing
significant workforce imbalances in terms of shape, skills, and retirement
eligibility, with the likelihood of a significant loss of experienced
personnel to retirement over the next few years and a resulting decline in
the ability to accomplish agency missions. Yet, until recently, there has
been very little action taken to address these problems, especially on the
civilian (or non- uniformed) side of DOD.

The last few decades have seen a dramatic decrease in the size of the DOD
workforce. However, while it has come down considerably in size, it is still
by far the largest employer in the government. Because it is the largest
employer of federal employees in the competitive civil service, how DOD

5 Human Capital: A Self- Assessment Checklist for Agency Leaders (GAO/ OCG-
00- 14G, September 2000). Use Of Management

Tools And Flexibilities At DOD And IRS

Department of Defense

Page 30 GAO- 01- 965T approaches human capital management sends important
signals about trends and expectations for federal employment across
government.

Last year, the Defense Science Board task force 6 identified several key
issues now evident across the total defense force. Within the civilian
workforce, it cited an insufficient number of properly trained candidates in
the pipeline, an aging workforce with little turnover, and limited
professional development opportunities.

DOD?s Human Capital Challenges. Many of the human capital problems that DOD
is dealing with today are the result of its approach to downsizing in the
early 1990s. While DOD had tools available to manage its civilian downsizing
and mitigate the adverse effects of force reductions, its approach to
civilian force reductions was not really oriented toward shaping the makeup
of the workforce for the future. In contrast, DOD did a much better job
managing active- duty military force reductions because it followed a policy
of trying to achieve and maintain a degree of balance between its accessions
and losses in order to shape its forces with regard to rank, specialties,
and years of service. 7

The consequences of the lack of attention to force shaping can be seen in
the current age distribution of the DOD civilian workforce in comparison to
the distribution at the start of the drawdown. Specifically:

 As of September 1999, only 6.4 percent of DOD?s civilian workforce was
under the age of 31, compared to about 17 percent in 1989.

 Since 1989, there has been a 69 percent drop in the number of civilians
with less than 5 years of service, but only a 4 percent drop in the number
of civilians with 11- 30 years of service.

The net effect is a workforce that is not balanced by cohort group or
experience and that puts at risk the orderly transfer of institutional
knowledge. Although we cannot say what the ideal balance of employees should
be, the continuing increase in the number of retirement- age employees could
make it difficult for DOD to infuse its workforce with

6 Final Report of the Defense Science Board Task Force on Human Resources
Strategy

(Office of the Under Secretary of Defense for Acquisition, Technology, and
Logistics, February 28, 2000).

7 Human Capital: Strategic Approach Should Guide DOD Civilian Workforce
Management (GAO/ T- GGD/ NSIAD- 00- 120, March 9, 2000).

Page 31 GAO- 01- 965T new and creative ideas and develop the skilled
civilian workers, managers, and leaders it will need to meet future mission
requirements. These

problems are even more severe in certain areas such as acquisition and depot
maintenance, where the proportional reduction in the size of the workforce
has been 47 percent and 59 percent, respectively, compared to a 37 percent
decrease in the DOD total civilian workforce. In addition, in both of these
areas, more than half of the current workforce will be eligible to retire
within the next 5 years.

Perhaps one of the more serious cases is the example that Senator Voinovich
cited in his recent Report to the President. 8 That case involved Wright-
Patterson Air Force Base in Dayton, Ohio, headquarters of the Air Force
Material Command, which employs over 10,000 civilian federal workers. It is
an excellent example of the age and skills imbalance currently affecting the
defense workforce. Demographically, 60 percent of Wright- Patterson?s
civilian employees will be eligible for either early or regular retirement
by 2005. Over and above the problem of continuity and succession, the
Wright- Patterson example also demonstrates a growing imbalance in DOD?s
engineering workforce as the need for new skills emerges in areas such as
space operations, lasers, optics, advanced materials, and directed energy
fields.

The extended period of downsizing in these and other segments of its
workforce has put DOD on the verge of a retirement- driven talent drain. DOD
is facing potential shortages of experienced personnel in a variety of
areas, including active duty flight- rated personnel and other skill areas
in addition to the acquisitions and depot maintenance areas already
mentioned. Retired military personnel are one potential source of
experienced personnel. For example, in late 1999, the Air Force?s Air
Education and Training Command announced plans to fill 30 flight- rated
staff positions with civilian employees. This initiative was aimed at
freeing up active duty pilots to return to flying positions. Since, as we
have pointed out in the past, a civilian employee costs less than a
comparablygraded military person, 9 finding a viable source of experienced
civilians to

8 Report to the President: The Crisis in Human Capital, report prepared by
Senator George V. Voinovich, Chairman, Subcommittee on Oversight of
Government Management, Restructuring, and the District of Columbia,
Committee on Governmental Affairs, United States Senate, December 2000.

9 DOD Force Mix Issues: Greater Reliance on Civilians in Support Roles Could
Provide Significant Benefits (GAO/ NSIAD- 95- 5, October 19, 1994).

Page 32 GAO- 01- 965T replace active duty personnel in support roles could
also yield significant budgetary savings for DOD.

Military retirees have considerable knowledge, skills, abilities, and
experience that they can bring to some of these highly specialized defense
jobs. They could be a great source of employees that would offset the
expected loss of personnel to retirement while minimizing the loss of
personnel in whom a substantial investment has been made and who still have
valuable contributions to make. However, until recently, many military
retirees who took federal civilian jobs incurred significant economic
penalties. A recent change in law, however, may improve the Department?s
ability to fill specialized positions with highly skilled, experienced
military retirees. The National Defense Authorization Act for Fiscal Year
2000 repealed the dual- compensation limit that required retired military
officers and some enlisted retirees to forego 50 percent of their military
retired pay in excess of about $10,450 if they went to work for the federal
government. A pay cap also placed a limitation on the combined military
retiree pay and civilian employee salary an individual could receive. The
recent repeal of these limitations should make civilian jobs in DOD more
appealing to retired military personnel, allowing the Department to continue
to benefit from the experience and knowledge of retirees after they leave
active duty.

A byproduct of the downsizing of the DOD workforce has been a shift in
composition away from clerical and blue- collar occupations with an
increasing percentage of professional, technical, and administrative
occupations. One of the implications of this trend is the need for
additional programs for training and development. In 1997, in response to
recommendations from the Commission on Roles and Missions of the Armed
Forces, DOD created its Defense Leadership and Management Program (DLAMP).
This is a succession- planning program aimed at preparing civilian employees
for key leadership positions throughout the Department. Since its inception,
nearly 1,500 DOD civilians have participated in the program, and the first
graduates completed the program in late fall 2000.

The Search for Personnel Management Flexibilities. As we have previously
reported, not all barriers to more effective strategic human capital
management in the federal government stem from law or

Page 33 GAO- 01- 965T regulation. 10 Some arise out of long- standing
perceptions about the limitations placed on agency officials? managerial
prerogatives or basic

philosophies about how people should be managed. Over the last couple of
decades, DOD has considered a number of approaches to gaining additional
flexibility with which to manage its civilian workforce. This has ranged
from considering proposing its own personnel system (independent from
government- wide personnel rules) to the development of various personnel
demonstration projects involving particular units or segments of the
workforce.

Defense, like other federal agencies, is authorized by the 1978 Civil
Service Reform Act (5 U. S. C. 4703) to conduct personnel demonstration
projects with the approval of OPM. Over the years, Defense organizations
have sought and received permission to engage in a variety of projects aimed
at demonstrating the potential to improve the management of civil service
employees. Most of these demonstration projects have experimented with
changing various civil service policies or procedures, such as broadbanding
grade levels and implementing various pay- for- performance or
contributions- based compensation systems. For example, a recent
demonstration project approved by OPM is intended to enhance the quality,
professionalism, and management of the Department?s civilian acquisition
workforce. 11 This demonstration project is designed to provide an
encouraging environment that promotes the growth of all employees and
improves the local acquisition managers? ability and authority to manage the
workforce effectively. It involves streamlined hiring processes,
broadbanding, simplified job classification, a contribution- based
compensation and appraisal system, revised reduction- in- force procedures,
expanded training opportunities, and sabbaticals.

The Need For Strategic Workforce Planning. Seeking additional flexibilities
and developing demonstration projects, however, is likely to do little to
solve DOD?s long- term human capital problems unless it first engages in a
concerted strategic workforce planning effort. As the Defense Science Board
task force reported in February 2000:

10 Transforming the Civil Service: Building the Workforce of the Future-
Results of a GAO- Sponsored Symposium (GAO/ GGD- 96- 35, December 20, 1995).
11 For details on this demonstration project, see Federal Register, Vol. 64,
No. 5, pp. 1426- 1432.

Page 34 GAO- 01- 965T  ?Today there is no overarching framework within
which the future DOD workforce is being planned aside from the planning
conducted within the

military services and ad hoc forums in the Office of the Secretary of
Defense. An overarching strategic vision is needed that identifies the kind
of capabilities, and the changes in human resources planning and programs
that will be required. (p. viii)? 12

This brings us to the crucial foundation that DOD needs to put in place if
it is to solve its long- term human capital challenges- strategic workforce
planning. The Department needs to:

 determine its current and future workforce needs,

 assess how its current and anticipated future workforce compares to these
needs, and develop effective strategies to fill the gaps.

Some work has recently begun in this area. The RAND Corporation recently
issued the results of a study conducted for DOD. 13 This report was aimed at
understanding the effect of Joint Vision 2010 14 on the defense workforce.
The researchers focused on three key questions to facilitate workforce
planning for the year 2010:

 What changes in military missions, organizations, and technology are
anticipated by 2010?

 To what extent will changes in military missions, organizations, and
technology affect defense work context and activities? How will changes in
work affect the desired characteristics of workers?

Efforts such as this need to be continued and expanded beyond the first
decade of the new century if DOD is to develop the workforce it will need to
fulfill our strategic national defense requirements.

12 Final Report of the Defense Science Board Task Force on Human Resources
Strategy

(Office of the Under Secretary of Defense for Acquisition, Technology, and
Logistics, February 28, 2000).

13 Levy, D. G., Thie, H. J., Robbert, A. A., Naftel, S., Cannon, C.,
Ehrenberg, R., and Gershwin, M. Characterizing the Future Defense Workforce
(RAND, MR- 1304- OSD, 2001). 14 A document published in 1996 by Chairman of
the Joint Chiefs, General Shalikashvili, outlining his vision for joint
warfighting in the early 21st century.

Page 35 GAO- 01- 965T IRS is revamping its human capital policies to help
achieve its congressionally mandated transformation to an agency that better

balances service to the taxpayers with enforcement of the tax laws. The
massive modernization required by the IRS Restructuring and Reform Act (the
Reform Act) is virtually unprecedented for IRS and will require many years
to implement.

Strategic planning. Before using the full range of personnel flexibilities
available to it under current law and as made available by the Reform Act,
IRS first needed to develop an agencywide strategic plan that established a
framework for meeting its revised responsibilities. High- performing
organizations develop strategic plans that shape the human capital policies
and practices needed to align all employees toward achieving organizational
goals and objectives. Such a plan was particularly important for IRS
because, given the breadth of changes the Congress expected it to make, the
agency needed to thoroughly reconsider its strategic direction. Further, at
the same time that IRS was developing a strategic plan pursuant to the
Reform Act, it was also reorganizing into four customer- focused operating
divisions and aligning the division?s efforts with its new strategic plan.
Not surprisingly, developing a new strategic approach and reorganizing in
concert with it were timeconsuming tasks.

As part of its annual strategic planning and budgeting process, IRS revised
its strategic plans at the agencywide, division, and field office levels in
October 2000. We found the plan to be well developed at the IRS- wide level,
reflecting the balance the Congress sought between taxpayer service and tax
compliance. However, the plans, developed by divisions and field offices
needed to be more specific, measurable and outcome oriented to provide a
road map for each employee?s daily activities. IRS is improving its
strategic planning process and is currently deploying operational balanced
measures to the field office level.

Concurrent with developing its strategic plan, IRS began changing its
employee evaluation systems to better reflect the agency?s strategic goals
and objectives. Such change was needed because, as we reported in October
1999, front- line employee evaluations were more heavily focused on revenue
production and efficiency than on customer service. IRS first revised the
evaluation system for managers because these changes could be made without
negotiating with the National Treasury Employees Union (NTEU), which
represents front- line employees. Effective February 2000, the new
evaluation system for managers includes critical job elements that reflect
IRS? strategic goals of balancing its customer service and Internal Revenue
Service

Page 36 GAO- 01- 965T compliance responsibilities while promoting employee
satisfaction. Managers are also required to develop specific commitments
about the

actions they will take to contribute to IRS? goals and objectives. IRS is
currently revising the evaluation system for the remainder of the workforce
so that their critical job elements also reflect IRS? strategic goals. IRS
is discussing these proposed changes with NTEU and hopes to have this system
in place by fiscal year 2002. We are currently assessing how effective these
new employee evaluation systems are in cascading strategic goals and
objectives down to managers and front- line employees.

Tailoring human capital approaches. IRS has used personnel flexibilities
authorized by the Reform Act and flexibilities within existing personnel
systems to better tailor its human capital policies and practices to its
needs. For example, the Reform Act authorized IRS to establish up to 40
critical pay positions to attract senior managers with special knowledge and
skills that IRS would otherwise have been unable to attract. As of early
July 2001, IRS had about 24 positions filled under its new critical pay
authority. IRS also created a broadbanded personnel classification and pay
system to increase its flexibility in rewarding and utilizing managers. In
March 2001, IRS collapsed over 1,500 GS- 14s and GS- 15s into a single pay
band.

In addition to the personnel flexibilities provided under the Reform Act,
IRS used its existing personnel authority to foster employee behavior that
supports its new strategic goals. For example, IRS has provided training to
its employees on the new definition of customer service and how customer
service should be integrated into their daily activities. In addition, IRS
has put into place personnel practices that the Congress tailored to IRS?
circumstances when it passed the Restructuring Act. These include, for
instance, a prohibition on using tax enforcement statistics in employee
evaluations and termination procedures for employees engaging in specific
types of misconduct.

Employee involvement. To get employee buy- in, IRS has continued to involve
NTEU in developing and implementing organizational changes. For example, IRS
and NTEU have partnered through efforts such as formally structured
partnering councils, business process improvement teams, and cross unit
committees. NTEU has also been involved since the beginning in IRS?
reorganization. For example, over 500 front- line employees worked on
reorganization teams. NTEU?s President said that because the union has been
involved in the reorganization since the beginning, NTEU has been willing to
expedite union negotiations on certain mission critical

Page 37 GAO- 01- 965T items. For example, NTEU has expedited the development
of new career paths and position descriptions for IRS employees.

IRS has also involved NTEU and employees in developing the new frontline
employee evaluation system. However, IRS has been less successful in
obtaining employee buy- in to these changes. IRS has had difficulty in
obtaining NTEU agreement to the implementation of the employees? new
critical job elements.

An agency?s people are its most valuable organizational asset in managing
for results. After years of inattentiveness to human capital as a critical
management issue, and now that strategic human capital management has earned
GAO?s governmentwide high- risk designation, the federal government must
take steps to meaningfully address its many human capital challenges. In
this regard, the federal government must take a more strategic approach to
human capital management. This area must be linked to each entity?s
strategic plan, core values, and organizational realignment.

Fundamental human capital legislative reform will eventually become a
reality. However, agencies must first take the steps available to them under
current laws and regulations to better manage their people. Second, agencies
and The Congress alike should explore several legislative opportunities to
help attract, motivate, and retain employees, both overall and especially in
connection with critical occupations. Finally, all interested parties should
work together to determine the nature and extent of more comprehensive human
capital (or civil service) reforms that should be enacted over time. These
reforms should include placing greater emphasis on skills, knowledge, and
performance in connection with federal employment and compensation
decisions.

I believe that if the government is to maximize its performance and assure
accountability, then a fundamental shift is needed in the performance
management paradigm. Decisions regarding hiring, compensation, promotion,
and disciplinary actions must be driven more by employee skills, knowledge,
and performance, and less by the passage of time and the rate of inflation,
as they are today. The message we will send by moving away from tenure-
based decisionmaking and toward decisions based on skills, knowledge, and
performance, is simple: results count. Federal employees and managers alike
will get the message, but so will prospective federal employees and members
of the general public. They will understand that the federal government is
holding its people to the Summary

Page 38 GAO- 01- 965T highest standards of accountability, and that
understanding will make the federal government a more prestigious,
respected, and attractive

employer. For further information regarding this testimony, please contact
Victor S. Rezendes, Managing Director, Strategic Issues, on (202) 512- 6806
or at rezendesv@ gao. gov. For information specific to the DOD- related
portion of this testimony, please contact Henry L. Hinton, Jr., Managing
Director, Defense Capabilities and Management, on (202) 512- 4300 or at
hintonh@ gao. gov. For further information specific to the IRS- related
portion of this testimony, please contact Michael Brostek, Director, Tax
Administration and Justice, on (202) 512- 9110 or at brostekm@ gao. gov.
Individuals making key contributions to this testimony included Stephen
Altman, William Beusse, Ralph Block, Margaret Braley, Benjamin Crawford,
Charlie Daniel, Gilbert Fitzhugh, John Pendleton, Joseph Santiago, and Jonda
Van Pelt. Contact and

Acknowledgments

(450043)

Page 39 GAO- 01- 965T Attachment I: Addressing the Human Capital Challenge:
Shared Responsibilities

 President

 Lead

 Promote

 Recognize

 OMB

 Lead

 Coordinate

 Link

 OPM

 Lead

 Advise/ Assist

 Review

 Departments/ Agencies

 Lead

 Design

 Implement

 Congress

 Confirm

 Oversee

 Legislate

 GAO

 Review

 Recommend

 Share

 Private Sector

 Partner

 Recognize

 Support

 Foundations

 Partner

 Research

 Integrate

 Academia

 Partner

 Revise

 Promote

 Media

 Learn

 Investigate

 Report

Page 40 GAO- 01- 965T Attachment II

Page 41 GAO- 01- 965T Attachment III

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