Federal Law Enforcement: Selected Issues in Human Capital	 
Management (23-JUL-03, GAO-03-1034T).				 
                                                                 
Many federal agencies in the Washington, D.C., metropolitan area 
have their own police forces to ensure the security and safety of
the persons and property within and surrounding federal 	 
buildings. In the executive branch, for example, the Secret	 
Service has over 1,000 uniformed officers protecting the White	 
House, the Treasury Building, and other facilities used by the	 
Executive Office of the President. The Interior Department's Park
Police consists of more than 400 officers protecting parks and	 
monuments in the area. The Pentagon Force Protection Agency has  
recently increased its force to over 400 officers. Even the	 
Health and Human Services Department maintains a small police	 
force on the campus of the National Institutes of Health (NIH) in
Bethesda, Maryland. In addition, there are federal uniformed	 
police forces in both the Legislative and Judicial Branches of	 
the federal government. We have continued to examine the	 
transformation of 22 agencies with an estimated 160,000 civilian 
employees into the Department of Homeland Security.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-1034T					        
    ACCNO:   A07672						        
  TITLE:     Federal Law Enforcement: Selected Issues in Human Capital
Management							 
     DATE:   07/23/2003 
  SUBJECT:   Federal agencies					 
	     Law enforcement					 
	     Police						 
	     Personnel management				 
	     Personnel recruiting				 
	     Attrition rates					 
	     Surveys						 
	     Hiring policies					 
	     Fringe benefits					 

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GAO-03-1034T

Testimony Before the Committee on Government Reform, Subcommittees on
Civil Service and Agency Organization and Criminal Justice, Drug Policy
and Human Resources, House of Representatives

United States General Accounting Office

GAO For Release on Delivery Expected at 10: 00 a. m. EDT Wednesday, July
23, 2003 FEDERAL LAW

ENFORCEMENT Selected Issues in Human Capital Management

Statement of Norman J. Rabkin, Managing Director, Homeland Security and
Justice Issues

GAO- 03- 1034T

Page 1 GAO- 03- 1034T Chairwoman Jo Ann Davis, Chairman Mark Souder, and
Members of the Subcommittees:

Many federal agencies in the Washington, D. C., metropolitan area have
their own police forces to ensure the security and safety of the persons
and property within and surrounding federal buildings. In the executive
branch, for example, the Secret Service has over 1,000 uniformed officers
protecting the White House, the Treasury Building, and other facilities
used by the Executive Office of the President. The Interior Department*s
Park Police consists of more than 400 officers protecting parks and
monuments in the area. The Pentagon Force Protection Agency has recently
increased its force to over 400 officers. Even the Health and Human
Services Department maintains a small police force on the campus of the
National Institutes of Health (NIH) in Bethesda, Maryland. In addition,
there are federal uniformed police forces in both the Legislative and
Judicial Branches of the federal government.

After the terrorist attacks of September 11, 2001, and the government*s
subsequent efforts to increase airline security, many of these local
police forces began experiencing difficulties in recruiting and retaining
officers. Police force officials raised concerns that the newly created
Transportation Security Administration (TSA) and its Federal Air Marshal
Program were luring many prospective and experienced officers by offering
better starting pay and law enforcement retirement benefits. Former
Congresswoman Morella asked us to look into these concerns. I would like
to summarize the results of that review, which was published last month. 1
 Most forces reported experiencing recruitment difficulties. Officials at
8 of

the 13 forces told us they experienced moderate to very great recruiting
difficulties. Despite this, none of the 13 forces used available human
capital flexibilities, such as recruitment bonuses or student loan
repayments in fiscal year 2002, to try to improve their recruiting
efforts.

1 U. S. General Accounting Office, Federal Uniformed Police: Selected Data
on Pay, Recruitment, and Retention at 13 Police Forces in the Washington,
D. C., Metropolitan Area, GAO- 03- 658 (Washington, D. C.: June 13, 2003).

Page 2 GAO- 03- 1034T  In fiscal year 2002, many of the local forces
experienced sizable increases in turnover, mostly due to voluntary
separations. About half of the officers who left voluntarily went to the
TSA. Some of the forces provided

retention allowances and incentive awards to try to retain more of their
officers.

 Entry- level pay at the 13 agencies during fiscal year 2002 ranged from
$28,801 to $39,427, a gap that narrowed for some of the forces in fiscal
year 2003 because officers at 12 of the 13 agencies received increased
entry- level pay.

However, information we have gathered since we issued our report indicates
that turnover in most of the police forces has dropped significantly
during fiscal year 2003. The increase in turnover that occurred at 12 of
the 13 police forces during fiscal year 2002 appears to be associated with
the concurrent staffing of the TSA Federal Air Marshal

Program. TSA's hiring of air marshals during fiscal year 2003 has been
pared back. To perform our work, we identified federal uniformed police
forces with

50 or more officers in the Washington Metropolitan Statistical Area (MSA)*
13 in all. We interviewed officials responsible for human capital issues
and obtained documents on recruitment and retention issues. Using this
information, we created a survey and distributed it to the 13 police
forces to obtain information on entry- level pay and benefits, officer
duties, turnover rates, 2 recruiting difficulties, and the availability
and use of

human capital flexibilities to recruit and retain officers. We reviewed
and analyzed the police forces* responses for completeness and accuracy
and followed- up on any missing or unclear responses with appropriate
officials.

Chairwoman Davis, at your request and the request of Senator Voinovich, we
have continued to examine the transformation of 22 agencies with an
estimated 160,000 civilian employees into the Department of Homeland
Security (DHS). To learn from private sector mergers and acquisitions, we

2 To calculate the turnover rates, we divided the total number of police
officers who separated from the police forces by the average number of
officers on- board at the beginning of the fiscal year and the number of
officers on- board at the end of the fiscal year. For each police force,
we included as separations both those who left the police force, as well
as those who transferred from the police officer series (GS- 0083) to
other job series within the force.

Page 3 GAO- 03- 1034T identified key practices and their implementation
steps that can serve as a basis for federal agencies, including DHS,
seeking to transform their

cultures to be more results- oriented, customer- focused, and
collaborative in nature. Our report on these implementation steps is being
released today. 3 Some of these steps are to

 define and articulate a succinct and compelling reason for change; 
identify cultural features of merging organizations to increase
understanding of former work environments;

 adopt leading practices to implement effective performance management
systems with adequate safeguards; and  involve employees in planning and
sharing performance information.

Although the specific duties police officers perform may vary among police
forces, federal uniformed police officers are generally responsible for
providing security and safety to people and property within and sometimes
surrounding federal buildings. There are a number of federal uniformed
police forces operating in the Washington MSA, of which 13 had 50 or more
officers as of September 30, 2001. Table 1 shows the 13 federal uniformed
police forces included in our review and the number of officers in each of
the police forces as of September 30, 2002.

3 U. S. General Accounting Office, Results- Oriented Cultures:
Implementation Steps to Assist Mergers and Organizational Transformations,
GAO- 03- 669 (Washington, D. C.: July 2, 2003). Federal Police Forces

in Washington, D. C.

Page 4 GAO- 03- 1034T Table 1: Federal Uniformed Police Forces with 50 or
More Officers Stationed in the Washington MSA Department Uniformed police
force Number of officers on- board

as of September 30, 2002

Executive branch Department of Defense Pentagon Force Protection Agency
259 Department of the Interior U. S. Park Police 439 Department of Justice
Federal Bureau of Investigation Police 173 Department of the Treasury
Bureau of Engraving and Printing Police 120

U. S. Mint Police 52 U. S. Secret Service Uniformed Division 1,072 General
Services Administration Federal Protective Service 140 Department of
Health and Human Services National Institutes of Health Police 53 U. S.
Postal Service U. S. Postal Service Police 109

Legislative branch Government Printing Office Government Printing Office
Police 52 Library of Congress Library of Congress Police 129 U. S. Capitol
Police U. S. Capitol Police 1,278 Judicial branch Supreme Court Supreme
Court Police 122

Total 3,998

Source: GAO analysis of data provided by the 13 police forces.

The enactment of the Homeland Security Act 4 on November 25, 2002, had
consequences for federal uniformed police forces. The act, among other
things, established a new DHS, which includes 2 uniformed police forces
within the scope of our review* the Federal Protective Service and the
Secret Service Uniformed Division. Another component of DHS is TSA, a
former component of the Department of Transportation. TSA includes the
Federal Air Marshal Service, designed to protect domestic and
international airline flights against hijacking and terrorist attacks.
During fiscal year 2002, the Federal Air Marshal Program increased its
recruiting significantly in response to the terrorist attacks of September
11, 2001. However, by fiscal year 2003, the buildup had been substantially
completed. Because Federal Air Marshals are not limited to the grade and
pay step structure of the federal government*s General Schedule, TSA has

4 P. L. 107- 296, 116 Stat. 2135 (2002).

Page 5 GAO- 03- 1034T been able to offer recruits higher compensation and
more flexible benefit packages than many other federal police forces.

Federal uniformed police forces operate under various compensation
systems. Some federal police forces are covered by the General Schedule
pay system and others are covered by different pay systems authorized by
various laws. 5 Since 1984, all new federal employees have been covered by
the Federal Employees Retirement System (FERS). 6 Federal police forces

provide either standard federal retirement benefits or federal law
enforcement retirement benefits. 7 Studies of employee retention indicate
that turnover is a complex and

multifaceted problem. People leave their jobs for a variety of reasons.
Compensation is often cited as a primary reason for employee turnover.
However, nonpay factors, such as age, job tenure, job satisfaction, and
job location, may also affect individuals* decisions to leave their jobs.

During recent years, the federal government has implemented many human
capital flexibilities to help agencies attract and retain sufficient
numbers of high- quality employees to complete their missions. Human

5 The General Schedule system consists of 22 broad occupational groups.
Each group includes separate series that represent occupations in that
group. The police series (GS- 0083) is within the Miscellaneous
Occupations group. The Office of Personnel Management (OPM) defines the
police series as positions in which the primary duties are the performance
or supervision of law enforcement work in the preservation of the peace;
the prevention, detection, and investigation of crimes; the arrest or
apprehension of violators; and the provision of assistance to citizens in
emergency situations, including the

protection of civil rights. 6 FERS benefits are derived from three
components: an annuity, a thrift savings plan, and Social Security. The
basic annuity provided under FERS is computed on the basis of (1) years of
service and (2) the 3 years of service with the highest annual salaries
(high 3). Congress intended that the second component of FERS* the Thrift
Savings Plan* be a key element of FERS. The Thrift Savings Plan provides
for an employer contribution, including an automatic contribution of 1
percent of salary, along with a matching contribution of up to 5 percent.
Social Security benefits make up the third component of the retirement

package. The Civil Service Retirement System annuity, which applies to
individuals hired prior to January 1, 1984, is a stand- alone annuity
based on age and years of service.

7 Under FERS, officers receiving federal law enforcement retirement
benefits receive 1.7 percent of their high 3 multiplied by the first 20
years of service and 1 percent multiplied by each year of service greater
than 20 years. Thus, a police officer who retires at age 50 with 20 years
of service would receive 34 percent of the officer*s high 3. After 30
years of service, the benefit would be 44 percent of the officer*s high 3.
Officers retiring under FERS would also receive benefits from their Thrift
Savings Plan accounts and Social Security.

Page 6 GAO- 03- 1034T capital flexibilities can include actions related to
such areas as recruitment, retention, competition, position
classification, incentive

awards and recognition, training and development, and work- life policies.
We have stated in recent reports that the effective, efficient, and
transparent use of human capital flexibilities must be a key component of
agency efforts to address human capital challenges. 8 The tailored use of
such flexibilities for recruiting and retaining high- quality employees is
an important cornerstone of our model of strategic human capital
management. 9 Eight of the 13 police forces reported difficulties
recruiting officers from a

moderate to a very great extent. Despite recruitment difficulties faced by
many of the police forces, none of the police forces used important human
capital recruitment flexibilities, such as recruitment bonuses and student
loan repayments, in fiscal year 2002. Some police force officials reported
that the human capital recruitment flexibilities were not used for various
reasons, such as limited funding or that the flexibilities themselves were
not available to the forces during the fiscal year 2002 recruiting cycle.
10 Officials at 4 of the 13 police forces (Bureau of Engraving and
Printing

Police, the Federal Bureau of Investigation (FBI) Police, Federal
Protective Service, and NIH Police) reported that they were having a great
or very great deal of difficulty recruiting officers. In addition,
officials at 5 police forces reported that they were having difficulty
recruiting officers

to a little or some extent or to a moderate extent. Among the reasons
given for recruitment difficulties were:

 low pay;  the high cost of living in the Washington, D. C.,
metropolitan area;  difficulty completing the application/ background
investigation process;

and  better retirement benefits at other law enforcement agencies.

8 U. S. General Accounting Office, High Risk Series: Strategic Human
Capital Management, GAO- 03- 120 (Washington, D. C.: Jan. 2003). 9 U. S.
General Accounting Office, A Model of Strategic Human Capital Management,
Exposure Draft, GAO- 02- 373SP (Washington, D. C.: Mar. 15, 2002). 10 All
executive branch agencies have the authority to use human capital
flexibilities, such as recruitment bonuses and student loan repayments.
However, agencies may choose not to offer them. Most Forces Experienced

Recruitment Difficulties

Page 7 GAO- 03- 1034T Conversely, officials at 4 of the 13 police forces
(Library of Congress Police, the Supreme Court Police, U. S. Mint Police,
and U. S. Postal Service

Police) reported that they were not having difficulty recruiting officers.
Library of Congress officials attributed their police force*s lack of
difficulty recruiting officers to attractive pay and working conditions
and the ability to hire officers at any age above 20 and who also will not
be subject to a mandatory retirement age. 11 Supreme Court officials told
us that their police force had solved a recent recruitment problem by
focusing additional resources on recruiting and emphasizing the force*s
attractive work environment to potential recruits. U. S. Postal Service
officials reported that their police force was not experiencing a
recruitment problem because it hired its police officers from within the
agency. Table 2 provides a summary of the level of recruitment
difficulties reported by the 13 police forces.

Table 2: Extent to Which Police Forces Reported Experiencing Recruitment
Difficulties in the Washington MSA Uniformed police force Very great
extent Great extent Moderate extent Little or some extent No extent

Library of Congress Supreme Court U. S. Capitol Pentagon Force Protection
Agency Secret Service Park Police Bureau of Engraving and Printing U. S.
Mint Police Government Printing Office Federal Bureau of Investigation U.
S. Postal Service Federal Protective Service National Institutes of Health
Total 1 3 4 1 4

Source: GAO analysis of data provided by the 13 police forces.

Although many of the police forces reported facing recruitment
difficulties, none of the police forces used human capital recruitment

11 Police forces that are not covered by federal law enforcement
retirement benefits do not have a mandatory retirement age.

Page 8 GAO- 03- 1034T tools, such as recruitment bonuses and student loan
repayments, in fiscal year 2002.

Total turnover at the 13 police forces nearly doubled from fiscal years
2001 to 2002. Additionally, during fiscal year 2002, 8 of the 13 police
forces experienced their highest annual turnover rates over the 6- year
period,

from fiscal years 1997 through 2002. There were sizable differences in
turnover rates among the 13 police forces during fiscal year 2002. NIH
Police reported the highest turnover rate at 58 percent. The turnover
rates for the remaining 12 police forces ranged from 11 percent to 41
percent. Of the 729 officers who separated from the 13 police forces in
fiscal year 2002, about 82 percent (599), excluding retirements,
voluntarily separated. About 53 percent (316) of the 599 officers who
voluntarily separated from the police forces in fiscal year 2002 went to
TSA. 12 Additionally, about

65 percent of the officers who voluntarily separated from the 13 police
forces during fiscal year 2002 had fewer than 5 years of service on their
police forces.

The total number of separations at all 13 police forces nearly doubled
(from 375 to 729) between fiscal year 2001 and 2002. Turnover increased at
all but 1 of the police forces (Library of Congress Police) over this
period.

The most significant increases in turnover occurred at the Bureau of
Engraving and Printing Police (200 percent) and the Secret Service
Uniformed Division (about 152 percent). In addition, during fiscal year
2002, 8 of the 13 police forces experienced their highest annual turnover
rates over the 6- year period, from fiscal year 1997 through 2002.

The turnover rates at the 13 police forces ranged from 11 percent at the
Library of Congress Police to 58 percent at the NIH Police in fiscal year
2002. In addition to the NIH Police, 3 other police forces had turnover
rates of 25 percent or greater during fiscal year 2002. The U. S. Mint
Police reported the second highest turnover rate at 41 percent, followed
by the

Bureau of Engraving and Printing Police at 27 percent and the Secret
Service Uniformed Division at 25 percent.

There was no clear pattern evident between employee pay and turnover rates
during fiscal year 2002. For example, while some police forces with

12 Of the 316 officers who went to TSA, 313 accepted law enforcement
positions and 3 accepted nonlaw enforcement positions. Sizable Differences
in

Turnover Rates among the 13 Police Forces

Page 9 GAO- 03- 1034T relatively highly paid entry- level officers such as
the Library of Congress Police (11 percent) and the Supreme Court Police
(13 percent) had

relatively low turnover rates, other police forces with relatively highly
paid entry- level officers such as the U. S. Mint Police (41 percent),
Bureau of Engraving and Printing Police (27 percent), and Secret Service
Uniformed Division (25 percent) experienced significantly higher turnover
rates. Additionally, turnover varied significantly among the 5 police
forces with relatively lower paid entry- level officers. For example,
while the Federal Protective Service (19 percent) and NIH Police (58
percent) entry- level officers both received the lowest starting pay,
turnover differed dramatically.

Likewise, no clear pattern existed regarding turnover among police forces
receiving federal law enforcement retirement benefits and those receiving
traditional federal retirement benefits. For example, entry- level
officers at

the Library of Congress Police, U. S. Capitol Police, and Supreme Court
Police all received equivalent pay in fiscal year 2002. However, the
Library of Congress (11 percent) had a lower turnover rate than the
Capitol Police (13 percent) and Supreme Court Police (16 percent), despite
the fact that officers at the latter 2 police forces received federal law
enforcement retirement benefits. In addition, while officers at both the
Park Police (19 percent) and Secret Service Uniformed Division (25
percent) received law enforcement retirement benefits, these forces
experienced higher

turnover rates than some forces such as U. S. Postal Service Police (14
percent) and FBI Police (17 percent), whose officers did not receive law
enforcement retirement benefits and whose entry- level officers received
lower starting salaries.

More than half (316) of the 599 officers who voluntarily separated from
the police forces in fiscal year 2002 went to TSA* nearly all (313 of 316)
to become Federal Air Marshals where they were able to earn higher
salaries, federal law enforcement retirement benefits, and a type of pay
premium for unscheduled duty equaling 25 percent of their base salary. The
number (316) of police officers who voluntarily separated from the 13
police forces to take positions at TSA nearly equaled the increase in the
total number of separations (354) that occurred between fiscal year 2001
and 2002.

About 25 percent (148) of the voluntarily separated officers accepted
other federal law enforcement positions, excluding positions at TSA, and
about 5 percent (32 officers) took nonlaw enforcement positions, excluding

positions at TSA. Furthermore, about 9 percent (51) of the voluntarily
separated officers took positions in state or local law enforcement or
separated to, among other things, continue their education. Officials were

Page 10 GAO- 03- 1034T unable to determine where the remaining 9 percent
(52) of the voluntarily separated officers went. Figure 1 shows a
percentage breakdown of where the 599 officers who voluntarily separated
from the 13 police forces during

fiscal year 2002 went.

Figure 1: Percentage Breakdown of Where 599 Officers Who Voluntarily
Separated during Fiscal Year 2002 Went

Although we did not survey individual officers to determine why they
separated from these police forces, officials from the 13 forces reported
a number of reasons that officers had separated, including to obtain
better pay and/ or benefits at other police forces, less overtime, and
greater responsibility. Without surveying each of the 599 officers who
voluntarily separated from their police forces in fiscal year 2002, we
could not draw any definitive conclusions about the reasons they left.

Data we gathered from the 13 police forces since we issued our report
indicate that fiscal year 2003 turnover rates will drop significantly at
12 of 13 forces-- even below historical levels at most of the forces* if
patterns for the first 9 months of fiscal year 2003 continue for the
remaining

316 - TSA

Source: GAO analysis of turnover data provided by the 13 police forces.

25% 9%

5% 3%

2% 3%

148 - Other federal law enforcement, excluding TSA 52 - Unknown

31 - State or local law enforcement 20 - Other

12 - Other non- law enforcement 20 - Other federal non- law

enforcement, excluding TSA

53%

Page 11 GAO- 03- 1034T months. 13 Prospective turnover rates at these 12
forces in fiscal year 2003 range from being 21 to 83 percent lower than
fiscal year 2002 levels. In

addition, prospective fiscal year 2003 turnover rates at 8 of the 13
forces are below historical levels.

The use of human capital flexibilities to address turnover varied among
the 13 police forces. For example, officials at 4 of the 13 police forces
reported that they were able to offer retention allowances, which may
assist the forces in retaining experienced officers, and 3 of these police
forces used this tool to retain officers in fiscal year 2002. The average

retention allowances paid to officers in fiscal year 2002 were about
$1,000 at the Pentagon Force Protection Agency, $3,500 at the Federal
Protective Service, and more than $4,200 at the NIH Police. The police
forces reported various reasons for not making greater use of available

human capital flexibilities in fiscal year 2002, including  lack of
funding for human capital flexibilities,  lack of awareness among police
force officials that the human capital flexibilities were available, and

 lack of specific requests for certain flexibilities such as time- off
awards or tuition reimbursement.

The limited use of human capital flexibilities by many of the 13 police
forces and the reasons provided for the limited use are consistent with
our governmentwide study of the use of such authorities. In December 2002,
we reported that federal agencies have not made greater use of such
flexibilities for reasons such as agencies* weak strategic human capital
planning, inadequate funding for using these flexibilities given competing
priorities, and managers* and supervisors* lack of awareness and knowledge
of the flexibilities. 14 We further stated that the insufficient or
ineffective use of flexibilities can significantly hinder the ability of
agencies to recruit, hire, retain, and manage their human capital.
Additionally, in May 2003, we reported that OPM can better assist agencies
in using human capital flexibilities by, among other things, maximizing
its

efforts to make the flexibilities more widely known to agencies through 13
Historical levels were calculated by averaging turnover rates, when
available, for fiscal years 1997- 2001. The turnover rate from fiscal year
2002 was excluded from the average due to the special circumstances of the
startup of TSA.

14 U. S. General Accounting Office, Human Capital: Effective Use of
Flexibilities Can Assist Agencies in Managing Their Workforces, GAO- 03- 2
(Washington, D. C.: Dec. 6, 2002).

Page 12 GAO- 03- 1034T compiling, analyzing, and sharing information about
when, where, and how the broad range of flexibilities are being used, and
should be used, to help agencies meet their human capital management
needs. 15 Entry- level pay and retirement benefits varied widely across
the 13 police

forces. Annual pay for entry- level police officers ranged from $28,801 to
$39,427, as of September 30, 2002. Officers at 4 of the 13 police forces
received federal law enforcement retirement benefits, while officers at
the remaining 9 police forces received standard federal employee
retirement benefits. According to officials, all 13 police forces
performed many of the same types of general duties, such as protecting
people and property and screening people and materials entering and/ or
exiting buildings under their jurisdictions. The minimum qualification
requirements and the selection processes were generally similar among most
of the 13 police forces.

At $39,427 per year, the U. S. Capitol Police, Library of Congress Police,
and Supreme Court Police forces had the highest starting salaries for
entry- level officers, while entry- level officers at the NIH Police and
Federal Protective Service received the lowest starting salaries at
$28,801 per year. The salaries for officers at the remaining 8 police
forces ranged from $29,917 to $38,695. Entry- level officers at 5 of the
13 police forces received

an increase in pay, ranging from $788 to $1,702, upon successful
completion of basic training. Four of the 13 police forces received
federal law enforcement retirement benefits and received among the highest
starting salaries, ranging from $37,063 to $39,427. Figure 2 provides a
comparison of entry- level officer pay and retirement benefits at the 13
police forces.

15 U. S. General Accounting Office, Human Capital: OPM Can Better Assist
Agencies in Using Personnel Flexibilities, GAO- 03- 428 (Washington, D.
C.: May 9, 2003). Entry- Level Pay and

Benefits Varied among the Police Forces

Page 13 GAO- 03- 1034T Figure 2: Pay for Entry- level Officers and
Retirement Benefits for Each of the 13 Police Forces with 50 or More
Officers Stationed in the Washington MSA as of September 30, 2002

a Pay increase after successful completion of basic training.

Entry- level officers at 12 of the 13 police forces (all but the U. S.
Postal Service Police) received increases in their starting salaries
between October 1, 2002, and April 1, 2003. Entry- level officers at three
of the four police forces (FBI Police, Federal Protective Service, and NIH
Police) with the lowest entry- level salaries as of September 30, 2002,
received raises of $5,584, $4,583, and $4,252, respectively, during the
period ranging from October 1, 2002, through April 1, 2003. In addition,
entry- level officers at

Library of Congress +$ 1,381 a

+$ 1,702 a

Federal law enforcement retirement

Supreme Court U. S. Capitol

Secret Service Park Police U. S. Mint

GPO FBI USPS

NIH 0

5,000 10,000

15,000 20,000

25,000 30,000

35,000 40,000

45,000

No Yes Yes No Yes Yes No No No No No No No $39,427

$39,427 $39,427

$40,808

$38,695 $37,851 $37,063 +$ 788 a

$36,613 $36,613

$32,964 $37,851

$31,262 $31,259 $29,917

$28,801 $28,801

+$ 1,381 a

$40,808

+$ 1,381 a

$40,808 Pentagon Force Protection Agency

Bureau of Engraving and Printing

Federal Protective Service

Source: GAO analysis of pay data provided by the 13 police forces.

Page 14 GAO- 03- 1034T both the U. S. Capitol Police and Library of
Congress Police* two of the highest paid forces* also received salary
increases of $3,739 during the

same time period. 16 These pay raises received by entry- level officers
from October 1, 2002, through April 1, 2003, narrowed the entry- level pay
gap for some of the 13 forces. For example, as of September 30, 2002,
entrylevel officers at the FBI Police received a salary $8,168 less than
an entrylevel officer at the U. S. Capitol Police. However, as of April 1,
2003, the pay gap between entry- level officers at the two forces had
narrowed to $6, 323. Officers at the 13 police forces reportedly performed
many of the same types of duties, such as protecting people and property,
patrolling the

grounds on foot, and conducting entrance and exit screenings. Police force
officials also reported that officers at all of the police forces had the
authority to make arrests. Although there are similarities in the general
duties, there were differences among the police forces with respect to the
extent to which they performed specialized functions.

16 In late April 2003, Supreme Court Police officers were granted a pay
increase retroactive to October 1, 2002. This pay increase brought the
entry- level pay of Supreme Court officers to the same levels as those of
the Capitol Police and Library of Congress Police.

Page 15 GAO- 03- 1034T We have observed in our recent Performance and
Accountability Series that there is no more important management reform
than for agencies to

transform their cultures to respond to the transition that is taking place
in the role of government in the 21st century. 17 Establishing the new DHS
is an enormous undertaking that will take time to achieve in an effective
and efficient manner. DHS must effectively combine 22 agencies with an
estimated 160,000 civilian employees specializing in various disciplines,
including law enforcement, border security, biological research, computer
security, and disaster mitigation, and also oversee a number of
nonhomeland security activities. To achieve success, the end result should
not simply be a collection of components in a new department, but the
transformation of the various programs and missions into a high
performing, focused organization.

Implementing large- scale change management initiatives, such as
establishing a DHS, is not a simple endeavor and will require the
concentrated efforts of both leadership and employees to accomplish new
organizational goals. We have testified previously that at the center of
any serious change management initiative are the people* people define the

organization*s culture, drive its performance, and embody its knowledge
base. 18 Experience shows that failure to adequately address* and often
even consider* a wide variety of people and cultural issues is at the
heart of unsuccessful mergers and transformations. Recognizing the
*people* element in these initiatives and implementing strategies to help
individuals maximize their full potential in the new organization, while
simultaneously

managing the risk of reduced productivity and effectiveness that often
occurs as a result of the changes, is the key to a successful merger and
transformation.

Chairwoman Davis, today you are releasing a report that we prepared at
your and Senator Voinovich*s request that identifies the key practices and
specific implementation steps with illustrative private and public sector
examples that agencies can take as they transform their cultures to be
more results- oriented, customer- focused, and collaborative in nature. 19
17 U. S. General Accounting Office, Major Management Challenges and
Program Risks: A

Governmentwide Perspective, GAO- 03- 95 (Washington, D. C.: January 2003).
18 U. S. General Accounting Office, Human Capital: Building on the Current
Momentum to Address High- Risk Issues, GAO- 03- 637T (Washington, D. C.:
Apr. 8, 2003).

19 GAO- 03- 669. DHS Organizational Transformati on

Page 16 GAO- 03- 1034T DHS could use these practices and steps to
successfully transform its culture and merge its various originating
components into a unified

department. (See table 3.)

Table 3: Key Practices and Implementation Steps for Mergers and
Organizational Transformations Practice Implementation steps

Ensure top leadership drives the transformation. Define and articulate a
succinct and compelling reason for change. Balance continued delivery of
services with merger and transformation activities.

Establish a coherent mission and integrated strategic goals to guide the
transformation. Adopt leading practices for results- oriented strategic
planning and

reporting. Focus on a key set of principles and priorities at the outset
of the transformation. Embed core values in every aspect of the
organization to reinforce the new

culture. Set implementation goals and a timeline to build momentum and
show progress from day one. Make public implementation goals and timeline.

Seek and monitor employee attitudes and take appropriate follow- up
actions.

Identify cultural features of merging organizations to increase
understanding of former work environments.

Attract and retain key talent. Establish an organizationwide knowledge and
skills inventory to allow knowledge exchange among merging organizations.

Dedicate an implementation team to manage the transformation process.
Establish networks to support implementation team.

Select high- performing team members. Use the performance management
system to define the responsibility and assure accountability for change.
Adopt leading practices to implement effective performance management

systems with adequate safeguards. Establish a communication strategy to
create shared expectations and report related progress. Communicate early
and often to build trust.

Ensure consistency of message. Encourage two- way communication. Provide
information to meet specific needs of employees.

Involve employees to obtain their ideas and gain their ownership for the
transformation. Use employee teams.

Involve employees in planning and sharing performance information.
Incorporate employee feedback into new policies and procedures. Delegate
authority to appropriate organizational levels. Build a world- class
organization. Adopt leading practices to build a world- class
organization. Source: GAO. As Secretary Ridge and his leadership team will
recognize, strategic

human capital management is a critical management challenge for DHS. In
our report on homeland security issued last December, we recommended that
OPM, in conjunction with the Office of Management and Budget and DHS
Strategic Human Capital Management

Page 17 GAO- 03- 1034T the agencies, should develop and oversee the
implementation of a longterm human capital strategy that can support the
capacity building across

government required to meet the objectives of the nation*s efforts to
strengthen homeland security. 20 With respect to DHS, in particular, this
strategy should

 establish an effective performance management system, which incorporates
the practices that reinforce a *line of sight* that shows how unit and
individual performance can contribute to overall organization goals;

 provide for the appropriate use of the human capital flexibilities
granted to DHS to effectively manage its workforce; and  foster an
environment that promotes employee involvement and

empowerment, as well as constructive and cooperative labor management
employee relations.

In response to these recommendations, the Director of OPM stated that OPM
has created a design process that is specifically intended to make maximum
use of the flexibilities that Congress has granted to DHS, including the
development of a performance management system linking individual and
organizational performance. Chairwoman Davis, at your and Senator
Voinovich*s request, we are reviewing the design process DHS and OPM have
put in place and we expect to issue our first report this September.

DHS must also consider differences in pay, benefits, and performance
management systems of the employee groups that were brought into DHS. Last
March, the Secretary of Homeland Security highlighted examples of such
differences. For example, basic pay is higher for Secret Service Uniformed
Division officers than for General Schedule police officers. TSA uses a
pay banding system with higher pay ranges than the General Schedule
system. The Secretary also cited differences in benefits. The Secret
Service Uniformed Division officers and TSA Air Marshals are covered under
the law enforcement officer retirement benefit provisions, while the
Federal Protective Service police and law enforcement security officers
and various Customs Service employees, among others, are not. Further, the
Secretary stated that DHS and OPM employees will determine

20 U. S. General Accounting Office, Homeland Security: Management
Challenges Facing Federal Leadership, GAO- 03- 260 (Washington, D. C.:
Dec. 20, 2002).

Page 18 GAO- 03- 1034T if the differences in pay and benefits constitute
unwarranted disparities and if so, they will make specific recommendations
on how these

differences might be eliminated in DHS*s human resources management system
proposal, which will be submitted later this year.

The performance management systems among DHS components also have
significant differences that need to be considered. The performance
management systems vary in fundamental ways. Of the 4 largest agencies
joining DHS, the Customs Service*s and TSA*s performance management
systems have 2- level performance rating systems. 21 We have raised
concerns that such approaches may not provide enough meaningful
information and dispersion in ratings to recognize and reward top
performers, help everyone attain their maximum potential, and deal with
poor performers. The Coast Guard has a 3- level system and Immigration and
Naturalization Service has a 5- level system. 22 One of the key practices
mentioned above to a successful merger and

transformation is to use the performance management system to define the
responsibility and assure accountability for change. An effective
performance management system can be a strategic tool to drive internal
change and achieve desired results. Effective performance management
systems are not merely used for once- or twice- yearly individual
expectation setting and rating processes, but are tools to help the
organization manage on a day- to- day basis. These systems are used to
achieve results, accelerate change, and facilitate two- way communication
throughout the year so that discussions about individual and
organizational performance are integrated and ongoing. The performance

management system must link organizational goals to individual performance
and create a line of sight between an individual*s activities and
organizational results.

Chairwoman Davis, at your and Senator Voinovich*s request, we identified a
set of key practices that federal agencies could use to create this line
of 21 The Customs Service*s performance management system applies to all
Customs Service

employees except the Senior Executive Service. The TSA performance
management system applies to all TSA employees.

22 The Coast Guard*s performance management system applies to civilian
employees. The Immigration and Naturalization Service*s performance
management system applies to all of its employees except attorneys and the
Senior Executive Service.

Page 19 GAO- 03- 1034T sight and develop effective performance management
systems. 23 These practices helped public sector organizations both in the
United States and abroad create a line of sight between individual
performance and

organizational success and, thus, transform their cultures to be more
results- oriented, customer- focused, and collaborative in nature. DHS has
the opportunity to develop a modern, effective, and credible performance
management system to manage and direct its transformation. DHS should
consider these key practices as it develops a performance management
system with the adequate safeguards, including reasonable transparency and
appropriate accountability mechanisms in place, to help create a clear
linkage between individual performance and organizational success. 24 We
recently reported that TSA, one of the components that joined DHS,

has taken the first steps in creating such a linkage and establishing a
performance management system that aligns individual performance
expectations with organizational goals. 25 TSA has implemented
standardized performance agreements for groups of employees, including
transportation security screeners, supervisory transportation security
screeners, supervisors, and executives. These performance agreements
include both organizational and individual goals and standards for
satisfactory performance that can help TSA show how individual performance
contributes to organizational goals. For example, each executive
performance agreement includes organizational goals, such as to maintain
the nation*s air security and ensure an emphasis on customer

satisfaction, as well as individual goals, such as to demonstrate through
actions, words, and leadership, a commitment to civil rights. To
strengthen its current executive performance agreement and foster the
culture of a high- performing organization, we recommended that TSA add
performance expectations that establish explicit targets directly linked
to organizational goals, foster the necessary collaboration within and
across organizational boundaries to achieve results, and demonstrate

23 U. S. General Accounting Office, Results- Oriented Cultures: Creating a
Clear Linkage between Individual Performance and Organizational Success,
GAO- 03- 488 (Washington, D. C.: Mar. 14, 2003).

24 For more information on adequate safeguards, see U. S. General
Accounting Office,

Defense Transformation: Preliminary Observations on DOD*s Proposed
Civilian Personnel Reforms, GAO- 03- 717T (Washington, D. C.: Apr. 29,
2003).

25 U. S. General Accounting Office, Transportation Security
Administration: Actions and Plans to Build a Results- Oriented Culture,
GAO- 03- 190 (Washington, D. C.: Jan. 17, 2003).

Page 20 GAO- 03- 1034T commitment to lead and facilitate change. TSA
agreed with this recommendation.

Madam Chairwoman and Mr. Chairman, this completes my prepared statement. I
would be happy to respond to any questions you or other members of the
Subcommittee may have at this time.

For further information, please call me or Weldon McPhail at (202) 512-
8777. Other key contributors to this testimony were Carole Cimitile,
Katherine Davis, Geoffrey Hamilton, Janice Lichty, Michael O*Donnell, Lisa
Shames, Lou Smith, Maria Strudwick, Mark Tremba, and Gregory H. Wilmoth.

Page 21 GAO- 03- 1034T Federal Uniformed Police: Selected Data on Pay,
Recruitment, and Retention at 13 Police Forces in the Washington, D. C.,
Metropolitan Area (GAO- 03- 658, June 13, 2003).

Review of Potential Merger of the Library of Congress Police and/ or the
Government Printing Office Police with the U. S. Capitol Police (GAO- 02-
792R, July 5, 2002).

Federal Retirement: Benefits for Members of Congress, Congressional Staff,
and Other Employees (GAO/ GGD- 95- 78, May 15, 1995). Capitol Police:
Administrative Improvements and Possible Merger With the Library of
Congress Police (GAO/ AFMD- 91- 28, Feb. 28, 1991).

Recruitment and Retention: Inadequate Federal Pay Cited as Primary Problem
by Agency Officials (GAO/ GGD- 90- 117, Sept. 11, 1990).

Report of National Advisory Commission on Law Enforcement (OCG- 90- 2,
Apr. 25, 1990).

Federal Pay: U. S. Park Police Compensation Compared With That of Other
Police Units (GAO/ GGD- 89- 92, Sept. 25, 1989).

Compensation And Staffing Levels Of the FAA Police At Washington National
And Washington Dulles International Airports (GAO/ GGD- 85- 24, May 17,
1985).

Results- Cultures: Implementation Steps to Assist Mergers and
Organizational Transformations (GAO- 03- 669, July 2, 2003).

Human Capital: Opportunities to Improve Executive Agencies' Hiring
Processes (GAO- 03- 450, May 30, 2003).

Human Capital: OPM Can Better Assist Agencies in Using Personnel
Flexibilities (GAO- 03- 428, May 9, 2003).

Human Capital: Selected Agency Actions to Integrate Human Capital
Approaches to Attain Mission Results (GAO- 03- 446, Apr. 11, 2003).

Results- Oriented Cultures: Creating a Clear Linkage between Individual
Performance and Organizational Success (GAO- 03- 488, Mar. 14, 2003).
Related GAO Products

Law Enforcement Personnel

Human Capital and Organizational Transformati on

Page 22 GAO- 03- 1034T Human Capital: Effective Use of Flexibilities Can
Assist Agencies in Managing Their Workforces (GAO- 03- 2, Dec. 6, 2002).

Highlights of a GAO Forum: Mergers and Transformation: Lessons Learned for
a Department of Homeland security and Other Federal Agencies (GAO- 03-
293SP, Nov. 14, 2002).

Highlights of a GAO Roundtable: The Chief Operating Officer Concept: A
Potential Strategy To Address Federal Governance Challenges (GAO- 03-
192SP, Oct. 4, 2002).

Results- Oriented Cultures: Using Balanced Expectations to Manage Senior
Executive Performance (GAO- 02- 966, Sept. 27, 2002). Results- Oriented
Cultures: Insights for U. S. Agencies from Other

Countries* Performance Management Initiatives (GAO- 02- 862, Aug. 2,
2002).

A Model of Strategic Human Capital Management (GAO- 02- 373SP, Mar. 15,
2002).

Human Capital: Practices That Empowered and Involved Employees

(GAO- 01- 1070, Sept. 14, 2001).

FBI Reorganization: Progress Made in Efforts to Transform, but Major
Challenges Continue (GAO- 03- 759T, June 18, 2003).

Homeland Security: Information Sharing Responsibilities, Challenges, and
Key Management Issues (GAO- 03- 715T, May 8, 2003).

High- Risk Series: Strategic Human Capital Management (GAO- 03- 120, Jan.
1, 2003).

Major Management Challenges and Program Risks: Department of Justice (GAO-
03- 105, Jan. 2003).

Homeland Security: Management Challenges Facing Federal Leadership

(GAO- 03- 260, Dec. 20, 2002). Major Management

Challenges

(440227)

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