    Performance and Accountability: Reported Agency Actions and Plans
    to Address 2001 Management Challenges and Program Risks
    (31-OCT-02, GAO-03-225).

    This report is in response to a request that we examine the
    actions and plans agencies reported in addressing the high-risk
    areas and major management challenges that were previously
    identified by GAO in its January 2001 Performance and
    Accountability and High-Risk Series. In fulfilling the request,
    except as otherwise noted, we reviewed the fiscal year 2001
    performance report and fiscal year 2003 performance plan required
    by the Government Performance and Results Act of 1993 (GPRA) for
    23 of the 24 Chief Financial Officers Act (CFO) agencies. The
    Department of Defense was not included in this review since it
    had not issued its combined performance report and performance
    plan.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-03-225
        ACCNO:   A05497
      TITLE:     Performance and Accountability: Reported Agency Actions
    and Plans to Address 2001 Management Challenges and Program Risks
         DATE:   10/31/2002
      SUBJECT:   Accountability
    	     Financial management systems
    	     Performance measures
    	     Strategic planning
    	     Reporting requirements
    	     Performance and Accountability Series
    	     2001

    	     High Risk Series 2001

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    GAO-03-225

                                           A

    Report to the Committee on Governmental Affairs, U. S. Senate

    October 2002 PERFORMANCE AND ACCOUNTABILITY Reported Agency Actions and
    Plans to Address 2001 Management Challenges and Program Risks

    GAO- 03- 225

    Letter 1 Background 1 Objective, Scope, and Methodology 2 Results in Brief
    3 Agency Comments 6

    Appendixes

    Appendix I: Observations on the Department of Agriculture*s Efforts to
    Address Its Major Management Challenges 7

    Appendix II: Observations on the Department of Commerce*s Efforts to
    Address Its Major Management Challenges 14

    Appendix III: Observations on the Department of Education*s Efforts to
    Address Its Major Management Challenges 24

    Appendix IV: Observations on the Department of Energy*s Efforts to Address
    Its Major Management Challenges 30

    Appendix V: Observations on the Environmental Protection Agency*s Efforts
    to Address Its Major Management Challenges 41

    Appendix VI: Observations on the Federal Emergency Management Agency*s
    Efforts to Address Its Major Management Challenges 47

    Appendix VII: Observations on the General Services Administration*s
    Efforts to Address Its Major Management Challenges 54

    Appendix VIII: Observations on the Department of Health and Human
    Service*s Efforts to Address Its Major Management Challenges 61

    Appendix IX: Observations on the Department of Housing and Urban
    Development*s Efforts to Address Its Major Management Challenges 73

    Appendix X: Observations on the Department of the Interior*s Efforts to
    Address Its Major Management Challenges 80

    Appendix XI: Observations on the Department of Justice*s Efforts to
    Address Its Major Management Challenges 87

    Appendix XII: Observations on the Department of Labor*s Efforts to Address
    Its Major Management Challenges 97

    Appendix XIII: Observations on the National Aeronautics and Space
    Administration*s Efforts to Address Its Major Management Challenges 104

    Appendix XIV: Observations on the Nuclear Regulatory Commission*s Efforts
    to Address Its Major Management Challenges 109

    Appendix XV: Observations on the National Science Foundation*s Efforts to
    Address Its Major Management Challenges 116

    Appendix XVI: Observations on the Office of Personnel Management*s Efforts
    to Address Its Major Management Challenges 119

    Appendix XVII: Observations on the Small Business Administration*s Efforts
    to Address Its Major Management Challenges 124

    Appendix XVIII: Observations on the Social Security Administration*s
    Efforts to Address Its Major Management Challenges 131

    Appendix XIX: Observations on the Department of State*s Efforts to Address
    Its Major Management Challenges 144

    Appendix XX: Observations on the Department of Transportation*s Efforts to
    Address Its Major Management Challenges 154

    Appendix XXI: Observations on the Department of the Treasury*s Efforts to
    Address Its Major Management Challenges 163

    Appendix XXII: Observations on the U. S. Agency for International
    Development*s Efforts to Address Its Major Management Challenges 177

    Appendix XXIII: Observations on the Department of Veterans Affairs*
    Efforts to Address Its Major Management Challenges 182

    Appendix XXIV: GAO Contact and Staff Acknowledgments 189 Tables Table 1:
    Number of Management Challenges on Which Agencies

    Reported 5 Table 2: Major Management Challenges for USDA 8 Table 3: Major
    Management Challenges for Commerce 15 Table 4: Major Management Challenges
    for Education 25 Table 5: Major Management Challenges for Energy 31 Table
    6: Major Management Challenges for EPA 42 Table 7: Major Management
    Challenges for FEMA 48 Table 8: Major Management Challenges for GSA 55
    Table 9: Major Management Challenges for HHS 63 Table 10: Major Management
    Challenges for HUD 74 Table 11: Major Management Challenges for Interior
    81

    Table 12: Major Management Challenges for Justice 88 Table 13: Major
    Management Challenges for Labor 98 Table 14: Major Management Challenges
    for NASA 105 Table 15: Major Management Challenges for NRC 110 Table 16:
    Major Management Challenges for NSF 117 Table 17: Major Management
    Challenges for OPM 120 Table 18: Major Management Challenges for SBA 125
    Table 19: Major Management Challenges for SSA 132 Table 20: Major
    Management Challenges for State 145 Table 21: Major Management Challenges
    for DOT 155 Table 22: Major Management Challenges for Treasury 164 Table
    23: Major Management Challenges for USAID 178 Table 24: Major Management
    Challenges for VA 183

    Abbreviations

    ACF Administration for Children and Families ADAMS Agencywide Document
    Access and Management System ATF Bureau of Alcohol, Tobacco, and Firearms
    BIS Bureau of Industry and Security BLM Bureau of Land Management CARES
    Capital Asset Realignment for Enhanced Services CDR Continuing Disability
    Review CFO chief financial officer CIP Critical Infrastructure Protection
    CISSCO Consolidated Information Support Services COPS Community Oriented
    Policing Service CPO chief people officer CMS Centers for Medicare &
    Medicaid Services CSRIC Computer Security Incident Response Capability DDB
    dependent database DEA Drug Enforcement Administration DOD Department of
    Defense DOE Department of Energy DOT Department of Transportation EDA
    Economic Development Administration EDP electronic data processing EIE
    Electronic Information Exchange EITC Earned Income Tax Credit EOWS
    Executive Office for Weed and Seed

    EPA Environmental Protection Agency ETA Employment and Training
    Administration FAA Federal Aviation Administration FDA Food and Drug
    Administration FECA Federal Employees* Compensation Act FEMA Federal
    Emergency Management Agency FHA Federal Housing Administration FMFIA
    Federal Managers* Financial Integrity Act FMS Financial Management Service
    FR Financial Report of the U. S. Government FSS Federal Supply Service FTE
    full- time equivalents FTS Federal Technology Service FWS Fish and
    Wildlife Service GISRA Government Information Security Reform Act GPRA
    Government Performance and Results Act GSA General Services Administration
    HEU highly enriched uranium HHS Department of Health and Human Services
    HUD Department of Housing and Urban Development IFS Integrated Financial
    System INS Immigration and Naturalization Service IRS Internal Revenue
    Service ISS International Space Station IT information technology ITA
    International Trade Administration MARAD Maritime Administration MBDA
    Minority Business Development Agency MIT Management Improvement Team NASA
    National Aeronautics and Space Administration NCLB No Child Left Behind
    Act NHC National Hiring Center NIF National Ignition Facility NIST
    National Institute for Standards and Technology NNSA National Nuclear
    Security Administration NOAA National Oceanic and Atmospheric
    Administration NSF National Science Foundation NRC Nuclear Regulatory
    Commission PBGC Pension Benefit Guaranty Corporation OASDI Old Age,
    Survivors, and Disability Insurance OGP Office of Governmentwide Policy

    OHREEO Office of Human Resources and Equal Employment Opportunity OIG
    Office of Inspector General OJP Office of Justice Programs OMB Office of
    Management and Budget OPM Office of Personnel Management PKI public key
    infrastructure PRA Probabilistic Risk Assessment REAP Resource Estimation
    Allocation Process RHIIP Rental Housing Integrity Improvement Project SBA
    Small Business Administration SES Senior Executive Service SSA Social
    Security Administration SSI Supplemental Security Income SSBG Social
    Services Block Grant TANF Temporary Assistance for Needy Families TSA
    Transportation Security Administration USAID U. S. Agency for
    International Development USDA Department of Agriculture VA Department of
    Veterans Affairs WIA Workforce Investment Act WtW Welfare- to- Work

    Letter

    October 31, 2002 The Honorable Joseph I. Lieberman Chairman The Honorable
    Fred Thompson Ranking Minority Member Committee on Governmental Affairs
    United States Senate

    This report is in response to your request that we examine the actions and
    plans agencies reported in addressing the high- risk areas and major
    management challenges that were previously identified by GAO in its
    January 2001 Performance and Accountability and High- Risk Series. 1 In
    fulfilling the request, except as otherwise noted, we reviewed the fiscal
    year 2001 performance report and fiscal year 2003 performance plan
    required by the Government Performance and Results Act of 1993 (GPRA)

    for 23 of the 24 Chief Financial Officers Act (CFO) agencies. The
    Department of Defense was not included in this review since it had not
    issued its combined performance report and performance plan.

    Background Since 1990, GAO has periodically reported on government
    operations that it identifies as *high risk.* Historically, GAO has
    designated federal

    programs and operations, either at the agency level or governmentwide, as
    high risk because of their greater vulnerability to fraud, waste, abuse,
    and mismanagement. More recently, GAO has given added emphasis to
    identifying as high risk those major programs and operations that need
    urgent attention in order to ensure our national government functions in
    the most economical, efficient, and effective manner possible. GAO removes
    the high- risk designations when legislative and agency actions, including
    those in response to our recommendations, result in significant

    progress toward resolving a high- risk problem, or when other factors
    affect a high- risk area, such as the occurrence of a time- related event.
    In January 1999, GAO first issued a special series of reports entitled the

    Performance and Accountability Series: Major Management Challenges and
    Program Risks. The reports in this series described the major 1
    Performance and Accountability Series, GAO- 01- 241 through 262
    (Washington, D. C.: January 2001) and High- Risk Series: An Update, GAO-
    01- 263 (Washington, D. C.: January 2001).

    management challenges and high- risk areas that the agencies needed to
    address to improve their performance and accountability. Updated 2 years
    later, the 2001 Performance and Accountability Series covered 21 agencies,
    including each cabinet department, most major independent agencies, and
    the U. S. Postal Service.

    This report describes agencies* reported progress in addressing the two
    governmentwide high- risk areas, information security and strategic human
    capital management, as well as in addressing the major management
    challenges and high- risk issues that GAO identified at each agency in the
    2001 Performance and Accountability and High- Risk Series. Hereafter, we
    refer to the two governmentwide high risks, agency major management

    challenges, and agency high- risk issues collectively as *major management
    challenges.*

    In January 2003, we will issue our latest performance and accountability
    series, which will discuss agencies* progress and identify new management
    challenges and program risks.

    Objective, Scope, and The objective of this report was to review for each
    of the major

    Methodology management challenges we discussed in our January 2001 series
    actions

    agencies reported in their fiscal year 2001 performance reports, as well
    as the goals, measures, and strategies agencies reported in their fiscal
    year 2003 performance plans. To assess agency responses to the management
    challenges, we reviewed the fiscal year 2001 GPRA performance report and
    fiscal year 2003 performance plan for 22 of the 24 CFO agencies. The
    Department of Education did not submit a performance report or performance
    plan;

    instead, it submitted a report of its Management Improvement Team, which
    we reviewed in lieu of the report and plan. As noted above, the Department
    of Defense did not submit a fiscal year 2001 performance report or fiscal
    year 2003 performance plan and was not included in our review. In
    evaluating agency responses to the information security management
    challenge, we also considered certain agency reports, including
    accountability reports, and prior GAO work. For each challenge, we
    evaluated whether the agency (1) discussed its progress in addressing its

    major management challenges and (2) had performance goals and measures
    directly or indirectly related to the challenge and, if not, whether it
    had management strategies to deal with the challenge. Unless otherwise
    noted, our review was based on the fiscal year 2001 performance reports

    and fiscal year 2003 performance plans. We did not include any changes or
    modifications the agencies may have made to the reports or plans after
    they were issued, except in cases in which agency comments provided
    information from a published update to a report or plan.

    Although many agencies chose to discuss how they are addressing their
    management challenges, such as those identified by GAO, in their
    performance reports and plans, there is no legal requirement to do so.
    However, according to Office of Management and Budget guidance to
    agencies, 2 performance goals for management problems should be included
    in the annual plan, particularly for problems whose resolution is mission
    critical or which could potentially impede achievement of program goals.
    Also, that an agency chose not to discuss its efforts to address major
    management challenges in its performance reports or plans does not

    necessarily mean that the agency is not addressing the challenges.
    Furthermore, because of the scope and timing of this review, information
    on the progress agencies may have made on addressing their management
    challenges during fiscal year 2002 was not yet available.

    We conducted our review from September through October 2002, in accordance
    with generally accepted government auditing standards. Results in Brief As
    shown in table 1, 18 of the 23 federal agencies in our review reported in
    their fiscal year 2001 performance reports that they had made progress on

    all of the major management challenges. For example, the Department of
    Energy, in response to the strategic human capital management challenge,
    reported that it held a human capital summit, and the Department of
    Housing and Urban Development, in response to an agency- specific
    challenge, discussed undertaking a number of initiatives to improve

    oversight of its single- family mortgage programs. However, 5 of the
    agencies did not discuss progress on one or more of the challenges.

    In their fiscal year 2003 performance plans, the agencies discussed, for
    the most part, performance goals and measures directly or indirectly
    related to the major management challenges. Specifically, 8 of the 23
    agencies discussed directly related goals and measures for all of the
    challenges, and

    2 Office of Management and Budget, Circular A- 11, Part 6, Preparation and
    Submission of Strategic Plans, Annual Performance Plans, and Annual
    Program Performance Reports,

    Sec. 220.3( f).

    8 others listed directly related goals and measures for most of the
    challenges.

    The 15 agencies that did not provide directly related goals and measures
    for all of their challenges varied in the extent to which they did address
    the challenges. Nine of the 15 agencies discussed goals and measures that
    were indirectly related to at least one of their major management
    challenges. Nine of the 15 agencies discussed strategies for addressing at
    least one of the challenges, but did not provide goals or measures. Five
    agencies* the departments of Agriculture, Justice, Transportation, and the
    Treasury, and the United States Agency for International Development
    (USAID)* mentioned no goals, measures, or strategies for one or more
    challenges. However, as noted in appendix XI, a Justice official stated
    that Justice believes that those challenges are no longer significant
    enough to

    be addressed in their performance report or plan. Furthermore, as noted in
    appendix XXI, Treasury has made progress in addressing two challenges,
    improving performance measures related to criminal access to firearms and
    the management of its asset forfeiture program.

    All 23 agencies in our review discussed progress in dealing with strategic
    human capital management, and 21 of the 23 agencies discussed information
    security. However, not all the agencies provided performance measures for
    evaluating progress on these challenges. For example, in the area of
    strategic human capital management, the Environmental Protection Agency
    reported having a specific target for fiscal year 2003 of having five
    offices use its newly developed workforce planning model. In contrast, the

    Federal Emergency Management Agency (FEMA) has goals of streamlining its
    organization and developing its workforce, but listed no measures to gauge
    progress for either goal. In the area of information security, the
    Department of the Interior reported it has a specific target of fiscal
    year 2003 for having its critical computer systems achieve compliance
    level 3 on the Federal Information Technology Security Assessment
    Framework, 3 and of fiscal year 2005 for achieving level 5, the highest
    possible. On the other

    hand, FEMA stated that information technology presented several management
    challenges, but did not present specific performance measures designed to
    measure the effectiveness of information security.

    3 The National Institute of Standards and Technology developed a security
    assessment framework and related tools that agencies can use to determine
    the status of their information security programs and that describe
    standards for five levels of information security status.

    Table 1: Number of Management Challenges on Which Agencies Reported Fiscal
    year 2003 performance plan Challenges on which agencies reported progress

    Challenges Challenges

    Challenges with Challenges with in fiscal year 2001

    with directly with indirectly

    strategies but no goals, Number of

    performance related goals

    related goals no goals or

    measures, or Agency challenges

    reports and measures

    and measures measures

    strategies

    Agriculture 9 9 6 1 0 2 Commerce 6 6 6 0 0 0 Education 6 4 5 0 1 0 Energy
    8 8 8 0 0 0 EPA 4 4 2 0 2 0 FEMA 5 2 3 2 0 0 GSA 2 2 2 2 0 0 HHS 7 7 5 2 0
    0 HUD 5 5 5 0 0 0 Interior 4 4 2 0 2 0 Justice 14 10 9 1 0 4 Labor 5 5 5 0
    0 0 NASA 5 5 4 3 1 0 NRC 6 5 2 0 4 0 NSF 2 2 2 0 0 0 OPM 2 2 2 0 0 0 SBA 6
    6 1 1 4 0 SSA 6 6 5 0 1 0 State 7 7 6 1 0 0 Transportation 8 8 3 0 4 1 Tr
    ea s ur y 7 7 3 2 0 2 USAID 5 4 1 2 1 1 VA 6 6 6 0 0 0

    Note: The columns for fiscal year 2003 represent the number of challenges
    that agencies have addressed in each category and are not mutually
    exclusive. Therefore, the numbers in these columns may not add to the
    total number of challenges. Source: GAO analysis.

    Appendixes I through XXIII have detailed information for each of the
    agencies reviewed concerning the response to each agency*s challenges.

    Agency Comments We sent drafts of all agency appendixes to the respective
    agencies for comments. The comments we received were largely of a
    technical nature,

    and these were incorporated where appropriate. The Department of
    Transportation (DOT) commented that it was not possible to address all of
    its management challenges in the 2001 performance report, since the 2001
    performance plan, which served as the basis for the 2001 performance
    report, was published in March 2000* several months before we issued our
    management challenges report. While we agree that DOT could not predict
    all of the challenges we were to cite and develop related targets, there
    was nothing to preclude DOT from discussing in its 2001 performance report
    the progress it had made in addressing its major management challenges.
    DOT also commented that it has taken or is in the process of taking a

    number of actions not addressed in the plan to address concerns we raised
    under some of the management challenges. These actions address issues
    concerning the Deepwater Acquisition Project, information security, air

    traffic control modernization, aviation, and safety and security. As noted
    above, we recognize that agencies may have taken actions or made plans to
    address their major management challenges that were not discussed in their
    performance reports or plans.

    As agreed with your offices, unless you announce the contents of this
    report earlier, we plan no further distribution until 30 days after its
    date. At that time, we will send copies to the President, the Director of
    the Office of Management and Budget, the congressional leadership, other
    Members of the Congress, and the heads of major departments and agencies.

    If you have any questions about this report, please contact me or
    Elizabeth Curda on (202) 512- 6806 or daltonp@ gao. gov. Major
    contributors to this report are listed in appendix XXIV.

    Patricia A. Dalton Director, Strategic Issues

    Appendi xes Observations on the Department of Agriculture*s Efforts to
    Address Its Major

    Appendi x I

    Management Challenges The following table identifies the major management
    challenges confronting the Department of Agriculture (USDA), including the
    governmentwide, high- risk areas of strategic human capital management and
    information security. The first column lists the major management
    challenges identified by our office. The second column discusses what
    progress, as discussed in their fiscal year 2001 performance report, the
    agency has made in resolving these challenges. The third column discusses
    the extent to which USDA*s fiscal year 2003 performance plans include
    performance goals and measures to address the challenges that we
    identified.

    We found that USDA*s performance report discussed the agency*s progress in
    resolving all of its challenges, except that USDA stated that it could not
    directly address GAO*s recommendation to establish a single food safety
    agency because such an action is beyond the legal authority of any federal
    department.

    Of the agency*s nine major management challenges, its performance plan had

    1. goals and measures that were directly related to 6 of the challenges,
    2. goals and measures that were indirectly applicable to the one of the

    challenges, including  strategic human capital management 3. no goals and
    measures related to two of the challenges, although USDA

    did discuss strategies to address the challenges, which were  food safety
    and  forest service performance accountability.

    Table 2: Major Management Challenges for USDA Progress in resolving major
    management

    Applicable goals, measures, and challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s Major management challenge year 2001
    performance report

    fiscal year 2003 performance plan GAO- designated governmentwide high risk

    Strategic human capital management: USDA did not address strategic human
    USDA*s 2003 performance plan included a GAO has identified shortcomings at
    multiple capital management as a challenge in its

    new departmentwide goal of improving agencies involving key elements of
    modern 2001 performance report. USDA stated that

    organizational productivity, accountability, strategic, including
    strategic human capital it should ensure the department has a and
    performance. USDA included strategic planning and organizational
    alignment;

    skilled, satisfied workforce and strong human capital management within
    this goal. leadership continuity and succession

    prospects for retention of its best USDA also stated that it developed a

    planning; acquiring and developing a staff employees. USDA concluded that
    it met its

    Strategic Human Capital Management Plan, whose size, skills, and
    deployment meet

    target for this outcome because a survey in line with the President*s
    Management agency needs; and creating results- oriented

    had found that 67 percent of USDA Agenda, which included a 5- year
    organizational cultures.

    employees were satisfied with their work, restructuring plan to enable
    USDA to deliver exceeding the governmentwide result by 4

    mission- critical services cost effectively. percent.

    USDA stated that it faces a potential *brain drain* because by 2005, 77
    percent of the department*s senior executives will be eligible for regular
    retirement and another 17 percent could take early retirement. USDA
    further recognized that skill gaps are

    emerging in key areas, such as information technology, and that it needs
    to maintain and develop a talented, flexible, and diverse workforce that
    can thrive in the digital era.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Information security: Our January 2001 USDA reported that reviews by GAO
    and

    USDA*s plan recognized significant systemic high- risk update noted that
    agencies* and

    others had documented that the integrity information security issues. USDA
    adopted

    governmentwide efforts to strengthen and availability of the department*s
    critical

    a new goal for 2003 to develop, implement, information security have
    gained momentum information assets continued to remain at

    and maintain a secure information and expanded. Nevertheless, audits risk.
    As GAO recommended, USDA stated

    technology environment, and included four continue to show that federal
    computer

    that these weaknesses were material. measures of performance. USDA
    reported

    systems are riddled with weaknesses that USDA also stated that it had made
    some on these measures and stated that it had (1)

    make them highly vulnerable to computerbased progress in strengthening
    cyber security,

    achieved 10 percent of its plan to implement attacks and place a broad
    range of

    and that it was revisiting its Cyber Security information security
    architecture, and that its

    critical operations and assets at risk of Action Plan.

    2003 target was to complete this fraud, misuse, and disruption. Further,
    the

    architecture, (2) achieved 5 percent of its events of September 11, 2001,
    underscored

    USDA*s performance report indicated plan to implement an information

    the need to protect America*s cyberspace information security as a
    material weakness

    survivability program, and that its 2003 against potentially disastrous
    cyber

    that includes shortcomings in entitywide target was to achieve 50 percent

    attacks* attacks that could also be security, access controls, segregation
    of

    implementation, and (3) achieved 5 percent coordinated to coincide with
    physical

    duties, application controls, and service of its goal to implement a
    system terrorist attacks to maximize the impact of

    continuity. Reviews of the agency*s security certification program, and
    that its 2003

    both. program have found integrity and availability

    target was to achieve 50 percent of the agency*s critical information
    assets to

    implementation; and (4) achieved 25 GAO and USDA*s Office of Inspector be
    a continued risk. USDA management

    percent of its goal to implement a risk General (OIG) have identified
    significant also recognizes this risk and reports that the

    management methodology, which it planned weaknesses in the department*s
    information agency is continuously working to improve to complete during
    2002. USDA also stated security program and its two major data

    information security across USDA. that (1) it was developing standard risk

    centers that place the department*s assessment tools for use throughout
    the computer systems, which support billions of

    The OIG similarly reported significant department, (2) risk assessment
    training

    dollars in benefits, at risk. USDA has taken information security
    weaknesses, with

    was being provided to staff, and (3) riskbased positive steps to improve
    its information inadequately restricted access to sensitive

    facility reviews were under way to security by developing its August 1999
    data being the most widely reported assess USDA*s critical infrastructure.
    action plan to address vulnerabilities and

    problem. The OIG identified widespread potential threats. However,
    significant

    and serious weaknesses in the In addition to Government Performance and

    progress was needed to implement many department*s ability to adequately
    protect Results Act reporting, the Office of components of the action plan
    that are

    (1) assets from fraud and misuse, (2) Management and Budget*s guidance for

    critical to strengthening departmentwide sensitive information from
    inappropriate fiscal year 2002 reporting under the

    information security. USDA also needed to disclosure, and (3) critical
    operations from

    Government Information Security Reform develop and document a detailed
    strategy disruption. This and other types of Act (GISRA) requires specific
    performance with time frames and milestones to fully weaknesses identified
    place critical measures as well as corrective action plans implement the
    action plan. Because of this,

    departmental operations, as well as the with quarterly status updates. we
    also recommended that USDA report assets associated with these operations,
    at information security weaknesses as a

    great risk of fraud, disruption, and material internal control weakness
    under the

    inappropriate disclosures. Federal Managers* Financial Integrity Act
    (FMFIA).

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    USDA*s performance report outlined the following actions taken during
    fiscal year 2001 to help address information security problems:

     developed model personnel position descriptions to be used in hiring
    cybersecurity specialists.  trained security technicians and managers.
    conducted onsite risk assessments at key

    USDA computer facilities.  developed training courses for USDA security
    technicians and managers.

     engaged industry expertise to develop comprehensive risk assessment
    tools and procedures to provide agencies with standardized tools and
    techniques.

    GAO- designated major management challenge

    Farm Service delivery: USDA has an USDA stated that it was working to
    acquire USDA*s plan stated that it would undertake a

    important role in distributing benefits and the capability to offer
    electronic filing and number of reviews aimed at improving addressing
    farmers* concerns. Since 1995,

    other key improvements to farmers. It stated service delivery to farmers.
    USDA said it USDA has been engaged in a that the standardization of the
    information would examine its office locations, and reorganization and
    modernization effort technology infrastructure for its countybased
    business processes, and accelerate its

    targeted at achieving operational efficiencies agencies was well under way
    and

    efforts to use business processes based on and better customer service.
    While USDA would be completed within the next 18 global information
    systems. USDA has has co- located its county field offices into months.

    three goals related to establishing an on- line service centers, USDA
    needs to improve electronic environment for the public that how these
    centers deliver program benefits apply to all USDA agencies including to
    their customers.

    agencies engaged in farm service delivery: (1) transition to a fully
    integrated egovernment environment, (2) simplify and reduce financial
    assistance program forms (a new goal), and (3) improve electronic
    processes for USDA financial assistance programs (a new goal). However,
    USDA did not adopt a quantifiable measure for its efforts to transition to
    a fully integrated egovernment environment, and USDA stated that targets
    for its other two measures are to be determined.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    The Food Stamp program: Food Stamp Based on fiscal year 2000 data, USDA To
    address the complexity of the Food benefits are in the form of paper
    coupons or

    reported that the accuracy rate of 91. 1 Stamp Program and its high error
    rate, the electronic benefits on debit cards. USDA percent that was
    achieved for making 2002 Farm Bill contained a number of needs to prevent
    improper payments to

    correct Food Stamp payments exceeded its administrative and simplification
    reforms, program participants, such as

    target accuracy rate of 90.5 percent. USDA such as allowing states to use
    greater overpayments. States made $1.4 billion in stated that the most
    important factor in flexibility in considering the income of erroneous
    Food Stamp payments to

    maintaining improved performance in this recipients for eligibility
    purposes and to

    recipients in 2001. area is the need for its state partners to extend
    simplified reporting procedures for all continue and renew their
    commitment to program recipients. USDA will need to In addition, USDA
    needs to implement

    using findings from the quality control respond to the statutory changes
    by electronic benefit transfer nationwide and system to improve payment
    accuracy. modifying its performance goal and ensure adequate controls.
    Also, trafficking measures on improper payments, and of food stamps
    continues to be a problem.

    USDA reported that 82.8 percent of food especially overpayments. stamps
    were issued through electronic benefit transfer, exceeding its target of
    81

    USDA*s plan stated that it is exploring the percent. USDA also stated that
    it expected feasibility of developing an outcome- based to achieve its
    goal for the proportion of

    measure to better estimate the extent of benefits issued by electronic
    benefit transfer

    Food Stamp trafficking. by the end of fiscal year 2002.

    USDA*s fiscal year 2001 Performance Report stated that it reported on
    corrective actions taken to address trafficking of Food Stamps as a
    material weakness in its

    Financial Management Financial Integrity Act Report for fiscal year 2001.

    Child and Adult Care Food Program: This USDA reported that it did not meet
    its target

    USDA*s plan adopted a revised goal of program provides for the nutritional
    wellbeing of completing management evaluations of evaluating the
    management performance of

    of young children and adults in day all state agencies administering the
    half of the states each year with more indepth

    care homes and centers and for teenagers program* but that it did complete
    management evaluations conducted in after school programs. USDA needs to
    evaluations in all but three states. USDA on a 2- year cycle.

    improve state and local management and also reported that unanticipated
    delays

    program controls to reduce fraud and abuse. occurred in the publication of
    regulations

    implementing program administrative changes brought about by legislation.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Civil rights complaints: There continues to USDA reported that it had
    reduced the

    USDA*s plan set a new target of reducing be problems in the timely
    processing of average processing time of civil rights cases

    the average number of days it takes to discrimination complaints in USDA*s
    Office by 1 percent in 2001, while it had a target of

    resolve USDA civil rights complaints by 20 of Civil Rights. Processing
    delays have reducing processing time by 5 percent. percent in fiscal year
    2002. The report caused a significant backlog in both program Also, USDA
    reported that in October 2000, it

    stated that the fiscal year 2003 budget was and employee discrimination
    complaints

    had completed an improvement plan for its seeking an increase of $2
    million to provide

    resulting in USDA*s failure to comply with civil rights functions and for
    processing civil

    staffing and other resources needed to federal regulations that affect the
    livelihood

    rights complaints. However, USDA make substantial reductions in complaint
    and well- being of individuals who believe

    cautioned that implementation of the plan processing time.

    they have been discriminated against. began *so far as resources
    permitted,* and

    Complaints involve the treatment of minority that implementation would
    continue in fiscal In September 2002, GAO reported that

    farmers when they applied for farm loans or year 2002 and beyond as
    resources although USDA*s Office of Civil Rights had

    loan servicing and employees* civil rights. permitted.

    made some modest improvements, it was still not completing investigative
    reports in a timely manner. For example, the Office had reduced the
    average timeframe for completing investigative reports from 365 days in
    fiscal year 2000 to 315 days in fiscal year 2001, but this timeframe
    substantially exceeded the requirement to complete the reports in 180
    days. In response to our

    report, USDA agreed to establish timeframe goals for all stages of its
    process for addressing civil rights complaints, and to address staff
    turnover and morale problems in its Office of Civil Rights. Also, the 2002
    Farm Bill creates the position of Assistant

    Secretary for Civil Rights within USDA.

    Financial management: USDA continues USDA reported that it did not meet
    its goal

    USDA*s plan retained its goal of achieving a to lack financial
    accountability over billions

    of achieving a qualified opinion on its clean audit opinion on its
    financial

    of dollars in assets. As such, USDA does financial statements in 2001.
    Nevertheless,

    statements. In addition, USDA stated that not have meaningful and accurate
    financial USDA also reported that (1) it had made

    the Forest Service is the primary focus for information with which to
    evaluate its

    significant progress in reconciling USDA*s corrective actions needed for
    obtaining a financial performance and provide fund balance with Treasury,
    (2) the OIG had clean opinion on its departmental financial assurance that
    its consolidated financial

    lifted its qualification on the Rural statements.

    statements are reliable and presented in Development*s financial
    statements, and (3)

    conformity with U. S. generally accepted the Forest Service was working In
    addition, USDA stated that its new

    accounting principles. In addition, in 1999, cooperatively with USDA to
    improve the accounting system* the Foundation

    GAO designated financial management at reliability of its real and
    personal property Financial Information System* will provide

    the Forest Service high risk on the basis of accounting.

    auditable financial data that can be used to serious financial and
    accounting

    prepare USDA*s consolidated financial weaknesses that had been identified,
    but

    statements. USDA stated that it decided to not corrected, in the agency*s
    financial

    measure progress toward this goal by statements for a number of years.
    tracking the percentage of USDA*s workforce that is served by the system.
    USDA*s target is to serve 100 percent of its workforce with the Foundation
    Financial Information System in 2003.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Food safety: The number of food- borne USDA reported that the creation of
    a single

    USDA*s plan reiterated the same illnesses has heightened concerns about

    food safety agency is beyond the legal observations as contained in its
    2001

    the effectiveness of the federal food safety scope of USDA or any federal
    department.

    report* that USDA does not have the legal system. GAO has found that the
    current In addition, USDA stated that concerns

    authority to create a single food safety multi- agency federal food safety
    system about the need for fundamental changes in

    agency and that USDA is addressing food needs to be replaced by a single
    food safety food safety programs and about overcoming safety fragmentation
    concerns by agency. perceived food safety fragmentation are

    coordinating with other departments. being addressed through
    crossdepartmental partnerships and program coordination activities.

    Forest Service* Improving performance

    USDA reported that the Forest Service USDA*s plan stated that in fiscal
    year 2001 accountability:

    continued to develop outcome- oriented and fiscal year 2002, the Forest
    Service GAO concluded that it is important for the

    performance measures and the baseline would transition to a new, outcome-
    oriented Forest Service to provide Congress and the

    data needed to support the new budget and planning structure that will
    show public with a better understanding of what is

    performance measures. USDA did not links between resources, program
    activities,

    achieved with the funds that are being specifically report on these
    measures in its and results. USDA said that this process

    spent. The Forest Service is refocusing its performance report. It did
    state that new

    would debut during the fiscal year 2003 activities, resulting in a
    significant change in measures for Forest Service budget cycle. Also, USDA
    said that it would its mission and funding priorities. The

    accomplishments were developed as part of be driven by a performance plan
    that

    Service*s fiscal year 2002 performance plan a new budget formulation and
    execution

    articulates annual performance targets that and the on- the- ground
    activities funded system, which the Forest Service started

    support the Forest Service*s long- term through the annual budget process.
    during fiscal year 2001.

    objectives. Also, the Forest Service reported that (1) it will complete a
    strategic plan by September 30, 2003 and (2) it is developing

    a performance accountability system to integrate its annual budget plans
    with the accomplishment of strategic plan goals that will be implemented
    between 2002 and 2005.

    Observations on the Department of Commerce*s Efforts to Address Its Major

    Appendi x II

    Management Challenges The following table identifies the major management
    challenges confronting the Department of Commerce, which include the
    governmentwide high- risk areas of strategic human capital management and
    information security. The first column lists the challenges identified by
    our office. The second column discusses what progress, as discussed in its
    fiscal year 2001 performance report, Commerce made in resolving its
    challenges. The third column discusses the extent to which Commerce*s
    fiscal year 2003 performance plan includes performance goals and measures
    to address the challenges that we identified.

    We found that Commerce*s performance report discussed the agency*s
    progress in resolving these challenges. For the most part, the progress
    was discussed either under the departmental management section of the
    performance report or in the sections detailing the progress of the Bureau
    of Industry and Security (BIS) (formerly called the Bureau of Export
    Administration), the Economic Development Administration (EDA), the
    International Trade Administration (ITA), the Minority Business
    Development Agency (MBDA), and the National Oceanic and Atmospheric
    Administration (NOAA).

    The agency*s performance plan has goals and measures that were directly
    related to all six of the major management challenges.

    Table 3: Major Management Challenges for Commerce Progress in resolving
    major management

    Applicable goals, measures, and challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s Major management challenge year 2001
    performance report

    fiscal year 2003 performance plan GAO- designated governmentwide high risk

    Strategic human capital management: Under the Departmental Management
    Under the Departmental Management

    GAO has identified shortcomings at multiple section of the report,
    Commerce describes

    section of the report, Commerce includes agencies involving key elements
    of modern activities undertaken to address this

    six performance measures related to the strategic human capital
    management,

    departmentwide management challenge. performance goal of managing human
    including strategic human capital planning

    capital. and organizational alignment; leadership

    To ensure that its workforce has the skills continuity and succession
    planning;

    and competencies needed to carry out The six measures reported include
    ensuring

    acquiring and developing a staff whose size, mission- critical activities
    over the long run,

    competency in leadership and in mission skills, and deployment meet agency
    needs; Commerce reports that it has combined

    critical occupations; ensuring and creating results- oriented
    organizational efforts with its component bureaus to

    comprehensive training and development cultures.

    develop a common approach to analyze strategies; ensuring diverse
    candidate workforce needs, plan recruitment and recruitment; efficiency
    and effectiveness of outreach efforts, and modify how human hiring
    systems; increasing the alignment of resource professionals integrate
    policies

    performance management with mission and services. Other recent
    departmental

    accomplishment; and implementing a efforts reported include completing a
    telecommuting program. comprehensive workforce analysis; completing
    workforce restructuring plans

    EDA included human capital issues in its during fiscal year 2002;
    improving an priorities, but did not include specific automated hiring
    system; reducing the time performance goals or measures related to

    needed to advertise and fill vacancies; and, human capital management. For
    fiscal year broadening outreach efforts to expand the

    2002, MBDA included a new measure to pool of job applicants.

    track the employees training hours under its performance goal to *Improve
    Under the same section of the report, Organizational Effectiveness,
    Commerce included a performance goal of Responsiveness, and Efficiencies*
    and ITA *Strategic Management of Human Capital*

    included a new measure of employees* job accompanied by six performance
    measures.

    satisfaction under the performance goal to Commerce reported that it met
    or exceeded *Improve Customer and Stakeholder the targets for four of the
    six performance Satisfaction.*

    measures and did not meet the targets for two measures. For the targets
    that it met or exceeded, Commerce reported that it used automated
    workforce planning tools in three

    offices; sponsored 19 recruitment activities and marketed over 352 resumes
    with Commerce managers* more than twice the targeted number of resumes;
    designed a

    tracking system for aligning ratings with mission accomplishments or
    overall recognition; and completed two balanced scorecard systems that
    were to identify the

    strategic human resources functions that were most critical to management.
    (Note:

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Commerce reported that it plans to replace this measure with new or
    refined measures beginning with fiscal year 2002.)

    For the measures that it reported as not met, Commerce explained its
    performance. For example, Commerce reported that it filled vacancies in 38
    days, which was 4 days more than its target of 34 days. Also, Commerce
    reported that its telecommuting policy is being developed and, thus, it
    could not determine whether it met the target of

    having 25 percent of the eligible workforce involved in telecommuting.
    Consequently, Commerce reported the target as unmet and noted that 13. 5
    percent of all employees were telecommuting.

    For each of its component agencies, Commerce provides a table of resource
    requirements, including full- time equivalent positions and summary of the
    skills needed in that component agency. For example, the skill summary for
    BIS includes having an extensive knowledge of the legislation and
    executive orders related to controlling dualuse commodities; knowledge of
    world political and economic systems, current

    trends in U. S. trade, and national security and foreign policy issues;
    and analytical abilities for complex licensing and policy

    decisions, as well as regulatory interpretations. EDA and MBDA included
    human capital management issues under their respective sections on
    priorities. Both EDA and MBDA discuss the importance of aligning

    resources, having a management process, hiring and retaining skilled
    employees, and having a competency based performance system. Neither EDA
    nor MBDA had specific performance goals or measures for fiscal year 2001.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Information security: Our January 2001 Under the Departmental Management

    In its 2003 performance plan, Commerce high- risk update noted that
    agencies* and

    section of the report, Commerce includes has four security- related
    measures. governmentwide efforts to strengthen

    performance goals and measures related to Commerce has set targets for
    performance

    information security have gained momentum information security. For
    example, under the measures that include planning and

    and expanded. Nevertheless, recent audits goal to *Ensure Effective
    Resource

    conducting compliance reviews of security continue to show federal
    computer systems

    Stewardship in Support of the Commerce programs and classified systems,
    are riddled with weaknesses that make them Department*s Programs,*
    Commerce

    documenting policies and implementing highly vulnerable to computer- based
    attacks includes a performance measure called

    procedures and controls, completing IT and place a broad range of critical
    *Ensure a Secure Workplace for All

    system security plans, and limiting operations and assets at risk of
    fraud,

    Commerce Employees.* Commerce says successful intrusion attempts. misuse,
    and disruption. Further, the events

    that it met all fiscal year 2001 targets for this of September 11, 2001,
    underscored the performance measure since it conducted 32

    Commerce*s measures may not specifically need to protect America s
    cyberspace

    inspections of classified systems, while the measure the effectiveness of
    information against potentially disastrous cyber

    2001 target was to conduct 10 inspections. security and the agency*s
    progress in attacks* attacks that could also be

    In addition, under the performance goal to implementing corrective
    actions. In addition

    coordinated to coincide with physical *Acquire and Manage the Technology

    to GPRA reporting, the Office of terrorist attacks to maximize the impact
    of

    Resources to Support Program Goals,* Management and Budget*s guidance for

    both. Commerce includes a performance

    fiscal year 2002 reporting under the measure on information technology
    (IT)

    Government Information Security Reform security program maturity.
    According to Act (GISRA) requires performance Commerce, it has met its
    target related to measures, as well as corrective action plans program
    maturity because 100 percent of with quarterly status updates. the IT
    security programs at Commerce have documented policy and 60 percent have
    documented procedures, exceeding the goal

    of having documented policy and procedures for 50 percent of the programs.
    Commerce also reported that it met the 2001 target of having a documented
    policy for Commerce*s systems. In Commerce*s FY 2001 Accountability

    Report, the Inspector General identified weaknesses in information
    security throughout Commerce as a top management challenge. The Commerce
    Inspector General also said that *because

    information security has not received adequate attention in the past* and
    because of rapidly changing technologies, capabilities, and concerns*
    substantial efforts are required to develop and oversee

    an effective security program.* While the accountability report does not
    list information security as a strategic goal for Commerce or include
    information security performance measures, the report does list acquiring
    and managing technology and related resources to support program goals as
    part of its Management Integration Goal.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    GAO- designated major management challenge

    The economy in distressed communities: Commerce discusses this challenge
    under Commerce discusses this challenge under

    EDA works with local, state, and national EDA*s performance goal called
    *Promote EDA*s performance goal called *Promote organizations to help
    distressed

    Private Enterprise and Job Creation.* Private Enterprise and Job
    Creation.* communities compete in regional, national,

    Commerce lists two program outcome (longterm) Commerce includes both
    program outcome

    and global markets. EDA provides grants for measures and two interim and

    (long- term) measures and interim and economic planning, technical
    assistance, process measures for this goal and process measures for this
    goal. These research, and infrastructure improvements.

    concludes that it met or exceeded the include

    These investments are intended to be targets for all four measures.
    Specifically,

     private sector investments in distressed catalysts to stimulate other
    public and

    Commerce reported that communities as a result of EDA*s private
    investments in distressed

     private sector investments in distressed investments,

    communities. Revolving loan funds help communities as a result of EDA*s
    fiscal

     jobs created or retained in distressed communities and businesses
    respond to

    year 1998 investments totaled $971 communities as a result of EDA*s

    severe economic dislocations caused by million, exceeding the target of
    $130 investments,

    layoffs, plant shutdowns, trade impacts, million;  the ratio of state and
    local dollars

    natural disasters, and the closure of military  12, 989 jobs were created
    or retained in

    committed per EDA dollar, bases and energy labs.

    distressed communities as a result of  percentage of EDA investments in
    areas of

    EDA*s fiscal year 1998 investments, highest distress, and exceeding the
    target of 5,400 jobs;

     the percentage of EDA dollars invested in  the ratio of state and local
    dollars

    technology- related projects in distressed committed per EDA dollar met
    the target of

    areas, which will be assessed for the first $1 to $1; and

    time for fiscal year 2002.  43 percent of EDA*s investments were in areas
    of highest distress, exceeding the 40 percent target.

    Commerce also discontinued one interim measure that it did not meet* to
    reduce the processing time for applications* because it was not an outcome
    measure. Commerce reported that processing time increased from 72.5 to 82
    days* missing the target of

    68. 1 days* due to the unavailability of funds, which kept it from
    obligating funds in a timely manner. Commerce plans to

    continue to monitor processing time for internal purposes.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Accurate and timely weather forecasts

    Commerce addresses this challenge under Commerce addresses this challenge
    under

    and warnings: NOAA is responsible for the performance goal *Advance Short-
    term the performance goal *Advance Short- term providing accurate and
    timely weather

    Warnings and Forecasts,* which includes Warnings and Forecasts.*
    Performance

    forecasts and warnings to protect human life measures of lead time,
    accuracy, and false measures include targets for

    and property. Every year hundreds of lives alarm rates related to warnings
    and

     lead times for severe weather warnings for and billions of dollars are
    lost due to severe

    forecasts. Of the 11 measures under this tornadoes, flash floods, and
    winter storm

    storms, floods, and other natural hazards. goal, Commerce reports that it
    met the warnings; While preventing these occurrences is not

    targets for 7 measures and did not meet the  the percentages of accuracy
    for severe possible, improved prediction capabilities

    targets for 4 measures. weather warnings for tornadoes and flash

    can minimize impact. floods, for winter storm warnings, for 3- day

    Specifically, Commerce reported forecasts of precipitation, and for
    aviation

     the false alarm rates for severe weather and marine forecast;

    warnings for tornadoes and for aviation  the percentages of false alarms
    for severe forecasts met the targets of 73 percent and

    weather warnings for tornadoes and for 51 percent, respectively;

    aviation forecasts; and  flash flood warnings had an average lead

     the accuracy of hurricane track forecasts, time of 46 minutes* longer
    than the 45minute which Commerce will measure beginning target* and an
    accuracy rate equal

    with fiscal year 2002. to the target of 86 percent;  winter storm
    warnings had an average

    lead time equal to the target of 13 hours and an accuracy rate of 90
    percent, exceeding the target of 86 percent; and  marine forecasts had an
    accuracy rate of

    52 percent, compared to a target of 51 percent. Commerce also reported
    that the lead time of 10 minutes and the accuracy rate of 67 percent for
    tornado warnings did not meet the respective targets of 13 minutes and 68

    percent; and the accuracy of aviation forecasts, which was18 percent, and
    3- day forecasts of precipitation, which was 19 percent, did not meet the
    respective targets

    of 21 percent and 22 percent. NOAA indicated that it has studied the data
    from these warnings and forecasts and plans

    actions that include refining its models and adjusting its targets.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Businesses* access to international

    Commerce discusses this challenge under Commerce reports that in fiscal
    year 2001 markets: ITA works to promote U. S. foreign four of ITA*s
    performance goals** Increase

    ITA undertook a major effort to recast its trade by monitoring the
    international

    trade opportunities for U. S. firms,* *Broaden mission statement,
    performance goals, and

    exchange of goods and services and by and deepen U. S. exporter base,*
    *Ensure supporting performance measures. This helping U. S. companies
    export, partner with

    fair competition in international trade,* and effort resulted in
    identifying six performance

    industry, and open markets. ITA also works *Improve the U. S. competitive
    advantage goals and new measures related to this

    with a variety of government agencies and through global e- commerce.*
    Commerce

    challenge. other organizations to formulate policy and

    includes 10 performance measures for fiscal monitor market access to
    ensure that U. S. year 2001 across these goals and reported ITA*s six
    performance goals are companies are competitive in foreign

    that 5 of the targets were exceeded and 5  increase trade opportunities
    for U. S. firms, markets while protecting American security. were not met.

     broaden and deepen the U. S. exporter base, Specifically, Commerce
    reported the

     ensure fair competition in international following targets that were
    exceeded:

    trade,  As a result of ITA*s involvement, 11, 160  advance the United
    States* international export transactions were made, exceeding

    commercial and strategic interest, the target of 9,253 transactions.

     improve customer and stakeholder  The number of new- to- market firms*

    satisfaction, and those introduced to foreign markets* was

     improve the U. S. competitive advantage 63, 719, exceeding the target of
    54, 779. through global e- commerce.  The number of exporters entering a
    new

    market was 5,386, exceeding the target of ITA reports that it has
    formulated new 4,540. performance measures, which include the  The number
    of U. S. firms exporting for the following

    first time was 742, exceeding the target of  the percentage of undertaken
    advocacy 679.

    actions completed successfully,  The value of gross exports supported was

     the dollar value of completed advocacies, $12.5 billion, exceeding the
    target of $11

     the percentage of antidumping or billion. countervailing duty cases
    completed on ITA states that it is discontinuing the last two time,
    measures and replacing them with new

     the number of market access and measures such as the number of U. S.
    compliance cases initiated, exporters entering a new market for the first

     the dollar value of the trade barriers time and the dollar value of
    completed

    addressed, advocacies.

     dollar exports in priority markets,  customer satisfaction with and
    level of Commerce also reported that it did not meet

    awareness of ITA*s products and services, the targets for five measures.
    These were and the following:

     the percentage of ITA business processes  The number of counseling
    sessions held

    provided electronically to external was 138, 165 compared with a target of
    customers. 281,165. ITA reported that it will

    discontinue and replace this measure because it is not accurate or useful.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

     The number of new- to- export firms was 20, 422 compared with a target
    of 30, 336. ITA stated that the target was not met due

    to the significant economic downturn and overly optimistic projections. It
    plans to discontinue this measure and replace it with the number of firms
    exporting for the first time.  The number of antidumping/ countervailing

    duty cases processed was 136 compared with a target of 185. ITA plans to
    discontinue this measure because it is not under ITA*s control. ITA plans
    to add a new measure on the timeliness of completing such cases.

     The number of new subscribers using BuyUSA. com E- services, which was
    338, did not meet the target of 5,000 due to a delay in the start of the
    Web site.  The dollar value of market openings of $2. 5 billion missed
    the target of $4. 1 billion

    due to the downturn in the economy and overly optimistic projections. ITA
    plans to discontinue this measure and replace it with a measure of the
    dollar value of trade barriers addressed.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Control of exports of dual- use

    Commerce discusses this challenge under Last year, BIS refined its
    performance goals

    commodities and chemical weapons: The BIS*s performance goals *Enhance the
    and measures by focusing on quality and

    United States controls the export of certain efficiency of the export
    control system while

    exporter satisfaction, developing measures goods and technologies for
    national security

    protecting U. S. national security interests,* using *plain language,* and
    developing new

    and foreign policy (including *Detect illegal export transactions and
    measures that accurately monitor BIS*s

    nonproliferation) purposes. BIS issues penalize violators,* *Assist key
    nations to

    program performance. These goals and licenses authorizing businesses to
    export establish effective export control programs,* measures relate
    directly to this challenge. certain dual- use commodities. Controls on and
    *The U. S. defense industrial base is dual- use items must balance the
    need to

    healthy and competitive.* Commerce lists The refined performance goals
    include

    protect national security and foreign policy 10 performance measures under
    these

     enhance the efficiency of the export control interests with the desire
    not to unduly

    goals and reports that the targets were met system while protecting U. S.
    national

    hamper trade opportunities and for 4 measures and not met for 6 measures.

    security interests, competitiveness.  ensure U. S. industry compliance
    with the For the targets that were met, BIS accepted

    Chemical Weapons Convention, 81 investigations for criminal or  detect
    illegal export transactions and administrative remedies, exceeding the

    penalize violators, target of 70; conducted 693 end use visits,

     assist key nations in establishing effective exceeding the target of
    680; conducted 43 export control programs, and nonproliferation and export
    control

     coordinate activities for the protection of international cooperative
    exchange critical infrastructures and to ensure that activities, exceeding
    the target of 37; and the federal government continues to be conducted
    1,046 enforcement outreach able to deliver services essential to the
    visits, exceeding the target of 1,010. BIS

    nation*s security, economy, or the health stated that it plans to
    discontinue the and safety of its citizens. measure related to end use
    visits because those are largely outside BIS*s control. It

    BIS reports that it has formulated new also plans to discontinue the
    enforcement

    performance measures such as outreach measure due to a policy decision
    average processing time for commodity to focus on developing criminal
    cases, rather

    classification requests and for issuing draft than conducting outreach.

    regulations,  level of exporter understanding of BIS For the targets that
    were not met,

    export control requirements, Commerce reported that  number of site
    assistance visits conducted  BIS processed export licenses in an to
    assist companies preparing for average of 40. 4 days compared with the
    Chemical Weapons Convention target of 32 days. BIS noted that it

    international inspections, depends on other agencies to act promptly

     timely recommendations made on license in order to meet this measure and
    will applications, continue to strive to reduce processing

     number of targeted deficiencies remedied times.

    in the export control systems of key  BIS made 10, 773 licensing
    decisions and

    nations, and missed the target of 14, 000 due to U. S.  the number of
    outreach conferences or policy changes. BIS plans to discontinue seminars
    held. this measure and incorporate it into a measure of the timeliness of
    processing export licenses.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

     The number of high- risk transactions that were deterred was 225, less
    than the target of 512. BIS attributed this performance to unforeseeable
    shifts in U. S. policy. It plans to discontinue this

    measure because of the difficulty in measuring certain aspects of
    deterrence and new measures developed for fiscal year 2003 are stronger
    performance indicators.  The export assistance seminars or

    conferences conducted totaled 106 instead of the 120 targeted due to
    program priority changes and staff shortages. BIS reported that it will
    discontinue this measure and will measure its outreach using the level of
    exporter understanding of BIS export control requirements.  BIS completed
    1, 181 export investigations and missed the target of 1,225 because of
    shifting focus on criminal cases. BIS plans

    to discontinue this measure and replace it with better measures of its
    enforcement effectiveness, such as the number of investigations accepted
    for administrative or criminal remedies.

     The number of strategic industry analyses completed was 278 versus a
    target of 300. BIS attributed this performance to having fewer memoranda
    of understanding reviewed than anticipated. BIS also noted that this
    measure will be discontinued because it relies on the actions of others

    and other measures are stronger BIS performance indicators.

    Observations on the Department of Education*s Efforts to Address Its Major

    Appendi x III

    Management Challenges The following table identifies the major management
    challenges confronting the Department of Education (Education), including
    the governmentwide high- risk areas of strategic human capital management
    and information security. The first column lists the challenges identified
    by our office in 2001. The second column discusses the progress Education
    made in resolving its challenges, as reported in its Management
    Improvement Team (MIT) Accomplishments Report. Education did not submit a
    Government Performance and Results Act report for fiscal year 2001
    because, according to agency officials, the department was revising its
    strategic plan. Instead, Education issued a MIT Accomplishments Report in
    October 2001 to reflect some of the department*s progress in resolving its
    challenges. 4 The third column discusses the extent to which Education*s
    2002- 2003 annual plan includes goals, strategies and performance measures

    to address the challenges that we identified 5 . We found that Education*s
    MIT Accomplishments Report discussed the agency*s progress in resolving
    many of its challenges, but it did not discuss the agency*s progress in
    resolving the following challenges

     encouraging states to improve performance information and upgrade
    federal evaluations used to assess how well all children reach challenging
    academic standards and

     promoting coordination with other federal agencies and school districts
    to help build a solid foundation of learning for all children.

    Of the agency*s six major management challenges, its performance plan had

    1. goals and measures that were directly related to five of the challenges
    and

    2. no goals and measures related to one of the challenges, but discussed
    strategies to partly address

    4 In April 2001, the Secretary of Education established a Management
    Improvement Team (MIT) comprised of senior- level managers within
    Education to formulate strategies to address key financial and management
    problems. 5 In March 2002, the Department of Education published its
    Annual Plan: 2002- 2003. This document lists goals, measures, and
    strategies for the department over an 18- month period.

     promoting coordination with other federal agencies and  school
    districts to help build a solid foundation of learning for all

    children.

    Table 4: Major Management Challenges for Education Progress in resolving
    major management challenge as discussed in agency*s Applicable goals,
    measures, and Management Improvement Team (MIT)

    strategies as discussed in agency*s Major management challenge
    Accomplishments Report

    2002- 2003 annual plan GAO- designated governmentwide high risk areas

    Strategic human capital

    The MIT Accomplishments Report In its 2002- 2003 annual plan, Education

    management: GAO has identified discussed human capital management. The

    reports the following strategies for improving shortcomings at multiple
    agencies involving report refers to a workforce analysis and

    the strategic management of the key elements of modern strategic human
    states that Education will be expanding its

    department*s human capital: (1) developing capital management, including
    strategic recruitment, retention, and training a five- year human capital
    plan, (2) human capital planning and organizational

    strategies to be able to compete for the identifying and obtaining needed
    skills, (3)

    alignment; leadership continuity and highest quality employees and
    appropriately

    improving employee performance and succession planning; acquiring and

    train and retain them. Further, the report accountability, (4) improving
    core processes developing a staff whose size, skills, and

    provides specific actions taken to address related to human capital
    management, such

    deployment meet agency needs; and leadership continuity and succession as
    recruitment efforts and expanded

    creating results- oriented organizational planning. The report states that
    Education

    personnel flexibility, and (5) improving the cultures.

    launched a yearlong leadership use of competitive sourcing. Education has
    development program and selected 24 developed some performance targets
    professional staff as participants. This

    related to strategic human capital that program will help participants
    develop their

    include measures on employee satisfaction leadership skills and requires
    them to

    and workforce skill gap reduction. complete a project that addresses the
    Secretary*s management improvement

    In addition, the department is addressing goals. The report also states
    that Education

    human capital management through its completed a training needs assessment
    and *One- ED* initiative. This initiative identifies the results are being
    used to identify

    four critical human capital strategies and performance improvement areas
    to guide

    several action steps for implementing them. future training initiatives.
    However, the MIT The strategies are (1) provide leadership for report did
    not include information on long improving performance and work processes,
    term human capital planning and

    (2) align performance management organizational alignment nor did the
    report

    systems, (3) improve employee skills, and discuss Education*s progress in
    creating a

    (4) focus on current and potential leaders. results- oriented
    organizational culture.

    (Continued From Previous Page)

    Progress in resolving major management challenge as discussed in agency*s
    Applicable goals, measures, and Management Improvement Team (MIT)

    strategies as discussed in agency*s Major management challenge
    Accomplishments Report

    2002- 2003 annual plan Information security: Our January 2001

    Education continued to report information In its 2002- 2003 annual plan
    Education high- risk update noted that agency and system controls as a
    material weakness in

    acknowledges that improved department governmentwide efforts to strengthen

    its Federal Managers* Financial Integrity Act accountability requires that
    it protect data

    information security have gained momentum report for 2001. To improve the
    integrity and confidentiality. Education

    and expanded. Nevertheless, recent audits department*s information
    security program,

    identifies several strategies and action steps continue to show federal
    computer systems

    Education reported in its MIT to help ensure the security of its IT

    are riddled with weaknesses that make them Accomplishment Report that it
    established a

    infrastructure, such as: (1) all general highly vulnerable to computer-
    based attacks temporary off- site disaster recovery facility

    support systems and major applications will and place a broad range of
    critical for the department *s computer network and be certified and
    accredited or receive interim operations and assets at risk of fraud,

    financial records and accounting system. It approval to operate to ensure
    the safety of

    misuse, and disruption. Further, the events also finalized plans for a
    permanent disaster the IT infrastructure, (2) remedial actions will

    of September 11, 2001, underscored the recovery facility. In addition,
    Education be completed on all problems identified in need to protect
    America *s cyberspace

    developed an information technology (IT) the Government Information
    Security

    against potentially disastrous cyber security training curriculum for IT

    Reform Act (GISRA) reviews and Critical attacks* attacks that could also
    be professionals and held initial classroom

    Infrastructure Protection assessments, (3) coordinated to coincide with
    physical

    training. The department also reported that the department*s vulnerability
    and threat terrorist attacks to maximize the impact of it performed
    security reviews of all IT

    assessment will be completed and remedial both.

    systems and developed a plan to correct action plans will begin, and (4)
    inform and

    deficiencies. train department officials on the new IT system. The
    department will also develop and test disaster recovery plans that are
    updated annually.

    However, these actions may not specifically measure the effectiveness of
    information security and the agency*s progress in implementing corrective
    steps. While the department stated that it has taken steps to

    improve its security program modeled on guidance from the National
    Institute of Standards and Technology (NIST), its annual plan does not
    include specific information on performance measures the

    department is using to identify progress in improving information
    security. NIST developed a security assessment framework and related tools
    that agencies can use in determining the status of their information

    security programs. Also, Office of Management and Budget (OMB) guidance
    for fiscal year 2002 reporting under GISRA requires agencies to use tools
    developed by NIST for evaluating the security of

    unclassified systems or groups of systems. In addition, OMB*s GISRA
    reporting guidance requires specific performance measures as well as
    corrective action plans with quarterly status updates.

    (Continued From Previous Page)

    Progress in resolving major management challenge as discussed in agency*s
    Applicable goals, measures, and Management Improvement Team (MIT)

    strategies as discussed in agency*s Major management challenge
    Accomplishments Report

    2002- 2003 annual plan GAO- designated major management challenges

    Encouraging states to improve

    This challenge was not addressed in the In the No Child Left Behind (NCLB)
    Act,

    performance information and upgrade

    MIT Accomplishments Report. states are required to report their progress

    federal evaluations used to assess how

    on a number of performance indicators

    well all children reach challenging

    annually. To help them meet their new

    academic standards.

    requirements, Education states in its 2002- 2003 annual plan that it will
    provide technical assistance to states on the utilization of online
    assessments. Education also acknowledges that there are steps the
    department can take to transform the field of

    education into an evidence- based field, such as developing and enforcing
    high standards for research initiatives that it funds. Education has set
    fiscal year 2003 performance targets related to this challenge, such as
    increasing the

    percentage of states with complete school accountability systems in place
    as required by the NCLB Act and increasing the number of projects and
    publications that are deemed to be of high quality by an independent group
    of scientists. Promoting coordination with other

    This challenge was not addressed in the While this challenge is not
    identified as a federal agencies and school districts to

    MIT Accomplishments Report. specific strategic goal in the 2002- 2003

    help build a solid foundation of learning annual plan, Education
    acknowledges the

    for all children.

    need for building partnerships across the federal government. For example,
    the department discusses continuing its work with the Department of Health
    and Human Services to improve educational services to preschool children,
    especially those from

    underserved populations. The department does not discuss any specific
    efforts to coordinate with school districts nor does it identify any
    performance targets for this challenge.

    (Continued From Previous Page)

    Progress in resolving major management challenge as discussed in agency*s
    Applicable goals, measures, and Management Improvement Team (MIT)

    strategies as discussed in agency*s Major management challenge
    Accomplishments Report

    2002- 2003 annual plan Improving financial management to help

    Education identified several In its 2002- 2003 annual plan, Education
    lists

    build a high performing agency. accomplishments related to this issue in
    its strategies and action steps for how the

    MIT Accomplishments Report. These department will develop and maintain
    accomplishments included: (1) financial integrity and management and
    implementing a payment system that checks

    internal controls. Education has listed the incoming bills and permits
    only authorized

    following strategies to meet this challenge: officials to approve
    payments, (2) requiring

    (1) update and integrate financial systems, appropriate review/ approval
    of all (2) prepare financial statements to provide purchases* ensuring
    appropriate data on department performance, (3) separation of duties to
    minimize risk of

    analyze data to reduce fraud, (4) review fraud, waste and abuse, (3)
    establishing an existing internal controls and implement Office of Chief
    Financial Officer group that

    changes where necessary, and (5) increase promotes employee awareness of
    internal the use of performance- based contracting. control, (4) beginning
    the process for

    Education also intends to align its budget implementing a new accounting
    system, and

    and planning process to ensure that (5) for the first time, preparing
    interim

    effective programs continue to be funded. financial statements on a
    quarterly basis. Education has set some performance targets for fiscal
    year 2003 related to improving the financial management of the agency.
    Measures include decreasing the number and amount of erroneous payments,
    decreasing the administrative cost per grant transaction, and decreasing
    the number of open audit recommendations remaining from the previous
    year*s financial statement audit.

    (Continued From Previous Page)

    Progress in resolving major management challenge as discussed in agency*s
    Applicable goals, measures, and Management Improvement Team (MIT)

    strategies as discussed in agency*s Major management challenge
    Accomplishments Report

    2002- 2003 annual plan Ensure access to postsecondary The MIT
    Accomplishments Report states In its 2002- 2003 annual plan, Education

    education while reducing the

    that the department is concentrating on outlines various activities to
    help ensure the

    vulnerability of student aid programs to

    removing the student financial aid programs removal of the Federal Student
    Assistance fraud, waste, error, and mismanagement.

    from the GAO high- risk list. The report programs from GAO*s high- risk
    program list. discusses Education*s actions in addressing

    The department plans to continue improving the problems with the
    department*s student

    and integrating its financial and financial aid programs. For example, the

    management information systems and to department has been able to collect
    $153

    improve program monitoring. In addition, million as a result of locating
    defaulted

    Education plans to create a study group to borrowers by matching with the
    Department examine the factors that contribute to the of Health and Human
    Services *National

    rising costs of postsecondary education and Directory of New Hires*
    database. investigate postsecondary funding Education has also resolved 93
    percent of

    strategies. Education has set fiscal year school audits within six months.

    2003 performance targets for establishing effective funding mechanisms for
    postsecondary education by modestly decreasing (1) the average national
    increase in college tuition and (2) the unmet needs for cost of attendance
    for low- income

    students. Education has developed performance targets for fiscal year 2003
    related to its Federal Student Assistance Program that include being
    removed from GAO*s high- risk list, increasing the default recovery rate,
    and decreasing grant

    overpayments to students.

    Observations on the Department of Energy*s Efforts to Address Its Major
    Management

    Appendi x IV

    Challenges The following table identifies the major management challenges
    confronting the Department of Energy (DOE), including the governmentwide
    high- risk areas of strategic human capital management and information
    security. The first column lists the challenges identified by our office.
    The second column discusses what progress, as discussed in its fiscal year
    2001 performance report, DOE made in resolving its challenges. The third
    column discusses the extent to which DOE*s fiscal year 2003 performance
    plan includes performance goals and measures to address the challenges
    that we identified. We found that DOE*s performance report

    discussed the agency*s progress in resolving its challenges. The agency*s
    performance plan had goals and measures that were directly related to all
    eight of the major management challenges.

    Table 5: Major Management Challenges for Energy Progress in resolving
    major management

    Applicable goals, measures, and challenges as discussed in agency*s
    strategies as discussed in agency*s Major management challenge fiscal year
    2001 performance report

    fiscal year 2003 performance plan GAO- designated governmentwide high risk

    Strategic human capital management:

    DOE*s fiscal year 2001 report recognized DOE*s fiscal year 2003 plan lists
    one

    GAO has identified shortcomings at multiple human capital management as a
    strategic objective to implement the

    agencies involving key elements of modern departmental challenge. DOE
    reported President*s Management Agenda initiatives strategic human capital
    management,

    progress in meeting this challenge in fiscal on Strategic Management of
    Human Capital. including strategic human capital planning

    year 2001 through a human capital summit In addition, the plan lists a
    strategic

    and organizational alignment; leadership in July 2001 that identified
    concerns and performance goal to implement DOE*s 5-

    continuity and succession planning; possible solutions. In addition, DOE

    year workforce restructuring plan. The acquiring and developing staffing
    whose

    submitted a 5- year workforce restructuring performance indicator for
    these goals will be

    size, skills, and deployment meet agency plan to the OMB with the fiscal
    year 2003

    achievement of established milestones in needs; and creating results-
    oriented budget submission. the plan. In addition, under the different
    organizational cultures.

    business lines, the plan lists two more DOE reported that it met its human
    capital strategic performance goals. A goal to performance target by
    completing all

    attract and retain the best laboratory and scheduled milestones in its
    Corporate production workforce is listed under National Training Plan and
    increasing the electronic

    Nuclear Security but no performance transfer of documents in its personnel
    indicator has been developed. Energy system to more than 49 percent.

    Resources lists a goal to increase overall university enrollment for
    nuclear engineers In addition, DOE reported that it met all but

    and scientists by 3 percent per year over the two of the fiscal year 2001
    milestones in the next 5 years. Success will be measured by Federal
    Managers* Financial Integrity Act

    undergraduate and graduate enrollments in (FMFIA) corrective action plan
    for the nuclear engineering. Indirectly related, departmental challenge of
    human capital Corporate Management lists promotion of management. The two
    unmet milestones,

    inclusion and diversity in all aspects of developing a mechanism to
    forecast mission human capital. Performance indicators needs/ project
    skills gaps and developing include a comparison of workplace diversity
    succession planning strategies have been with national and local
    populations and extended into fiscal years 2002 and 2003 workplace
    satisfaction surveys. due to revised initiatives included in the DOE 5-
    Year Workforce Restructuring Plan.

    DOE claims to have completed these in fiscal year 2002. DOE*s Science,
    National Nuclear Security, Environmental Quality, and Energy Resources
    business lines generally did not

    include specific goals or measures related to human capital. DOE*s Science
    business line articulated a goal to provide extraordinary tools,
    scientific workforce, and infrastructure to support DOE*s science mission.
    However, while the science line mentions it will continue the advanced
    education and training of young scientists we could only

    find one related performance target and

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenges as discussed in agency*s strategies as discussed in agency*s
    Major management challenge fiscal year 2001 performance report

    fiscal year 2003 performance plan

    result. DOE reported recruiting 24 new fellows under its Computational
    Science Graduate Fellowship program.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenges as discussed in agency*s strategies as discussed in agency*s
    Major management challenge fiscal year 2001 performance report

    fiscal year 2003 performance plan Information security: Our January 2001

    In fiscal year 2001, DOE did not specifically DOE discusses information
    security in a high- risk update noted that agency and identify information
    security as a

    number of different places in its fiscal year governmentwide efforts to
    strengthen departmental challenge. DOE did, however, 2003 performance
    plan. In the Corporate information security have gained momentum recognize
    the management of information

    Management section, the plan lists a and expanded. Nevertheless, recent
    audits

    technology and the broader field of security strategic objective to ensure
    the operation of continue to show federal computer systems

    as separate management challenges. DOE secure, efficient, effective, and
    economical are riddled with weaknesses that make them

    noted that it had created a focal point for Information Technology Systems
    and highly vulnerable to computer- based attacks

    information technology issues by moving the infrastructure. Underneath
    this objective, and place a broad range of critical Office of Chief
    Information Officer to report the plan lists a performance goal to ensure

    operations and assets at risk of fraud, directly to the Secretary of
    Energy. Although that DOE*s information assets are secure misuse, and
    disruption.

    we did not evaluate DOE*s efforts, DOE through effective policies,
    implementation,

    reported that it met seven of eight planned and oversight. The plan then
    lists three

    critical milestones contained in the FMFIA performance indicators: (1)
    number of

    corrective action plan for meeting the employees trained in cyber
    security, (2) challenge of information technology cyber incident response
    time, and (3) cyber management.

    intrusion detection and reporting efficiency. The plan also lists a
    strategic objective to Under the goal of providing security and reduce
    adverse security incidents through emergency operations, DOE reported that
    it

    oversight of information assets. A related is modernizing its information
    security

    performance goal is the development of program to allow for analysis and
    deterrence security policy and management of security of major incidents
    involving the compromise

    operations for DOE facilities in the national of classified information.
    In this effort, DOE

    capital area. Indicators include DOE reported it had nearly met its goal
    but

    findings specific to security policy and the provided little detail on how
    it had done so.

    number of incidents at headquarters facilities. Another performance goal
    is to DOE also reported that its Office of

    provide inspections that contribute to the Independent Oversight and
    Performance security of assets. Performance indicators Assurance completed
    17 cyber security

    include reportable events that impact inspections during fiscal year 2001.
    national security and cyber attacks on However, DOE did not report on the
    findings

    information technology systems that lead to of these inspections. a breach
    in security. Finally, another

    performance goal is to increase the In addition, DOE reported that its

    protection of sensitive and classified counterintelligence program is
    developing information against attempts by foreign an enhanced intrusion
    detection capability

    intelligence organizations to acquire nuclear for DOE to address cyber
    threats. DOE

    weapons information from the National reported it had nearly met its goal
    for fiscal Laboratories and other National Nuclear year 2001 but, again,
    provided few details.

    Security Administration (NNSA) facilities. However, no performance
    indicators have Last, DOE*s independent auditors* report for been
    developed. fiscal year 2001, included in the fiscal year 2001 performance
    report, identified

    Under the National Nuclear Security unclassified information systems
    security as

    business line, the plan lists a goal to protect a reportable condition
    because of network

    classified information and assets. However, vulnerabilities and access
    control the plan notes that for all goals under weaknesses. Although this
    condition is not

    National Nuclear Security, quantitative believed to be a material
    weakness, it was performance indicators are to be developed. first
    reported in 1999. DOE reports

    DOE claims the performance indicators

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    Progress in resolving major management Applicable goals, measures, and

    challenges as discussed in agency*s strategies as discussed in agency*s
    Major management challenge fiscal year 2001 performance report

    fiscal year 2003 performance plan

    progress through security upgrades and listed in the plan are deemed to be
    *subgoals*

    development of a cyber security and do not need any description.

    performance improvement plan. Like the fiscal year 2001 report, the fiscal
    DOE did not explicitly state how all these year 2003 plan does not
    explicitly state how various efforts will be integrated across

    all these various efforts will be integrated business lines and
    organizational across business lines and organizational boundaries. While
    DOE believes this is an

    boundaries. excellent idea and will look for opportunities to include this
    information, it must balance this with demands to streamline its report.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenges as discussed in agency*s strategies as discussed in agency*s
    Major management challenge fiscal year 2001 performance report

    fiscal year 2003 performance plan GAO- designated major management
    challenge

    Financial management: For the past 3 DOE*s independent auditors* report
    for fiscal

    DOE*s fiscal year 2003 plan includes a years, the independent auditor*s
    report on year 2001, included in the fiscal year 2001

    strategic performance goal to manage DOE*s consolidated financial
    statements performance report, identified financial

    financial resources and obtain an has reported financial management

    management at Western as a reportable independent auditor*s unqualified
    opinion on concerns at the Western Area Power

    condition. The report noted that Western the department*s annual financial

    Administration (WAPA or Western). Western has made improvements over the
    past year statements. However, DOE did not address markets and transmits
    electric power and but did not uniformly perform necessary the reportable
    condition for financial provides related services.

    reconciliations and could not promptly management at Western as a
    performance

    prepare account analyses. This reportable indicator in its plan under this
    goal.

    condition was not deemed to be a material Addressing the reportable
    condition would

    weakness. The audit report recommended be an appropriate target to assist
    in meeting that DOE*s Chief Financial Officer (CFO)

    the objective of receiving an unqualified monitor Western*s management
    actions to

    audit opinion in the future. improve Western*s overall financial
    management. The CFO agreed with the recommendation and plans to oversee
    development of a corrective action plan and

    to monitor implementation. However, DOE did not list this as a
    departmental challenge in its fiscal year 2001 performance report.

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    Progress in resolving major management Applicable goals, measures, and

    challenges as discussed in agency*s strategies as discussed in agency*s
    Major management challenge fiscal year 2001 performance report

    fiscal year 2003 performance plan Nonproliferation issues: Achieving

    DOE reported on 26 performance targets Under the National Nuclear Security

    nonproliferation goals requires improved related to reducing danger of
    global nuclear

    business line, DOE*s plan lists a strategic priority setting and program
    coordination.

    proliferation. Several of these measures objective to detect, prevent, and
    reverse the GAO identified three main challenges that

    addressed some aspects of the proliferation of weapons of mass destruction
    DOE*s nonproliferation programs face.

    management challenges we identified for while promoting nuclear safety
    worldwide. These include obtaining better access to

    this area (see below). For example, DOE Underneath this objective, the
    plan lists

    information and Russian nuclear weapons reported that its Initiatives for
    Proliferation three performance goals related to

    laboratories to better target program Prevention projects and
    Nonproliferation and

    nonproliferation including enhancing the resources to the greatest risks,
    verifying the International Security institutes engaged

    capability to detect and prevent the use of program funds, and
    coordinating over 5000 Russian and former- Soviet

    proliferation of weapons of mass destruction several DOE programs
    involving the newly

    engineers and technicians in fiscal year as well as eliminating weapons
    and

    independent states to increase their 2001. In addition, DOE reported
    progress in redirecting foreign weapons expertise to effectiveness. Our
    reviews of DOE*s

    monitoring the conversion of Russian highly civilian enterprises. However,
    as mentioned

    nonproliferation programs recognize that enriched uranium (HEU) into low
    enriched

    before, the plan notes that for all goals under there are inherent
    difficulties involved in

    uranium and in conducting special National Nuclear Security, quantitative
    working with Russia and the other newly

    monitoring visits to Russian nuclear performance indicators are to be
    developed.

    independent states. processing facilities. At the same time, DOE

    reported delays, for the second straight year, Indirectly, the plan lists
    a performance goal in installation of monitoring equipment at

    to deploy new business practices to create one Russian blending facility
    and delays in

    an integrated nuclear security enterpriseintegrated the negotiating the
    opening of a monitoring information system; a new facility at another
    Russian processing

    planning, programming, budgeting, and facility.

    evaluation system; human capital initiatives, and efforts to increase
    accountability at all DOE did list U. S. and Russian surplus fissile

    levels of NNSA. This may eventually help to materials as a management
    challenge. verify the use of program funds, improve DOE*s report contains
    10 performance coordination, and establish priorities. measures related to
    this challenge and However, no quantifiable performance continues to
    report that the department has

    indicators have been developed yet. made mixed progress in this area. For
    example, DOE reported that it had successfully completed most of the
    material control and accountability upgrades it had planned for Russian
    facilities for fiscal year 2001. However, some important activities, such
    as the installation of monitoring equipment at a Russian HEU facility, and
    the

    shipping of surplus HEU to the United States Enrichment Corporation, fell
    behind schedule. The department reported completion of the Title 1 design
    of the mixed

    oxide fuel facility for surplus U. S. plutonium. However, it did not
    report that completion of Title 1 design work for its Pit Disassembly and
    Conversion Facility had been delayed from the previous goal of fiscal year
    2001 to fiscal year 2002.

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    Progress in resolving major management Applicable goals, measures, and

    challenges as discussed in agency*s strategies as discussed in agency*s
    Major management challenge fiscal year 2001 performance report

    fiscal year 2003 performance plan Nuclear weapons stockpile: GAO and

    DOE*s report discussed three performance Under the National Nuclear
    Security others have found pervasive and longstanding goals and eight
    performance measures

    business line, DOE*s plan lists a strategic problems with DOE*s ability to
    involving DOE*s Stockpile Stewardship

    objective to maintain and enhance the address project management, planning
    and Program. This small number of

    safety, security, and reliability of the nation*s budgeting,
    organizational alignment, and performance measures is disproportionate
    nuclear weapons stockpile to counter the human capital challenges, while
    effectively

    to the over one- third of DOE*s budget that is threats of the 21 st
    century. Under this and efficiently maintaining nuclear weapons

    spent on this business line. In addition, objective, the plan lists two
    performance

    capabilities. DOE has sought to maintain some of the measures are too
    highly

    goals including conducting a program of through the Stockpile Stewardship
    Program,

    aggregated to be useful. warhead evaluation, maintenance, the safety and
    reliability of U. S. nuclear

    refurbishment, and production in partnership weapons under a nuclear
    testing DOE reported that Stockpile Surveillance with DOD and developing
    science, design, moratorium in the post- Cold War era. The and Testing is
    a management challenge. engineering, testing and manufacturing Congress
    created NNSA to deal with many Other areas that DOE recognizes as

    capabilities needed for long- term of these problems. departmental
    management challenges * stewardship of the stockpile. project management,
    managing physical assets, human capital management * also The plan also
    lists another strategic

    apply to the nuclear weapons stockpile objective to ensure the vitality
    and readiness program.

    of the NNSA*s nuclear security enterprise. Listed under this objective,
    two related DOE reported that it progressed in some performance goals are
    to attract and retain stockpile areas, including certifying to the

    the best laboratory and production President that the nuclear weapons

    workforce and to provide state- of- the art stockpile was safe and
    reliable for the sixth

    facilities and infrastructure. However, as straight year. However, DOE
    noted that it

    mentioned before, the plan notes that for all had failed for the fifth
    straight year to meet

    goals under National Nuclear Security, its schedules for stockpile
    surveillance tests. quantitative performance indicators have not In
    addition, DOE reported that it had not

    been developed. Importantly, DOE offers no been meeting internally
    established time performance measures on how it intends to frames for
    initiating and conducting reduce the stockpile surveillance and testing
    investigations into defects and malfunctions

    backlog, an area that it recognizes as a in nuclear weapons. Both
    activities are vital management challenge. According to to ensuring the
    nuclear weapons stockpile

    NNSA, the department plans to complete remain safe and reliable. DOE also
    reported the remaining backlog by the end of fiscal that it was addressing
    project management

    year 2003, except for a few gas transfer challenges for the stockpile (see
    discussion systems. under the contract management challenge).

    Indirectly, as mentioned earlier under DOE also said that it sought to
    ensure the nonproliferation, the plan lists a performance availability of
    a workforce with the critical goal to deploy new business practices to
    skills necessary to meet long- term create an integrated nuclear security
    requirements. It further said that it had

    enterprise such as a new planning, completed some of the milestones listed
    in

    programming, budgeting, and evaluation its FMFIA corrective action plan
    for

    system. This may eventually help to verify managing physical assets. The
    goals and

    the use of program funds, improve results of these initiatives, however,
    are so

    coordination, and establish priorities. highly aggregated that it is
    difficult to discern However, no quantifiable performance where progress
    is being made. indicators have been developed yet.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenges as discussed in agency*s strategies as discussed in agency*s
    Major management challenge fiscal year 2001 performance report

    fiscal year 2003 performance plan Contract management: Problems in

    DOE*s report addressed contract/ project DOE*s fiscal year 2003
    performance plan contract management (which includes

    management challenges under two continues to address contract management
    project management) place DOE at high risk

    business lines* Corporate Management under the Corporate Management goal.

    for fraud, waste, abuse, and and National Nuclear Security. In the

    The plan has a strategic objective to mismanagement. This has been a
    challenge

    Corporate Management overview section, effectively manage DOE by
    implementing

    for DOE since 1990, especially because DOE reported continuing improvement

    competitive sourcing. The plan has one DOE relies heavily on contractors
    to achieve efforts aimed at implementing National

    strategic performance goal to improve most of its missions. DOE has begun
    a

    Research Council recommendations to DOE*s contract management to become a
    number of initiatives to improve contractor improve project management. To
    date,

    model for government. The three management, but it is too soon to tell
    reforms reported as implemented include: a

    performance indicators under this goal are: whether the initiatives will
    be effective in the watch list of projects for stringent review,

    the percent of eligible service contracts that long- run. In addition,
    several Office of

    external independent reviews, and DOEwide are performance- based, the
    status of

    Inspector General (OIG) audits have found policy and operating procedures.

    contract management as a management that many of DOE*s contract reform
    goals

    Regarding contract management for 2001, challenge, and the percentage of
    new

    have yet to be achieved. DOE reported that it met the goal of

    competitive awards made electronically. converting all of its management
    and

    However, these limited measures do not operating contracts awarded to

    directly address the challenges of the large performance- based contracts.
    As part of management and operating contracts that the department*s
    ongoing effort to drastically

    have been the focus of outside criticism and change its contract
    management policies

    contract reform. and practices for major facility contracts, DOE reported
    issuing final rules in fiscal The plan includes other goals and measures
    year 2001 to overhaul its regulations and

    that indirectly address the contract adopt the federal acquisition
    regulations for

    management challenge. For example, these contracts. under a Corporate
    Management performance goal to conduct audits, the Under the National
    Nuclear Security

    DOE Office of Inspector General has a business line, DOE reported creating
    a new

    target to ensure that at least 90 percent of project management
    organization to assist its performance audits incorporate in completing
    important projects. For

    approaches to evaluate the use of example, the National Ignition Facility
    (NIF)

    performance measures *a fundamental was rebaselined in fiscal year 2000
    because tool of contract reform. Also, the it was over budget and behind
    schedule.

    Environmental Quality business line has a DOE reported developing a six
    point plan for

    goal and related indicators that pertain to NIF and certifying a new
    project baseline. timely completion of cleanup projects at DOE also
    reported that its tritium production geographic sites. program was on
    track. However, on some projects, schedule slippages and cost

    The plan lists two performance targets that overruns still exist. For
    example, a recent

    address the project management DOE Inspector General*s report found that
    component of the contract management the tritium production project was
    both

    challenge. Under Corporate Management, behind schedule and over budget.

    the department plans to pilot six courses on the Project Manager Career
    Development Program. Under National Nuclear Security, NNSA plans to meet
    established construction schedules to properly maintain needed facilities.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenges as discussed in agency*s strategies as discussed in agency*s
    Major management challenge fiscal year 2001 performance report

    fiscal year 2003 performance plan Security: Numerous studies have
    identified Overall, the department reports that it is As discussed under
    information security, pervasive weaknesses in DOE*s security

    making progress in improving security. DOE DOE*s plan lists a strategic
    objective to

    controls. Our reports have highlighted says it is meeting most of its
    FMFIA

    reduce adverse security incidents through weaknesses in computerized
    information

    milestones for the security management policy development,
    counterintelligence, systems, foreign visitor, and foreign travel
    challenge and the security aspects of

    intelligence, and oversight of the nation*s programs. While DOE has
    responded to

    counterintelligence. DOE also reported that energy infrastructure, nuclear
    weapons,

    many recommendations, the department its Office of Independent Oversight
    and

    materials, facilities, and information assets. has not always followed
    through to ensure Performance Assurance met its goals for

    A related performance goal is the that improvements are consistently
    conducting safeguards and security and development of security policy and
    implemented. In addition, the September

    cyber security inspections. Nevertheless, management of security
    operations for DOE 11, 2001 terrorist attacks pose new

    while a variety of activities have been facilities in the national capital
    area.

    challenges for DOE security. completed, DOE and NNSA are still

    Indicators include DOE findings specific to developing methods for
    evaluating those

    security policy and number of incidents at activities* effectiveness in
    improving security. headquarters facilities. However, the plan Until these
    methods are in place, DOE and

    goes on to list some different *proposed NNSA cannot determine the impact
    of the targets* under this goal including meeting individual initiatives
    or their effect on FMFIA security milestones, improving security.

    headquarters security; centralized tracking of controlled nuclear
    material; centralized tracking of foreign national visitors to DOE
    facilities; and, completing the audit of classified materials at the
    National Archives and Records Administration.

    Another performance goal is to provide inspections that contribute to the
    security of assets. Performance indicators include reportable events that
    affect national security and cyber attacks on information

    technology systems that lead to a breach in security. Finally, another
    performance goal is to increase the protection of information. However, no
    performance indicators have been developed, although, as a proposed

    target, DOE indicates it will inspect a number of site counterintelligence
    programs in fiscal year 2003. Finally, under the National Nuclear Security
    business line, the plan lists a goal to protect classified information and
    assets. However, no quantitative performance indicators have been
    developed.

    Overall, in the fiscal year 2003 plan, neither DOE nor NNSA devotes much
    attention to the physical security challenges that have resulted since the
    terrorist attacks of September 11, 2001. While the fiscal year 2001 report
    notes that additional funding will

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenges as discussed in agency*s strategies as discussed in agency*s
    Major management challenge fiscal year 2001 performance report

    fiscal year 2003 performance plan

    be needed to address physical security issues and the fiscal year 2003
    plan discusses additional funding to provide for the continued safe and
    secure transport of nuclear material and weapons conducted by NNSA*s
    Secure Transportation Asset, there

    appear to be few performance measures directly related to physical
    security.

    Environmental cleanup: Over 50 years of DOE continued to report progress
    towards

    The department*s fiscal year 2003 nuclear weapons research and production

    most of the six general performance goals performance plan has a specific
    strategic

    have left a legacy of environmental that address the environmental cleanup
    objective to safely and expeditiously

    contamination that poses unacceptable effort. Under these six goals, the
    specific manage waste, clean up facilities and the

    risks. The magnitude of the cleanup effort, performance targets continued
    to track the

    environment; and stabilize and store nuclear which includes technical
    complexities and

    progress of measurable cleanup steps such material and spent nuclear fuel.
    Under this

    uncertainties at 44 remaining sites, ensures as completing site
    remediation, disposing of objective, the plan lists 4 performance goals:

    that it will remain a departmental challenge radioactive wastes, and
    issuing a site (1) to clean up specific sites, (2) to safely for the
    foreseeable future. The OIG reported

    suitability evaluation to support the dispose of waste generated by DOE
    during that the department has made progress in recommendation of a site
    for geologic

    past and current operations, (3) to stabilize defining the cleanup effort,
    estimating its

    disposal of civilian radioactive wastes. The nuclear material and spent
    nuclear fuel and

    scope, and prioritizing individual projects; department*s report also
    provides

    reduce exposure risk, and (4) to deploy however, increased management
    attention information on how much additional cleanup innovative cleanup
    and treatment is needed to achieve intended work remains, for example, by
    stating that

    technologies. The plan goes on to list 13 environmental outcomes.

    the target of producing 225 canisters of performance indicators for these
    goals, high- level waste will complete about 7. 4 however, no indicators
    have been developed

    percent of the total canisters that will be for the innovative
    technologies goal. DOE produced from fiscal year 1998 to life cycle

    commented that it recognizes this problem; completion. In addition to
    progressing however, a top to bottom review of the entire toward its
    general performance goals, the program forced a delay in developing

    department reported that it was conducting measures until the direction of
    the

    a top to bottom review of the environmental technology development program
    became

    management program that will identify clear. DOE states that appropriate

    opportunities for achieving more and faster measures will appear in future
    planning cleanup. documents now that the review is complete. Some of the
    indicators include completion of environmental cleanup at one additional
    geographic site and disposal of an additional 80, 000 cubic meters of low-
    level radioactive waste. The department made some changes to other
    strategic objectives and goals related to environmental cleanup. The

    fiscal year 2003 plan no longer specifically addresses the disposal of
    depleted uranium hexafluoride or excess natural uranium inventories* a
    goal that was not met during fiscal year 2001.

    Observations on the Environmental Protection Agency*s Efforts to Address
    Its

    Appendi x V

    Major Management Challenges The following table identifies the major
    management challenges confronting the Environmental Protection Agency
    (EPA), including the governmentwide high- risk areas of strategic human
    capital management and information security. The first column lists the
    challenges identified by our office. The second column discusses what
    progress, as discussed in its fiscal year 2001 performance report, EPA
    made in resolving its challenges. The third column discusses the extent to
    which EPA*s fiscal year 2003 performance plan includes performance goals
    and measures to address the challenges that we identified. We found that
    EPA*s performance report

    discussed the agency*s progress in resolving all of its challenges. Of the
    agency*s four major management challenges, its performance plan had

    1. goals and measures that were directly related to two of the challenges
    and

    2. no goals and measures related to two of the challenges but discussed
    strategies to address the challenges, which were  environmental and
    performance information management to set

    priorities and measure program results and  working relationships with
    states.

    Table 6: Major Management Challenges for EPA Progress in resolving major
    management

    Applicable goals, measures, and challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s Major management challenge year 2001
    performance report

    fiscal year 2003 performance plan GAO- designated governmentwide high risk

    Strategic human capital management: EPA*s fiscal year 2001 performance
    report EPA reported that it is developing a

    GAO has identified shortcomings at multiple did not include any specific
    performance comprehensive strategy to attract, develop, agencies involving
    key elements of modern goals and measures associated with this and retain
    a diversified workforce that is strategic human capital management,

    management challenge. In the agency*s prepared to meet the agency*s future
    including strategic human capital planning

    discussion of its fiscal year 2001 challenges. To do this it will continue
    to and organizational alignment; leadership

    performance, however, the agency stated implement its action plan in
    support of the continuity and succession planning;

    that managing human capital was one of the agency*s strategy for human
    capital. The

    acquiring and developing staff whose size, overarching priorities it
    focused on in fulfilling

    agency*s goals will focus on implementing skills, and deployment meet
    agency needs; its management commitments. a workforce- planning model,
    completing a and creating results- oriented organizational

    comprehensive pay review, and developing cultures.

    In November 2000, EPA developed a human delivery systems and processes to

    capital strategy, Investing in Our People:

    enhance the training and development of EPA has recognized that it must
    devote EPA*s Strategy for Human Capital, 2001

    its workforce. EPA included the number of considerable attention to
    building a

    2003, to refine its human capital policies and agency offices using the
    workforce

    workforce with the highly specialized skills practices. This strategy
    identified the

    planning model, which identifies skills and and knowledge required to
    accomplish its

    agency*s vision and major objectives. It also competencies needed by the
    agency for

    work or risk seriously weakening its ability to included the development
    of a workforce

    strategic recruitment, retention, and fulfill even the most basic of its
    legal,

    planning system, implementation plans for development training, as a
    performance

    regulatory, and fiduciary responsibilities. achieving the objectives, and
    identification measure in its fiscal year 2003 plan. Its

    of the agency units responsible for carrying fiscal year 2003 goal is for
    five offices to out the implementation plans. The agency use the model.
    reported that with its Human Capital Strategic Plan in place, it has a
    blueprint for the initial

    In July 2001, GAO reported that, although and long- term steps needed to
    begin the strategy represented a positive step, it addressing this issue.

    did not (1) explain how achieving the human capital objectives would
    improve EPA reported that in fiscal year 2001 it had the agency*s
    performance in meeting its begun to implement its Human Capital

    strategic goals, (2) identify either the Strategic Plan by initiating
    development of a resources needed or the specific competency- based
    workforce- planning milestones for implementing the objectives, model.
    Other accomplishments for 2001, as and (3) provide outcome measures to
    track reported by the agency, included: (1)

    the agency*s progress and evaluate its graduating a second class of
    interns and

    success in achieving those objectives. We hiring another class, (2)
    launching a senior also reported that EPA did not know the executive
    service candidate development

    appropriate size, skills, and deployment of program, (3) developing and
    launching a

    staff needed to achieve its strategic goals; course for new supervisors
    and managers, was unprepared for the potential loss in and (4) beginning
    the rollout of courses

    leadership and institutional knowledge that created as part of the
    agency*s mid- level was likely to occur as more than half of its
    development program. EPA further stated senior executives become eligible
    to retire that it planned to dedicate additional

    by 2006; and had no systematic means to resources to this effort in fiscal
    year 2002,

    recruit and develop staff with the scientific including obtaining
    contractor support to and technical skills needed to effectively develop a
    competency- based workforce carry out environmental programs.

    planning model and selecting candidates for

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    its senior executive service development program. Finally, the agency
    stated that it planned to complete all corrective actions by fiscal year
    2004.

    Information security: Our January 2001 EPA provided no information
    security

    Strengthening and securing the agency*s high- risk update noted that
    agencies* and

    performance goals or measures in its fiscal information infrastructure is
    one of eight

    governmentwide efforts to strengthen year 2001 performance report. The
    report,

    specific activities EPA identified as a information security have gained
    momentum

    however, refers in general language to the means for accomplishing its
    environmental and expanded. Nevertheless, recent audits

    agency*s commitment to make information goal for fiscal year 2003. In the
    continue to show federal computer systems

    *improvements in providing secure, costeffective plan, EPA also recognizes
    that it must

    are riddled with weaknesses that make them telecommunications and
    computing remain vigilant in maintaining a strong and highly vulnerable to
    computer- based attacks

    capabilities.* The agency also reported that, secure information
    infrastructure that and place a broad range of critical in fiscal year
    2001, it had improved its

    directly supports its mission and homeland operations and assets at risk
    of fraud, security measures for electronic information

    security. misuse, and disruption. Further, the events

    exchange with its external business partners of September 11, 2001,
    underscored the

    by using virtual private network technology. Performance measures for
    information

    need to protect U. S. cyberspace against security are included in EPA*s
    fiscal year

    potentially disastrous cyber attacks* attacks More detailed information on
    agency actions

    2003 performance plan. In the plan, the that also could be coordinated to
    coincide to address risks to its information system agency describes three
    objectives for the with physical terrorist attacks to maximize security
    are discussed in the agency*s fiscal strategic goal *Quality Environmental
    the impact of both. year 2001 Integrity Act report included in its

    Information,* one of which is to improve the annual performance report. In
    this report,

    agency*s information infrastructure and EPA stated that it had made
    substantial

    security. The performance goals and progress in strengthening its
    information

    measures listed for this objective include security program by
    establishing a (1) documenting critical infrastructure, comprehensive
    strategy that addressed all

    financial, and mission critical environmental security- related
    deficiencies. Corrective systems risk assessment findings to be actions it
    reported included improving the completed in fiscal year 2002, (2)
    obtaining agency*s risk assessment and planning 75 percent compliance with
    the 13 criteria process, implementing major new technical OMB uses to
    assess agency security

    and procedural controls, issuing new policies, programs, and (3) making
    sure that 75 and beginning a regular process of testing

    percent of intrusion detection monitoring and evaluation. sensors are
    installed and operational. The last two performance measures and
    Specifically, the agency reported that during goals apply only to fiscal
    year 2003.

    fiscal year 2001 it completed risk assessments for security- critical
    applications

    GAO believes, however, that these and systems, conducted training and

    measures may not specifically measure the awareness activities for
    information security

    effectiveness of information security and officers and senior managers,
    and provided

    the agency*s progress in implementing general awareness training for all
    agency

    corrective actions. employees. The agency also reported installing network
    intrusion- detection and monitoring controls on its centrally managed
    environment and plans to install additional tools on its distributed
    systems environment. It reported that all corrective actions are expected
    to be complete by the end of fiscal year 2002.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    GAO- designated major management challenge

    Environmental and performance

    EPA did not have any performance goals or EPA*s fiscal year 2003
    performance plan information management to set priorities measures to
    address this specific challenge

    includes a general objective to improve

    and measure program results: In 2002, in its fiscal year 2001 annual
    report. It did,

    agency information infrastructure and GAO reported that EPA needs high-
    quality however, describe and summarize agency

    security, but provides no specific scientific and environmental
    information to activities to address *Data Management

    performance goals and measures related establish priorities that reflect
    risks to human Practices,* which is one of 13 major

    to improving data quality. health and the environment, and that management
    challenges identified by GAO, compare risk reduction strategies across
    OMB, the EPA Inspector General, and EPA.

    In discussing the means and strategy the programs and pollution problems.
    a GAO agency plans to follow in meeting its quality found that, although
    the agency has

    According to EPA, data management environmental information goal, it
    states

    collected a vast amount of scientific and practices include the need to
    improve the that strengthening its information environmental data, much of
    the data is not

    management, comprehensiveness, infrastructure is fundamental to increasing
    complete and accurate enough to credibly

    consistency, reliability, and accuracy of its the availability, usability,
    and reliability of assess risks and establish corresponding

    data to better measure performance and environmental information.

    risk reduction strategies. We reported, for achieve environmental results.
    It also example, that historically, EPA*s ability to

    includes the need to develop error detection assess risks and establish
    risk- based

    processes to make sure that errors in its priorities has been hampered by
    data quality

    databases are addressed appropriately and problems, including critical
    data gaps, in a timely and documented fashion. The databases that are not
    compatible with one

    agency reported it was working both another, and persistent concerns about
    the

    internally and with the states to address this accuracy of the data in
    many of its data challenge. systems.

    EPA reported that in fiscal year 2001, it had promulgated six key data
    standards and their rules for implementation; and the Environmental Data
    Standards Council had developed four additional standards that are
    expected to be implemented in fiscal year 2002. It also reported that it
    was working to

    expand its implementation of an error correction process, which provides
    an effective feedback mechanism for reporting and resolving errors
    identified by the public on EPA Web sites. It also identified two

    activities the agency planned to complete in fiscal year 2002 -- a formal
    data architecture document and a strategic plan for addressing data gaps.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Working relationships with states: GAO EPA*s 2001 performance report did
    not

    EPA*s performance plan for fiscal year identified the need for EPA to
    strengthen its

    include any specific goals and measures to 2003 does not include any
    specific working relationships with the states. More address this
    management challenge. The

    performance goals or measures for this recently, GAO has recognized that
    working report, however, does discuss indirectly the

    management challenge. However, in relationships with states are hindered
    by the agency*s progress in addressing this

    discussing its means and strategies for statutorily imposed regulatory
    framework

    challenge in both the general discussion of its attaining its *Effective
    Management* goal,

    under which EPA operates. b GAO has found *Effective Management* goal and
    as one of the agency states that developing

    that this framework, often criticized for being its 13 major management
    challenges.

    partnerships with stakeholders to ensure costly, inflexible, and
    ineffective in

    that mutual goals are met is one of the addressing some of the nation*s
    most

    This information states that in August 2001, strategies that cuts across
    all

    pressing environmental problems, has also the EPA Administrator issued a
    major policy organizational boundaries and is a key to

    constrained EPA and state innovation memo calling for senior leadership to

    performing the agency*s mission. efforts. In 2002, GAO reported that to
    advance the National Environmental overcome the constraints on innovation

    Performance Partnership System through Because existing environmental
    statutes imposed by strict interpretation of existing increasing the
    agency*s flexibility for states to do not contain explicit language
    authorizing prescriptive regulations, EPA would need address the highest
    priority environmental

    the use of innovative environmental legislative changes providing the
    agency problems, working with the states to improve

    approaches in lieu of specific regulatory with broad statutory authority,
    or a *safe performance measures, and generally

    requirements, GAO has reported that EPA legal harbor,* for allowing states
    and others

    increasing the incentives for states to improve and its stakeholders
    should closely monitor

    to use innovative approaches in carrying out results- based management
    under the the effectiveness of future innovative efforts

    federal environmental statutes. c system. The agency also reported that it
    had

    to determine whether legislative changes solicited formal input from the
    Environmental are needed. d EPA has reported that it relies on state

    Council of the States and the Tribal Caucus partners for successful
    completion of 8 of on state and tribal priorities for the EPA the 10 goals
    included in its strategic plan. budget at the beginning of its annual
    planning The agency further states that during the

    and budgeting process for fiscal year 2003 past two decades environmental
    and human

    and that representatives of both health protection programs have grown in

    organizations presented their recommended size, scope, and complexity;
    many priorities for EPA*s budget at its fiscal year environmental problems
    transcend media 2003 annual planning meeting with senior and geographic
    boundaries and that management. It reported that these solutions may
    require innovative, flexible,

    recommendations were considered as part of cross- media approaches. Thus,
    according

    the budget decision- making process. To to EPA, the agency and the states
    have facilitate this process, EPA reported that it realized that
    traditional arrangements for was developing tools that state and EPA
    addressing environmental problems are not

    regional partnership system negotiators can as effective and efficient as
    they need to be. use to clarify the appropriate performance EPA maintains
    that the National expectations. It also reported that the Environmental
    Performance Partnership

    agency and the Environmental Council of the System establishes a framework
    to build a States had established an active joint working result- based
    management system focusing

    group to address continuing implementation on joint planning and priority
    setting and

    issues and to identify and remove barriers to using environmental
    indicators and outcome effective implementation of the partnership
    measures for accountability.

    system. a U. S. General Accounting Office, Environmental Protection:
    Observations on Elevating the Environmental Protection Agency to Cabinet
    Status, GAO- 02- 552T (Washington, D. C.: Mar. 21, 2002.) b U. S. General
    Accounting Office, Environmental Protection: Overcoming Obstacles to
    Innovative State

    Regulatory Programs, GAO- 02- 268 (Washington, D. C.: Jan. 31, 2002.)

    c GAO- 02- 552T. d GAO- 02- 268.

    Observations on the Federal Emergency Management Agency*s Efforts to
    Address Its

    Appendi x VI

    Major Management Challenges The following table identifies the major
    management challenges confronting the Federal Emergency Management Agency
    (FEMA), including the governmentwide high- risk areas of strategic human
    capital management and information security. The first column lists the
    challenges identified by our office. The second column discusses what
    progress, as discussed in its fiscal year 2001 performance report, FEMA
    made in resolving its challenges. The third column discusses the extent to

    which FEMA*s fiscal year 2003 performance plan includes performance goals
    and measures to address the challenges that we identified. We found that
    the FEMA 2001 performance report discussed the agency*s progress in
    resolving all its challenges. However, for three challenges, it is
    difficult to discern how FEMA addresses these challenges because they are
    not clearly linked to a specific goal, including

     strategic human capital management,  information security, and  reduce
    the cost of disaster assistance. FEMA does not have a specific goal for
    strategic human capital management but does consider it a future
    management challenge that is discussed generally in the report. Of the
    agency*s 5 major management challenges, its 2003 performance plan had

    1. goals and measures that were directly related to 3 of the challenges,
    including

     determine the cost- effectiveness of disaster mitigation efforts,
    reduce the cost of disaster assistance, and  improve the financial
    condition of the National Floor Insurance

    Program (NFIP) 2. goals and measures that were indirectly applicable to 2
    of the

    challenges, including  strategic human capital management and
    information security.

    Table 7: Major Management Challenges for FEMA Progress in resolving major
    management

    Applicable goals, measures, and challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s Major management challenge year 2001
    performance report

    fiscal year 2003 performance plan GAO- designated governmentwide high risk

    Strategic human capital management:

    The report noted that the agency is working FEMA*s fiscal year 2003
    performance plan GAO has identified shortcomings at multiple to develop a
    5- year comprehensive has two human- capital- related goals but no
    agencies involving key elements of modern enterprisewide human capital
    strategy that measures to quantify achieving the goals. strategic human
    capital management, can be integrated with its mission, goals, including
    strategic human capital planning operational requirements, and financial

    The first goal* streamlined organizations* and organizational alignment;
    leadership

    resources. was established as an OMB universal continuity and succession
    planning; government initiative. This goal calls for acquiring and
    developing a staff whose size,

    streamlining FEMA*s workforce while skills, and deployment meet agency
    needs;

    focusing on the number of mission- related and creating results- oriented
    organizational

    emergency management jobs. It will also cultures.

    enable FEMA to estimate the level of management needed to perform its
    mission, FEMA*s ability to attract and retain a

    including the new emphasis on terrorism qualified and motivated workforce
    and to preparedness. Further, FEMA plans to provide employment
    opportunities to

    establish criteria that will be used adequately respond to current and
    future

    agencywide to meet approved management organizational challenges is a
    major

    levels and set management authority levels. challenge facing the agency.
    This is critical since FEMA estimates that 70 percent of its

    The second goal* workforce development* workforce is from 40- 59 years
    old, with

    will include workforce planning and about 17 percent of the agency*s
    permanent developing initiatives to address imbalances full- time
    workforce eligible for voluntary

    in staff talent and skill requirements in retirement.

    addition to addressing anticipated surges of voluntary retirements over
    the next 3 to 5 years and the attrition factors that normally affect the
    stability of the workforce. Through this goal, FEMA plans to initiate its

    comprehensive 5- year strategy to create a motivating and challenging
    performancebased, customer- focused work environment for employees. This
    strategy will address the important issues of retention and recruitment,
    professional development, employee performance, managerial performance,
    and a safe and healthy work environment.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Information security: Our January 2001 In its fiscal year 2001 performance
    report,

    In its fiscal year 2003 annual performance high- risk update noted that
    agencies* and FEMA reported that its antivirus software plan, FEMA stated
    that IT presented several governmentwide efforts to strengthen had scanned
    approximately 35 million

    management challenges; however, it did not information security have
    gained momentum messages and removed over 49, 000

    present specific performance measures and expanded. Nevertheless, recent
    audits

    infections, and its capabilities allowed FEMA designed to measure the
    effectiveness of

    continue to show that federal computer to restore all of its e- mail
    services in less

    information security. systems are riddled with weaknesses that than 24
    hours after the agency was attacked make them highly vulnerable to
    computerbased by the NIMDA virus.

    The National Institute of Standards and attacks and place a broad range of

    Technology (NIST) developed a security critical operations and assets at
    risk of

    While FEMA continues to progress in assessment framework and related tools

    fraud, misuse, and disruption. Further, the addressing its information
    technology that agencies can use in determining the

    events of September 11, 2001, underscored management and performance
    challenges,

    status of their information security programs. the need to protect America
    s cyberspace

    its independent auditors continue to identify Also, OMB guidance for
    fiscal year 2002

    against potentially disastrous cyber system deficiencies and
    vulnerabilities, such

    reporting under GISRA requires agencies to attacks* attacks that could
    also be

    as poor authentication procedures and use tools developed by NIST to
    evaluate the

    coordinated to coincide with physical excessive user access and
    permissions,

    security of unclassified systems or groups of terrorist attacks to
    maximize the impact of which undermine the security of FEMA*s systems. In
    addition, OMB*s GISRA both.

    information management systems. Material reporting guidance requires
    specific weaknesses in internal controls over performance measures, as
    well as FEMA*s financial management systems and

    corrective action plans with quarterly status processes, including
    information security updates. controls for the financial systems
    environment, contributed to its

    In its plan, FEMA acknowledged that the noncompliance with the Government

    increasing connectivity between systems, Information Security Reform Act
    (GIRSA), especially through the Internet, and the Clinger- Cohen Act, the
    Federal constantly changing and evolving Managers* Financial Integrity
    Act, and the technology and communications Federal Financial Management

    dramatically increase its security risks. Improvement Act.

    FEMA*s information management strategies included several high- level
    approaches for As part of FEMA*s report, the Inspector

    addressing these challenges but no specific General (IG) stated that the
    agency

    performance measures. For example, in its continued to lack an effective
    entitywide plan, FEMA stated that it had initiated a security program in
    fiscal year 2001. In major functional and organizational

    response to major management and realignment of its IT operations to
    improve performance challenges identified by the IG

    service delivery, provide better control over under the Reports
    Consolidation Act, FEMA

    IT investments, and ensure that program reported that it took the
    following actions to

    and administrative requirements are fulfilled. address some of its
    information technology In addition, FEMA indicated that it is (IT)
    security related challenges. Specifically,

    reengineering its processes to ensure better FEMA

    control of its IT environment and increase the efficiency of its
    resources.  conducted vulnerability assessments and

    prepared security plans for all of its Presidential Decision Directive 63
    (PDD63) critical systems;

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

     is drafting a comprehensive security plan and guidelines for both
    classified and unclassified systems so that system owners can assess,
    mitigate, and certify their systems.  tasked the newly organized
    Configuration

    Management Branch, a which reports directly to the Chief Information
    Officer, to develop and enforce security policy and

    conduct internal information systems security reviews and audits;
    developed a three- phase remediation plan to address FEMA*s noncompliance
    with

    the Federal Financial Management Improvement Act of 1996 and Office of
    Management and Budget (OMB) Circular A- 11, which requires continual
    financial process improvement and system modifications (including
    implementation of system and data security elements);  published FEMA
    Information Technology

    Architecture, Version 2.0: The Road to eFEMA

    in May 2001; and  began making several system

    improvements to increase the reliability and capability of its National
    Emergency Management Information System.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    GAO- designated major management challenge

    Determine the cost- effectiveness of

    The report contains the goal to *support the The fiscal year 2003
    performance plan

    disaster mitigation efforts: In August, development of disaster resistance
    in generally contains the same goals

    1999, GAO recommended that FEMA, communities and states.*

    established in fiscal year 2002. FEMA*s among other things, establish an
    analytical disaster mitigation efforts can be costeffective basis to
    support the cost- effectiveness of

    The goal indicates that FEMA has a number by

    acquiring substantially damaged properties of mitigation efforts under way
    to reduce the in floodplains and conduct periodic reviews

    risk of disaster damage. By reducing risk, (1) reducing the number of
    lives, structures, of projects after they have been

    FEMA would be able to reduce costs and elements of infrastructure at risk,
    and by implemented to determine whether they are associated with disaster
    damage. For

    increasing the number of communities cost- effective. To provide the best
    available example, in concert with state and local

    actively committed in fiscal year 2003 to data for analyzing the cost-
    effectiveness of governments, FEMA has acquired and building their
    disaster resistance programs, proposed flood hazard mitigation projects,

    shared risk management information and and GAO also recommended that FEMA

    coordinated and supported community efforts to identify and assess
    potential risks,

    (2) maintaining an estimated avoidance of  conduct post disaster
    verifications of flood to develop plans and address the risks, and

    approximately $1 billion in flood losses hazards for use in evaluating and
    possibly

    to take actions to reduce or eliminate the through FEMA*s National Flood
    Insurance revising flood hazard map information and risks, according to
    the report.

    Program (NFIP) activities.  make the agency*s information on past

    insurance more readily available for FEMA The report states that
    mitigation programs

    staff conducting benefit- cost analyses. are aimed specifically at taking
    people and

    property out of harm*s way to mitigate losses due to earthquakes,
    hurricanes, flooding, and other destructive events.

    The report also states that FEMA exceeded its measurable goals in support
    of the development of disaster resistance in communities and states.
    According to the report, FEMA reduced the number of lies, structures, and
    infrastructures at risk and

    increased the number of communities that have taken disaster resistance
    actions.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Reduce the cost of disaster assistance:

    As a result of consolidating a number of The fiscal year 2003 performance
    plan

    One way to reduce federal disaster goals, specifics to this challenge are
    spread contains three goals directly related to this assistance costs is
    to change the eligibility

    throughout the report among various FEMA management objective.

    criteria under the public assistance program. programs and are not linked
    to a specific In 1996, GAO made several

    goal. (1) FEMA plans to maintain at least a 90 recommendations regarding
    changing the

    percent success rate in the return of eligibility criteria. FEMA has since
    made In fiscal year 2001, FEMA recalculated the equipment from field
    offices following changes to eligibility, but eligibility and projected $1
    billion in savings from the disasters. By recovering and restoring used
    oversight issues remain.

    reduction of flood losses. Using a new equipment, savings can be realized
    by methodology, some prior year estimates

    avoiding the purchase of new items. were lower than originally reported
    but even with these revised figures all goals were met

    (2) FEMA plans to establish on- line according to FEMA*s annual report.

    procurement and e- government services training to all contracting staff.
    During 2001, FEMA continued to update its

    aging flood map inventory that will involve a (3) Under two disaster
    recovery programs*

    7- year upgrade to the 100, 000- panel flood Individual Assistance and
    Public

    map inventory and an enhancement of Assistance* FEMA plans to increase

    products, services, and processes that customer satisfaction by
    streamlining its

    potentially reduce or eliminate disaster recovery programs that provide a
    more costs. On February 12, 2002, the FEMA

    efficient delivery of services. Flood Map Store opened as part of its
    egovernment initiative for the sale of flood maps products via the
    Internet.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Improve the financial condition of the

    FEMA*s report provides two performance FEMA*s Annual Performance Plan for
    fiscal

    NFIP: The program has had to borrow goals related to this challenge

    year 2003 calls for improving the NFIP*s funds from the Treasury to cover
    operating income- to- expense ratio by 1 percent in losses resulting from
    heavy flooding in (1) Operating the mitigation program for fiscal year
    2002 and the four following years. recent years that produced flood
    insurance repetitive- loss properties and implementing losses exceeding
    the premiums collected

    measures to reduce the subsidy to pre- flood To achieve this goal, NFIP
    will work to

    from policyholders. Two major factors insurance rate map properties as
    measures increase income, decrease expenses, and underlie financial
    difficulties* the program,

    to improve the Program*s underwriting ratio. operate more efficiently by
    implementing by design, is not actuarially sound and it has

    business processes that improve the experienced repetitive losses.

    (2) Implementing and completing NFIP exchange of information, turnaround
    time,

    business improvements and information and reduce costs. system studies.
    Increasing income will be accomplished by To address the first goal, FEMA
    has started FEMA*s efforts to seek year- to- year to reduce the almost
    $200 million per year in

    increases in policies- in- force for the 5- year losses to repetitive-
    loss properties. To period from fiscal year 2002 to fiscal year decrease
    expenses, in 2001, the Federal 2007. Insurance and Mitigation
    Administration identified about 10,000 repetitive- loss

    To decrease expenses, the Federal properties that are most at risk. If
    FEMA Insurance and Mitigation Administration will could mitigate the risk
    to these properties, it

    continue to work to reduce the risk of could expect cost savings.

    repetitive loss properties to NFIP. As the number of these structures
    decrease, NFIP To address the second goal, NFIP*s policyholders will save
    and NFIP will reduce Community Rating System (CRS)

    repetitive flood losses. recognizes and encourages community floodplain
    management and related activities to exceed the minimum standards. CRS
    adjusts the insurance rates to reflect the reduced flood risk resulting
    from community and state activities that meet the goals of the system. In
    fiscal year 2001, the number of CRS communities increased to a total of
    938 communities and another 119 improved their ratings.

    a This Branch has been renamed the Office of Cyber Security.

    Observations on the General Services Administration*s Efforts to Address
    Its Major

    Appendi x VII

    Management Challenges The following table identifies the major management
    challenges confronting the General Services Administration (GSA), which
    include the governmentwide high- risk areas of strategic human capital
    management and information security. The first column lists the challenges
    identified by our office. The second column discusses what progress, as
    discussed in its fiscal year 2001 performance report, GSA made in
    resolving its challenges.

    The third column discusses the extent to which GSA*s fiscal year 2003
    performance plan includes performance goals and measures to address the
    challenges that we identified. We found that GSA*s performance report
    discussed the agency*s progress in resolving both of its challenges. In
    addition, we noted that GSA*s fiscal year 2003 performance plan had goals
    and measures that directly and indirectly related to both governmentwide
    management challenges.

    Table 8: Major Management Challenges for GSA Progress in resolving major
    management Applicable goals, measures, and challenge as discussed in
    agency*s fiscal

    strategies as discussed in agency*s Major management challenge year 2001
    performance report

    fiscal year 2003 performance plan GAO- designated governmentwide high risk

    Strategic human capital management:

    GSA*s performance report discusses the GSA*s fiscal year 2003 performance
    plan GAO has identified shortcomings at actions GSA is taking to address
    its human

    discusses general strategies and goals multiple agencies involving key
    elements of

    capital management challenge. Specifically, beyond those in the 2001
    performance modern strategic human capital the report discusses a new
    strategic goal, a

    report that relate to its efforts to deal with management, including
    strategic human more effective human capital management

    its human capital challenges. The capital planning and organizational
    process, and five categories in which human strategies are related to GSA
    actions on alignment; leadership continuity and

    capital performance is intended to be the President*s governmentwide
    succession planning; acquiring and

    measured. In addition, the report has seven management agenda and sections
    specific developing a staff whose size, skills, and

    specific performance goals addressing the to CPO, the Federal Supply
    Service (FSS),

    deployment meet agency needs; and human capital management challenge. GSA
    and FTS. The performance plan has eight

    creating results- oriented organizational reported that its performance
    exceeded the

    goals* six for CPO and two for OGP* cultures.

    targets for five goals and achieved success in directed at the human
    capital management

    two goals. challenge. These goals primarily focus on GSA*s performance
    report and plan recruiting, training, and retaining staff.

    recognize that GSA has a human capital GSA*s performance report explained
    that GSA management challenge and state that GSA

    had added a new strategic goal--* Maintain a The performance plan has a
    section that

    is prepared to meet this challenge. GSA world- class workforce and a
    world- class

    addresses how GSA stands on the human recognizes that it has lost, and
    will continue workplace*-- to reflect human capital*s capital initiative,
    which was part of the to lose, significant knowledgeable staff and
    importance. Under this goal, GSA specified President*s governmentwide
    management that staff have not been added to replace

    the need to recruit, hire, develop, and retain agenda. Specifically, GSA
    states in this

    the voids left by these departures. staff with strategic competencies for
    mission section that it has prepared an agencywide

    Specifically, GSA has significantly critical occupations; promote a
    knowledge

    human capital strategic plan. This plan downsized and restructured its

    sharing culture and a climate for intellectual outlines the actions GSA
    expects to take to organization since 1993. Much of the honesty; promote
    continuous learning and

    meet the challenges linked with an aging downsizing was accomplished
    through improvement; and ensure that agency

    workforce, many of whom are eligible for early retirements and buyout
    authority and

    leadership inspires, motivates, and develops retirement.

    by filling job vacancies sparingly. In staff, adapts to various
    situations, and models addition, GSA recognizes that it has an standards
    of honesty, integrity, trust, and

    CPO says in the performance plan that the aging workforce and faces the
    potential respect.

    workforce challenge has moved to the for significant loss of institutional

    forefront of the federal government*s and knowledge in the coming years as
    these GSA*s performance report also explains that GSA*s agendas. The plan
    says GSA is staff leave the workforce. GSA is developing a more effective
    human

    prepared for the challenge of keeping its capital management process that
    is to be

    human capital *need* from becoming a In response to the challenge, GSA

    integrated with GSA*s strategic goals and human capital *crisis.* The GSA
    human identified human capital planning and performance management
    process. The

    capital management process is to address organizational alignment,
    leadership human capital management process is to

    the need for specific recruitment, training, continuity and succession
    planning, and

    address the need for specific recruitment, retention, and exit/ succession
    planning.

    recruitment and retention of staff with the training, retention, and exit/
    succession GSA plans to use a template designed by right skills as key
    areas needing attention.

    planning that is required to maintain the skills the Human Resources
    Management

    and competencies needed to achieve high Council, which is made up of the
    human performance and continuous improvement at resource directors from
    major federal

    GSA. agencies and executives from the federal government*s Office of
    Personnel

    The report also states that GSA plans to focus Management (OPM), to help
    measure its

    on measuring human capital performance in success in human resource
    management. five categories* strategic competencies,

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    Progress in resolving major management Applicable goals, measures, and
    challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s Major management challenge year 2001
    performance report

    fiscal year 2003 performance plan

    leadership, performance culture, learning, and The FSS section of the plan
    also addresses strategic awareness* to measure success.

    the need to invest in and develop a worldclass The strategic competencies
    category is

    workforce. FSS reports that it described as encompassing recruiting,

    implemented an initiative that places developing, and retaining staff with
    the special emphasis on recruiting new staff, strategic competencies for
    mission critical energizing the current workforce, and occupations. The
    leadership category is to developing leadership skills. In addition, the
    address ensuring that agency leadership

    plan states that FSS is focusing on inspires, motivates, and models high
    recruiting new staff, determining how to standards. The performance
    culture category

    reallocate existing staff to ensure they are is to focus on creating a
    culture that motivates

    deployed in a manner appropriate for staff while ensuring fairness in the
    workplace. mission accomplishment, and identifying The learning category
    is to be concerned with

    areas where out- sourcing may be a useful promoting knowledge sharing,
    intellectual way of offsetting shortages. To help honesty, and continuous
    learning and

    improve its performance, FSS explains in improvement. The strategic
    awareness the plan that it is implementing a category is intended to align
    human capital

    performance management and incentives policies to support GSA*s mission,
    values, and system to link performance and results. goals. The intent is
    to reward FSS staff and programs that meet or exceed standards of

    In addition to the five categories for measuring high performance. human
    capital performance, GSA*s

    performance report includes seven goals* In addition, the FTS section of
    the plan

    three for GSA*s Office of Chief People Officer addresses human capital
    management.

    (CPO) and four for the Office of The plan states that FTS will strive to
    hire Governmentwide Policy (OGP)* that relate to and retain staff that are
    highly trained in the

    GSA*s efforts to address its human capital acquisition,
    telecommunications, and management challenge. These goals

    information technology fields. FTS generally focus on recruiting and
    training staff.

    perceives this as critical to help achieve customer satisfaction and the
    effective CPO is responsible for providing GSA with

    procurement of technology. In addition, in workforce, organization, and
    workplace order to foster a culture in which all staff solutions. Efforts
    that CPO reported include can succeed and be respected, FTS states an
    increased emphasis on hiring recent

    that it is implementing initiatives to increase college graduates,
    improving the skills of internal communication, recognize and current
    staff, and holding a series of meetings

    develop staff, and provide current with managers to share best practices
    in the

    technology so that its workforce excels at areas of recruiting, energizing
    staff, and

    customer service. developing leaders, contracting with the Office of
    Personnel Management to develop a

    The CPO section of the fiscal year 2003 succession plan for Public
    Buildings Service

    performance plan has six goals related to leadership, and hiring a private
    vendor to

    the human capital challenge. The goals deploy additional training in GSA*s
    Federal generally focus on recruiting, training, and Technology Service
    (FTS).

    retaining staff. Two 2003 performance goals*( 1) to improve cycle time for
    CPO had three human capital management

    recruiting and (2) to increase the use of performance goals. The goals
    were to

    GSA online university as a cost- effective increase customer satisfaction
    with filling method to improve employee skills* were vacancies, to improve
    the cycle time for

    also included in GSA*s 2002 plan. For the

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    Progress in resolving major management Applicable goals, measures, and
    challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s Major management challenge year 2001
    performance report

    fiscal year 2003 performance plan

    recruiting, and to increase the use of its online first goal, CPO will
    measure the days it university as a cost- effective method for

    takes to process relevant personnel improving staff skills. The 2001
    performance actions. The basic strategy to achieve the report says CPO
    exceeded its targets for each

    target performance is to identify and of these goals. encourage cost-
    effective methods to streamline the recruitment process. For the

    OGP, which is charged with shaping and second goal, the measure is to
    increase the

    maintaining a governmentwide framework that number of course
    registrations. CPO*s

    helps agencies better serve the public by strategy to meet this goal is to
    encourage improving management in the federal online university use,
    promote the government, had two goals directly related to

    advantages of online over traditional the human capital management
    challenge. training, and add quality courses to the The first goal was to
    invest in the

    curriculum. competencies of its workforce to ensure that all OGP staff
    have the necessary knowledge

    In addition, the 2003 plan includes four new and skills to support the
    organization*s

    human capital management performance mission. Although data had not been

    goals. CPO has added two goals related to developed to measure performance
    on this

    improving staff competencies needed in goal, OGP reported being
    successful. OGP three job categories* acquisition, real cited results such
    as providing employees with estate, and technology. One goal is to

    continuing education opportunities, making increase the professional
    competency of additional funds available for the training GSA*s
    acquisition workforce and the other budget, and using specialized software
    to is to develop competency models for key assess the competence of some
    staff

    real estate and technology positions. The members as evidence of its
    success. The

    basic strategy for both goals is to develop second goal, which was a new
    goal, was to

    information on the existing and desired increase the satisfaction and
    effectiveness of competencies for staff in these areas and its workforce
    by encouraging innovation and

    develop plans for improving the level of increasing staff satisfaction
    with OGP- wide competencies where needed. CPO is communications,
    cooperation, and information examining ways to measure these goals.
    assets. Although OGP did not have a performance target for this goal, OGP

    The third new goal is to identify high reported that it had achieved
    success in that it

    performing staff in GSA*s critical job had used a survey to assess
    impediments and categories to enable GSA to improve its then focused on
    addressing them.

    strategies to recruit and retain talented staff. CPO*s approach is to
    develop OGP also had two performance goals that strategies using financial
    and other were not directly related to training GSA*s

    incentives that will encourage high employees but to training employees of
    all performing staff in critical jobs to stay with agencies. Since GSA
    employees could take the agency. CPO reports that it is in the advantage
    of the offerings under these goals,

    process of developing measures for this we discuss them here. One goal was
    to goal. establish and maintain a core curriculum of Internet- based
    courses and to increase the The fourth new goal addressing the human
    number of training instances. The other goal

    capital challenge is to have GSA rank in the was to improve the
    professional skills of

    75 th percentile in the Gallup Q12 survey. present and future federal
    information

    This survey measures employee attitudes technology leaders. OGP reported
    that it

    about their workplace environments. exceeded its performance targets for
    both According to the plan, Gallup has goals.

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    Progress in resolving major management Applicable goals, measures, and
    challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s Major management challenge year 2001
    performance report

    fiscal year 2003 performance plan

    determined that organizations in the 75 th percentile are considered
    *World- Class Workplaces* and this is GSA*s goal for fiscal year 2003. The
    strategy is (1) to use the results of this survey to identify employees*
    concerns and (2) to develop, measure, and implement action plans to

    improve in areas needing attention. The ultimate end is to attract and
    retain talented employees.

    OGP also had two human capital management goals in the performance plan.
    The fiscal year 2003 performance plan explained that OGP had consolidated,

    modified, and restructured its goals to make them more customer- focused
    and outcome- oriented. As such, the fiscal year 2003 human capital goals
    are different from those of the prior year. One goal is directly and the
    other is indirectly related to GSA*s human capital management challenge.
    The first is to improve the overall score on the Gallup Q12 survey. This
    survey measures employees* satisfaction with their workplace environments,
    and OGP will use the results to help identify and improve the workplace
    and thus improve staff satisfaction, productivity, and retention. OGP will
    measure progress by monitoring improvement in its total mean survey score.

    The other goal* establish core technical and general competencies and
    governmentwide standards for program

    areas within OGP*s responsibility* is aimed at the government in general
    and, as such, could indirectly be used to help GSA. Measures are yet to be
    developed for this goal, but OGP*s strategy includes working with
    government and nongovernment

    entities to identify (1) competencies essential for federal workers to be
    successful and (2) ways to impart these

    needed skills to staff.

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    Progress in resolving major management Applicable goals, measures, and
    challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s Major management challenge year 2001
    performance report

    fiscal year 2003 performance plan Information security: Our January 2001

    GSA*s performance report discusses some The GSA fiscal year 2003
    performance

    high- risk update noted that agency and general strategies related to the
    information plan includes some additional discussion governmentwide
    efforts to strengthen technology security challenge and includes

    related to this management challenge that information security have gained
    one goal related to it. In the report, GSA was not in the 2001 performance
    report momentum and expanded. Nevertheless, recognizes that its systems
    have had security and one direct and one indirect goal related recent
    audits continue to show federal

    vulnerabilities and weaknesses and outlined to it. computer systems are
    riddled with the following steps it took during fiscal year weaknesses
    that make them highly

    2001 to help address these challenges: The performance plan*s section on
    the

    vulnerable to computer based attacks and President*s governmentwide
    management

    place a broad range of critical operations  development and funding of a
    new

    agenda on E- government discusses how and assets at risk of fraud, misuse,
    and

    information technology center of expertise; GSA stands on the information
    security

    disruption.  development and execution of an information

    initiative. This section states that GSA technology security plan;

    recognized that it has significant The performance report and plan
    recognize

     development and distribution of agencywide information technology
    security

    that GSA*s challenges in the information information technology security
    guidelines

    weaknesses and has submitted a report technology area continue to
    increase. Many and procedures;

    with plans to remedy them. The plan of its systems process and store
    sensitive

     development and implementation of identifies two groups within FTS that

    information. Specific to information security, procedures for performing
    vulnerability and provide governmentwide assistance in the

    GSA reported its major management risk assessments;

    area of information security. The challenge is to ensure that systems

     monitoring of access attempts and security Information Technology
    Solutions group continue to operate as intended, agency

    violations; specifically says that, among other things, it

    assets are protected, and privacy is  development and implementation of
    security provides security solution services and the

    assured. training; and

    Office of Information Assurance and Critical  monitoring and reporting of
    policies and Infrastructure Protection, among other guidelines for
    compliance by Services, staff

    things, helps federal agencies meet the offices, and regions. challenges
    of securing operations in the Internet environment. The Office of the
    Chief Information Officer (CIO) has a goal that directly relates to GSA*s

    The CIO continues its goal, which is directly efforts to address this
    challenge. Specifically

    related to the challenge, to resolve all highrisk this goal is to resolve
    all high- risk

    vulnerabilities and conditions detected vulnerabilities detected by
    information

    by information technology audits or reviews technology audits or reviews
    within 30 days of

    within 30 days of findings and the findings and recommendations. CIO

    recommendations. CIO measures its time reports that in fiscal year 2001
    four high- risk

    frame to ensure its performance meets the security vulnerabilities were
    identified and all

    30- day standard. Basically, its strategy is to were resolved within the
    30- day time frame. In

    monitor reports of problems, monitor action addition, the report says that
    all vulnerabilities

    plans to see if they seem responsive to the found during testing were
    resolved in less than problem, and track the timeliness of an hour.

    corrective actions. Although not specific to GSA, the plan also has an
    information security goal that addresses the challenge governmentwide.
    Specifically, the FTS goal is to raise the

    level of awareness of information security across the federal government.
    As background, the plan explains that the Government Information Security
    Reform Act requests federal agencies to report

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    Progress in resolving major management Applicable goals, measures, and
    challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s Major management challenge year 2001
    performance report

    fiscal year 2003 performance plan

    computer security incidents to GSA. GSA*s Federal Computer Incident
    Response Center is its focal point for computer security incident
    recognition, reporting,

    handling, and prevention. To assess awareness, GSA tracks the number of
    agencies who report incidents to the center. GSA*s strategy for this goal
    is basically to interact with agencies and educate them on the importance
    of incident

    reporting.

    Observations on the Department of Health and Human Service*s Efforts to
    Address Its

    Appendi x VIII

    Major Management Challenges The following table identifies the major
    management challenges confronting the Department of Health and Human
    Services (HHS), including the governmentwide, high- risk areas of
    strategic human capital management and information security. The first
    column lists the major management challenges identified by our office. The
    second column discusses what progress, as discussed in their fiscal year
    2001 performance reports, HHS and three of its component agencies* the
    Centers for

    Medicare & Medicaid Services (CMS) 6 , the Food and Drug Administration
    (FDA), and the Administration for Children and Families (ACF)* have made
    in resolving these challenges. We chose to review these agencies* plans
    because they are the responsible agencies for addressing the five agency-
    specific management challenges. The third column discusses the

    extent to which HHS*s, CMS*s, FDA*s, and ACF*s fiscal year 2003
    performance plans include performance goals and measures to address the
    challenges that we identified. We found that all seven of the major
    management challenges identified by GAO were discussed, to some extent, in
    at least one or more of the agencies* fiscal year 2001 performance
    reports. Regarding how the department and its agencies addressed the
    government- wide challenge of strategic human capital in their fiscal year
    2003 performance plans, we found that, although HHS and its component
    agencies did not directly

    address all four elements of the challenge, each had some goals that
    related to some aspects of human capital management. Regarding the
    government- wide challenge of information security, we found that HHS only
    referred to having goals to address this challenge and CMS had a

    specific goal that directly addressed it, but FDA and ACF did not. Because
    HHS and the agencies we reviewed were uneven in their approach to these
    government- wide management challenges, we considered them to have

    goals and measures indirectly related to these challenges. Of the agency*s
    seven major management challenges, its performance plan had

    1. goals and measures that were directly related to the five
    agencyspecific challenges and

    6 In this appendix, we refer to the Centers for Medicare & Medicaid
    Services (CMS), formerly known as the Health Care Finance Administration
    (HCFA) as *CMS* throughout the text because that is how the agency
    referred to itself in its Performance Report and Plan.

    2. goals and measures that were indirectly applicable to both of the
    governmentwide management challenges, including

     strategic human capital management and  information security.

    Table 9: Major Management Challenges for HHS Progress in resolving major
    management

    Applicable goals, measures, and challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s Major management challenge year 2001
    performance report

    fiscal year 2003 performance plan GAO- designated governmentwide high risk

    Strategic human capital management: HHS*s report did not address
    departmental Overall, the fiscal year 2003 performance GAO has identified
    shortcomings at multiple performance relating to the four key

    plans for HHS, CMS, FDA, and ACF did not agencies involving key elements
    of modern elements of this challenge. However, CMS, directly address all
    four key elements of this strategic human capital management,

    FDA, and ACF did report on some human challenge. However, each plan
    contained including strategic human capital planning

    capital activities, which were related to some some goals that are related
    to some aspects and organizational alignment; leadership

    aspects of this challenge. of this challenge.

    continuity and succession planning; acquiring and developing a staff whose
    size,

    For CMS, see discussion below under the HHS*s main human capital
    management

    skills, and deployment meet agency needs; management challenge *Provide
    current

    goal is to reduce unnecessary layers and and creating results- oriented
    organizational

    and future generations with a well- designed develop a more efficient
    organizational

    cultures. and administered Medicare program.*

    structure. To achieve this, it plans to consolidate its management layers,
    reduce FDA reported that its strategic goal was to the number of personnel
    offices, and provide a streamlined and efficient hierarchy

    consolidate the public affairs and legislative within the agency that
    aligned itself with

    affairs functions. HHS*s guidelines for consolidating administrative
    functions. FDA*s fiscal year

    For CMS, see discussion below under the 2001 performance goal was to
    increase the management challenge *Provide current number of employees per
    supervisor to one and future generations with a well- designed supervisor
    to every 7.28 employees. FDA

    and administered Medicare program.* reported that it exceeded its goal by
    obtaining a ratio of 1: 7.69. Although FDA

    FDA*s fiscal year 2003 performance goals did not establish a performance
    goal to include developing and implementing a plan consolidate
    administrative functions in the

    to reduce organizational layers in all of agency until fiscal year 2002,
    FDA merged FDA*s components. In addition, FDA plans its management
    information systems and

    to review 15 percent of its full time evaluation staffs in fiscal year
    2001. equivalents that are in functions that might be candidates for
    outsourcing to determine if ACF reported that it has tracked its efforts
    to additional opportunities for outsourcing develop and retain a highly
    skilled, strongly

    exist. FDA did not retain a goal for its motivated staff since fiscal year
    2000, but its

    supervisor to employee ratio. performance report does not include any data
    that show progress it has made. In ACF*s fourth strategic goal is to build
    a fiscal year 2001, ACF had only one

    results- oriented organization. Two performance measure related to
    strategic

    objectives under this goal relate to strategic human capital management,
    that each ACF

    human capital management and are major staff member have at least one
    training

    administration initiatives: (1) develop and opportunity directly related
    to increasing job retain a highly skilled, strongly motivated skills. ACF
    reported that data were not

    staff and (2) streamline ACF organizational available to assess whether
    this goal was

    layers. achieved, but it reported developing an agency training strategy
    to increase and broaden technical and nontechnical training opportunities
    for all employees.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    In fiscal year 2002, ACF reinstated a fiscal year 1999- 2000 performance
    measure to increase ACF*s staff relative to the number of its managers. In
    addition, ACF is in the process of developing a restructuring plan and
    analyzing information gathered for

    workforce planning purposes in order to identify additional performance
    measures in this area.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Information security: Our January 2001 Overall, only CMS*s fiscal year
    2001 Overall, HHS*s fiscal year 2003 performance

    high- risk update noted that agencies* and performance report discussed
    steps it took

    plan only referenced the fact that the governmentwide efforts to
    strengthen

    that were directly related to this department had goals related to the
    information security have gained momentum

    management challenge. information security challenge. However, of and
    expanded. Nevertheless, recent audits

    its component agencies, only CMS*s plan continue to show that federal
    computer HHS*s fiscal year 2001 performance report contained a specific
    goal relating to this systems are riddled with weaknesses that did not
    provide information on steps the

    challenge. make them highly vulnerable to computerbased agency had taken
    to improve information

    attacks and place a broad range of security.

    HHS states in its plan that it has added critical operations and assets at
    risk of

    information security goals as a result of our fraud, misuse, and
    disruption. Further, the

    CMS had three objectives related to its goal January 2001 report. It does
    not address

    events of September 11, 2001, underscored of improving information
    security in fiscal them further.

    the need to protect America *s cyberspace year 2001. against potentially
    disastrous cyber

    For fiscal year 2003, CMS has four attacks* attacks that could also be

    First, CMS met its objective to increase by objectives related to its goal
    of improving coordinated to coincide with physical

    one- third the proportion of Medicare information security. These include

    terrorist attacks to maximize the impact of contractor sites whose
    information security

    both. practices were reviewed. However, it did not

     eliminating all material weaknesses in meet its second objective of
    eliminating the

    information security, as measured by the material weakness found in the
    fiscal year CFO audit; 2001 CFO audit related to information
    implementing an improved access control security. Auditors of HHS*s fiscal
    year 2001

    management system to prevent financial statement noted numerous
    unauthorized access; problems with the security of Medicare

     continuing contractor security reviews; and information systems, which
    had also been

     conducting penetration testing and noted in prior CFO audits. These
    audits

    vulnerability assessments at a subset of stated that these problems could
    result in

    Medicare contractors and CMS service unauthorized access to sensitive
    Medicare

    providers. data. CMS*s report did not address the nature of these problems
    or whether the

    In its technical comments, CMS reported problems were corrected. In its
    technical that it has now revised its fiscal year 2003 comments to this
    appendix, CMS reported information security objectives by that it
    implemented a control to address this

    eliminating the latter two objectives. weakness. Finally, CMS did not meet
    its objective of providing security awareness

    FDA did not generally address information training to 95 percent of its
    workforce; it security in its fiscal year 2003 plan. trained only 20
    percent of its workforce on this topic. In its technical comments, CMS

    While ACF has an objective to improve reported that it implemented
    computerbased automated data and management systems, security awareness
    training in late the objective does not specifically address

    2002 and that approximately 70 percent of issues related to information
    security.

    CMS employees had completed the training. FDA*s fiscal year 2001 report
    did not generally address information security, except in how the need to
    increase security requirements contributed to missing a target to
    implement an adverse event reporting system for medical devices.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    ACF*s fiscal year 2001 performance plan did not provide information on
    steps the agency had taken to improve information security.

    GAO- designated major management challenge

    Provide current and future generations

    CMS*s fiscal year 2001 report indicated that For fiscal year 2003, the CMS
    plan outlines

    with a well- designed and administered

    it took some steps to address the human three goals to improve human
    capital

    Medicare program: GAO has identified a capital aspects of this management

    management. By fiscal year 2003, CMS number of human capital challenges
    facing

    challenge even though CMS did not draft its anticipates fully implementing
    an automated

    CMS. First, despite Medicare*s size and goals relating to our strategic
    human capital workforce planning system for all employees

    complexity, there is no official whose sole management challenge until its
    2002 and and a performance- based management

    responsibility is to run the program. In 2003 plans.

    system and award and recognition program addition to Medicare, CMS*s
    Administrator

    for non- SES managers. Additionally, CMS and top- level management have
    oversight

    First, CMS began implementing a fourphase plans to consolidate
    administrative functions

    and administrative responsibilities for other process to systematically
    assess its

    and reduce FTE usage through other major health- related programs and

    workforce needs. As part of this process, administrative initiatives.
    However, the CMS initiatives, such as Medicaid, the State

    CMS identified gaps in staff skills and report addresses neither the lack
    of a single Children*s Health Insurance Program, and knowledge by using a
    voluntary, agencywide

    individual overseeing Medicare nor the nursing homes. Second, frequent
    changes

    assessment process. Second, CMS frequent changes in agency leadership.

    in leadership have inhibited the initiated the design of an intranet-
    based implementation of long- term Medicare system to house workforce
    planning data. initiatives and the pursuit of a consistent

    Third, CMS continued implementation of management strategy. Third, CMS*s
    staff

    competency- based recruitment and lacks the experience and training to
    deal

    selection for non- SES managers. Fourth, in with some of the complex new

    fiscal year 2001, it offered continuous responsibilities mandated by the
    Balanced learning courses in core management skills. Budget Act of 1997.
    Finally, with one- third of

    CMS reported that it intends to make some its staff eligible to retire
    within the next 5 of these courses mandatory for newer years, CMS faces
    the loss of valuable

    managers. However, the CMS report did not institutional knowledge.

    address the lack of a single individual overseeing Medicare or frequent
    changes in agency leadership.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Better safeguard the integrity of the

    In fiscal year 2001, CMS had eight goals CMS has 10 goals for fiscal year
    2003

    Medicare program: Because of the relating to the program integrity related
    to the program integrity challenge. program*s vast size and complexity,

    management challenge. CMS met six of First, it plans to reduce the
    percentage of Medicare is at risk of considerable losses these goals; did
    not meet one; and, pending improper payments made under the from waste,
    fraud, abuse, and

    final data, expects to meet another. These Medicare fee- for- service
    program to 5 mismanagement. As a result, we have goals partly addressed
    the management

    percent. In conjunction with this goal, CMS designated it a high- risk
    program and issues we identified. However, CMS

    expects to have fully implemented the identified several management
    challenges, changed some of its program integrity goals Comprehensive
    Error Rate Testing program, which are outlined below. from prior years,
    making it difficult to assess which is expected to produce a more First,
    in Medicare*s fee- for- service

    CMS*s progress in addressing the challenge accurate Medicare fee- for-
    service error rate

    component, there are several weaknesses we identified. than current
    estimates. in CMS*s monitoring of contractor claims

    review and payment. Second, CMS faces First, CMS sought to reduce the
    percentage

    Second, to increase Medicare secondary challenges in establishing
    appropriate prices

    of improper payments made under the feefor- payer credit balance
    recoveries and

    to pay for covered services through its service program to 7 percent. The

    decrease the time to collect improper prospective payment methods. Third,

    agency met this goal. For fiscal year 2001, payments, CMS plans to
    implement and Medicare*s managed care component,

    the HHS Office of Inspector General monitor the use of revised credit
    balance known as Medicare+ Choice, is subject to estimated that 6. 3
    percent of fee- for- service

    instructions by its regional offices, fiscal improper payment problems,
    such as claims were paid improperly.

    intermediaries, and providers. overpayment and failure to deliver
    necessary services. Finally, a major

    Second, in fiscal year 2001, CMS reported Third, CMS plans to develop a
    goal to problem underlying CMS*s effort to ensure meeting its goal to
    implement initiatives for

    measure and improve beneficiary and proper claims payment is that its
    information

    measuring program integrity outcomes. provider satisfaction with the way
    the systems are outmoded and many of its These included taking steps to
    implement

    agency and its contractors conduct program financial management procedures
    are not

    the Comprehensive Error Rate Testing safeguard activities. yet in order.

    program. CMS anticipates that the program will serve to provide ongoing
    measures of Fourth, CMS plans to improve the provider improper payments.

    enrollment process by implementing the Provider Enrollment Chain Ownership
    Third, CMS reported that, pending final

    System, which will create a centralized data, it expected to meet its goal
    of depository of information on Medicare implementing the Comprehensive
    Plan for

    providers. In conjunction with this goal, CMS Program Integrity. This plan
    outlined the also plans to revalidate its current agency*s overall program
    integrity strategy information on 20 percent of Part A and 10 specific
    short- term initiatives that

    providers. addressed certain vulnerable areas, such as effectiveness of
    medical review of claims,

    Fifth, CMS plans to continue development of efforts to safeguard payments,
    and provider

    its information technology architecture and integrity and benefit areas
    including develop architectural support services for inpatient care,
    managed care, community

    the agency. mental health, and nursing homes.

    Sixth, CMS*s objective for its financial Fourth, regarding its goal to
    increase

    statements is to maintain an unqualified Medicare secondary payer
    liability and nofault opinion. dollar recoveries, in fiscal year 2001, CMS
    changed its focus from no- fault dollar

    Seventh, CMS plans to implement an recoveries to increasing Medicare

    integrated general ledger accounting secondary payer credit balance
    recoveries system. The system is currently in the pilot

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    and decreasing recovery time. CMS design, development, and implementation
    reported that it met its target by hiring a

    phase. In its fiscal year 2003 performance consulting firm to gather
    information on plan, CMS stated that it expected to provider credit
    balance identification, the

    complete implementation by fiscal year submission and resolution process,
    and 2006. However, in its technical comments, contractor monitoring and
    resolution of CMS stated that it now expects to complete credit balances.
    implementation by fiscal year 2007.

    Fifth, CMS continued to develop an Eighth, in order to meet the
    requirements of

    information technology architecture to help it the Debt Collection
    Improvement Act of

    plan and develop an information systems 1996, CMS has a goal to increase
    referrals

    environment that is more responsive to of eligible delinquent debt to the
    Department

    current and future business demands, less of the Treasury or to a
    Treasury- designated expensive to maintain, and better able to

    debt collection center. In fiscal year 2003, support program operations
    and policy

    CMS plans to refer all eligible delinquent decision making. However, CMS
    did not

    debt and improve the procedures for meet all of its fiscal year 2001
    targets in this

    identifying, monitoring, and tracking these area, which it attributed to
    budget and debts. staffing shortfalls.

    Ninth, with respect to timeliness of payment, Sixth, HHS met its goal of
    maintaining an as required by the Social Security Act, CMS unqualified, or
    *clean,* audit opinion of its

    plans to continue to meet the Act*s fiscal year 2001 financial statement.
    In requirement of paying at least 95 percent of other words, HHS*s
    financial statements

    its electronic claims within 14 to 30 days of fairly presented its
    financial position,

    receipt. including net costs, changes in net position, budgetary
    resources, and financing.

    Finally, in fiscal year 2003 CMS plans to However, the agency continued to
    have a continue its goal to improve its oversight of material weakness
    related to its financial

    Medicare fee- for- service contractors, but did processes and controls, in
    addition to the not set a fiscal year 2003 target to measure weakness
    related to information systems

    performance. security. As a result, the agency has taken steps to
    strengthen financial management.

    Seventh, as required by the Social Security Act, CMS exceeded its goal of
    paying 95 percent of Medicare electronic claims on time.

    Finally, CMS met its goal of improving the oversight of Medicare fee- for-
    service contractors. With the objective of national uniform contractor
    evaluation, CMS conducted on- site reviews using standardized review
    protocols.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Improve oversight of nursing homes so In fiscal year 2001, CMS had three
    goals For fiscal year 2003, CMS*s plan has the

    that residents receive quality care: Citing that relate to improving
    oversight of nursing

    same three quality of care goals as it did in complaints of harm to
    residents, in our homes and ensuring quality of care. CMS fiscal year
    2001, which are to January 2001 report, we identified two

    did not meet its target for its first goal* challenges. First, CMS needs
    to address

    decreasing the prevalence of restraint use in  decrease the prevalence of
    restraints in weaknesses in federal and state oversight of nursing homes.
    Its target was 10 percent,

    nursing homes, nursing homes. Second, to improve

    and interim data indicated that restraint use  decrease the prevalence of
    pressure

    oversight, CMS needs to better use was at 10.2 percent. In the text of its
    report, ulcers in nursing homes, and

    management information to verify and CMS did not adequately explain how it
     improve the management of the survey assess states* oversight activities
    and

    measured restraint use. budget process. analyze and monitor nursing home

    performance. With respect to its second goal* to With respect to the
    latter, CMS states in its

    decrease the prevalence of pressure ulcers plan that it will use the
    performance

    in nursing homes* CMS reported that, measures and associated baselines to

    based on interim data, it did not meet its measure the quality of the
    survey work target of 9. 6 percent. Here, as with restraint

    performed. However, its plan does not use, the text of its report did not
    adequately

    indicate what action it intends to take if state explain how CMS measured
    pressure ulcer agencies fall below the baselines. prevalence. CMS was
    unsure of the cause for the increase in pressure ulcers and was examining
    the data. However, its report did not address what measures it would take
    in response to an actual increase in the incidence of pressure ulcers.

    CMS reported that it met the objectives of its third goal* to improve the
    management of the survey budget process. It increased budget allocations
    to states within a specific threshold and developed performance

    measures and baselines for the quality of survey work performed.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Ensure the safety and efficacy of medical

    FDA reported that it met or exceeded seven FDA established fiscal year
    2003 goals to products: Our January 2001 report noted

    of the nine goals that we identified in its inspect

    two major management challenges for FDA fiscal year 2001 performance
    report that in this area. First, FDA*s efforts to monitor

    related to this challenge.  9 percent of foreign medical device medical
    product manufacturing needed

    manufacturers, improvement. Specifically, the number of

    FDA reported meeting or exceeding its fiscal  26 percent of registered
    domestic human

    inspections completed by FDA had been far year 2001 goals for

    drug manufacturers, repackers, relabelers, fewer than the number required
    by statute. and medical gas repackers, Second, FDA*s risk- based
    inspection

     inspecting 9 percent of foreign device  20 percent of domestic medical
    device strategy for foreign pharmaceutical manufacturers,

    manufacturers, manufacturers did not ensure timely followup.  assuring
    that 90 percent of the domestic

     mammography facilities to ensure that at drug industry conformed with
    FDA

    least 97 percent of the facilities meet requirements, inspection
    standards, and  assuring that 90 percent of domestic

     50 percent of blood banks, source plasma biologics industry conformed to
    FDA

    operations and biologics manufacturing standards,

    establishments.  assuring that 90 percent of the domestic medical device
    manufacturers conformed

    FDA has eliminated its performance goals to to FDA requirements,

    assure that domestic drug, biologics, and  inspecting 17 percent of
    domestic medical

    medical device industries conform to FDA device manufacturers,
    requirements. According to FDA, these  ensuring at least 97 percent of

    goals are routinely being met by industry mammography facilities met FDA
    and are no longer needed. FDA did not standards, and

    establish a performance goal for the  inspecting 50 percent of blood
    banks.

    percentage of plasma fractionator establishments that should be in
    compliance FDA did not address the progress it made in with FDA
    requirements. According to FDA, inspecting 50 percent of source plasma

    it combined its performance goal for plasma operations and biologics
    manufacturing fractionators with its goal to inspect 50 establishments. In
    its technical comments, percent of registered blood banks, source FDA
    stated that it reported meeting this goal

    plasma operations, and biologics in its fiscal year 2002 Congressional

    manufacturing establishments. Justification.

    FDA reported not meeting its goals for  inspecting 26 percent of
    registered

    domestic human drug manufacturers,  inspecting repackers, relabelers, and

    medical gas repackers, and  assuring that 80 percent of plasma
    fractionator establishments remain in

    compliance with FDA requirements. In its technical comments, FDA
    acknowledged that it did not meet statutory inspection levels for product
    manufacturers but stated that the agency is operating with limited
    resources and must focus those on

    inspections of facilities posting the greatest risk.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Enhance the economic independence

    As in past years, ACF reported that it lacked The first strategic goal in
    ACF*s plan* to

    and well- being of children and families: fiscal year 2001 performance
    data for most *increase economic independence and

    Our report identified two management measures linked to reaching this key

    productivity for families** corresponds most challenges in this area.
    First, changes in outcome. ACF was unable to obtain these

    closely to this management challenge. The social support programs due to
    welfare data due to the time lag in receiving and

    ACF goal has the following four objectives: reform have heightened the
    importance of validating data reports from states, localities, HHS, its
    component agencies, and partners,

    and other program partners. Of the 35  increase employment,

    such as states, having adequate information measures listed in the fiscal
    year 2001

     increase independent living, systems in place to manage programs and

    performance report related to the Temporary  increase parental
    responsibility, and

    provide data to determine the effectiveness Assistance for Needy Families
    (TANF), Child

     increase affordable child care. and efficiency of program approaches.
    Support Enforcement, Child Care, Social Second, with major programs for
    low- income

    Services Block Grant (SSBG), Refugee Each objective has a number of
    related

    children and families in the hands of so Resettlement, and Developmental
    performance measures associated with many state and local agencies, HHS
    and its

    Disabilities programs, data on only two specific programs. component
    agencies face the challenge of performance measures related to the holding
    its partners accountable for their use

    Developmental Disabilities programs were In addition, to improve program

    of funds to ensure the well- being of children available for fiscal year
    2001.

    effectiveness and assist states in reaching and families. desired
    outcomes, ACF plans to continue to

    Performance data were available on 20 of support training and technical
    assistance, the 24 measures used to assess progress

    share best practices, and sponsor research. for fiscal year 2000. ACF
    reported that it achieved or exceeded its targets for 5 of the The ACF
    performance plan for fiscal year 20 measures for which data were available

    2003 briefly discusses strategies to for fiscal year 2000, and did not
    meet its

    eliminate time delays in reporting data performance targets for 15 of the
    20 where appropriate for the TANF, measures. Specifically, ACF reported
    that it

    Developmental Disabilities, Refugee met three of its targets related to
    its

    Resettlement, SSBG, Child Support Developmental Disabilities programs and

    Enforcement, and Child Care programs. one target associated with its Child
    Support

    These strategies include training, technical Enforcement program,
    increasing the assistance, and additional communication number of paying
    child support cases. ACF

    with program partners. However, the plan reported that it also met one
    target related to does not include any goals or indicators TANF; in fiscal
    year 2000 all states met the

    related to these strategies. TANF work participation rates for families.
    As we reported last year, some target

    CMS reports setting goals for fiscal year performance levels may be set
    beyond what

    2003 that partly address this management ACF can reasonably hope to
    achieve. For

    challenge. As part of a new goal for fiscal example, the employment
    retention and year 2003, CMS plans to begin working with earnings gains
    rates under TANF and the

    states on the Performance Measurement employment- related performance
    measures

    Partnership Project. The purpose of this for the refugee resettlement
    program have project is to use performance measures to ambitious targets
    that may not be met in improve the delivery and quality of health fiscal
    year 2002 or in fiscal year 2003.

    care for Medicaid and State Children*s Health Insurance Program
    populations. With regard to its information technology performance, the
    ACF fiscal year 2001

    performance report noted that the agency replaced its audit resolution
    tracking process

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    in August 2000. Enhancements to the system were planned for 2001. The
    report did not discuss any efforts to work with states and grantees to
    improve information systems nor any progress made in developing a plan to
    reduce delays in receiving state administrative data. Finally, although we
    recommended that ACF work with other federal agencies to address

    issues surrounding state automated data systems, the report did not
    include information on progress made in this area.

    In fiscal year 2001, CMS reported taking some steps to address each of the
    management challenges we outlined. In the area of information systems, CMS
    met its target to provide 56 states and territories with linked Medicare
    and Medicaid data files for dually eligible beneficiaries. This allowed
    states to have Medicare utilization data and

    link it with their Medicaid files. In the area of program effectiveness
    and accountability, CMS worked with states to develop a methodology,
    baselines, and performance measures for state- specific immunization rates
    of 2- year- old children enrolled in Medicaid. However, CMS*s progress in

    addressing this accountability challenge was limited to one specific
    aspect of its program, rather than the Medicaid program as a

    whole.

    Observations on the Department of Housing and Urban Development*s Efforts
    to Address

    Appendi x IX

    Its Major Management Challenges The following table identifies the major
    management challenges confronting the Department of Housing and Urban
    Development (HUD), including the governmentwide high- risk areas of
    strategic human capital management and information security. The first
    column lists the challenges identified by our office. The second column
    discusses what progress, as discussed in its fiscal year 2001 performance
    report, HUD made in resolving its challenges. The third column discusses
    the extent to

    which HUD*s fiscal year 2003 performance plan includes performance goals
    and measures to address the challenges that we identified. We found that
    HUD*s performance report discusses actions the agency has taken to address
    all of the management challenges we identified in January of 2001. In its
    performance plan, HUD reported that it fully focused on resolving the

    remaining high- risk issues and management challenges. The agency*s
    performance plan had goals and measures that were directly related to all
    five of the challenges.

    Table 10: Major Management Challenges for HUD Progress in resolving major
    management

    Applicable goals, measures, and challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s Major management challenge year 2001
    performance report

    fiscal year 2003 performance plan GAO- designated governmentwide high risk

    Strategic human capital management: The performance report discusses steps
    The performance plan includes five GAO has identified shortcomings at
    multiple HUD is taking to improve its human capital

    measures directly related to HUD*s human agencies involving key elements
    of modern management under the strategic goal to capital activities:
    strategic human capital management, *ensure public trust.* Most
    significantly, the including strategic human capital planning

    report states that HUD adopted and  The REAP will be fully implemented
    and and organizational alignment; leadership

    implemented a Resource Estimation and will establish a baseline for
    managing continuity and succession planning;

    Allocation Process (REAP) by December resource requirements and
    prioritizing

    acquiring and developing a staff whose size, 2001 and started secession
    planning staffing allocations by program and office.

    skills, and deployment meet agency needs; through development of an intern
    program.

     HUD will continue implementing its 5- year and creating results-
    oriented organizational

    HUD has also developed new appraisal plan to reduce the number of managers
    cultures.

    standards for senior executives, managers, and supervisors and
    organizational layers. and supervisors. The report also discusses

     HUD will pursue training and development As we reported in July 2002,
    human capital

    HUD*s organizational realignment that, and recruitment strategies designed
    to

    management is the most pressing among other things, was intended to reduce
    ensure that critical positions are filled. crosscutting management
    challenge facing

    reporting layers and increase program  HUD will increase the
    representation of

    HUD. The need for HUD to recruit and hire oversight and accountability.
    However, HUD

    underrepresented groups by 0.3 percent. is exacerbated by the upcoming
    wave of

    has not achieved the targets set for the  HUD employees will become more

    potential retirements that HUD faces. More specific performance measures
    that relate

    satisfied with the department*s than half of HUD*s professional workforce
    to its human capital activities. The report performance and work
    environment. (staff in grades GS 9 through 15) will be states that HUD
    plans to use a survey to eligible to retire by August 2003. HUD has

    measure its process toward achieving a done little outside hiring in the
    past decade.

    workforce that is empowered, capable, and focused on results, but the
    survey results will not be available until next year. HUD also

    has not met its objectives to increase the number of Hispanics and white
    women in the department which was part of its

    measure to increase the representation of underrepresented groups. We have
    reported that HUD needs to develop a

    comprehensive human capital strategy to address this management challenge.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Information security: Our January 2001 HUD reports highlights major

    To address information security, the high- risk update noted that
    agencies* and

    accomplishments during 2001, including performance plan includes a measure
    that governmentwide efforts to strengthen identifying all major
    application and general

    identifies five milestones to be completed information security have
    gained momentum support systems, developing security plans

    during fiscal year 2003. HUD will and expanded. Nevertheless, recent
    audits

    for these systems, identifying all sensitive continue to show that federal
    computer

    and critical applications systems for critical  prepare its annual GISRA
    report;

    systems are riddled with weaknesses that infrastructure protection,
    implementing  verify its list of sensitive systems;

    make them highly vulnerable to computerbased access control software, and
    initiating the

     complete a review of access rights to attacks and place a broad range of

    planning and development of an entitywide sensitive data and systems to
    identify

    critical operations and assets at risk of security awareness and training
    program.

    individuals who need background fraud, misuse, and disruption. Further,
    the Ongoing initiatives include developing

    investigations; events of September 11, 2001, underscored

    security policies and procedures, assigning  conduct an external
    penetration test; and

    the need to protect America*s cyberspace security responsibilities to
    appropriate  provide enterprise security awareness

    against potentially disastrous cyber personnel, requiring completion of

    training to all employees in all four critical attacks* attacks that could
    also be background investigations for individuals

    infrastructure protection areas* data, coordinated to coincide with
    physical who have access to HUD*s critical and people, facilities, and
    systems. terrorist attacks to maximize the impact of sensitive systems,
    and reporting and both. We have reported since 1994 on open

    correcting unauthorized penetration attempt However, these measures may
    not

    recommendations on computer security at incidents. HUD also identifies
    improvements

    specifically assess the effectiveness of HUD.

    and planned actions to correct long- reported information security and the
    agency*s control weaknesses in its procedures for

    progress in implementing corrective actions. managing and controlling
    changes to work products and systems* hardware and In addition to the
    Government Performance software (configuration management). and Results
    Act reporting, the Office of Management and Budget*s guidance for Office
    of Inspector General (OIG) reports

    fiscal year 2002 reporting under GISRA recognize some improvements in HUD

    requires specific information security information security, but emphasize
    that

    performance measures as well as corrective HUD has still not placed
    adequate emphasis action plans with quarterly status updates. on
    information security. In its evaluation of

    HUD*s security program and practices required by the Government
    Information Security Reform Act (GISRA), the OIG reported that HUD*s
    information security program lacks executive- level leadership and
    direction, with weaknesses identified in

    many important aspects of HUD*s information security program, including
    the lack of a risk management program to assess and mitigate risk, system
    security plans not updated and completed, and

    inadequate computer access controls. Also, in its audit of HUD*s financial
    statements for fiscal years 2001 and 2000, the OIG reported that while HUD
    actions had significantly strengthened general controls for the UNISYS
    mainframe- computing environment, controls for HUD*s computing

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    environment were a reportable condition with improvements needed in
    configuration management, network access controls, and physical access. It
    also reported personnel

    security as a reportable condition with weaknesses including a continued
    backlog in obtaining background investigations for users granted access to
    HUD*s critical and sensitive systems. Corrective actions for these
    weaknesses did not address physical security weaknesses at two of its
    computer facilities, such as the lack of barriers around the building and
    magnetometer and X- ray screening of incoming personnel. HUD reported that
    the cost and practicality of changing the facilities outweighed any
    advantages and also that it is recompeting the contract that provides the
    computing services at these facilities.

    GAO- designated major management challenges

    Continued improvements needed to

    HUD reports that it has a number of The plan includes nine performance

    reduce HUD*s single- family mortgage initiatives in process or under
    development measures related to HUD*s single- family

    insurance risk: To reduce financial risks, to improve oversight of its
    single- family

    programs, four of which are directly related HUD*s Federal Housing
    Administration programs, including enhancing qualifications to issues that
    GAO has raised about the (FHA) needs to continue to improve its

    for lender participation, implementation of need to improve the control
    environment in management over home mortgage loans an accelerated claims
    demonstration as an HUD*s single- family mortgage insurance made by
    private lenders that it insures

    alternative to traditional note servicing and programs. The plan includes
    three new

    against nearly all losses. While FHA has property disposition activity,
    and several

    measures for 2003: accumulated capital reserves of about $16.6

    proposed rules on appraisers, excessive billion on insured home loans
    valued at fees, and property flipping. The report  By the end of fiscal
    year 2003, FHA will about $454 billion, we estimate that FHA lost includes
    three measures related to its efforts

    prevent the issuance of FHA mortgage about $1. 9 billion during fiscal
    year 2000 on

    to reduce single- family mortgage insurance insurance on properties that
    have been

    the sale of foreclosed loans that it had risk, and HUD met or exceeded its
    goals for

    transferred within 6 months. insured. We reported that HUD has

    all three. HUD increased the share of FHA  FHA will exceed the rate of
    net recovery opportunities to strengthen FHA*s

    mortgage defaults resolved by loss received on the sale of property
    through management and internal controls that

    mitigation by 12 percentage points, the Accelerated Claim Program

    include strengthening the loan origination exceeding its goal by 10
    percentage points.

    Demonstration (Section 601). process; promoting better monitoring of

    The FHA Mutual Mortgage Insurance Fund  HUD will implement procedures to
    hold lenders, appraisers, and property

    exceeded congressionally mandated capital lenders accountable for the
    selection and

    management and marketing contractors; reserve targets. HUD reports it also

    performance of FHA- insured mortgages. and ensuring that sufficient staff
    with the

    achieved a net recovery of FHA real estate right skills are available to
    carry out FHA*s owned sales of 65.5 percent, 4 percentage home loan
    mission.

    points above fiscal year 2000, exceeding the goal to increase recovery by
    1 percentage point.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Continued improvements needed to

    The plan describes HUD*s strategy for The plan includes 24 measures on
    various

    ensure that HUD*s rental housing resolving inaccurate subsidies using the
    aspects of ensuring that quality housing is

    assistance programs are used effectively

    Rental Housing Integrity Improvement provided to eligible households that
    pay the

    and efficiently: Because HUD is able to Project (RHIIP), established in
    2001. RHIIP correct amount of rent. These measures serve fewer than half
    of the households that was developed to resolve the management

    include the following: are eligible for assisted housing, it is

    control weaknesses in HUD*s rental essential that it ensure that its
    programs are

    assistance programs by focusing on frontend  The high incidence of
    program errors and

    used efficiently and effectively to maximize controls (at the time
    beneficiaries apply improper payments in HUD*s rental

    the number of households that can be for housing subsidies) to address the
    root assistance housing programs will be assisted. Significant
    opportunities still exist cause of error and improper payments. HUD

    reduced. to reduce excess subsidy payments,

    reports success in improving the physical  The unit- weighted average
    Public Housing

    estimated to total over $5 billion for the last 5 conditions of HUD-
    supported public and Assessment System score increases by 5 years, by
    ensuring that only eligible families

    assisted housing projects, as reflected in the percent. occupy units and
    that they pay the correct

    percentage of projects or units that met  The household- weighted average
    Section

    rents; ensure that providers of rental HUD*s physical condition standards.
    The 8 Management Assessment Program

    housing maintain housing that is decent, report includes 16 measures (1 of
    which

    score increases. safe, sanitary, and in good condition; and be

    was used under two goals) that directly  The share of public housing and
    assisted

    certain that HUD has the capital resources relate to the issues associated
    with this

    multifamily units that meet HUDestablished and controls needed to detect
    and address

    management challenge* improving the physical standards increases

    problems that exist in its rental housing quality of housing and ensuring
    that by 1.5 percentage points. assistance programs.

    accurate subsidies are paid to eligible  The share of HUD- Assisted
    Properties

    persons. HUD reported that it did not meet observed with exigent health
    and safety or

    5 of the stated goals or that the data were fire safety deficiencies
    decreases by 1.0

    not available; set baselines for two percent for public housing and 0.6
    measures; and met 9 of the performance

    percentage points for assisted multifamily goals. housing.

     As part of the effort to eliminate 100,000 units of the worst public
    housing, demolish 13,000 units during fiscal year 2003.  The Departmental
    Enforcement Center will complete three enforcement milestones to

    improve management practices of multifamily housing partners and reduce
    fraud, waste, and abuse.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Resolution needed for programmatic and

    HUD reports considerable achievements in The performance plan continues
    the

    financial management information

    addressing its programmatic and financial emphasis on addressing these
    management

    systems and human capital issues: HUD management information systems

    challenges as part of HUD*s strategy to has determined that its financial
    management challenge. HUD has

    improve HUD*s management and internal management systems do not meet all
    of its

    developed an Enterprise Architecture model controls, including strategies
    to train needs and has plans under development to

    that expands upon core elements included employees, improve equipment, and

    address this issue. We reported that HUD in the framework developed by the
    Federal

    develop a long- term staffing strategy to deal must continue to focus on
    improving its

    Chief Information Officer Council, initiated a with expected retirements.
    The plan information technology management

    data quality improvement program, and includes 14 measures related to the
    processes to help ensure success in addressed two of the Inspector
    General*s programmatic and financial management systems initiatives across
    the department.

    previous management concerns about the information systems and human
    capital

    HUD must also resolve a number of human reliability and security of its
    financial

    challenges. For example, capital issues, such as adjusting workload to

    systems and controls over fund balances consider implementation of the new
    centers, with Treasury reconciliations. The report  FHA will address
    financial management completing actions to measure workload,

    includes measures that address certain and system deficiencies through the

    and staffing its programs adequately. aspects of the systems management

    phased implementation of an integrated challenge and HUD reports that it
    achieved financial system to support FHA functions, its targets for these
    measures. Under its which will be completed by December performance
    measure to have data systems

    2006; that are rated highly for usefulness and  the number of
    noncompliant financial reliability, HUD reports it successfully

    management systems will be reduced from completed a pilot project to
    develop a

    17 to 14; performance measurement methodology for

     during fiscal year 2003, eight additional its information systems. HUD
    reports that mission critical data systems will be this effort resulted in
    establishing certified, increasing the total number of performance
    measures for the entire certified systems to 15;

    information technology (IT) portfolio. Under  REAP will be fully
    implemented and will

    another measure to earn data quality establish a baseline for managing
    resource

    certifications, HUD reports that two missioncritical requirements and
    prioritizing staffing

    data systems, which it reports are allocations by program and office;

    crucial to HUD*s financial management,  HUD will continue implementing
    its 5- year

    earned data quality certifications. A third plan to reduce the number of
    managers measure from the 2001 plan, that the Office and supervisors and
    organizational layers of Housing would review a sample of in the
    department; and transactions for compliance with data quality

     HUD will pursue training and development standards, is not reported in
    the 2001

    and recruitment strategies designed to performance report. However, under
    the ensure that critical positions are filled. data quality certification
    measure, HUD states that it completed data quality assessments for seven
    mission- critical systems. It is not clear whether this refers to the
    third measure that is no longer included in the performance report. As
    discussed under the governmentwide challenge, HUD reports it has made
    progress on addressing its human capital issues. Although it has not met
    its targets, HUD reports on two measures related to the

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    human capital management challenge. HUD does not yet have results for one
    measure* whether HUD*s workforce is empowered* because the results of that
    measure will be determined from a survey that will be conducted in fiscal
    year 2002.

    HUD has not met its targets for increasing the representation of
    underrepresented groups, because it did not meet its objectives for
    increasing the number of Hispanics and white women in the

    department. While HUD did not achieve its specific performance measures,
    it reports that the final stages of REAP were completed in December 2001.
    The results were used to support the development of HUD*s fiscal year 2002
    staffing plan and fiscal year 2003 staffing budget request. As part of
    ongoing efforts to improve its resource allocation activities, HUD reports
    it will validate the results of the REAP during 2002 using the Total
    Estimation and Allocation Mechanism.

    Observations on the Department of the Interior*s Efforts to Address Its
    Major

    Appendi x X

    Management Challenges The following table identifies the major management
    challenges confronting the Department of the Interior, including the
    governmentwide high- risk areas of strategic human capital management and
    information security. The first column lists the challenges identified by
    our office. The second column discusses what progress, as discussed in its
    fiscal year 2001 performance report, Interior made in resolving its
    challenges. The third column discusses the extent to which Interior*s
    fiscal year 2003 performance plan includes performance goals and measures
    to address the challenges that we identified.

    We found that the Department of the Interior*s performance report
    discussed the agency*s progress in resolving all of its challenges. Of the
    agency*s four major management challenges, its performance plan had

    1. goals and measures that were directly related to two of the challenges
     improve management of national parks and  improve management of
    ecosystem restoration efforts 2. no goals and measures related to two of
    the challenges, but discussed

    strategies to address the challenges, which were  address persistent
    management problems in Indian trust programs and  address challenges in
    managing an expanding land base.

    Table 11: Major Management Challenges for Interior Progress in resolving
    major management

    Applicable goals, measures, and challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s Major management challenge year 2001
    performance report

    fiscal year 2003 performance plan GAO- designated governmentwide high risk

    Strategic human capital management:

    Interior achieved its goal of completing the The departmental Workforce
    Planning GAO has identified shortcomings at multiple

    departmentwide Workforce Planning Policy. Policy requires that all bureaus
    develop agencies involving key elements of modern In fiscal year 2001,
    Interior*s Office of comprehensive 5- year workforce plans by strategic
    human capital management,

    Personnel Policy led the development of the the end of fiscal year 2003 to
    support the including strategic human capital planning department*s first
    workforce analysis, which

    President*s Management Agenda, the and organizational alignment;
    leadership

    was submitted to the Office of Management department*s Strategic Plan, and
    future

    continuity and succession planning; and Budget (OMB) on June 30, 2001. The

    budget submissions. The plans will address acquiring and developing a
    staff whose size,

    workforce analysis addressed numerous all areas of strategic human capital

    skills, and deployment meet agency needs; strategic human capital
    management issues

    management and will include information on and creating results- oriented
    organizational

    facing the department over the next 5 years. critical mission skills and
    competencies; cultures.

    The Office of Personnel Policy also retirement and attrition projections;

    completed the development of the workforce shaping requirements; and In
    September 2002, Interior issued its 5- year

    departmentwide Workforce Planning Policy. budgetary projections on
    required

    Strategic Human Capital Management Plan The policy was completed in early
    recruitment, intern, retention, training and for fiscal years 2003 through
    2007. The plan

    September; however, events on September development, and relocation
    programs.

    identified technical skill gaps in nine areas, 11, 2001, delayed the
    actual policy issuance including three areas that are receiving until
    October 30, 2001. special attention due to their extreme urgency and
    importance* Indian trust fund management, wildland fire management,

    and law enforcement and security.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Information security: Our January 2001 Interior continues to report
    information

    Interior*s fiscal year 2003 performance plan high- risk update noted that
    agencies* and

    security controls as a material weakness on includes a goal to achieve
    compliance level governmentwide efforts to strengthen

    its Federal Managers* Financial Integrity Act 3 on the Federal Information
    Technology

    information security have gained momentum report for 2001. To improve its
    information Security Assessment Framework for all of its

    and expanded. Nevertheless, recent audits security program, Interior
    achieved its goal

    national critical infrastructure systems, all of continue to show that
    federal computer of completing a National Critical Information its
    national security information systems, systems are riddled with weaknesses
    that Technology Infrastructure Protection Plan.

    and all of its mission- critical systems. make them highly vulnerable to
    computerbased The plan was completed and implemented Achieving level 3
    compliance requires that attacks and place a broad range of

    in September 2001. Interior also reported security policies and procedures
    are critical operations and assets at risk of

    that it met its goal of achieving compliance adopted, system certification
    procedures fraud, misuse, and disruption. Further, the level 1 on the
    Federal Information

    are established, and a security awareness events of September 11, 2001,
    underscored

    Technology Security Assessment program is in place. Interior*s overall
    target the need to protect America*s cyberspace

    Framework for all of its national critical is to achieve compliance level
    5 by fiscal against potentially disastrous cyber

    infrastructure systems, all of its national year 2005, the highest level
    achievable in

    attacks* attacks that could also be security information systems, and all
    of its

    this assessment framework. To meet the coordinated to coincide with
    physical

    mission- critical systems. Achieving level 1 compliance requirement for
    this level, an

    terrorist attacks to maximize the impact of compliance requires
    establishing agency must establish an enterprisewide both.

    documented security policies and security program.

    standards. In addition to Government Performance and Results Act
    reporting, the Office of Management and Budget*s guidance for fiscal year
    2002 reporting under the Government Information Security Reform Act
    (GISRA) requires specific performance measures, as well as corrective
    action plans

    with quarterly status updates.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    GAO- designated major management challenge

    Improve management of national parks:

    The Park Service reported meeting its goal The Park Service plans to
    develop or The National Park Service needs to (1)

    of developing or acquiring 30.4 percent of acquire 59. 3 percent of its 2,
    527 data sets

    place a higher priority on gathering more the 2,527 data sets needed for
    natural needed for natural resource inventories in scientific information
    on the condition of resource inventories for all parks. In fiscal year
    2003. In addition, the agency natural resources, (2) gather more accurate

    addition, the agency reported exceeding its plans to identify vital signs
    for 40 percent of

    data on its maintenance backlog, (3) goal of having 5 percent of the 270
    parks

    the 270 parks by the end of fiscal year 2003. improve park managers*
    accountability, (4)

    with significant natural resources identify address management problems
    with its

    their vital signs for natural resources By the end of fiscal year 2003,
    the Park concessions program, and (5) ensure the monitoring* 13 percent of
    the parks

    Service*s goal is to deploy a new facility safety of park visitors and
    employees.

    accomplished this in fiscal year 2001. management software system at each
    park and to complete the initial annual facility

    The Park Service reported that it is condition assessments at all parks.
    developing the capability to determine and

    monitor the physical condition of its facilities. According to the Park
    Service*s fiscal year

    It plans to use facility condition as a 2003 performance plan, all seven
    regions in performance indicator beginning in 2003. the Park Service are
    using goal The Park Service did not have a fiscal year

    achievement as an element in park 2001 goal for this activity, thus there
    was no managers* performance evaluations. Full associated performance to
    report.

    implementation of accountability will improve the Park Service*s ability
    to achieve all of its The Park Service no longer reports on this

    goals. specific issue since it no longer has a specific goal linked to
    this challenge. The Park Service revised its goal for Instead the agency
    states that it will use concessions contracts for fiscal year 2003. goal
    achievement as an element of park Essentially, it redefined how the rate
    of managers* performance evaluations.

    return to the government is calculated. This change led to changing the
    performance The Park Service reported meeting its goal goal from 7. 3
    percent of gross concessioner

    of having concession contracts average a revenue to 4 percent. There are
    no specific

    7.3 percent return to the government for goals related to concessions
    management

    fiscal year 2001. The agency does not issues.

    have specific goals related to concessions management issues.

    The Park Service*s goal is to continue to improve visitor and employee
    safety, The Park Service reported exceeding its

    lowering the visitor incident/ accident rate to goal to reduce visitor
    accidents to 8.72 per

    8.29 per 100,000 visitor days, and the 100,000 visitor days. Actual
    visitor

    employee lost time injury rate to 3.312 per accidents for fiscal year 2001
    were 8.64 per

    200,000 hours worked. 100,000 visitor days. In addition, the agency
    reported exceeding its goal of reducing the employee lost time injury rate
    in 2001* its goal was 4. 67 per 200, 000 hours worked; it achieved a rate
    of 3.67 per 200, 000 hours worked.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Address persistent management Interior reported that the Office of the The
    Office did not prepare a separate fiscal

    problems in Indian trust programs:

    Special Trustee did not achieve its goal of year 2003 plan. In addition,
    Interior*s fiscal

    Interior needs to ensure that Indian trust completing 64 milestones of the
    11 year 2003 overview plan does not have any assets are well managed.
    Interior cannot do

    subprojects in the High- Level annual performance goals on Indian trust

    this currently, although it is updating its trust Implementation Plan.
    Only 47 milestones

    fund reform. fund management systems. were reported completed. The Office
    was created in fiscal year 1996 specifically to In January 2002, in
    Interior*s eighth reform Interior*s Indian trust management.

    quarterly report to the court, the Secretary Reform plans, consisting of
    11 subprojects

    of the Interior announced that the High- to improve trust management, are
    contained Level Implementation Plan, which has in the High Level
    Implementation Plan,

    guided trust reform activities since 1998, which was updated in February
    2000. The

    was obsolete. The Secretary concluded that Office is currently deeply
    involved in the plan did not reflect an adequately responding to court
    orders relating to a coordinated and comprehensive view of the class-
    action lawsuit over trust fund trust reform process. Fiscal year 2002 was

    management and reports quarterly to the the beginning of a transition from
    a narrow, court. The Office did not prepare a separate

    nonintegrated, task- oriented set of activities fiscal year 2001
    performance report. The related to trust reform, to an integrated, goal to
    complete 64 milestones was in goal- focused approach to managing and
    Interior*s fiscal year 2001 overview plan.

    accounting for Indian trust assets. Interior*s senior management team will
    coordinate the development of a new management strategic plan to replace
    the High Level Implementation Plan.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Improve management of ecosystem

    Interior has a departmentwide long- term Interior has a departmentwide
    long- term

    restoration efforts: Interior needs to goal of maintaining healthy natural
    systems. goal of maintaining healthy natural systems. improve its
    management of ecosystem

    As part of this long- term goal, Interior has As part of this long- term
    goal, Interior has

    restoration efforts by working to develop annual performance goals dealing
    with the

    annual performance goals dealing with the plans and strategies;
    coordinating with the

    South Florida Ecosystem Restoration South Florida Ecosystem Restoration

    multiple entities involved, such as states and Program, the California
    Desert Project, and Program, the California Desert Project, and

    tribes; and preparing for the attrition of key wildland fire management.

    wildland fire management. personnel related to ecosystem restoration
    efforts, such as fire managers.

    Interior reported that it did not have a fiscal For fiscal year 2003,
    Interior and its partners year 2001 performance target for the South

    in the South Florida ecosystem restoration Florida ecosystem restoration
    effort.

    effort plan to build 4,100 acres of However, Interior and its partners in
    the stormwater treatment areas for a total of South Florida ecosystem
    restoration effort 28, 438 acres constructed. They also plan to

    constructed 18, 088 acres of stormwater acquire 40, 000 acres of land for
    habitat treatment areas and acquired 28, 917 acres

    protection purposes. of land for habitat protection. Interior and its
    partners in the California

    For the California Desert Project, Interior Desert Project* which seeks to
    restore the

    and its partners plan to remove 1,000 wild population of the federally
    listed desert burros from tortoise habitats, clean up five tortoise*
    reported meeting their goals of

    illegal dumps on public lands, and install 40 developing protocols for
    identifying and miles of fence along highways to prevent counting
    tortoises and assessing tortoises from being hit on these roads.
    populations in five recovery units. With regard to wildland fires,
    Interior With regard to wildland fires, Interior plans

    reported that it did not meet its goal of to contain 95 percent of fires
    in the initial

    treating 1.4 million acres (it treated 728,000 attack, provide assistance
    to 33 percent, or acres). According to Interior*s report,

    1,085, rural fire departments to improve several factors contributed to
    the lower than

    safety, training, and equipment standards; anticipated fuel treatment
    levels. For

    complete 9 percent of the highest priority example, drought conditions in
    many parts

    community- at- risk projects; build or improve of the country forced
    agencies to postpone 15 fire facilities; and treat 1.1 million acres of
    treatments or to accomplish treatment by land with accumulated fuels. more
    costly means (mechanical and

    chemical treatments), rather than by prescribed methods.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Address challenges in managing an

    Interior did not have any departmentwide Interior*s fiscal year 2003
    overview plan and expanding land base: Interior oversees performance goals
    or measures, and BLM BLM*s fiscal year 2003 plan do not have any many land
    transactions. In particular, the

    did not have any performance goals or goals or measures related to this
    challenge.

    Bureau of Land Management (BLM) needs measures, applicable to this
    challenge for

    According to BLM*s fiscal year 2003 plan, to ensure that the lands are
    needed and are

    fiscal year 2001. However, BLM*s fiscal year the necessary actions to
    address this exchanged for approximately equal value. 2001 performance
    report did discuss how

    challenge have been completed. Once Interior gets new land, either through

    the agency had addressed this challenge. exchange or acquisition, it needs
    to highlight According to the report, BLM has

    Interior does not address the need for the need for increased funding to
    operate

    incorporated new requirements into its operations and maintenance fund and
    maintain those lands. In particular, the

    Appraisal Manual for improving the appraisal information in its fiscal
    year 2003 plan. FWS Fish and Wildlife Service (FWS) needs to

    process for land exchanges, developed does not have a goal to address
    this, but include operations and maintenance appraisal training, and
    revised its Land

    plans to maintain an inventory of unmet information in its budgets when it
    Exchange Handbook to incorporate revised

    operating needs and to request funding for establishes refuges.

    policies and guidance to ensure that land them. exchanges are in the
    public interest. Furthermore, the report indicates that the National Land
    Exchange Evaluation and Assistance Team continues to conduct technical
    review and oversight for all land exchange feasibility reports and
    decision

    documents. Interior did not have any departmentwide performance goals or
    measures, and FWS did not have any performance goals or measures, related
    to reporting operations and maintenance funding needs for fiscal year
    2001. However, FWS*s fiscal year

    2001 performance report did discuss how the agency had addressed this
    challenge. According to the report, beginning in fiscal

    year 2001, FWS included in its budget a table of land that will be added
    during the year, including the operation and maintenance costs needed.

    Observations on the Department of Justice*s Efforts to Address Its Major
    Management

    Appendi x XI

    Challenges The following table identifies the major management challenges
    confronting the Department of Justice*s (Justice) including the
    governmentwide high- risk areas of strategic human capital management and
    information security. The first column lists the challenges identified by
    our office. The second column discusses what progress, as discussed in its
    fiscal year 2001 performance report, Justice made in resolving its

    challenges. The third column discusses the extent to which Justice*s
    fiscal year 2003 performance plan includes performance goals and measures
    to address the challenges that we identified. We found that Justice*s
    performance report discussed the agency*s progress in resolving many its
    challenges, but it did not discuss the agency*s progress in resolving the
    following challenges, including

     Asset Forfeiture Program,  program management weaknesses remain in Weed
    and Seed Program,  internal control weaknesses at the Drug Enforcement
    Administration

    (DEA), and  efforts to reduce unauthorized employment face impediments.
    Of the agency*s 14 major management challenges, its performance plan had
    1. goals and measures that were directly related to 9 of the challenges 2.
    goals and measures that were indirectly applicable to the 1 of the

    challenges, including  strategic human capital management and 3. no
    goals, measures or strategies to address four of the challenges,

    including  Asset Forfeiture Program,  program management weaknesses
    remain in Weed and Seed Program,  internal control weaknesses at DEA, and
     efforts to reduce unauthorized employment face impediments.

    A Justice official stated that it did not address these challenges because
    Justice believes that those challenges are no longer significant enough to
    be addressed in their performance report or plan.

    Table 12: Major Management Challenges for Justice Progress in resolving
    major management

    Applicable goals, measures, and challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s fiscal Major management challenge

    year 2001 performance report year 2003 performance plan GAO- designated
    governmentwide high risk

    Strategic human capital management: Justice*s performance report did not
    Relative to this management challenge,

    GAO has identified shortcomings at specifically address its progress
    toward

    Justice*s 2003 performance plan has a multiple agencies involving key
    elements of

    resolving this management challenge. performance target of 10, 974 border
    patrol

    modern human capital management, However, it had one performance measure

    agents on board for fiscal year 2003. including strategic human capital
    planning

    that addressed part of this challenge* the and organizational alignment;
    leadership

    number of border patrol agents on board at Justice*s 2003 performance plan
    also states continuity and succession planning;

    the Immigration and Naturalization Service that the ability of INS to hire
    up to the full

    acquiring and developing a staff whose (INS). For fiscal year 2001, the
    performance

    complement of border patrol agents (and size, skills, and deployment meet
    agency

    target was 9,807 border patrol agents on other occupations) that are
    authorized and needs; and creating results- oriented board and the actual
    number was 9,859 funded by Congress means that the mission organizational
    cultures.

    agents. of INS can expand as intended. INS projects

    that new border patrol agents will be Justice*s 2001 performance report
    states

    deployed in key operational zones along the that Justice has given
    priority attention to the southwest border and at northern border
    recruitment of border patrol agents and that

    sites. The National Hiring Center (NHC) will it has been quite successful.
    Further, the

    continue as the centralized processing facility report states that INS
    will continue

    for entry- level hiring for border patrol agents. improvements in this
    area through the NHC assumes full responsibility for the implementation of
    the following five Border Patrol Registry, oral board scheduling,
    initiatives: (1) increase the Internet recruiting

    preappointment processing, entry- on- duty system that involves 12 sites,
    (2) establish and attendance at the Border Patrol overseas testing
    involving military bases

    Academy, and the Border Patrol around the world, (3) develop the capacity
    to Reinstatement Program. conduct walk- in testing or mobile testing, (4)
    revise the compressed testing process to Justice*s performance plan does
    not have any allow on- site drug testing, and (5) initiate an

    goals, measures, or strategies for addressing integrity interview and full
    field investigation

    this challenge within its other departments. prior to the oral board.
    Justice believes that valuable staff hours and resources will be

    saved by utilizing the Internet and walk- in testing. Justice*s
    performance report does not discuss how it is addressing this challenge
    for any of its other agencies

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s fiscal

    Major management challenge year 2001 performance report

    year 2003 performance plan Information security:

    In Justice*s fiscal year 2001 financial audit, Justice*s 2003 plan
    includes management

    Our January 2001 high- risk update noted the department*s Office of
    Inspector General performance goals, which focus on (1)

    that agencies* and governmentwide efforts (OIG) reported information
    security

    meeting an ongoing requirement to certify to strengthen information
    security have weakness in access controls, segregation of

    department networks and systems and (2) gained momentum and expanded.

    duties, system and application software testing major systems contingency
    plans.

    Nevertheless, recent audits continue to controls, service continuity, and
    entitywide

    These goals are measured based on the show that federal computer systems
    are security program management. Justice

    percentage of information systems that are riddled with weaknesses that
    make them acknowledged that it has information

    certified by the department components (100 highly vulnerable to computer-
    based security weaknesses and reported

    percent) and major systems with tested attacks and place a broad range of
    critical

    information system controls as a material contingency plans (85 percent).

    operations and assets at risk of fraud, weakness in its Federal Managers*
    Financial

    misuse, and disruption. Further, the events Integrity Act report for 2001.

    While these measurements provide an of September 11, 2001, underscored the
    indication of progress in these two areas, need to protect America*s
    cyberspace

    To improve the department*s information they may not specifically measure
    the against potentially disastrous cyber

    technology (IT) security program, Justice effectiveness of information
    security and the

    attacks* attacks that could also be reported in its performance report
    that it

    agency*s progress in implementing corrective coordinated to coincide with
    physical

    issued a new security policy, continued to actions. NIST developed a
    security

    terrorist attacks to maximize the impact of verify and accredit its key
    systems, and

    assessment framework and related tools that both.

    integrated IT security into its capital planning agencies can use in
    determining the status of and investment controls process. Further, their
    information security programs. Also,

    Justice reported that it will continue its OMB guidance for fiscal year
    2002 reporting

    program of penetration tests and under the Government Information Security

    independent assessments, develop Reform Act (GISRA) requires agencies to
    use

    remedial plans for identified vulnerabilities, tools developed by NIST for
    evaluating the and reevaluate and assess the department*s

    security of unclassified systems or groups of critical infrastructure and
    planning initiatives.

    systems. In addition, OMB*s GISRA reporting guidance requires specific
    Justice*s 2001 performance report indicates performance measures, as well
    as corrective that it did not meet its fiscal year 2001 action plans with
    quarterly status updates. performance target of 100 percent for certifying
    and accrediting its information systems by department components. The
    department reported that the target was not

    met (83 percent certified and accredited) due to resource constraints in
    two bureaus.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s fiscal

    Major management challenge year 2001 performance report

    year 2003 performance plan GAO- designated major management challenge

    Asset Forfeiture Program:

    Progress in resolving this management The 2003 performance plan had no
    goals, Justice needs to address weaknesses in its

    challenge was not discussed. measures, or strategies directly related to
    this asset forfeiture program, specifically, its

    management challenge. management and accountability of seized and
    forfeited property.

    GAO has designated Justice*s asset forfeiture program as high- risk since
    1990 because (1) over the years, neither Justice nor Treasury adequately
    focused on managing and accounting for seized and

    forfeited items and (2) Justice and Treasury had not formed a plan to
    consolidate postseizure administration of certain properties to eliminate
    duplication of resources and reduce administrative costs. In recent years,
    Justice has taken many actions to improve the management and

    disposition of seized and forfeited property. However, challenges remain
    to address the program*s inadequate information systems and financial
    management weaknesses, including accountability over seized assets.

    Program management weaknesses

    Progress in resolving this management The 2003 performance plan had no
    goals,

    remain in the Weed and Seed Program:

    challenge was not discussed. measures, or strategies directly related to
    this While Justice has made some progress

    management challenge. The fiscal year 2001 toward addressing
    administrative and

    performance report and 2003 performance management weaknesses, challenges

    plan merely state that EOWS helps remain related to developing better

    communities build stronger, safer performance measures for the Weed and

    neighborhoods by implementing the Weed Seed program. We recommended that
    and Seed strategy, a community- based, Justice*s Executive Office for Weed
    and

    multidisciplinary approach to combating Seed (EOWS) develop additional
    crime. performance measures to track program outcomes, noting that
    indicators would help EOWS make more informed program decisions, such as
    whether to continue existing funding.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s fiscal

    Major management challenge year 2001 performance report

    year 2003 performance plan Police Corps program had a slower than

    The fiscal year 2001 performance report had The 2003 performance plan has
    goals and

    expected start, due to funding and

    two performance measures associated with measures directly applicable to
    the

    staffing limitations:

    this management challenge, both under the management challenge. While
    Justice has made some progress

    COPS initiative. toward addressing administrative and

    Justice*s performance plan had a management weaknesses, challenges

    Regarding the Police Corps Program, performance target of 117,901 officers

    remain related to increasing states* Justice had a performance measure*
    the funded and 100,000 on the street. The plan participation in the Police
    Corps program.

    number of Police Corps graduates serving in also noted that the number of
    officers funded We reported in February 2000 that the

    1- year community patrols* in its fiscal year may be inflated, as
    discretion exist to use this majority of participant slots for the Police

    2000 performance report. But this measure additional funding for equipment
    as well as

    Corps program, under the Community was discontinued because of
    streamlining

    officers. Oriented Policing Service (COPS),

    the departmental plan and was not remained unfilled. a

    specifically discussed in the context of Justice reports that COPS grants
    have achieving any of its goals. However, in its

    funded more than 114,000 officers in more Several states indicated that
    participation in

    discussion of discontinued measures in an than 12,400 police and sheriffs*
    departments.

    the program and reasons for the program*s appendix, Justice*s performance
    report According to Justice, independent studies

    slow growth were related to the Police states that the fiscal year 2001
    target was

    have proven that the hiring initiatives resulted Corps statute (42 U. S.
    C. 14091- 14119) not 490 and the fiscal year 2001 actual was 470. in
    significant reductions in local crime rates in providing funding to pay
    states for program

    The report also noted in the appendix that cities with populations greater
    than 10,000.

    administration or for recruitment and the fiscal year 2001 target was not
    met

    With over 90 percent of the U. S. population selection of participants. We
    also reported

    because the Office of Police Corps and Law living in areas of this size,
    the COPS hiring that according to federal and state officials, Enforcement
    Education encouraged states

    and innovative grant programs appear to a factor contributing to unfilled
    positions

    to use a more selective recruitment process have had a significant crime-
    reducing effect

    was that COPS dedicated insufficient staff to reduce the number of
    resignations and

    on the vast majority of the United States. to the program, which led to
    delays in

    removals. providing program guidance, processing

    Justice*s performance plan also states that program applications and
    payments, and

    Regarding COPS, Justice*s performance OJP will continue to support
    existing grants answering participants* questions about the

    report had two performance measures* the and evaluate the effects of
    community

    program. number of new police officers funded and on policing on crime,
    fear of crime, and trust in the street and the number of school law
    enforcement among its grantees. COPS

    In December 1998, the Police Corps resource officers funded/ hired. COPS
    fell

    will also continue to support the advancement program was transferred from
    COPS to the short of the target for officers funded

    of community policing through training and Office of Justice Programs
    (OJP). We (targeted performance was 116,299 and

    technical assistance, community policing reported that OJP had made
    significant

    actual performance was 114,124), and for innovation conferences,
    development and

    progress in obligating funds and number of officers on the street
    (targeted sharing of best practices through publications

    establishing interagency agreements with performance was 91, 000 and
    actual

    and Web sites, and pilot community policing participating states and
    providing program performance was 83,024). However, COPS

    programs. To meet critical law enforcement guidance. However, at the time
    of our

    exceeded the number of school resource needs, the OJP will continue to
    work in review, it was too soon to tell whether OJP

    offices funded and hired. The targeted partnership with law enforcement
    agencies to would succeed in filling empty participant

    performance was 4,511 funded and 3,078 enhance police integrity. slots
    promptly.

    hired while the actual performance was 4,532 funded and 3, 191 hired.

    While Justice*s performance plan indicated that school resource officers
    assist schools and communities in ensuring a safe environment for students
    and staff by acting as problem solvers and liaisons to the

    community, safety experts and law enforcers, and educators, there was no
    performance target set because the program was not funded for fiscal year
    2003.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s fiscal

    Major management challenge year 2001 performance report

    year 2003 performance plan Develop measurable DEA performance Justice*s
    performance report had two

    The 2003 performance plan has goals and

    targets to determine progress in

    performance measures associated with this measures directly related to
    this reducing the availability of illegal drugs:

    management challenge. management challenge.

    Consistent with the Office of National Drug Control Policy strategy to
    reduce the supply

    According to Justice*s performance report, a Justice*s performance plan
    has a fiscal year of illegal drugs to our nation, one of

    new performance measure, reduction in the 2003 performance target of 5
    percent for the Justice*s strategic objectives is to reduce supply of
    drugs entering the United States,

    reduction of the supply of drugs entering the the threat and trafficking
    of illegal drugs by is being established and will be baselined

    United States. According to the plan, a identifying, disrupting, and
    dismantling drug

    during fiscal year 2002. DEA, in conjunction reduction in the availability
    of drugs entering

    trafficking organizations that are with the Office of National Drug
    Control

    the United States will strengthen our international, multijurisdictional,
    or have an

    Policy and an interagency group, is communities, improve our economy, and

    identified local impact. Despite progress developing national estimates
    for the reduce violent crime and the profits of

    that DEA made in developing strategic amount of cocaine, heroin,

    terrorist organizations. goals and objectives and in enhancing its

    methamphetamine, and marijuana available programs and initiatives, which
    are for consumption in the United States each The performance plan has a
    fiscal year 2003 consistent with the National Drug Control

    year. performance target of 7 percent reduction (45 Strategy, limitations
    in DEA*s performance

    organizations) in the number of priority drug measures make it difficult
    to determine its The second performance measure in trafficking
    organizations to be progress in reducing the availability of Justice*s
    performance report was the dismantled/ disrupted. According to the plan,
    illegal drugs.

    number of priority drug trafficking as these organizations are disrupted
    and organizations to be targeted and

    dismantled, America*s communities will dismantled/ disrupted. According to
    the

    become safer, due to less drug- related violent report, the fiscal year
    2001 performance

    crime. The expected long- term benefit is that, target was 538 such
    organizations targeted as those arrested cooperate and identify their and
    27 dismantled/ disrupted, a 5 percent

    sources of supply, DEA will be able to identify, reduction. The actual
    performance measure target, disrupt, and dismantle higher- level was
    reported as 632 organizations targeted

    priority drug trafficking organizations (e. g., and 66 dismantled/
    disrupted, a 10 percent

    those operating out of Colombia and Mexico) reduction.

    that supply the drugs to the violent street trafficking organizations.

    Internal control weaknesses at DEA:

    Progress in resolving this management The 2003 performance plan had no
    goals,

    Although DEA obtained an unqualified challenge relative to DEA was not

    measures, or strategies to address this opinion on its fiscal year 1999
    financial

    specifically addressed in Justice*s challenge. However, as previously
    noted, this

    statements, the number of reported internal performance report. It was,
    however, management challenge is addressed control weaknesses at DEA
    increased from

    covered indirectly under the departmentwide indirectly under the
    departmentwide fiscal year 1998 to 1999. These material

    focus on financial statements and systems, management challenge on
    financial weaknesses include, among other things,

    which is discussed later in this table. statements and systems.

    information system controls, the lack of a system to accurately and
    completely account for property and equipment, and a weak financial
    reporting process.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s fiscal

    Major management challenge year 2001 performance report

    year 2003 performance plan INS*s organizational structure remains

    Justice*s performance report had a Justice*s performance plan indicated
    that INS

    undecided:

    performance measure to streamline would begin implementing its
    reorganization Proposals to restructure INS have been

    selected agencies and programs by in fiscal year 2002, continue
    implementation issued as a result of several critics* delayering
    management levels. As this was

    in fiscal year 2003, and complete the conclusion that *mission overload*
    has a new initiative, there was no specific

    restructuring in fiscal year 2004. impeded INS from succeeding at either
    of

    performance target set for this measure for its primary functions. To
    remedy problems

    fiscal year 2001. identified, various entities and several members of
    Congress have proposed a

    The report also indicated that INS proposed wide range of reorganization
    options.

    reorganizing itself into two separate but connected bureaus, one to handle
    enforcement of immigration laws and one to

    provide services and benefits to immigrants. According to the report, this
    reorganization would address systemic problems related to INS*s dual
    missions of service and enforcement by creating two separate

    chains of command and accountability, reporting to a single policy leader.
    INS*s restructuring would also address the need to streamline the
    organization to emphasize frontline enforcement and service delivery
    functions.

    Efforts to reduce unauthorized

    Specific progress in this area was not The 2003 performance plan had no
    goals,

    employment face impediments:

    discussed. In its performance report under measures, or strategies to
    address this The effectiveness of the verification the discussion of
    efforts to reduce the

    management challenge. Justice*s fiscal year process has been undermined by
    aliens*

    number of illegal aliens, Justice limited its 2002 performance plan stated
    that the use of fraudulent documents. In addition,

    discussion to noting that the reduction in the measure related to employer
    sanctions was a employers face little chance of being illegal resident
    population reinforces discontinued measure. However, under investigated by
    INS, in part because

    immigration laws and reduces the supply of program evaluations for one of
    its strategic resources for worksite enforcement have illegal aliens for
    unauthorized employment.

    goals, Justice notes that Employment been relatively small. Furthermore,
    INS

    Verification Pilots, which were begun in fiscal issued an interior
    enforcement strategy that year 1999 and include statistics and called for
    INS to pursue the criminal interpretation of the impact of the pilot in
    investigation of employers who are flagrant providing alien status
    verification services for or grave violators. However, the strategy left

    employers, will be evaluated in fiscal years unclear what was meant by a
    flagrant or 2002 and 2003. Moreover, one of the grave violation, what
    criteria would be used strategies listed under the strategic objective for
    opening investigations of employers

    addressing criminal aliens is to block and suspected of criminal
    activities, and how remove employers* access to undocumented INS would
    measure the effectiveness of its

    workers and help reduce worker exploitation. strategy.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s fiscal

    Major management challenge year 2001 performance report

    year 2003 performance plan Shortcomings in programs to control

    Justice*s performance report had two The 2003 performance plan has goals,
    alien smuggling:

    performance measures associated with this measures, and strategies to
    address this The country*s ability to combat the management challenge.

    management challenge. significant and growing problem of alien smuggling
    is hampered by management

    The first performance measure was to The performance target for the number
    of

    and operational problems at INS, such as identify, disrupt, and dismantle
    targeted

    targeted alien smuggling and trafficking fragmented and uncoordinated

    alien smuggling and trafficking organizations identified, disrupted, and

    investigative efforts and lack of staff to organizations. There was no
    specified

    dismantled was three, zero, and zero perform intelligence functions.

    performance target set for fiscal year 2001, respectively. According to
    Justice*s

    but the performance report indicated that the performance plan, zero
    targets were set for

    actual numbers achieved were five such the number of organizations to be
    disrupted

    organizations identified, one disrupted, and and dismantled as a result of
    the changes in

    one dismantled. enforcement priorities since the recent terrorist attacks.

    The second performance measure was the The performance target for the
    number of

    number of interceptions of mala fide and interceptions of mala fide and
    offshore offshore travelers en route to the United travelers en route to
    the United States was

    States. The fiscal year 2001 performance set at 20, 000 for fiscal year
    2003. target was 9,324 and the actual report number was 34, 594. The
    report noted that INS overseas offices significantly exceeding

    their goal was due to a pilot in INS*s Mexico City office established in
    cooperation with the governments of Mexico and Guatemala, Operation Bus
    Bound. The pilot involved the interception and repatriation of Central
    American and third- country nationals.

    Financial statements and systems:

    Justice*s performance report had a The 2003 performance plan has a goal
    and Achieve excellence in financial

    performance measure associated with this measure related to this
    management management, including, but not limited to, a management
    challenge.

    challenge. departmentwide unqualified opinion for fiscal year 2000 and
    beyond.

    Justice*s targets were to receive an Justice has set a goal to achieve a
    unqualified opinion on all statements and to departmentwide, unqualified
    audit opinion on resolve one material weakness. According

    all statements and to resolve six material to the report, actual fiscal
    year 2001

    weaknesses. According to Justice*s performance was an unqualified opinion
    on performance plan, the department and its all statements, and three
    material

    components will focus on continuing weaknesses were corrected. The report
    substantive progress in improving financial also noted that Justice
    received its first fully

    operations and financial systems. The Chief unqualified audit opinion on
    all six of the

    Financial Officer will continue to closely financial statements for fiscal
    year 2001.

    measure component progress in reducing Further, Federal Prison Industries
    corrected internal control weaknesses and in making one material weakness
    and implemented improvements to financial systems. To improvements that
    resulted in two material facilitate achievement of the department*s
    weaknesses being reclassified as

    goal, a unified financial system will be nonmaterial. implemented to
    replace three systems currently requiring replacement and replace the
    other systems when new systems are required.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s fiscal

    Major management challenge year 2001 performance report

    year 2003 performance plan Information systems planning and

    The performance report discussed Justice*s Justice*s 2003 performance plan
    discusses implementation:

    efforts to implement disciplined IT the department*s strategy for meeting
    this Justice*s mission- critical computer systems

    investment processes with the issuance of challenge. Specifically, Justice
    plans to were poorly planned, experienced long an IT investment management
    policy and

    continue investing in an IT management delays in implementation, or did
    not provide guide in fiscal year 2001. Justice also

    framework built around a capital timely, useful, and reliable data.

    reported revising its system development life programming process that is
    closely aligned cycle to align with the IT investment with its enterprise
    architecture. management process.

    The 2003 plan also has goals and measures The report also noted INS*s
    continued move for Justice that are directly related to this towards a
    strategic approach to managing management challenge. The plan establishes
    IT. The report states that management

    a measure for the number of systems that will approaches to IT planning
    and

    be managed according to its approved IT implementation are still
    undergoing

    investment management processes, with a significant long- term changes.

    target of 100 percent in fiscal year 2003. However, the plan does not
    indicate if the measure will apply to all Justice systems or simply new IT
    investments.

    The 2003 performance plan discusses INS*s strategy for meeting its goal,
    stating that INS will use its newly developed enterprise architecture to
    guide and justify its use of resources.

    The 2003 plan also has goals and measures for INS that are directly
    related to this management challenge. Specifically, the plan includes a
    performance goal to provide an adequate, cost- effective, and compliant IT
    environment. This goal will be measured by the percentage of IT systems
    that comply

    with security requirements and system development life- cycle standards,
    and are supported with technologically adequate workstations.

    However, the 2003 plan does not specifically describe the system
    development life- cycle standards.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s fiscal

    Major management challenge year 2001 performance report

    year 2003 performance plan INS southwest border strategy:

    Justice*s performance report had a According to Justice*s performance
    plan, the Although INS generally allocated newly

    performance measure to have eight highpriority performance target for the
    number of highpriority

    hired border patrol agents in accordance corridors demonstrating optimum

    border corridors demonstrating with its strategy, INS was not able to meet

    deterrence. The report indicated that the optimum deterrence was set at
    nine corridors

    its goal of increasing its onboard strength of performance target of eight
    such corridors

    for fiscal year 2003. border patrol agents by at least 1, 000 in

    was met for fiscal year 2001. fiscal year 1999. INS saw an increase of
    only 369 agents in fiscal year 1999 due to

    According to Justice*s performance report, recruitment and retention
    problems.

    the primary indicator of successful deterrence is the significant
    reduction and INS lacks performance information to

    leveling off of attempted entry. Optimum determine the overall impact of
    its strategy deterrence is defined as the level at which to reduce the
    illegal alien flow across the applying more border patrol agents and
    border, reduce flow to the border, and

    resources is no longer justifiable considering reduce the number of
    illegal aliens who the areas current or future potential to reside in the
    United States.

    facilitate successful illegal entry.

    Removal of illegal aliens:

    Justice*s performance report had a new Justice*s performance plan had a

    We found that for fiscal year 1999, 43 performance measure* to reduce the
    performance target of 510,000 new entrants

    percent of the aliens released from annual entries of illegal aliens
    residing in the for the number of annual entries of illegal detention
    prior to determination of their

    United States. Since it was a new measure aliens residing in the United
    States for fiscal asylum status had not appeared for

    there was no performance target for fiscal year 2003.

    subsequent removal hearings. year 2001, but the report indicated that the
    actual number of new entrants was We recommended that INS analyze the

    estimated at 625,000. characteristics of those aliens who appeared and
    those who did not appear for

    their removal hearings and use the results to reevaluate its policy for
    when to release aliens in cases when an asylum officer determined the
    aliens to have a credible fear of persecution or torture.

    a U. S. General Accounting Office. Police Corps: Some Problems Resolved,
    But Most Positions Remain Unfilled, (GAO/ GGD- 00- 69, Washington, D. C.:
    Feb. 22, 2000). .

    Observations on the Department of Labor*s Efforts to Address Its Major
    Management

    Appendi x XII

    Challenges The following table identifies the major management challenges
    confronting the Department of Labor (Labor), which include the
    governmentwide high- risk areas of strategic human capital management and
    information security. The first column lists the challenges identified by
    our office. The second column discusses what progress, as discussed in its
    fiscal year 2001 performance report, Labor made in resolving its
    challenges. The third column discusses the extent to which Labor*s fiscal
    year 2003 performance plan includes performance goals and measures to
    address the challenges that we identified. We found Labor*s performance
    report

    discussed the agency*s progress in resolving its challenges. The agency*s
    performance plan has goals and measures that were directly related to all
    five of the major management challenges.

    Table 13: Major Management Challenges for Labor Progress in resolving
    major management

    Applicable goals, measures, and challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s Major management challenge year 2001
    performance report

    fiscal year 2003 performance plan GAO- designated governmentwide high risk

    Strategic human capital management: Of its four human capital performance
    goals, In its fiscal year 2003 performance plan, GAO has identified
    shortcomings at multiple

    Labor reported that it achieved two goals Labor has three human capital
    performance agencies involving key elements of modern and did not achieve
    two goals. Labor

    goals rather than the four goals reported in strategic human capital
    management,

    reported it achieved its goal to recruit, fiscal year 2001. The
    performance goal including strategic human capital planning

    develop, and retain a highly competent and related to complying with civil
    rights laws

    and organizational alignment; leadership diverse workforce; and exceeded
    its goal to and equal opportunity workplaces was

    continuity and succession planning; comply with applicable civil rights
    laws and

    discontinued in Labor*s fiscal year 2002 acquiring and developing a staff
    whose size,

    achieve equal opportunity workplaces. performance plan because Labor had
    been skills, and deployment meet agency needs;

    Labor did not achieve its goals to reduce the achieving this goal since
    fiscal year 1999

    and creating results- oriented organizational rate of lost production
    days; and reduce the

    and needed to redirect resources to other cultures.

    injury/ illness rate, and improve the activities. The other three
    performance

    timeliness of filing injury claim forms. goals are generally the same as
    the 2001

    In addition, our January 2001 report a on goals. major management
    challenges and program risks at the Department of Labor identified

    To meet its human capital performance human capital management issues at
    the goals, Labor*s significant, new, or enhanced Pension Benefit Guaranty
    Corporation

    efforts include (PBGC). PBGC had not adequately linked its decisions to
    contract out for services to

     using workforce projection tools to refine longer- term strategic
    planning

    Labor*s 5- year workforce planning and considerations; as a result, PBGC
    could not

    restructuring efforts, be assured that it had a cost- beneficial mix

     identifying gaps for mission- critical of contractor and federal
    employees, and occupations based on core competencies, risked being
    unprepared for future workload and

    changes. We recommended that PBGC  using OMB*s human capital scorecard.
    conduct a comprehensive review of its human capital needs. Our subsequent
    work The human capital scorecard focuses on 5 has also identified human
    capital

    important dimensions of human capital management issues at Labor*s Pension
    and management: strategic alignment, strategic Welfare Benefits
    Administration that could

    competencies, leadership, performance undermine the continuity and
    effectiveness

    culture, and learning. Using the fiscal year of its enforcement programs.

    2001 scorecard results for ten of its agencies as a baseline, Labor found
    that one agency met the standard, four agencies

    had mixed results, and five agencies were unsatisfactory. Although Labor
    plans to use the 2001 scorecard results as its baseline and as a data
    source, Labor does not have any targets listed in its 2003 performance

    plan.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Information security: Our January 2001 Labor reported in its 2001
    performance Labor*s fiscal year 2003 performance plan high- risk update
    noted that agencies* and

    report that it had taken steps to strengthen noted that the department
    established a

    governmentwide efforts to strengthen its information security. For
    example, it

    performance goal to improve organizational information security have
    gained momentum reported that it had developed computer

    performance and communication through and expanded. Nevertheless, recent
    audits security guidance and issued a computer

    effective information management and continue to show federal computer
    systems

    security handbook, established an deployment of IT resources. To meet this
    are riddled with weaknesses that make them emergency incident response
    team,

    performance goal, Labor has developed five highly vulnerable to computer-
    based attacks installed an intrusion detection system on

    performance indicators. One indicator is and place a broad range of
    critical the department*s core network backbone, related to information
    security and the other operations and assets at risk of fraud,

    upgraded the firewall on its core network, four are related to improving
    organizational misuse, and disruption.

    and conducted risk assessments of key performance and communication. The

    systems. information security indicator calls for

    reducing severe unauthorized intrusions by 50 percent of the baseline.
    However, this indicator addresses only one aspect of information security.

    While Labor reported that it had adopted the Federal Security Assessment
    Framework, it did not establish specific performance goals for achieving
    each of the levels addressed in this framework. These goals would
    facilitate the department*s ability to measure its

    progress in improving its overall information security program. Further,
    the Office of Management and Budget*s guidance for fiscal year 2002
    reporting under the Government Information Security Reform Act (GISRA)
    requires specific information security performance measures as well as

    corrective action plans with quarterly status updates.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    GAO- designated major management challenge

    Increasing the employment and earnings

    In its fiscal year 2001 performance report, In its fiscal year 2003
    performance plan,

    of America*s workforce. Labor reported its progress in achieving Labor
    listed the same goals discussed in its

    three outcome goals related to this 2001 performance report. In addition,
    the

    challenge: increasing employment, WtW performance goal also became a

    earnings, and assistance; assisting youth in performance indicator for the
    Employment making the transition to work; and and Training Administration
    (ETA). In fiscal increasing employment and earnings for year 2003, Labor
    added two new goals for retrained workers. For these three outcome

    this challenge relating to training for goals, Labor reported it achieved
    four

    individuals significantly disabled and performance goals, substantially
    achieved b registrants for the apprenticeship program. three performance
    goals, and did not achieve one performance goal.

    Labor*s 2003 performance plan also cited strategies to improve performance
    Labor reported it achieved the following measurement and organizational
    alignment. performance goals: increasing employment With regard to
    performance measurement, and earnings under the Workforce Labor said that
    it will complete plans to Investment Act (WIA) adult program;

    improve the quality and timeliness of data in preparing women for the
    labor force;

    its performance management systems for its assisting 19- 21- year- old
    youths in making WIA adult program. With regard to the transition to work;
    and providing jobs for

    organizational alignment, Labor said it will dislocated workers. Of the
    three goals

    continue to work with the states to identify Labor reported it
    substantially achieved,

    and develop strategies to better serve these goals related to assisting
    14- 18- yearold employers through one- stop systems to

    youths with training, post- secondary increase the numbers of jobs listed
    with onestops education, military service, apprenticeships, and job
    seekers that enter or in becoming employed; enhancing job employment.
    placement and wages for Job Corps graduates; and assisting trade- affected
    workers to find jobs. The goal not achieved measured the extent Welfare-
    to- Work (WtW) participants retained employment and received wage
    increases. Labor believed two factors may have contributed to not meeting
    this goal: employment declined in the service and retail sectors, both of
    which were a significant source of entry- level

    placements, and WtW grantees were reporting questionable data. Labor*s
    strategy for improving these outcomes included implementing new
    initiatives and

    issuing technical assistance products. Labor did not report on two of its
    performance goals related to increasing services to disabled individuals
    and awarding youth opportunity grants. For the

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    services to disabled individuals goal, Labor reported that data were not
    available and stated it would report on this goal in its fiscal year 2002
    Performance and Accountability

    Report. For the youth grant program goal, Labor stated that this program
    was not funded in 2001 and would not be reported in its 2002 Performance
    and Accountability Report.

    Our January 2001 report that discussed Labor*s major management challenges
    indicated that Labor could better meet its challenges by improving its
    performance in three other areas: performance measurement, strategic
    planning, and organizational alignment. Labor*s

    performance report cites actions taken in some of these areas. For example
    with regard to performance measurement, Labor reported it developed a
    comprehensive labor exchange performance measurement

    system that included newly developed performance measures and an improved
    system of obtaining employment outcome

    information. In addition, Labor stated the ETA developed a verification
    and validation process to ensure the accuracy of

    performance data submitted to Labor. With regard to organizational
    alignment, Labor stated it was working with a network of partners from
    business coalitions, public

    interest groups, and community and faithbased organizations to implement
    the WIA program improvements to assure a more consistent policy.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Protecting the benefits of workers. In its fiscal year 2001 performance
    report, Of the 13 goals listed in its 2001 Labor reported its progress in
    achieving two

    performance report, Labor included 11 of outcome goals related to this
    challenge:

    them in its fiscal year 2003 performance protecting worker benefits and
    increasing

    plan. These goals were: (1) producing compliance with worker protection
    laws. cumulative first- year savings in the FECA Under these two outcome
    goals, Labor

    program; (2) providing for secure pension reported it achieved six out of
    13 plans by increasing the number of cases performance goals. These six
    goals were:

    with fiduciary results; (3) reducing expanding pension coverage
    particularly

    processing time for pension benefit among women, minorities, and small

    determinations; (4) providing for secure business workers; producing
    cumulative health and welfare plans; (5) making timely first- year savings
    in the Federal Employees*

    determination and payment of Compensation Act (FECA) program; issuing

    unemployment benefits; (6) reducing lost timely and accurate Davis- Bacon
    wage

    production days due to federal employees* determinations; reducing
    processing time for

    injuries; (7) reducing selected medical costs; pension benefit
    determinations; providing for

    (8) increasing pension benefit recoveries; secure pension plans by
    increasing the

    (9) increasing compliance with labor number of cases with fiduciary
    results; and

    standards in targeted industries; (10) providing for secure health and
    welfare

    increasing compliance with labor standards plans. Labor reported it did
    not achieve 7 among previous violators; and (11) performance goals: making
    timely

    increasing timely union financial reporting. determination and payment of
    unemployment benefits; reducing lost

    The two performance goals related to wage production days due to federal
    employees*

    determinations and expanding pension injuries; reducing selected medical
    costs;

    coverage were not included in Labor*s fiscal increasing pension benefit
    recoveries;

    year 2003 performance plan because Labor increasing compliance with labor
    standards

    eliminated these goals. The Davis- Bacon in targeted industries;
    increasing wage determinations goal was eliminated in compliance with
    labor standards among

    Labor*s fiscal year 2002 performance plan previous violators; and
    increasing timely because Labor successfully achieved this union financial
    reporting. goal during fiscal year 2001 and said that it

    needed to refocus its resources. Also, as Labor analyzed the performance
    goals not

    stated earlier, Labor eliminated its achieved and generally provided
    reasons

    expanding pension coverage to women, why the goals were not met. For
    example, minorities, and small business workers for the recovering pension
    benefits

    performance goal due to difficulties recoveries goal, Labor said that the

    evaluating the extent its program influenced contributing factors included
    the volatile the pension coverage for these types of nature of benefit
    recoveries, the large

    workers. recoveries that occurred in the prior year, and a hiring freeze
    that left numerous Labor positions unfilled.

    In addition, Labor recognized that some of its performance goals needed to
    be modified or terminated. For example, Labor*s goal for

    recovery of pension benefits for individual participants is being
    considered for revision

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    because Labor believes the goal does not adequately measure the total
    impact of its customer assistance program. Also, Labor terminated its
    expanding pension coverage to women, minorities, and small business

    workers performance goal for fiscal year 2002. Labor reported it had
    difficulties evaluating the extent its program influenced the pension
    coverage for these types of

    workers due to the significant impact the economy has on this goal.

    Fostering safe and healthy workplaces. Of Labor*s six performance goals in
    its All six goals discussed in the fiscal year outcome goal related to
    reducing workplace 2001 performance report were included in

    injuries, illnesses, and fatalities, Labor Labor*s fiscal year 2003
    performance plan.

    reported it achieved five goals and did not In addition, all six goals had
    higher

    achieve one goal. The goals achieved were: performance targets or expanded
    the

    reducing the number of mine fatalities and coverage of the performance
    goal. For

    nonfatal injuries; reducing the percentage of example, one goal for fiscal
    year 2001 called coal dust samples and silica dust samples

    for the reduction of coal and silica dust but that exceed standards;
    reducing three of the

    the 2003 goal was expanded to also include most significant types of
    workplace injuries;

    reducing noise exposure in all mines and the reducing injuries and
    illnesses in at least

    number of citations/ orders for diesel 75, 000 workplaces with
    Occupational Safety

    particulate matter in mines. and Health Administration intervention; and
    decreasing fatalities in the construction industry. Labor reported it did
    not achieve

    its goal to reduce three of the most significant types of workplace
    injuries and causes of illnesses. Labor selected

    exposure to silica and lead and the number of amputations as the three
    items to measure. During the year, Labor*s tests for exposure to lead
    showed an increase of 21 percent, whereas the test results for silica

    exposure and the number of amputations significantly decreased.

    a See U. S. General Accounting Office, Department of Labor: Major
    Management Challenges and Program Risks, GAO- 01- 251 (Washington, D. C.,
    Jan. 2001). b Labor defines substantially achieved as attaining 80 percent
    or more of the targeted goal.

    Observations on the National Aeronautics and Space Administration*s
    Efforts to Address Its

    Appendi x XIII

    Major Management Challenges The following table identifies the major
    management challenges confronting the National Aeronautics and Space
    Administration (NASA) which include the governmentwide high- risk areas of
    strategic human capital management and information security. The first
    column lists the challenges identified by our office. The second column
    discusses what progress, as discussed in its fiscal year 2001 performance
    report, NASA made in resolving its challenges. The third column discusses
    the extent to which NASA*s fiscal year 2003 performance plan includes
    performance goals and measures to address the challenges that we
    identified. We found that NASA*s performance report discussed the agency*s
    progress in resolving all of its challenges.

    Of the agency*s five major management challenges, its performance plan had

    1. goals and measures that were directly related to four of the
    challenges, including

     strategic human capital management,  information security,  contract
    management, and  international space station costs 2. goals and measures
    that were indirectly applicable to three of the

    challenges, including  strategic human capital management,  contract
    management, and  faster, better, cheaper approach to space exploration
    projects 3. no goals related to one of the challenges, but discussed
    measures

    and/ or strategies to address the challenge, which was  faster, better,
    cheaper approach to space exploration projects.

    Table 14: Major Management Challenges for NASA Progress in resolving major
    management

    Applicable goals, measures, and challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s Major management challenge year 2001
    performance report

    fiscal year 2003 performance plan GAO- designated governmentwide high risk

    Strategic human capital management:

    NASA*s fiscal year 2001 performance report NASA*s fiscal year 2003
    performance plan GAO has identified shortcomings at multiple states that
    the strategic management of

    retains the strategic objective to invest agencies involving key elements
    of modern human capital remains a top priority of the wisely in its use of
    human capital and annual strategic human capital management,

    agency, particularly since human capital is performance goals and
    indicators that (1)

    including strategic human capital planning one of the five major
    initiatives on the

    align management of human resources to and organizational alignment;
    leadership

    President*s Management Agenda. The achieve agency strategic goals and

    continuity and succession planning; report indicates that NASA failed to
    meet the objectives and (2) attract, retain, and

    acquiring and developing a staff whose size, President*s executive
    scorecard criteria in maximize the individual performances of a

    skills, and deployment meet agency needs; this area, but the agency is
    responding to

    diverse workforce through training and and creating results- oriented
    organizational this challenge by improving recruitment,

    development experiences. The plan states cultures. retention, training,
    career development, and that by the end of fiscal year 2003, NASA
    workforce planning. In the report, NASA

    plans to increase the availability of In January 2001, we reported the
    need to

    acknowledges that it fell short of achieving assessment tools used in
    agency- wide

    implement a human capital approach in its targeted increases in workforce
    diversity leadership and project management training

    NASA*s workforce management strategies levels, but does report that it
    increased

    and development. It states that in fiscal year as a major management
    challenge. We representation of minorities and women,

    2003, NASA will continue to develop and reported that NASA*s shuttle
    workforce had

    and implemented numerous initiatives implement consistent workforce
    planning declined significantly in recent years to the

    during the year to recruit and retain a highly that links staffing,
    funding, mission activities,

    point of reducing the agency*s ability to technical workforce. The report
    states that

    and core competencies allowing each center safely support the shuttle
    program. NASA achieved its performance indicators to plan its own
    recruitment, retention, of increasing training opportunities and the

    succession, and training and development In September 2001, we reported in
    use of technology- based learning activities. testimony that while NASA
    continued to opportunities through increased funding for make progress in
    revitalizing the shuttle

    training, career development, and The fiscal year 2003 plan structure
    remains program*s workforce, considerable succession planning. The report
    also states

    basically the same as that for fiscal year challenges remained. that in
    fiscal year 2002 NASA will begin

    2002; it still does not yet relate NASA*s implementation of a consistent
    agency- wide

    human capital annual performance goals In July 2002 testimony, we reported
    that

    workforce planning and reporting system at and indicators to specific
    programs with NASA believes that similar workforce

    all centers to track distribution of its critical skill gaps. In a May
    2002 agreement

    problems affect the entire agency, and was workforce across programs and
    facilitate between NASA and OMB, NASA

    taking further steps to address its workforce critical skill gap analyses.

    acknowledged that it needed to complete challenges. and submit to OMB a
    transformation In our July 2002 testimony, we noted that workforce
    restructuring plan, which, in additional steps being taken by NASA to

    conjunction with its strategic human capital address its workforce
    problems included plan, will be critical to ensuring that no skill
    developing an agencywide integrated gaps or deficiencies exist in mission-
    critical

    workforce planning and analysis system to occupations. The agreement,
    which track the distribution of its workforce across

    documents NASA*s plans for addressing the programs and facilitate skill
    gap analyses. governmentwide initiatives in the President*s NASA also
    developed a strategic human Management Agenda, indicated that NASA

    capital plan which identifies human capital was still in the process of
    identifying its

    goals, problems, improvement initiatives, critical skills and competencies
    at risk intended outcomes, and strategies and across the agency. metrics
    to support the goals. NASA also submitted legislative proposals to
    Congress

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    requesting further flexibilities and authorities for attracting and
    retaining a skilled workforce.

    Information security:

    NASA*s fiscal year 2001 performance report NASA*s fiscal year 2003
    performance plan Our January 2001 high- risk series update states that the
    agency achieved its annual also continues to identify information report
    noted that agencies* and

    performance goal related to the information technology security as a
    significant area of governmentwide efforts to strengthen technology
    infrastructure improvement

    management concern. NASA*s fiscal year information security have gained
    momentum challenge. NASA reported that it had

    2003 performance plan maintains a strategic and expanded. Nevertheless,
    recent audits

    implemented a number of steps to address objective to enhance the security
    of its

    continue to show that federal computer the challenge. These steps
    included, but

    information technology resources by systems are riddled with weaknesses
    that were not limited to, approving a partitioned meeting an annual
    performance goal and make them highly vulnerable to computerbased firewall
    for the agency network,

    indicators in three critical areas: attacks and place a broad range of

    implementing Web- based information critical operations and assets at risk
    of

    security training accessible to all employees,  Reduce system
    vulnerabilities specified for fraud, misuse, and disruption. Further, the

    conducting network vulnerability analyses, the year across all NASA
    centers to at events of September 11, 2001, underscored

    conducting self- assessment of continuity least the targeted ratios.

    the need to protect America*s cyberspace plans, reviewing user
    authentication and

     Meet established targets for information against potentially disastrous
    cyber data protection activities, purchasing smart

    technology security awareness training for attacks* attacks that could
    also be

    card and token technologies for evaluation, all NASA employees, managers,
    and coordinated to coincide with physical

    and implementing a Critical Infrastructure system administrators.

    terrorist attacks to maximize the impact of Protection Program to enhance
    intrusion

     Complete the information technology both.

    detection and response capabilities. security plans at a targeted level,
    including authorization to process, for critical NASA

    Additionally, the report indicates that NASA systems. conducted security
    awareness training for all levels of civil service employees. By the end
    However, these efforts may not specifically of fiscal year 2001, NASA
    reported that 93 measure the overall effectiveness of percent of all civil
    service employees, 100 information security and the agency*s

    percent of civil service managers, and 98 progress in implementing
    corrective actions. percent of all civil service system administrators had
    completed the

    specialized training through NASA*s expanded use of Web- based training.
    In addition, NASA completed reviews of 98 percent of all information
    technology security plans for critical systems. However, NASA does not
    specifically address the

    influence of private contractors in its results. This is important because
    contractors make up a substantially larger proportion of NASA overall
    workforce than civil service employees.

    However, in spite of the achievements listed above, NASA reported that
    given the extent of its systems and the magnitude and variety of security
    threats, its security program remains a key challenge. A recent

    NASA Office of Inspector General audit

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    report a noted that while NASA reported its information technology
    infrastructure improvement goal as having been achieved in its performance
    report, it did not disclose in the report several limitations in the

    supporting data related to the system vulnerabilities and security
    awareness training. NASA had earlier agreed that the data limitations
    should be described in the report.

    The need to correct weaknesses in

    NASA*s fiscal year 2001 performance report NASA*s fiscal year 2003
    performance plan NASA*s contract management:

    states that NASA exceeded its goals for has performance goals to (1) renew
    its

    We have reported that NASA*s contract both obligating available funds
    against

    management systems and facilities through management is a continuing area
    of high

    performance- based contracts and use of updated automated systems and

    risk. Implementation of the financial increasing awards of contract
    dollars to facilities revitalization and (2) improve the

    management system and its integration with small disadvantaged businesses.
    According agency*s financial management and

    full cost accounting has been delayed. Until to the report, a new
    integrated financial

    accountability. The plan also includes the financial management system is

    management system remains a high priority performance goals to continue
    taking

    operational, performance assessments for NASA. NASA plans to implement the

    advantage of opportunities for improved relying on cost data may be
    incomplete.

    core financial module of the integrated contract management by (1)
    maintaining a

    financial management system at the high proportion of performance- based

    In our July 2002 testimony, we pointed out Marshall and Glenn centers in
    October 2002

    contracts and (2) significantly involving small that much work remains to
    be done to and at the rest of the centers by June 2003. businesses,
    minority institutions, and strengthen contract oversight. According to
    businesses owned by women as NASA NASA, the agency*s financial management

    contractors. NASA*s plan provides specific environment consists of
    decentralized, indicators for each goal. nonintegrated systems with
    policies, procedures, and practices that are unique to

    its centers. For the most part, data formats are not standardized,
    automated systems are not interfaced, and on- line financial information
    is not readily available to program managers. Thus, it is difficult to
    ensure contracts are being effectively and efficiently implemented and
    budgets are

    executed as planned.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    The need to control International Space

    NASA*s fiscal year 2001 performance report NASA*s fiscal year 2003
    performance plan Station development and support costs:

    discusses several actions that address ISS contains an annual performance
    goal that

    Development costs for the International cost control issues. The report
    states that

    addresses ISS cost control issues. The goal Space Station (ISS) have
    soared to the point

    projected future space station cost growth is to develop and execute a
    management

    where NASA has had to make substantial from fiscal year 2003 through
    fiscal year

    plan and open future station hardware and cutbacks in the program. This
    has

    2006 continues to constrain the program. To service procurements to
    innovation and negatively affected NASA*s credibility with

    keep ISS within its planned budget, the cost- saving ideas. The Integrated
    Program Congress and raised concern among administration scaled it down to
    a core

    Management Plan contains reforms that international partners and the
    scientific station. In response to fiscal year 2002

    strengthen headquarters involvement, community about the viability of the
    space

    budget constraints, the agency developed increase communications, provide
    more

    station. We reported in July 2002 that the Program Management Action Plan,
    July

    accurate assessment, and maintain budget NASA is instituting a number of

    2001, which provides a set of management accountability. Timely and
    successful

    management and cost reforms, but the and resource control actions to
    address completion of the initiatives is vitally

    agency still faces considerable challenges in institutional and program
    reforms. Several

    important, but NASA faces significant successfully implementing the
    reforms.

    of these reforms have already been challenges in implementing these
    reforms. implemented, including increasing For example, NASA currently
    lacks a headquarters oversight, strengthening modern integrated financial
    management business management functions, improving

    system to track and maintain data needed cost estimating and control
    methodologies, for estimating and controlling costs. and instituting
    independent financial assessment capabilities.

    The need to effectively implement the

    The status of this challenge has been As discussed, the status of this
    challenge

    faster- better- cheaper approach to space

    overtaken by events. As discussed under has been overtaken by events.
    exploration projects:

    our characterization of this challenge, NASA Although NASA has recently
    decided that its

    has decided to end this approach. NASA*s performance plan provides a
    faster- better- cheaper approach will no general discussion of a strategic
    objective, longer be used as a preference for

    Regarding lessons learned, the but no specific performance goals or

    managing its programs and projects, we performance report states that NASA
    failed indicators directly related to this

    have reported that NASA has been following to achieve its performance
    target to capture

    management challenge. The plan*s this management philosophy to reduce
    cost, a set of *best practices/ lessons learned*

    strategic objective is to capture engineering become more efficient, and
    increase

    from each program. and technological best practices and scientific results
    by conducting more and process knowledge that will continually smaller
    missions in less time. While NASA

    improve NASA*s program/ project has had many successes, the failures of
    two

    management. According to the plan, the Mars probes show that there are
    limits to NASA Integrated Action Team*s efforts this approach,
    particularly in terms of represent a systems solution for effectively
    NASA*s ability to learn from past mistakes.

    executing its programs and projects. Each NASA has taken steps in recent
    years to action plan defines how, when, and by strengthen lessons learned
    within the whom the plan is being implemented. The agency.

    plan states that (1) most actions will be fully implemented by the end of
    fiscal year 2002 In January 2002, we reported that more

    and (2) revision of NASA Procedures and

    needs to be done to overcome cultural and Guidelines 7120. 5, which is
    approaching organizational impediments. NASA plans to

    completion, includes extensive implement our recommendations to improve

    changes/ clarifications of the processes its current knowledge sharing
    mechanisms.

    involved in program/ project management. a National Aeronautics and Space
    Administration, Audit Report: Validation And Verification Of Selected NASA
    Fiscal Year 2001 Performance Data Related To The Government Performance
    And Results Act,

    IG- 02- 025 (Sept. 27, 2002).

    Observations on the Nuclear Regulatory Commission*s Efforts to Address Its
    Major

    Appendi x XIV

    Management Challenges The following table identifies the major management
    challenges confronting the Nuclear Regulatory Commission (NRC), which
    include the governmentwide high- risk areas of strategic human capital
    management and information security. The first column lists the challenges
    identified by our office. The second column discusses what progress, as
    discussed in its fiscal year 2001 performance report, NRC made in
    resolving its challenges. The third column discusses the extent to which
    NRC*s fiscal year 2003 performance plan includes performance goals and
    measures to address the challenges that we identified. We found that NRC*s
    performance report

    discussed the agency*s progress in resolving many of its challenges, but
    it did not discuss NRC*s progress in resolving the challenge relating to
    its new document system.

    Of NRC*s six major management challenges (as determined by GAO), its
    performance plan had

    1. goals and measures that were directly related to two of the challenges,
    including;  development and implementation of a risk- informed approach
    for

    commercial nuclear power plants and  inherent difficulties in applying a
    risk- informed approach to nuclear

    material licensees 2. no goals related to four of the challenges, but
    discussed measures

    and/ or strategies to address the challenges, which were  strategic human
    capital management,  information security,  improving financial
    management systems, and  information technology issues.

    Table 15: Major Management Challenges for NRC Progress in resolving major
    management

    Applicable goals, measures, and challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s Major management challenge year 2001
    performance report

    fiscal year 2003 performance plan GAO- designated governmentwide high risk

    Strategic human capital management: In contrast to its fiscal year 2000
    NRC*s 2003 performance plan does not

    GAO has identified shortcomings at multiple performance report, in its
    fiscal year 2001

    contain any performance goals that directly agencies involving key
    elements of modern report NRC discussed several steps it is address human
    capital management. strategic human capital management,

    taking to respond to its human capital However, it does contain corporate

    including strategic human capital planning challenges. First, it is
    integrating its

    management strategies, implementing and organizational alignment;
    leadership strategic workforce planning efforts into the

    strategies, and output measures to help continuity and succession
    planning; NRC Planning, Budgeting, and Performance

    NRC accomplish its strategic and acquiring and developing staff whose
    size,

    Management process for the fiscal year performance goals. One of these
    corporate

    skills, and deployment meet agency needs; 2004 budget. In addition, NRC
    noted that it strategies is to sustain a high- performing,

    and creating results- oriented organizational is instituting performance
    goals and

    diverse workforce. To implement this cultures.

    measures for human capital management in strategy NRC will employ seven
    strategies. its fiscal year 2003 performance plan.

    One of these strategies includes designing a GAO also identified NRC*s
    continued efforts

    Second, NRC states that it is using all strategic workforce plan to
    address critical

    to cope with significant human capital issues available personnel
    flexibilities and tools, as

    skill gaps and guide the agency in the as a major management challenge for
    the

    well as adding new measures to provide recruitment, development, and
    retention of a

    agency. In a highly technical, complex needed flexibility, to recruit and
    retain highly skilled diverse workforce. Following industry, NRC is facing
    the loss of a

    qualified staff. These flexibilities and tools the initial assessment of
    agency technical

    significant percentage of its senior include approving selected waivers of
    dual skills and competencies, and based on managers and technical staff.
    For example, compensation limitations under delegated

    lessons learned in the course of that for the NRC office responsible for
    achieving authority from OPM; using retention undertaking, this effort
    will be expanded to the outcome of preventing radiation- related

    allowances for current employees; address skills and competency

    deaths or illnesses due to civilian nuclear increasing the number of
    recruitment

    requirements in IT, and management and reactors, about 22 percent of the
    technical bonuses offered to new applicants;

    support areas. The plan also states that in staff and 16 percent of senior
    executive instituting a student loan repayment fiscal year 2003, NRC will
    direct additional service staff were eligible to retire in 2001.

    program; and creating a new undergraduate focus on managing human capital

    And, by 2005, the number eligible for some fellowship program to help pay
    the expenses investment programs, including waivers of type of retirement
    is about 42 percent and of promising college seniors. Third, NRC

    dual compensation limitations, expanded 77 percent, respectively. At the
    same time,

    states that it is building a capability to usage of retention allowances
    and

    NRC will need to rely on these staff to inventory current agency skills
    and recruitment bonuses, Senior Fellowships,

    achieve its strategic and performance goals. competencies and forecast
    future skills and

    Graduate Fellowships, Undergraduate competency needs. NRC completed a
    pilot Fellowships, a student loan repayment effort in fiscal year 2001 to
    identify highly

    program, and an agencywide intern specialized skills and competencies
    program. One output measure to judge the currently available in the
    agency, the skills

    success of whether NRC*s strategic and competencies needed over the next 5

    workforce planning efforts adequately years, and the gap closure
    strategies address its core competency requirements necessary for
    acquiring and maintaining the

    is to hire 20 percent of its new professional needed skills and
    competencies. In fiscal staff at the entry level and retain 75 percent
    year 2002, NRC states that it will review the of these new hires over
    their first 3 years of results of this pilot to develop and implement

    their employment. an agencywide skills assessment and needs forecasting
    process. By fiscal year 2004, NRC plans to have a fully integrated process
    and an automated skills database to support human capital management
    throughout the

    agency.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Information security: Our January 2001 NRC does not have a specific
    performance

    NRC*s fiscal year 2003 budget and high- risk update noted that agencies*
    and

    goal for information security. No targets for performance plan does
    discuss the issue of

    governmentwide efforts to strengthen information security were provided or
    information security. In its management

    information security have gained momentum measured by NRC in fiscal year
    2001. The support section, NRC describes several and expanded.
    Nevertheless, recent audits

    NRC*s fiscal year 2001 Performance and program output measures that
    address its

    continue to show federal computer systems Accountability Report says that
    *the agency

    system security plan, network security, and are riddled with weaknesses
    that make them

    did not have a process to consistently the security and availability of
    critical e- mail highly vulnerable to computer- based attacks

    implement its program and recently received and Web access infrastructure
    services. and place a broad range of critical a grade *F* in computer
    security from a

    For example, one performance measure will operations and assets at risk of
    fraud,

    congressional score card* but that NRC had be to *respond to any new
    network security

    misuse, and disruption. Further, the events *issued a Corrective Action
    Plan to address

    vulnerability within 24 hours of discovery.* of September 11, 2001,
    underscored the these issues.* Another will be to *restore e- mail and Web
    need to protect America *s cyberspace

    access to operational status within one hour against potentially
    disastrous cyber

    Information security is addressed by the IG of discovery of a security
    incident.* attacks* attacks that could also be

    in the management challenge of coordinated to coincide with physical

    *identification, acquisition, implementation, terrorist attacks to
    maximize the impact of

    and protection of information resources.* both. According to the IG, NRC
    has made some progress in addressing security.

    (NRC*s OIG identified information security Specifically in the areas of
    (1) development

    as part of a broader challenge related to the of a centralized information
    security identification, acquisition, and

    oversight and performance measurement implementation of information
    technologies.)

    process based on the Federal IT Security Assessment Framework developed by
    the National Institute of Standards and Technology and the Chief
    Information Officer*s Council; (2) use of monitoring techniques so that no
    interruptions to or loss

    of data from NRC*s business applications were due to computer viruses in
    fiscal year 2001; (3) independent review (penetration test) of its cyber
    protection mechanisms;

    and (4) online training in computer security awareness.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    GAO- designated major management challenge Development and implementation
    of a NRC*s fiscal year 2001 performance report NRC*s 2003 performance plan
    contains

    risk- informed approach for commercial

    stated that NRC met this challenge in fiscal three performance goals, one
    performance

    nuclear power plants: NRC faces year 2001 by implementing an important

    measure, and seven implementing numerous challenges in implementing a

    transition to an improved Reactor Oversight strategies that relate to this
    challenge. The risk- informed approach for nuclear power

    Process. The improved processes included performance goals are: (1) to
    maintain plants. Whatever processes NRC ultimately

    developing and implementing a riskinformed safety, protection of the
    environment, and adopts must be consistent, visible, and

    inspection program to provide the common defense and security; (2) to
    clear. A clearly defined strategy would help

    increased focus on aspects of plant make NRC activities and decisions more

    NRC and the utilities address the public*s performance, which had the
    greatest impact effective, efficient, and realistic; and (3) to

    concerns as it implements a risk- informed on safe plant operation. NRC
    stated that it reduce unnecessary regulatory burden on regulatory
    approach. Although NRC initially

    used licensee- reported performance stakeholders. The performance measure
    is

    agreed on the need for a comprehensive indicator information to improve
    the to complete milestones in the Risk- Informed strategy, it has not
    followed through to

    program*s objectivity, and to make it more Regulation Implementation Plan.
    The seven develop one. Instead, NRC developed a

    understandable and predictable. In addition, implementing strategies are:
    (1) to sharpen Risk- Informed Regulation Implementation NRC*s report
    stated that:

    the focus on safety to include a transition to Plan, but the plan is not
    as comprehensive  the Commission was provided with a revised NRC reactor
    oversight program for as it needs to be because it does not identify

    recommendations for using risk analysis inspection, assessment, and
    enforcement those items critical to achieving its

    as a basis for revising nuclear reactor activities; (2) to evaluate
    operating objectives, activities that cut across the

    regulations; experience and the results of risk

    agency, resources, performance measures,  the Commission is making
    significant

    assessments for safety implications; (3) to or the relationships among
    these various progress toward developing a riskinformed identify,
    evaluate, and resolve safety issues,

    activities. rule on the special treatment

    including age- related degradation, and requirements for systems,
    structures, and ensure that an independent technical basis components of
    reactor facilities.

    exists to review license submittals to ensure that safety is maintained;
    (4) to continue to develop and incrementally use risk- informed and, where
    appropriate, less prescriptive performance- based regulatory approaches

    to maintain safety; (5) to use risk information to improve the
    effectiveness and efficiency of our activities and decisions; (6) to make
    agency decisions based on technically

    sound and realistic information; and (7) to use risk information and
    performance- based approaches to reduce unnecessary regulatory burden.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Inherent difficulties in applying a riskinformed

    NRC*s fiscal year 2001 performance report NRC*s fiscal year 2003
    performance plan

    approach to nuclear material

    stated that NRC made significant progress contains three performance
    goals, one

    licensees: The sheer number of towards identifying regulatory applications
    performance measure, and three licensees* almost 21,000* and the

    that would be amenable to, and would implementing strategies that relate
    to this diversity of the activities they conduct*

    benefit from, an increased use of risk challenge. The performance measure
    is to

    converting uranium; transporting radioactive insights and information.
    NRC*s report also

    complete those specific materials materials; and using radioactive
    material for

    stated that it: milestones in the Risk- Informed Regulation industrial,
    medical, or academic purposes*

     published draft screening criteria and Implementation Plan and the
    implementing

    increase the complexity of developing a riskinformed completed eight case
    studies to (1)

    strategy is to continue to improve the approach for nuclear material
    evaluate the effectiveness of the screening regulatory framework to
    increase the focus licensees. In addition, NRC will be

    criteria for identifying regulatory on safety and safeguards, including

    challenged to define its role, including the applications amenable to
    being riskinformed, incremental use of risk- informed and, where

    size and skill mix of staff both in (2) identify potential near- term
    appropriate, less prescriptive performancebased

    headquarters and regional offices, as an process improvements, and (3)
    evaluate regulatory approaches to maintain increasing number of states
    assume

    existing tools, methods, and data; safety.

    responsibility for regulating nuclear material  issued a revision to 10
    CFR* s report Part users within their borders. The decisions 70 that
    increased the use of risk

    In addition, NRC*s plan states that during that NRC ultimately makes could
    have information for fuel cycle facilities;

    fiscal year 2002* 2003, NRC will develop budgetary and other implications
    for the

     substantially completed development of probabilistic risk assessment
    (PRA) tools agency.

    the Standard Review Plan to implement and guidance to risk- inform the
    regulatory

    the new requirements; and framework for materials licenses, develop or

     completed the medical pilot inspection adapt PRA methods for use in
    materials risk program in fiscal year 2001.

    analyses, perform material risk studies, and support the development of
    guidance for materials risk regulatory activities. The intended outcome of
    this research will be improved effectiveness and realism of agency
    regulation in the Nuclear Materials Safety arena by better focusing staff
    and licensee resources on the most risksignificant

    issues.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Improving financial management

    As in the prior 2 years, NRC did not NRC*s fiscal year 2003 performance
    plan

    systems: NRC needs to develop and implement a cost accounting system to

    does not contain any performance goals, implement a cost accounting
    system. provide its managers with reliable and

    performance measures, or implementing NRC*s Office of the Inspector
    General routine information for decision- making

    strategies that directly relate to this identified the lack of a cost
    accounting purposes in fiscal year 2001. As a result,

    challenge. The plan does contain one process as a material weakness
    constituting NRC was found to still be in substantial implementing
    corporate management an instance of substantial noncompliance

    noncompliance with the Federal Financial strategy that indirectly
    addresses this with the Federal Financial Management Management
    Improvement Act of 1996

    challenge and one program output measure Improvement Act.

    (FFMIA) by its independent auditors and its that directly addresses this
    challenge. The

    OIG. This noncompliance issue was first implementing corporate management

    identified in its fiscal year 1998 audit. NRC strategy discusses
    strengthening NRC*s has under development a new cost

    financial systems and processes to ensure accounting system to address
    this issue and

    that financial assets are adequately states that it expects to implement
    it in fiscal protected consistent with risk and that its year 2002.

    financial information is better integrated with decision- making. The
    management NRC*s independent auditors and its OIG

    program output measure states that NRC*s also identified a new instance of
    substantial

    fiscal year 2002 financial statement audit will noncompliance by NRC with
    FFMIA in the

    find no material weaknesses. area of accounting for internal use software.
    NRC did not have an adequate system to track the labor incurred for
    internal use software development activities. In its response to the audit
    report, NRC told the OIG that in fiscal year 2002 it planned to implement
    a new system to integrate human

    resources, payroll, and time and labor, and to be a single system for
    time, attendance, and labor reporting. NRC expects this system to correct
    all of the system

    weaknesses identified in the Payroll/ Personnel System.

    NRC does discuss both of these material internal control weaknesses and
    its noncompliance with FFMIA in an overview section (management*s
    discussion and

    analysis) of the fiscal year 2001 performance report where it states that
    some progress had been made in 2001 and mentions that it expects to
    implement systems to correct these weaknesses during fiscal year 2002.
    However, NRC OIG*s assessment does not mention NRC*s substantial
    noncompliance with either of these FFMIA standards in the section of the
    report that discusses its actions to address

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    its management challenges. NRC does state in this section that it had a
    number of significant achievements in financial management in fiscal year
    2001. These

    achievements include the CFO*s evaluation of the status of the
    implementation of new systems that support cost accounting and revision of
    the accounting remediation plan for implementing a new cost accounting

    system in January 2002; the CFO*s review of the potential of creating more
    meaningful cost reports to better meet the needs of managers on an interim
    basis (prior to implementing a new cost accounting system); and the
    development of a statement of work for a new Consolidated Information
    Support Services (CISSCO) II program that addresses the financial

    management weaknesses of the original CISSCO I program that ended in
    August 2001.

    Information technology issues: NRC NRC*s fiscal year 2001 performance
    report NRC*s fiscal year 2003 performance plan

    experienced problems with implementing a does not address the issues
    associated with

    contains no performance goals, new document capture and retrieval the
    implementation of its ADAMS system in

    performance measures, or implementing system* Agencywide Documents Access
    its management challenge actions. Instead,

    strategies for addressing this challenge. and Management System (ADAMS).

    NRC identifies a number of process However, NRC did develop four new

    improvements and initiatives aimed at corporate management strategies to
    help expanding productivity and enhancing

    accomplish its strategic and performance customer service under the
    President*s

    goals in its 2003 performance plan. One of direction toward electronic
    government as a

    these new corporate strategies is to provide management priority. As a key
    component proactive information management and of its electronic
    government activities, NRC

    information technology services. Several of states that it launched the
    Electronic

    the implementing strategies for this Information Exchange (EIE) production

    corporate strategy indirectly relate to this system. NRC states that it is
    also challenge and one management program developing an Electronic
    Licensing rule that

    output measure states that NRC installed an will allow NRC licensees and
    others to updated version of ADAMS in fiscal year electronically submit
    almost all documents

    2001 and plans to evaluate results of and data via EIE, as well as CD-
    ROM, email, alternative approaches and feed- in to work and fax.

    in ADAMS during fiscal year 2003.

    Observations on the National Science Foundation*s Efforts to Address Its
    Major

    Appendi x XV

    Management Challenges The following table identifies the major management
    challenges confronting the National Science Foundation (NSF) in the
    governmentwide high- risk areas of strategic human capital management and
    information security. The first column lists the challenges identified by
    our office. The second column discusses what progress, as discussed in its
    fiscal year 2001 performance report, NSF made in resolving its challenges.
    The third column discusses the extent to which NSF*s fiscal year 2003
    performance plan includes performance goals and measures to address the
    challenges that we identified. We found that NSF*s performance report
    discussed the agency*s progress in resolving its challenges.

    NSF*s performance plan had goals and measures directly related to both
    major management challenges.

    Table 16: Major Management Challenges for NSF Progress in resolving major
    management

    Applicable goals, measures, and challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s Major management challenge year 2001
    performance report

    fiscal year 2003 performance plan GAO- designated governmentwide high risk

    Strategic human capital management: NSF*s 2001 performance report
    addresses The 2003 performance plan addresses the

    GAO has identified shortcomings at multiple one of the four human capital
    management

    management of human capital in four agencies involving key elements of
    modern issues: acquiring and developing a staff performance goals for
    management: a strategic human capital management,

    whose size, skills, and deployment meet strategic business analysis, an
    increase in

    including strategic human capital planning agency needs. NSF met its
    management

    hiring for science and engineering positions and organizational alignment;
    leadership

    goal to improve staff diversity by increasing from underrepresented
    groups, preparation

    continuity and succession planning; the total number of science and
    engineering of a diversity plan, and development of a acquiring and
    developing a staff whose

    hires at NSF from underrepresented groups. NSF training academy.
    Additionally, a short size, skills, and deployment meet agency

    NSF also met its management goal that 95 *resources required* section has
    been needs; and creating results- oriented percent of grant proposals will
    be reviewed developed for a number of management organizational cultures.

    electronically through FastLane. According goals. Further, NSF has
    addressed aspects to NSF*s performance report, this

    of creating a results- oriented organizational investment provides
    incentives for the culture as a part of the Government recruitment and
    retention of high- quality Performance and Results Act (GPRA) employees.

    process. In addition, according to NSF*s

    Administration and Management Strategic Plan, NSF conducted an agencywide
    workforce planning exercise that identified the need for additional staff
    to meet increasing workload requirements.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Information security: Our January 2001 NSF reported in its 2001
    performance report

    NSF*s fiscal year 2003 performance plan high- risk update noted that
    agencies* and that it had taken steps to strengthen its

    noted that the agency had established a governmentwide efforts to
    strengthen information systems security. Specifically,

    performance goal to maintain and enhance information security have gained
    momentum NSF reported that it had implemented an the agencywide security
    program to ensure and expanded. Nevertheless, recent audits

    agencywide program that encompasses all adequate protection of its
    information

    continue to show that federal computer aspects of information security,
    including (1)

    technology infrastructure and critical assets. systems are riddled with
    weaknesses that policy and procedures, (2) risk assessments

    This goal was established in accordance make them highly vulnerable to
    computerbased and security plans, (3) managed intrusion with the
    Government Information Security

    attacks and place a broad range of detection services, (4) vulnerability

    Reform Act (GISRA), OMB Circular A- 130, critical operations and assets at
    risk of

    assessments, and (5) technical and and the Computer Security Act of 1987.
    The fraud, misuse, and disruption. Further, the management security
    controls. For

    performance goal provides that 100 percent events of September 11, 2001,
    underscored

    example, NSF appointed an Automated of mission- critical systems will have
    the need to protect America*s cyberspace Data Processing Security Officer
    to

    documented risk assessments and against potentially disastrous cyber

    coordinate Information Technology Security approved security plans.

    attacks* attacks that could also be (ITS) Program plans and required
    computer

    coordinated to coincide with physical security awareness training for all
    However, NSF*s indicators and strategies for

    terrorist attacks to maximize the impact of employees and contractors.
    success need to be specifically tied to the

    both. security assessment framework, developed

    by the National Institute for Standards and Technology (NIST), and related
    tools for determining the status of its information security programs. In
    addition, OMB*s GISRA reporting guidance requires specific performance
    measures, as well as corrective action plans with quarterly status
    updates.

    Observations on the Office of Personnel Management*s Efforts to Address
    Its Major

    Appendi x XVI

    Management Challenges The following table identifies the major management
    challenges confronting the Office of Personnel Management (OPM), which
    include the governmentwide high- risk areas of strategic human capital
    management and information security. The first column lists the challenges
    identified by our office. The second column discusses what progress, as
    discussed in its fiscal year 2001 performance report, OPM made in
    resolving its challenges. The third column discusses the extent to which
    OPM*s fiscal year 2003 performance plan includes performance goals and
    measures to address the challenges that we identified. We found that OPM*s
    performance report

    discussed the agency*s progress in resolving both of its major management
    challenges* strategic human capital management and information security.
    In addition, we found that OPM*s performance plan had goals and measures

    to address both of the governmentwide management challenges.

    Table 17: Major Management Challenges for OPM Progress in resolving major
    management

    Applicable goals, measures, and challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s Major management challenge year 2001
    performance report

    fiscal year 2003 performance plan GAO- designated governmentwide high risk

    Strategic human capital management: The report states that OPM met its The
    plan has six goals directly applicable to

    GAO has identified shortcomings at multiple corporate management strategy
    of

    this challenge. These goals are the agencies involving key elements of
    modern recruiting, developing, and maintaining a following. strategic
    human capital management,

    highly skilled and diverse workforce including strategic human capital
    planning

    necessary to accomplish current and future  OPM manages its workforce
    strategically

    and organizational alignment; leadership strategic goals with efficiency
    and and aligns its human resources in a

    continuity and succession planning; innovation. Specifically, the report
    states manner that best supports

    acquiring and developing a staff whose size, that OPM has

    accomplishment of the agency*s strategic skills, and deployment meet
    agency needs;

    goals and furthers the President*s

    and creating results- oriented organizational  created a comprehensive
    human capital

    Management Agenda.

    cultures. OPM also faces shortcomings in action plan to address all
    elements of the  Recruitment and staffing strategies are

    many of these areas. human capital initiative on the President*s based on
    workforce planning information

    Management Agenda,

    and facilitate the hiring of a diverse, As the President*s agent and
    advisor for  established a cross- organizational task

    capable, and flexible workforce. human resource matters, OPM is charged
    force to develop a leadership succession

     Innovative employee education and with leading the governmentwide human

    plan, training programs and practices cultivate a

    capital initiative. This initiative is part of the  implemented new
    automated staffing workforce that is flexible, optimally trained,

    President*s Management Agenda, released software to streamline staffing
    processes, and capable of adapting to changing

    to agencies governmentwide in August  established a Delegated Examining
    Unit

    technology. 2001.

    within OPM to facilitate a more efficient  OPM*s work environment
    attracts, retains, and cost- effective method of filling

    and satisfies employees and managers. positions,  OPM*s Office of Human
    Resources and  secured training slots for *Introduction to

    Equal Employment Opportunity Supervision* so that all new supervisors

    (OHREEO) uses the best available and select aspiring supervisors can
    attend technology for personnel data processing the training,

    and recordkeeping to provide fast,  laid the groundwork for a new OPM
    Virtual

    accurate, and efficient human resources University, which allows employees
    access

    services. to thousands of online training courses,

     OPM*s work environment promotes and  improved its work environment by
    values diversity and is free from unlawful expanding the use of certain
    family friendly discrimination. flexibilities, which resulted in almost 30
    percent of OPM employees participating in

    To meet these goals, among other activities, telecommuting on a scheduled
    or ad- hoc

    OPM states that it will do the following. basis, and  promoted other
    family friendly options,

     Develop consultative skills and technical such as nursing mothers*
    lactation competencies of OHREEO staff to facilities, family- medical
    leave entitlements, enhance their ability to be strategic alternative work
    schedules, and health and advisors to OPM managers. wellness programs.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

     Educate OPM managers and supervisors about existing strategic human
    capital flexibilities that support recruitment and retention efforts.
    Provide general needs training to close

    common skill gaps that exist across organizational lines.  Improve
    managers* access to employee relations policy and guidance and help

    them deal effectively with performance/ conduct issues.  Implement new
    technological efficiencies

    in human resources transaction processing.  Continue to assess
    organizations that are at high risk for workplace disputes that result in
    grievances and complaints of discrimination and provide quarterly analysis
    to OPM senior managers.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Information security: Our January 2001 OPM reports that during fiscal year
    2001, it

    As part of its overall information technology high- risk update noted that
    agencies* and

    developed a new computer security policy management strategy, OPM*s goal
    is to

    governmentwide efforts to strengthen that enhanced its information
    technology protect its mission- critical systems, information security
    have gained momentum security program, and that extensive reviews

    infrastructure, and information with a robust and expanded. Nevertheless,
    recent audits

    of its information technology security by an information technology
    security program. continue to show federal computer systems

    outside auditor and the Office of Inspector OPM does not identify any
    specific

    are riddled with weaknesses that make them General (OIG) uncovered no
    material

    performance measures associated with this highly vulnerable to computer-
    based attacks

    weaknesses. In addition, OPM reports goal, but does indicate that it plans
    to

    and place a broad range of critical progress in implementing a systems
    resolve all remaining security issues during

    operations and assets at risk of fraud, development life- cycle process
    for its

    fiscal year 2002. OPM told us that all major misuse, and disruption.
    Further, the events

    information technology projects. However, it milestones and plans
    scheduled to be

    of September 11, 2001, underscored the also reports that a review of its
    financial

    accomplished in fiscal year 2002 were need to protect America *s
    cyberspace

    management systems by an outside auditor accomplished during that year.

    against potentially disastrous cyber found that, on an agencywide level,
    OPM did

    attacks* attacks that could also be not provide adequate system security
    in that

    In addition to Government Performance and coordinated to coincide with
    physical

    it does not have coordinated security Results Act reporting, the Office of
    terrorist attacks to maximize the impact of

    procedures, lacks effective incidence Management and Budget*s guidance for

    both. response and monitoring capabilities, does

    fiscal year 2002 reporting under the not conduct periodic risk
    assessments, and

    Government Information Security Reform has not developed adequate
    securityrelated Act (GISRA) requires specific information processes to
    protect its assets from security performance measures, as well as
    unauthorized access or improper use. OPM

    corrective action plans with quarterly status also reports the need to
    strengthen four updates. OPM told us that all reports under specific areas
    of electronic data processing this requirement have been filed. (EDP)
    general controls: (1) entitywide security, (2) access control, (3) control
    over application changes and systems development, and (4) service
    continuity planning.

    In the audit of OPM*s fiscal year 2001 consolidated financial statements,
    an outside auditor identified OPM*s EDP

    general control environment as a reportable condition noting that this
    environment had substantially not changed from the prior

    year. The auditor notes that while OPM has recently improved security
    controls, certain controls still need improvement to prevent

    and detect unauthorized changes to financial information, control access
    to sensitive information, and protect its information resources. These
    weaknesses are consistent with those identified by OPM in its performance
    report, but also include weaknesses related to system software

    controls (controls that limit and monitor access to the program and
    sensitive files that control the computer hardware and

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    secure applications supported by the system) and segregation of duties
    controls for application programmers. In its evaluation of OPM*s security
    program

    and practices required by GISRA, the OIG identified security requirements
    not met by OPM*s program, including that it had not

    developed a formal risk assessment methodology, implemented an agencywide
    security program, implemented a security

    training program to ensure that employees with critical information
    technology responsibilities are sufficiently trained, or

    formally established a computer incident response capability.

    Observations on the Small Business Administration*s Efforts to Address Its
    Major

    Appendi x XVII

    Management Challenges The following table identifies the major management
    challenges confronting the Small Business Administration (SBA), which
    include the governmentwide high- risk areas of strategic human capital
    management and information security. The first column lists the challenges
    identified by our office. The second column discusses what progress, as
    discussed in its fiscal year 2001 performance report, SBA made in
    resolving its challenges. The third column discusses the extent to which
    SBA*s fiscal year 2003 performance plan includes performance goals and
    measures to address the challenges that we identified. We found that SBA*s
    performance report

    discussed the agency*s progress in resolving all of its challenges. Of the
    agency*s six major management challenges, its performance plan had

    1. goals and measures that were directly related to the challenge of
    streamlining and automating disaster loan processing and improving
    timeliness,

    2. goals and measures that were indirectly applicable to the challenges of
    focusing the 8( a) program on helping firms obtain contracts to increasing
    procurement opportunities, and

    3. no goals and measures related to four of the challenges, but discussed
    strategies to address the challenges, which were

     strategic human capital management,  information security,  strengthen
    human capital, information technology, budget, and financial

    management practices to help modernize SBA, and  continue to improve
    oversight of SBA*s lending partners to correct

    oversight weaknesses.

    Table 18: Major Management Challenges for SBA Progress in resolving major
    management

    Applicable goals, measures, and challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s Major management challenge year 2001
    performance report

    fiscal year 2003 performance plan GAO- designated governmentwide high risk

    Strategic human capital management: SBA reported that human capital
    planning is This issue is listed under a section in the

    GAO has identified shortcomings at multiple more important than ever
    because performance plan on SBA*s corporate

    agencies involving key elements of modern technology, an increasing demand
    for small management strategies. There are no

    strategic human capital management, business information and training, and

    directly applicable measures included for including strategic human
    capital planning

    changes in loan processing functions will this strategy. According to SBA,
    it treats and organizational alignment; leadership

    require significant changes in SBA this strategy as an internal management

    continuity and succession planning; personnel needs. SBA will have fewer

    function and therefore does not publish acquiring and developing a staff
    whose size,

    employees involved in loan processing, and directly available measures for
    the strategy.

    skills, and deployment meet agency needs; more employees focused on
    outreach and The plan provides a list of major activities and creating
    results- oriented organizational

    lender oversight. Additionally, SBA will planned for fiscal year 2003 that
    includes,

    cultures. increasingly require personnel proficient in

    among other things, beginning the using and applying new technologies.

    implementation of the 5- year Workforce Restructuring Plan; reducing the
    number of SBA refers to transforming the workforce as

    organizational layers in headquarters; and one of its corporate management
    strategies implementing the results of fiscal 2002 pilot and as an agency
    management challenge

    projects for alternate district office operating identified by the SBA
    Office of Inspector models. General (OIG). The SBA OIG notes that SBA has
    made some progress in areas such as analyzing the tasks that need to be
    performed by SBA today, developing competency models, and providing
    adequate training. However, SBA had not made substantial progress in over
    half the action areas outlined by the SBA OIG.

    As GAO testified on July 16, 2002, a SBA*s current structure contributes
    to the challenges SBA faces in delivering services to the small business
    community. In particular, ineffective lines of communication; confusion
    over the mission of district offices; complicated, overlapping
    organizational relationships; and a field structure not consistently
    matched with mission requirements combine to impede the efforts of SBA
    staff to deliver services effectively. To guide organizational changes and
    to respond to challenges raised by GAO, OMB, and the SBA OIG, SBA drafted

    a plan for a 5- year workforce transformation. The draft plan recognizes
    SBA*s need to restructure its workforce, privatize noncore functions,
    adjust incentives and goals, and streamline its headquarters* operation.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    In commenting on this appendix, SBA noted that it has made much progress
    on its Human Capital initiative and was recognized by the Office of
    Personnel Management in the last two quarters of fiscal year 2002 with a
    green light on progress in implementing this area of the President*s
    Management Agenda.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Information security: Our January 2001 SBA reports that systems security
    was

    In its 2003 plan, SBA addressed information high- risk update noted that
    agencies* and found to be a reportable condition in the

    security as part of its corporate governmentwide efforts to strengthen

    audit of its fiscal year 2001 financial management strategy for
    modernizing

    information security have gained momentum statements. In response, SBA*s
    corporate information systems. However, there were

    and expanded. Nevertheless, recent audits management strategy to modernize
    its

    no directly applicable goals or measures for continue to show federal
    computer systems

    information systems includes efforts to this strategy in the plan.
    According to SBA,

    are riddled with weaknesses that make them improve systems security by it
    treats this strategy as an internal

    highly vulnerable to computer- based attacks institutionalizing its
    security program

    management function and therefore does and place a broad range of critical
    management procedures, developing an not publish directly applicable
    measures for operations and assets at risk of fraud,

    organizational framework for identifying and the strategy. SBA plans to
    continue to

    misuse, and disruption. Further, the events assessing risks and deciding
    what mix of

    address specific OIG information security of September 11, 2001,
    underscored the

    policies and controls are needed, regularly audit recommendations. In
    discussing the need to protect America *s cyberspace

    evaluating the effectiveness of information status of these
    recommendations in its fiscal

    against potentially disastrous cyber technology security policies and
    controls,

    year 2001 performance and accountability attacks* attacks that could also
    be

    and acting to address any identified report, SBA also noted that because
    of the

    coordinated to coincide with physical weaknesses. Further, while not
    discussed in

    long- term nature of implementing a security terrorist attacks to maximize
    the impact of

    detail in its fiscal year 2001 performance program, completion of final
    action on some

    both. and accountability report, SBA*s fiscal year recommendations is not
    scheduled until the

    2003 budget request and performance plan fiscal year 2002 to 2004 time
    frame. identifies specific actions taken to improve information security,
    including

    The National Institute of Standards and Technology developed a security
    committing over $1.2 million in personnel

    assessment framework and related tools and contract support to enhance its

    that agencies can use in determining the computer security program,

    status of their information security programs.  issuing an updated
    computer security

    Also, OMB guidance for fiscal year 2002 policy document that incorporated
    security

    reporting under the Government Information policies covering the latest
    agency

    Security Reform Act (GISRA) requires technology, including client servers,
    e- mail,

    agencies to use tools developed by NIST to and the Internet,

    evaluate the security of unclassified systems  documenting the computer
    security or groups of systems. program and producing guidance

    documents and templates for the In addition, OMB*s GISRA reporting

    performance of computer security guidance requires specific performance

    functions within the agency, measures, as well as corrective action plans

     completing certification and accreditation with quarterly status
    updates. reviews for 38 of the most sensitive systems,

     developing a security training program, and  continuing work on
    developing critical

    infrastructure protection and security plans.

    In its 2001 performance and accountability report, SBA included its
    independent auditor*s report on its internal controls. The independent
    auditor noted improvements in SBA*s internal control over its information

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    system environment, but also identified the need for improvements in each
    of the six categories of controls reviewed: entitywide security program,
    access controls, application software development and program change,
    system software, segregation- of- duties, and service continuity.

    The OIG also evaluated SBA*s security program as required by GISRA and
    reported that SBA generally maintains a satisfactory information security
    program for its highpriority

    financial management and general support systems and has developed and
    issued policies and procedures to address security protections agencywide.
    However, the OIG also reported that information security vulnerabilities
    continue to exist that will require continued management

    emphasis with appropriate underlying resources. These vulnerabilities are
    computer security system testing and program monitoring, system access
    controls, and disaster recovery and contingency planning.

    GAO- designated major management challenge

    Streamline and automate disaster loan

    SBA reported that it is continuing to seek The plan, as updated in August
    2002,

    processing to improve timeliness: In our ways to improve response times
    and reduce

    includes a disaster lending goal and five 2001 Performance and
    Accountability Series costs through a modernization effort. The measures
    that directly relate to disaster loan SBA report, we said that SBA needs
    to be

    Office of Disaster Assistance is focusing on processing, (1) SBA field
    presence

    able to quickly expand its loan processing internal streamlining efforts
    such as

    established within 3 days, capabilities, including hiring and training
    providing applicants with the ability to apply

    (2) applications processed within 21 days, damage inspectors, loan
    officers, and other

    online or by telephone and the use of (3) customer satisfaction, (4)
    making initial

    staff to provide consistent, timely electronic files for processing and
    managing disbursement of loan proceeds within 5 days assistance.

    the program. of closing a loan, and (5) conducting quality

    assurance reviews of each disaster office to ensure compliance with
    program underwriting procedures. SBA also lists the continued of
    development and implementation of the Disaster Assistance Credit
    Management Modernization Initiative as a major activity for fiscal year
    2003.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Strengthen human capital, information

    Human capital: This issue was discussed SBA included a section on
    corporate

    technology, budget, and financial under the governmentwide, high- risk
    areas management strategies that includes

    management practices to help modernize identified by GAO. managing human
    capital more strategically

    SBA.

    Information technology: SBA addressed (this issue was discussed under the

    modernizing its information systems under governmentwide, high- risk
    areas), improving

    the corporate management strategies information technology management,

    section of its performance report. SBA said integrating performance with
    the budget,

    that it has undertaken a multiyear and improving financial management

    information technology management information. However, no goals or
    measures

    improvement and systems modernization were provided for these strategies.
    effort that upgrades its infrastructure, offers

    According to SBA, it treats these strategies electronic access, and
    ensures timely and

    as internal management functions and accurate information. SBA listed its
    major

    therefore does not publish directly applicable accomplishments in fiscal
    year 2001 as measures for the strategies.  implemented a pilot of
    electronic loan applications,  implemented a new lender information

    system,  continued implementation of the ClingerCohen Act with
    implementation of new procedures such as the Information

    Technology Investment Manual and development of other draft procedures,
    and

     completed SBA*s Government Paperwork Elimination Act implementation
    plan. However, SBA*s OIG said that although SBA

    has made some progress, it needs to formulate and implement sound
    procedures for system development and software acquisition for all its
    systems under development. In commenting on this appendix, SAB said that
    it published a

    System Development Methodology in November 2001 that it uses as the
    official guide for systems development in the

    agency. Budget: SBA addressed developing an activity- based budgeting
    process to link resources to strategic goals within a strategy on managing
    for results in the corporate

    management strategies section of its performance report. SBA also reported
    the implementation of a Web- based cost allocation survey and system to
    tie

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    resources to activities and results and beginning integration of cost
    accounting with the budget planning and execution process as a major
    accomplishment in fiscal year 2001.

    Financial Management: SBA addressed improving financial management under
    the corporate management strategies section of its performance report. SBA
    said that it had received its sixth unqualified audit opinion

    on its fiscal year 2001 financial statements and had improved its internal
    control framework. Continue to improve oversight of SBA*s

    SBA reported that it is strengthening the There were no directly
    applicable goals or

    lending partners to correct oversight

    oversight of its lending partners through measures. However, one of the
    strategies

    weaknesses.

    continued efforts to put in place automated included under corporate
    management

    systems that will provide more strategies was improving credit program
    comprehensive data on the loans that it

    management. SBA also listed key guarantees and greater access to that
    data.

    objectives for this area. Among other things, Although SBA*s plan states
    that loan risk they included management issues have assumed a higher

    priority, much of SBA*s planned effort in this  expanding existing
    portfolio analysis to

    regard has not been completed. For provide more detailed and timely
    example, SBA does not perform routine

    information and related analysis of analyses of its portfolio to assess
    financial performance trends, risk, and current SBA preferred lending
    conducting loan and investment analyses partner reviews are not designed
    to evaluate

    to understand performance and to identify financial risk. areas of program
    risk, and  analyzing, revising, and as appropriate, expanding existing
    credit program

    performance measures so that they are reflective of risk.

    Focus the 8( a) program on helping firms

    SBA identified concentration of contracts as The plan contains the goal of
    empowering obtain contracts to increase a material weakness in its fiscal
    year 2000

    entrepreneurs, but the measure does not

    procurement opportunities.

    Performance and Accountability Report.

    directly relate to helping 8( a) firms obtain However, the SBA OIG
    reported that SBA contracts. In September 2001, SBA had not acted or made
    substantial progress committed to the SBA OIG to improve its with respect
    to this challenge. SBA stated

    performance measures for the 8( a) program. that to enhance the
    effectiveness of the 8( a)

    As of September 30, 2002, the program, it would develop and implement a

    recommendations had not been acted on, plan that would focus on providing
    business

    according to the SBA OIG. development assistance to ultimately result in a
    more equitable distribution of program benefits. a U. S. General
    Accounting Office, Small Business Administration: Workforce Transformation
    Plan is Evolving, GAO- 02- 931T (Washington, D. C.: July 16, 2002).

    Observations on the Social Security Administration*s Efforts to Address
    Its Major

    Appendi x XVIII

    Management Challenges The following table identifies the major management
    challenges confronting the Social Security Administration*s (SSA) in the
    governmentwide high- risk areas of strategic human capital management and
    information security. The first column lists the challenges identified by
    our office. The second column discusses what progress, as discussed in its
    fiscal year 2001 performance report, SSA made in resolving its challenges.
    The third column discusses the extent to which SSA*s fiscal year 2003
    performance plan includes performance goals and measures to address the
    challenges that we identified. We found that SSA*s performance report

    discussed the agency*s progress in resolving all of its challenges. Of the
    agency*s six major management challenges, its performance plan had

    1. goals and measures that were directly related to five of the challenges
    and

    2. no goals and measures related to one of the challenges, but discussed
    strategies to address the challenge, which was

     information security.

    Table 19: Major Management Challenges for SSA Progress in resolving major
    management

    Applicable goals, measures, and challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s Major management challenge year 2001
    performance report

    fiscal year 2003 performance plan GAO- designated governmentwide high risk

    Strategic Human Capital Management: SSA*s progress in this area is
    presented SSA*s human capital goals and strategies

    GAO has identified shortcomings at multiple under its strategic goal to be
    an employer are presented under its strategic goal to be agencies
    involving key elements of modern that values and invests in each employee.

    an employer that values and invests in each strategic human capital
    management,

    SSA reported that the focus of this goal is to employee. This goal
    contains three

    including strategic human capital planning ensure that SSA continues to
    have a highly

    strategic objectives, which address (1) and organizational alignment;
    leadership

    skilled, high performing, and motivated providing workforce tools and
    training, such continuity and succession planning; workforce. SSA*s human
    capital strategic

    as access to interactive video training and acquiring and developing a
    staff whose size,

    goal contained four strategic objectives, management development programs;
    (2)

    skills, and deployment meet agency needs; which addressed (1) providing
    workforce providing a physical environment that and creating results-
    oriented organizational

    tools and training, such as access to promotes the health and well being
    of every

    cultures. interactive video training and management

    employee; and (3) recruiting and developing development programs, (2)
    providing a a qualified and satisfied workforce to SSA faces human capital
    management

    physical environment that promotes the perform effectively in a changing
    future challenges due to an increasing demand for

    health and well being of every employee, environment. Overall, these
    strategies and

    services, the imminent retirement of a large (3) promoting an agency
    culture that

    goals are similar to SSA*s 2002 plan. portion of its workforce, changing
    customer

    successfully incorporates SSA*s values, and expectations, and mixed
    success in past

    (4) creating a skilled workforce to serve SSA*s plan contains revisions to
    several of technology investments. These conditions

    SSA*s diverse customers in the 21 st century. its human capital strategic
    objectives and challenge SSA*s ability to meet service performance goals.
    For example, SSA*s delivery demands, such as faster and more To measure
    its progress towards its 2001 plan deleted, without explanation, the
    accurate benefit claims determinations and strategic goal for human
    capital

    strategic objective to promote an agency an increased emphasis on
    returning the management, SSA had 15 performance

    culture that successfully incorporates its disabled to work. The aging of
    the *baby goals, of which it reported 11 were met, 3

    values and to attain a 50 percent boom* generation has heightened this

    were not, and data were not available for 1. improvement in the gap
    between current

    challenge. In prior work we have and desired workplace practices and
    values recommended that SSA develop a more

    For example, SSA reported meeting its by 2005. The deletion of this
    objective could

    detailed service delivery plan that would goals to

    limit SSA*s ability to implement and monitor provide a blueprint for
    assessing a proper

     implement formal management not only its human capital- related
    initiatives, staff and skill mix for operating in the future.

    development programs; but also those in other parts of the agency,
    complete various tests and surveys of the

    such as customer service. quality and security of its office facilities;
    and

    SSA*s 2003 plan maintains a strategic  implement and update its Future

    objective to address the need to recruit,

    Workforce Transition Plan, which was develop, and retain a well- qualified
    and

    published in June 2000. satisfied workforce to perform effectively in a
    changing future environment. This objective contains a performance goal to
    continue to

    implement SSA*s Future Workforce Transition Plan. Previously the
    percentage of employees satisfied with SSA as a place to work also served
    as a performance goal for this strategic objective. However, in its 2003
    plan, SSA deleted this performance goal, potentially diminishing its
    ability to develop strategies for retaining employees.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Regarding SSA*s Future Workforce

    SSA added a performance goal to this Transition Plan, SSA has not yet
    reported strategic objective to increase the retention that it met its
    fiscal year 2000 performance rate of new hires through the use of goal to
    complete an employee survey as an

    competency- based tools. While adding a interim step to developing the
    transition

    performance goal to measure the retention plan. Fully meeting this goal
    requires that of new hires is a beneficial human capital SSA complete the
    employee survey. We are

    management practice, SSA*s goal does not particularly concerned that SSA
    did not

    aim to increase the retention rate by a set complete this survey, which
    could have explicit percentage. Rather, the plan stated provided critical
    information for developing only that SSA wanted to increase retention the
    transition plan. SSA reported it did not

    due to the use of competency- based tools, meet its goals to exclusive of
    environmental factors beyond SSA*s control. The development and use of
    create and implement an agency change

    a more clearly defined goal could further aid strategy (SSA planned to
    drop this goal in

    SSA*s ability to monitor and improve year- toyear 2002 because it is
    undergoing too many performance in this area. organization changes);

     attain 33- 1/ 3 percent participation by SSA also revised a component of
    its managerial staff in leadership training (28

    strategic objective to provide the necessary percent participated), and
    tools, training, and continuous learning  provide 67 percent of its
    offices with direct

    opportunities to maintain a highly skilled and access to interactive video
    training (access

    high performing workforce by the year 2005. to 57.7 percent achieved).

    Specifically, it lowered its goal of providing its employees necessary
    competency- based training and tools from *all* to *70 percent* of
    employees. SSA did not explain why it lowered this goal. Finally, SSA*s
    plan contains information on program evaluations and key initiatives in
    support of their strategic goal to value and invest in each employee. For
    example, SSA anticipates completing studies on attrition patterns and
    recruiting processes in 2003. The plan also contains an appendix, which
    lists key initiatives related to human capital

    management, such as the implementation of competency- based selection
    tools and a training administration system. However, the appendix does not
    contain implementation schedules, which were

    included in its fiscal year 2002 plan, making it difficult to monitor
    SSA*s progress in these areas. In addition, the fiscal year 2003 plan does
    not contain the key initiatives for implementing SSA*s workforce
    transition plan and leadership training, which were key initiatives in
    fiscal year 2002.

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    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Information security: SSA*s 2001 report did not contain any SSA*s 2003
    performance plan does not

    Our January 2001 high- risk update noted specific performance indicators
    and goals include specific measurable goals and that agencies* and
    governmentwide efforts

    related to information security. SSA*s fiscal indicators related to its
    information security to strengthen information security have year 2001
    performance report is and information system weaknesses. gained momentum
    and expanded.

    incorporated in its Accountability Report for However, the *management
    challenges*

    Nevertheless, recent audits continue to that year. In the latter, SSA
    highlighted

    section of SSA*s fiscal year 2003 plan states show federal computer
    systems are riddled

    management improvement actions it took to that it intends to continue to
    strengthen its

    with weaknesses that make them highly improve the security of its
    information.

    information systems controls. vulnerable to computer- based attacks and
    place a broad range of critical operations

    SSA has continued to make progress in The 2003 plan discusses several
    ongoing and assets at risk for fraud, misuse, and addressing the
    information protection issues

    initiatives to improve security awareness, disruption. Further, the events
    of raised in prior years. Specifically, in fiscal such as security
    training for all new hires September 11, 2001, underscored the need

    year 2001 SSA has: and certification training for security

    to protect America*s cyberspace against  conducted a risk assessment to
    identify

    professionals. In addition, the plan contains potentially disastrous cyber
    attacks* attacks critical assets and vulnerabilities as part of

    an appendix, which lists key information that could also be coordinated to
    coincide its Critical Infrastructure Protection Project; security
    initiatives, such as one to *combat with physical terrorist attacks to
    maximize  issued a final security policy for the State

    fraud.* However, this appendix does not the impact of both.

    Disability Determination Service sites in contain the descriptions and
    implementation accordance with the information security

    schedules contained in its fiscal year 2002 requirements included in the
    National plan, which makes it difficult to measure Institute of Standards
    and Technology

    SSA*s progress. Special Publication 800- 18;  established and published
    technical To help SSA manage progress in this area, security configuration
    standards for NT,

    SSA should develop formal performance Unix, AS 400, and firewall servers;

    plan goals and measures to build upon  completed updates for
    accreditation and

    commitments it presented in its fiscal year certification of key systems;
    and

    2003 plan. These included annually: (1)  strengthened physical access
    controls reviewing and re- certifying 100 percent of its over the National
    Computer Center.

    sensitive system plans; (2) testing its Contingency Plan; and (3) testing
    its While SSA has made progress in

    Incident Response Procedures. addressing information protection issues we
    Improvements in this area are key to raised in prior years, weaknesses in
    its

    ensuring that automated agency data are security infrastructure persist.
    Until both reliable and credible. corrected, a weakened or incomplete
    information protection control structure will

    In addition to reporting under GPRA, the continue to impair SSA*s ability
    to mitigate

    Office of Management and Budget*s (OMB) the risk of unauthorized access,

    guidance for fiscal year 2002 reporting modification, or disclosure of
    sensitive SSA

    under the Government Information Security information. For example,
    through a

    Reform Act (GISRA) requires specific contractor SSA found that it needed
    to performance measures, as well as further strengthen controls to protect
    its

    corrective action plans with quarterly status information and that
    weaknesses in controls updates. SSA*s 2003 plan stated that it expose key
    elements of SSA*s systems and estimates issuing its GISRA report to OMB
    networks to unauthorized access. These

    in 2003. included SSA*s efforts to implement, enforce, and monitor
    security standards, network firewalls, and access controls at

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    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    nonheadquarters locations. The contractor recommended that SSA (1) take
    actions to fully implement its information security framework such as
    assigning specific resources, with priority given to the implementation,
    enforcement, and monitoring of technical security standards; (2) fully
    implement technical security configuration standards; and (3) establish
    and enforce procedures for monitoring security violations.

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    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    GAO- designated major management challenge

    Play an Active Research, Evaluation, and

    SSA presents its progress related to this SSA*s plans to address this
    challenge are

    Policy Development Role:

    challenge under its strategic goal, to presented under the strategic goal
    to

    As the nation*s expert on social security promote valued, strong, and
    responsive promote valued, strong, and responsive issues, SSA is uniquely
    positioned to assess

    social security programs and conduct social security programs and conduct

    how economic and demographic trends effective policy development,
    research, and

    effective policy development, research, and affect its programs and to
    identify policy

    program evaluation. This goal contains program evaluation. Generally,
    these

    changes necessary to ensure efficient and strategic objectives such as
    providing

    strategies and goals are similar to SSA*s cost- effective solutions for
    meeting information for decisionmakers and others

    2002 plan. recipients* needs. However, we have on Social Security and
    Supplemental testified and reported that SSA has not Security Income (SSI)
    through objective and SSA*s plan discusses its responsibility to always
    been sufficiently active in using its

    responsive research, evaluation, and policy address critical short- and
    long- term Social research, evaluation, and policy

    development. Security and Supplemental Security Income

    components to identify areas where issues and contains strategic goals,
    legislative or other changes are needed and

    SSA reported that it met nearly all of its objectives, and performance
    indicators that

    to assist policymakers in developing options fiscal year 2001 goals
    related to the should help the agency play a more active for change. Thus,
    SSA has missed strategic objectives for policy development,

    research, evaluation, and policy opportunities to provide information to
    the research, and program evaluation. Of SSA*s

    development role. Congress and other policymakers.

    eight performance goals, it reported that seven were met and one was not.
    SSA*s plan maintains a performance goal to Performance goals in this area
    generally

    measure the percent of major statistical were output- oriented, such as
    the

    products produced on time. Also, SSA*s preparation of studies and analyses
    to plan contains a customer- oriented goal to support key SSA program
    challenges. gauge user satisfaction with the quality and

    timeliness of its research products, an area For example, SSA reported
    meeting its

    in which we previously recommended that goals to

    SSA take action. In this area, SSA reported that it plans to make
    improvements to its  prepare analyses of proposals to

    user satisfaction measures and to award a strengthen the solvency of Old
    Age, contract for a follow- up survey in 2003. Survivors, and Disability
    Insurance (OASDI) programs,

    For several of SSA*s planned activities, the  analyze complex SSI
    policies,

    agency did not sufficiently define its  establish a baseline of customer
    performance goals to be able to sufficiently satisfaction with the quality
    of its research track its progress. For example, in the areas products,
    and

    of research to support its disability program,  measure the percent of
    statistical products

    SSA stated that it will report on its status to that are issued on time.

    develop a method to validate medical listings. However, the plan does not
    contain SSA reported it did not meet its goal to target dates or
    intermediate milestones to complete a report on welfare reform in track
    progress in this area. SSA*s 2003 plan

    conjunction with its SSI Childhood Disability also lists goals for
    developing and using

    Survey. additional *barometer* measures to assess the effectiveness of the
    OASDI and SSI We were unable to assess if SSA met its

    programs. These measures also did not performance goal to issue a
    periodically specify milestones to help SSA track its updated research and
    policy agenda. SSA

    progress. deleted this performance goal from its fiscal year 2001 report.

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    agency*s Major management challenge

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    Improve SSA*s disability determination

    SSA*s progress related to this challenge is SSA*s plans to address this
    challenge are

    process and return people to work: presented under its customer service,
    included under its customer service, SSA*s disability determination
    process is research and policy development, and

    research and policy development, and time- consuming, expensive,
    fragmented,

    program integrity strategic goals. program integrity strategic goals.
    Overall, and complex. Ongoing weakness in making these strategies and
    goals are similar to timely and accurate determinations result in SSA
    reported that it met about half of its

    SSA*s 2002 plan. beneficiaries often waiting more than 1 year

    performance goals related to making for final disability decisions. Also,
    very few

    disability determinations more timely and For fiscal year 2003, SSA
    maintained its

    beneficiaries leave the rolls to return to accurate. SSA had 11
    performance goals, strategic objective to increase the number of work. The
    costs of administering the of which it reported that 5 were met, 4 were

    disability customers who receive timely Disability Insurance (DI) and SSI
    programs

    not, and data were not available for 2. services and payments. This
    objective reflect the demanding nature of these should help SSA measure
    the percent of processes. In fiscal year 2001, SSA spent

    For example, SSA reported meeting its initial disability claims decisions
    issued almost $4.1 billion or 57 percent of its

    goals for within 120 days and the implementation of administrative budget
    on these programs.

     the number initial disability claims electronic processing of claims by
    2005.

    processed, Also, SSA added two key output indicators

     timeliness of processing initial disability to its 2003 plan for pending
    disability claims

    claims, and pending hearings, which we criticized  the percent of its
    multiyear Continuing

    SSA for deleting from its 2002 plan. These Disability Review (CDR) Plan
    completed,

    key disability process indicators should help and SSA track its progress
    in these areas.  periodic Continuing Disability

    Reviews( CDR) processed. The extent of SSA*s progress will depend on its
    ability to successfully implement

    SSA reported it did not meet its goals to supporting technology, which has
    been process

    challenging for SSA in the past. SSA*s plan  526, 000 hearings (465, 228
    were

    has an indicator to have the software and processed), infrastructure in
    place for electronic  hearings on average in 271 days (average

    processing of disability claims and hearings was 308 days),

    cases, which builds upon its fiscal year 2002  103 hearings cases per
    work year (87

    goal in this area. Despite these were processed), and improvements, SSA*s
    plan still lacks an  93.5 percent of its disability denial overall
    measure of timeliness of the entire

    determinations accurately (rate was 92 disability determination process.
    percent). Regarding the return- to- work area, the plan In addition, SSA*s
    report showed that data contains two performance goals to help were
    unavailable for two performance measure SSA*s long- term success in goals*
    the net accuracy of Disability

    returning people to work: (1) the percent Determination Service and State
    Office of increase in the number of DI beneficiaries Hearings and Appeals
    decisions. These

    whose benefits are suspended/ terminated data were also not available in
    SSA*s fiscal due to substantial gainful activity and (2) the year 2000
    report, which makes measuring

    percent increase in the number of SSI SSA*s year- to- year progress in
    this area difficult.

    In fiscal year 2001, SSA*s performance in the return- to- work area
    dropped somewhat over the previous year. SSA reported that it

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    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    met four of its seven goals in this area in disabled beneficiaries who no
    longer receive

    2001, whereas it reported that it met nearly benefits due to work. SSA*s
    plan showed

    all of them in fiscal year 2000. For example, that it postponed
    implementation of the SSA reported meeting its goals for

    indicators from 2005 to 2007. Moreover,  identifying and defining
    *barometer*

    SSA*s plan did not specify performance measures to assess the
    effectiveness of

    targets for these measures, establishing OASDI programs,

    instead interim indicators to measure the  preparing analyses of the
    effects of OASDI start of work activity. In addition, for the programs on
    different populations, and return- to- work area, SSA*s plan contains
    preparing analyses of alternative return to

    performance goals to monitor its efforts to work strategies.

    (1) validate medical listings and (2) prepare its National Study on Health
    Activity report. SSA reported it did not meet its goals to

    However, the goals for these activities are to  increase the number of
    SSI disabled provide *status reports,* and do not contain beneficiaries
    aged 18 to 64 who are

    time frames for meeting milestones or final working but still receiving
    benefits by completion dates. 27, 061 individuals (increase was 24,816)

    and SSA also has not developed a

     prepare analyses of its National Study on comprehensive strategy, as we
    Health Activity to improve its disability recommended, to develop earlier
    determination process. intervention and work capacity identification
    strategies or sufficiently integrate its returnto-

    For the goal to increase the number of DI work and disability redesign
    efforts. The adult worker beneficiaries who begin a trial

    absence of such a strategy and work period, SSA did not have data for its

    accompanying performance goals will likely fiscal year 2001 report (SSA
    reported in its

    hinder SSA*s future efforts to make 2000 report that it did not meet this
    goal). significant strides in the return- to- work area.

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    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Sustain management and oversight of

    SSA*s progress related to this challenge is SSA*s plans in this area are
    included under

    long- standing, high- risk Supplemental

    addressed under its strategic goal to ensure its strategic goal to ensure
    the integrity of Security Income (SSI) issues:

    the integrity of social security programs with social security programs,
    with zero tolerance

    We designated the SSI program high- risk in zero tolerance for fraud and
    abuse. for fraud and abuse. These strategies and 1997 due to continued
    waste, fraud, and

    goals are similar to SSA*s 2002 plan. mismanagement. SSA reported it met
    its target goals for

    nearly all of its performance goals in this SSA*s plan reaffirms its
    commitment to

    area in fiscal year 2001. Of SSA*s 10 improve SSI program integrity and
    highlights

    performance goals, it reported that 7 were its key goals related to
    improving SSI

    met and data were not available for 3. management. For example, SSA
    increased

    SSA increased and met its targets for 6 of 7 all of its performance goals
    for its strategic

    goals, and attributed this to additional OIG objective to deter, identify,
    and resolve fraud,

    resources and higher than anticipated return namely the on investigative
    and debt collection activities. For example, SSA reported

     dollar amounts reported from SSI meeting its goals for the

    investigations,  number of judicial actions reported, and  amount of SSI
    debt collected,

     number of investigations closed.  number of investigations closed,
    SSI dollar amounts reported from

    SSA revised its goal to track outstanding investigative activities, and

    SSI debt, which we criticized last year, to  SSI nondisability
    redeterminations.

    measure outstanding SSI debt not in a collection arrangement, excluding
    due However, we were unable to assess SSA*s

    process. SSA*s previous goal measured performance in the accuracy of SSI

    outstanding SSI debt in a repayment payments, as SSA did not report this
    data in

    agreement, under appeal, or newly its fiscal year 2001 report. Data for
    this

    detected. However, we are concerned that performance goal was also not
    reported in

    the new measure still does not track actual SSA*s fiscal year 2000 report.
    SSA*s plan debt collected by SSA in a given fiscal year. and report
    acknowledges that this data was

    SSA*s new measure generally contains the not available at the time of
    publication. In same components of the prior measure, prior work however,
    we have recommended which we previously criticized* e. g., the

    that SSA ensure that all key data necessary level of outstanding debt that
    is in a to measure SSA*s progress be included in

    repayment agreement, under appeal, or its reports. newly detected, and
    debt not being collected. SSA also revised its measure of the

    *number of criminal convictions conducted* to instead track the *number of
    judicial actions reported.* SSA reported that it made this revision
    because actions it counted in the universe of *criminal

    convictions,* such as arrests and trial appearances, were actually broader
    than the legal definition of a criminal conviction. While this revision
    helps clarify SSA*s actions we believe that a separate measure on the
    total number of convictions* which is

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    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    the ultimate barometer of SSA*s anti- fraud efforts* should be included in
    its plans.

    Finally, SSA has not yet implemented improvements in its performance plan
    that we cited last year, such as more clearly

    linking its goals and measures for CDRs, investigations, and convictions
    to the SSI program. Nor has SSA developed additional indicators of anti-
    fraud efforts, such as tracking the number of civil and monetary penalties
    levied. These actions would further facilitate SSA*s efforts to improve
    SSI program integrity.

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    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Better position SSA for future service

    While SSA reported that it is working to SSA addresses this challenge
    under its

    delivery challenges: develop detailed plans and strategies to strategic
    goals to deliver citizen- centered SSA faces significant challenges that
    could serve as a roadmap for meeting its future

    world- class service, improve program hamper its ability to provide high-
    level

    resource and workload challenges* integrity, and to strengthen public
    service delivery over the next decade and specified in its long- term
    Service Vision

    understanding of social security programs. beyond. SSA expects to
    experience a

    plan* these plans and strategies were not However, as in its 2002 plan,
    SSA mainly

    significant increase in the demand for clearly linked to it*s 2001
    performance

    discusses meeting its existing customer services as the baby boom
    generation ages.

    report. SSA*s progress related to this service performance goals. While
    SSA*s

    In addition, the imminent retirement of a challenge is contained under its
    strategic

    plan discusses human capital and large portion of SSA*s own workforce over

    goals to deliver customer- responsive worldclass information technology
    issues related to

    the next decade and changing customer service, improve program integrity,
    and

    attaining its customer service strategic expectations for the types of
    services

    to strengthen public understanding of social goals, they are not clearly
    linked to the

    delivered will further strain agency security programs, where it discussed
    attainment of its long- term Service Vision.

    operations. progress in meeting its current customer

    As such, scarce budget resources may be service performance goals. spent
    on initiatives that do not adequately support SSA*s customers and may SSA
    places a high priority on customer

    ultimately result in a degradation of services service and reported that
    it met over half of

    to the public. its fiscal year 2001 goals related to this area. Of SSA*s
    25 performance goals, it reported

    SSA changed and deleted several that 15 were met, 4 were not, and data
    were

    performance goals in its fiscal year 2003 not available for 6. plan,
    potentially detracting from its customer service functions. For example,
    SSA

    For example, SSA reported meeting its deleted its goal to measure the
    percent of goals for

    the public without an appointment who waited 30 minutes or less. SSA
    reported  the percentage of earnings posted that it eliminated this goal
    because it is now correctly,

    emphasizing services it provides to the  the percentage of OASI and SSI
    Aged public via an appointment. However, SSA*s claims processed within 14
    days of filing,

    plan did not indicate that it analyzed  the percentage of the public
    without an customer needs, workloads, or service appointment waiting 30
    minutes or less,

    preferences, to warrant this deletion. This  the number of Social
    Security number

    deletion may negatively affect SSA*s ability requests processed,

    to monitor its services to people who do  the percentage of employee
    reports (W- 2s) business with SSA without an appointment. filed
    electronically, and

    SSA also deleted two other goals without  the percentage of its customer-
    initiated explanation measure: (1) telephone services services available
    via the Internet or by of its field offices, which was contained in its

    telephone. fiscal year 2002 plan, (2) the aged OASI and

    SSI claims introduced in its fiscal year 2002 SSA reported it did not* but
    came close

    plan. The deletions may hinder SSA*s ability to* meeting its goals to

    to track progress in these areas.  have 82 percent of core business

    In addition, the 2003 plan maintains a goal, customers rate overall
    service as

    which we criticized last year* the dollar *excellent,* *very good,* or
    *good* (81

    accuracy of OASI payment outlays and the percent gave SSA this rating),

    dollar accuracy of DI payment outlays. Aggregating and reporting on these
    separate and distinct programs in a single

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

     have 30 percent of core business indicator may affect SSA*s ability to

    customers rate overall service as sufficiently monitor and manage payment

    *excellent* (28 percent gave SSA this accuracy and obscure SSA*s actual

    rating), performance in either program. Also, in our

     have 85 percent of the public with an prior work we have recommended
    that SSA appointment wait 10 minutes or less

    develop a performance plan goal to assess (performance was 84. 4 percent),

    customer satisfaction with the clarity of its  process 3,125,000
    Retirement and

    notices. a However, SSA deleted a measure Survivors Insurance (RSI) claims
    (actual

    of the clarity of its notices in fiscal year was 3,092,743), and

    2000, and its 2003 plan still does not include  handle 60 million 800-
    number calls (actual a goal to track SSA*s work in this area. was 59.3
    million). SSA revised several of its goals in the

    SSA*s 2003 plan contains an appendix that customer service area. For
    example, SSA

    lists initiatives related to customer service, did not meet its lowered
    goals for: (1) the such as improving its 800 number service, percentage of
    core business customers improving field office reception and waiting
    rating overall service as *excellent,* *very

    times, and electronic payment services. good,* or *good* and (2) the
    percentage of

    However, the appendix does not contain the core business customers rating
    overall

    descriptions and implementation schedules service as *excellent.* for
    these initiatives, contained in its 2002

    plan, which makes it difficult to track SSA*s For six performance goals
    SSA did not

    progress in the area. report data for us to assess performance (SSA also
    did not report on these indicators

    SSA has begun taking concrete steps to in its fiscal year 2000 report):
    address its service delivery challenges. However, without a long- term
    service  service accuracy of its 800- number,

    delivery plan, it cannot ensure that  payment service accuracy of its
    800- investment in its workforce and technologies number,

    are consistent with and fully support its  the percentage of OASDI
    payments

    future approaches to service delivery. The without overpayments, fiscal
    year 2003 plan does not include  the percentage of OASDI payments

    specific objectives and goals for developing without underpayments,

    such a plan.  the percentage of employers rating its overall services as
    *excellent,* *very good,* or *good,* and  the percentage of employers
    rating its

    overall services as *excellent.* With the exception of its employer-
    related customer satisfaction goals, SSA noted these data would be
    reported in its fiscal year 2002 report.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Further strengthen controls to protect

    See discussion under information security See discussion under information
    security

    SSA information.

    governmentwide high- risk area. governmentwide high- risk area. See
    discussion under information security governmentwide high- risk area,
    above.

    a U. S. General Accounting Office, Social Security Administration:
    Longstanding Problems in SSA*s Letters to the Public Need to Be Fixed,
    GAO/ HEHS- 00- 179 (Washington, D. C.: Sept. 26, 2000).

    Observations on the Department of State*s Efforts to Address Its Major
    Management

    Appendi x XIX

    Challenges The following table identifies the major management challenges
    confronting the Department of State (State), including the governmentwide
    high- risk areas of strategic human capital management and information
    security. The first column lists the challenges identified by our office.
    The second column discusses what progress, as discussed in its fiscal year
    2001 performance report, State made in resolving its challenges. The third
    column discusses the extent to which State*s fiscal year 2003 performance
    plan includes performance goals and measures to address the challenges
    that we identified.

    We found that State*s 2001 performance report discussed its progress in
    meeting all of its challenges; however, it provided little information on
    what is being done to realign the U. S. workforce overseas with the U. S.
    government*s mission (also referred to as rightsizing, the process for
    determining the appropriate size and locations of the U. S. overseas
    presence).

    Of the agency*s seven major management challenges, its performance plan
    had 1. goals and measures that were directly related to six of the
    challenges,

    and 2. goals and measures that were indirectly applicable to one of the

    challenges, which was  realigning the U. S. workforce overseas. 7

    7 State had an indirectly related goal, but no measures or strategies to
    address this challenges.

    Table 20: Major Management Challenges for State Progress in resolving
    major management

    Applicable goals, measures, and challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s fiscal Major management challenge

    year 2001 performance report year 2003 performance plan

    GAO- designated governmentwide high risk Strategic human capital
    management:

    In its performance report, the department State*s fiscal year 2003
    performance plan

    GAO has identified shortcomings at stated that in fiscal 2001 it began to
    lay the includes three performance goals with multiple agencies involving
    key elements of foundations for its 3- year diplomatic

    measurable indicators. For its first goal* to modern strategic human
    capital readiness initiative scheduled to begin in

    hire and retain an adequate number of management, including strategic
    human

    fiscal year 2002. It added that this initiative employees* State
    established three key capital planning and organizational

    will rectify a severe imbalance between its performance indicators and set
    five alignment; leadership continuity and

    workforce and its workload. According to accompanying projected targets
    (three for

    succession planning; acquiring and the report, State met its fiscal 2001
    targets

    the first indicator). The five targets are (1) developing a staff whose
    size, skills, and

    for Foreign Service hiring and began 20,000 individuals will take the
    Foreign

    deployment meet agency needs; and preparations for hiring an additional 1,
    158 Service Written Exam, (2) 7, 000 of these test

    creating results- oriented organizational foreign and civil service
    employees over 3 takers will be minorities, (3) 3,300 applicants

    cultures. a years. These additional personnel will allow

    will participate in the alternate exam program it to fill vacancies,
    create a *training float*

    for specialists, (4) 1, 530 people will apply to (this will allow people
    to be trained without

    the student and specialist programs, and (5) leaving a position vacant),
    provide backup

    State will hire 400 employees above normal personnel to respond to crises,
    and

    intake to meet its priorities and provide a minimize staffing gaps.
    training float (it did not explain what normal intake is). The State
    Department stated that

    State had four Diplomatic Readiness in addition to the 2003 performance
    plan, it

    performance goals that addressed human has other indicators that track
    human capital

    capital. The first is that the department will goals. State*s performance
    plan indicates

    hire and retain an adequate number of that the department will take
    appropriate

    employees. The three performance steps to ensure that Americans are

    indicators deal with number of registrants for satisfactorily represented
    in multilateral the Foreign Service Written Exam and organizations.
    However, the plan does not

    alternate recruitment programs, hiring to provide indicators to measure
    this effort. attrition (approximately 800), and

    According to State, the Bureau of resignation rates. State exceeded the
    International Organization Affairs tracks targets for all three
    indicators.

    progress toward achieving it through appropriate performance indicators.
    The second performance goal is that State will develop and implement
    training and

    The second goal* to develop and implement professional development
    programs and training and professional development make them available to
    all full- time

    programs for all full- time employees employees throughout their careers.
    This

    throughout their careers* sets two goal had three indicators* a 5 percent

    performance indicators: (1) progress toward increase in the number of
    civil service a 3- year goal to provide appropriate employees in career
    development programs,

    leadership and management training to junior 1,623 foreign service
    nationals trained in

    and midlevel officers and (2) a percentage of crisis management, and
    maintaining or

    employees assigned to language- designated improving the current rate of
    66 percent of

    positions who meet the requirement of the language students who are
    assigned for at

    position. For 2003, State projects that 25 least the recommended amount of
    time and percent of targeted employees will receive

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s fiscal

    Major management challenge year 2001 performance report

    year 2003 performance plan

    who meet their training goals. The appropriate leadership and management
    department did not meet the target for the training, and that the
    department will first two indicators but met the target for the

    maintain or improve the current percentage last indicator.

    of employees in language- designated positions that meet the requirement,
    which The third performance goal is that the

    State reported at 83 percent in 2001. Foreign Service Institute will be
    configured and equipped to provide and support the full

    The third goal* work- life programs* has two range of its distance-
    learning offerings and

    new performance indicators: (1) the results that the National Foreign
    Affairs Training

    of an employee satisfaction survey and (2) Center will be adequate to
    support staff and

    the percentage of eligible family members student needs. The two
    indicators involved employed in local economies overseas converting the
    first analog multimedia

    through the Spouse Networking Assistance laboratory to digital and
    initiating a formal Program. For 2003, State plans to use the capacity
    review of the training center. It

    results of the employee survey to evaluate exceeded the first target but
    only partially and develop appropriate work- life programs met the second
    target (it undertook a review and double the number of spouses employed of
    junior officer orientation space, with a full on the local economy. study
    pending).

    The fourth performance goal is to maintain current work- life programs and
    introduce new programs to improve the quality of the

    workplace for all employees, and to improve the quality of the lives of
    Foreign Service employees and their dependents serving abroad. The one
    performance indicator, with three quantifiable targets, measures

    Foreign Service specialist and generalist and civil service resignation
    rates. State exceeded all three targets. Indicators did not address
    whether work- life programs were being maintained or if new ones were
    being introduced, or how quality of life overseas was improved.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s fiscal

    Major management challenge year 2001 performance report

    year 2003 performance plan Information security: Our January 2001

    A comprehensive information protection The 2003 plan does not have a
    separate

    high- risk update noted that agencies* and program includes many elements,
    according

    performance goal addressing information governmentwide efforts to
    strengthen

    to State*s report, including personnel security. However, one of the
    performance

    information security have gained investigations for security clearances,
    indicators under the performance goal of

    momentum and expanded. Nevertheless, counterintelligence investigations
    and having safe, secure, and functional facilities

    recent audits continue to show that federal briefings, and computer
    security. The report addresses information security* the number

    computer systems are riddled with added that the department has made of
    periodic reinvestigations of security weaknesses that make them highly

    substantial progress on information clearances undertaken per month. The

    vulnerable to computer- based attacks and technology security by
    implementing target for this indicator is 300 per month. place a broad
    range of critical operations

    incident handling and response teams, State commented that it is drafting
    a and assets at risk of fraud, misuse, and incident handling units,
    network monitoring performance goal for its fiscal year 2005 plan
    disruption. Further, the events of and threat analysis centers, and
    effective that addresses both employee security and September 11, 2001,
    underscored the

    working relationships with other federal information security. need to
    protect America*s cyberspace

    incident response centers. against potentially disastrous cyber In
    discussing progress on the President*s attacks* attacks that could also be
    However, State*s fiscal year 2001

    Management Agenda, the plan stated that coordinated to coincide with
    physical

    independent auditor*s report, completed in under the initiative to expand
    electronic terrorist attacks to maximize the impact of

    early 2002, stated that information systems government, the department
    will develop

    both. security was a material weakness that could

    security corrective action plans for any be exploited, possibly
    compromising the

    programs and systems with security information State uses to prepare its

    weaknesses. financial statements. The auditor*s report identified
    significant information system The National Institute of Standards and

    security weaknesses that made the Technology developed a security
    assessment

    department*s systems networks for domestic framework and related tools
    that agencies

    operations vulnerable to unauthorized can use in determining the status of
    their access. It added that although State had

    information security programs. In addition, closed the recommendations we
    made in

    Office of Management and Budget (OMB) 1998 in fiscal year 2000, this did
    not

    guidance for fiscal year 2002 under the demonstrate that the material
    weakness in Government Information Security Reform Act this area had
    necessarily been corrected.

    (GISRA) requires agencies to use tools developed by the Institute to
    evaluate the State*s fiscal year 2001 performance report security of
    unclassified systems or groups of stated that the department had one

    systems. This guidance also requires specific performance goal, that all
    classified and

    performance measures, as well as corrective sensitive information overseas
    and in

    action plans with quarterly status updates. domestic facilities be
    safeguarded from physical and technical compromise. This goal has four
    performance indicators. State*s fiscal 2001 actual performance exceeded
    its targets percentage of cleared department employees that have received
    an annual security briefing and percentage of network intrusion detection
    systems for its primary

    unclassified computer system in place domestically. It met the target for
    percentage of periodic reinvestigations being done to meet the 5- year
    requirement.

    It did not meet its target for percentage of network intrusion detection
    systems on its unclassified system abroad.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s fiscal

    Major management challenge year 2001 performance report

    year 2003 performance plan GAO- designated major management challenge

    Improve the security and maintenance

    Since 1998, the department stated that it The department has embarked on a
    major

    of U. S. facilities overseas and enhance

    has made significant strides in improving capital construction program
    aimed at

    the management of overseas security

    security overseas. State added that it has replacing many overseas
    facilities; security of

    programs: State faces many challenges completed 90 percent of the security

    U. S. installations is also being improved. and risks in its program to
    replace its most

    upgrade projects begun under the One of State*s four infrastructure and

    vulnerable facilities, improve security at all Emergency Security
    Amendment of 1998,

    operations performance goals* to have safe, posts, and improve facility
    maintenance. has hired additional security personnel, and

    secure, and functional facilities* addresses Attacks on U. S. embassies
    and consulates

    has expanded its capital building program. this challenge.

    in recent years and the events of September 11 underscore the importance

    State*s report included two strategic goals State*s plan has seven
    performance

    of addressing this management challenge. that support overseas security
    and capital indicators for this goal: (1) number of periodic

    construction, and rehabilitation. The first reinvestigations undertaken,
    (2) the

    had a performance goal that security for percentage of 38 projects funded
    through the formerly lower- threat posts is heightened to

    Emergency Security Appropriation that have meet standards used at higher-
    threat posts. been completed, (3) the number of foreign This goal had four
    performance indicators,

    service nationals trained in crisis three of which State reported that it
    met.

    management, (4) the percentage of access They were percentage of 38
    security

    control system and newly designed building upgrade projects that have been
    completed,

    passes in place at State Department percentage of posts with technical
    security

    headquarters, (5) the percentage of projects equipment upgrades, and
    number of

    completed under the Physical Security Accountability Review Boards
    convened that Upgrade Program, (6) the number of capital found that a
    serious injury, loss of life, or

    projects awarded as part of the Long Range significant destruction at a U.
    S. mission was

    Overseas Building Plan, and (7) the number due to inadequate security
    management or of major renovation projects started in countermeasures.
    State did not meet the

    construction. While these indicators reflect fourth goal, number of
    foreign service an effort to quantify progress made towards nationals
    trained in crisis management. completing various projects, they do not

    demonstrate the impact that these activities State also has three
    performance goals

    can be expected to have in terms of under a second strategic goal dealing
    with protecting employees and facilities. overseas facilities. These
    performance goals are to continue the worldwide security

    upgrade program started in fiscal 1999; expeditiously relocate U. S.
    government staff into safe, secure, and functional facilities; and extend,
    through strategic and timely rehabilitation, the useful lives of
    facilities and enhance their functionality. State had seven

    performance indicators supporting these goals, addressing the status of
    (1) the physical security upgrade program, (2) new

    construction projects, and (3) major rehabilitation projects. The report
    said

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s fiscal

    Major management challenge year 2001 performance report

    year 2003 performance plan

    State*s performance goals were partially achieved. It met the targets for
    two of the indicators, while falling below the targets on five indicators.
    The report contains no performance goals or indicators that specifically
    address facility

    maintenance, although both GAO and State*s Office of Inspector General
    (OIG) have identified it as a major long- standing management challenge.

    Improve the visa processing system and

    State reported two performance goals under The fiscal year 2003
    performance plan

    enhance border security: Since the strategic goal to facilitate travel and
    includes a strategic goal, travel and

    September 11, 2001, the administration immigration to the United States of
    migration. State*s single performance goal has taken steps to strengthen
    the visa legitimate visa applicants, and the denial of under this
    strategic goal is timely and process, but will need to take additional
    visas to ineligible applicants. The two effective visa issuance and a
    reduction of actions, including reassessing staffing performance goals are
    to meet anticipated visa fraud. Four performance indicators and
    requirements, revamping and expanding increases in demand for nonimmigrant
    and

    targets were established: (1) develop a consular training, and using the
    latest

    immigrant visas and reduce the risk of biometrics collection program for
    U. S. visas, technology. illegitimate entry of aliens hostile to our

    with development work on worldwide interest by using all- source
    information from

    biometrics collection expected to begin in throughout the U. S. government
    to identify

    2003, (2) provide six other U. S. agencies foreign terrorists and
    criminals. The report access to the Consular Consolidated lists two
    performance indicators linked to Database, (3) process 715, 000 immigrant
    both performance goals. They are the

    visa cases, and (4) process 7.6 million numbers of immigrant and
    nonimmigrant

    nonimmigrant visa cases. The department visa cases processed. The number
    for

    added that it has taken numerous actions to immigrant visas processed fell
    below the *improve the visa processing system and target, while the number
    for nonimmigrant

    enhance border security.* For example, it visa cases was above the target.
    However, said that it is now providing real- time transfer using number of
    cases as a performance

    of visa issuance information to the indicator does not explain how State
    will Immigration and Naturalization Service and meet anticipated increases
    in demand. has entered nearly 8 million law enforcement Also, neither of
    the indicators offers an

    records from a Federal Bureau of explanation on how this will help State

    Investigation database into the consular reduce the risk of illegitimate
    entry.

    name check system.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s fiscal

    Major management challenge year 2001 performance report

    year 2003 performance plan Realign the U. S. workforce overseas

    In its report, State said that its overall OMB has directed all agencies
    operating with the U. S. government*s mission: The

    workforce planning process begins with the abroad to rightsize their
    presence overseas U. S. presence overseas needs to be setting of
    priorities through the strategic

    and, in coordination with State and other U. S. adjusted to reflect the
    emerging economic, planning and budgeting process, which agencies, is
    working to develop a process for political, security, and technological

    ensures that its staffing is the right size for agencies to follow in this
    effort. We have requirements of the 21 st century.

    its mission. It further stated that OMB has developed a general framework
    for

    incorporated interagency rightsizing rightsizing b that addresses
    security, agency overseas as one of the initiatives in the

    mission, and cost considerations, and we President*s Management Agenda.
    have recommended that this framework be used in formulating the
    government*s The administration*s rightsizing initiatives approach to
    rightsizing the overseas aim to reconfigure U. S. overseas staff to the
    presence. minimum number necessary to meet U. S. foreign policy goals.
    Continued high- level

    The 2003 plan does not include goals or cooperation and commitment from
    all measures that specifically address this participating agencies will be
    needed to

    challenge. However, the agency*s strategic make any rightsizing effort
    work given

    goal for human resources states that its State*s limited authority and
    influence over

    workforce be at an optimum number, the staffing decisions of other
    agencies

    distribution, and configuration to respond to operating overseas. the
    foreign policy priorities identified in the

    strategic plan. State did not include any performance goals or measures
    for rightsizing in its 2001

    State commented that it believes it is too performance report. early to
    have indicators and targets for this OMB- led rightsizing process.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s fiscal

    Major management challenge year 2001 performance report

    year 2003 performance plan Enhance overseas communication,

    State continues to organize its efforts in this State*s performance goal
    for information information technology, and knowledge area around five
    strategies: (1) develop, resources is to provide modern, secure, and

    management capabilities: U. S. agencies deploy, and sustain a secure,
    commercialstyle

    advantageous IT to support the mission of located overseas have great
    difficulty

    global information technology (IT) the department.

    communicating electronically with each network and infrastructure, (2)
    provide other and sharing available information.

    systems and tools to ensure ready access to State has four performance
    indicators international affairs applications and

    relating to information resources. By 2003, information, (3) develop a
    modern,

    State*s projected performance includes (1) integrated messaging approach
    and

    extending its primary unclassified but capability, (4) leverage IT to
    streamline sensitive network to 100 percent of existing administrative and
    IT operations and sites worldwide and improving network facilities, and
    (5) sustain a trained productive availability, projected to increase to 98
    workforce. percent in 2001, (2) replacing classified and

    unclassified computers older than 4 years at State*s report includes four
    performance

    all overseas posts and for employees indicators to address the five
    strategies;

    needing them, (3) reducing the average however, the indicators are not
    directly

    number of servers per post and initiating the related to any specific
    strategy. The use of regional/ central servers, and (4) department
    responded that the performance

    implementing the pilot and beginning indicators are related to and support
    the

    deployment of a system to replace the department*s information resources

    current outmoded cable system. performance goal, to provide secure,
    advantageous, commercial- quality IT support for the full range of
    international affairs activities of the United States.

    The first indicator is percentage of commercial networking facilities
    available for unclassified and classified processing completed. However,
    the target was to conduct studies to move toward commercialstyle

    networking, which does not address the indicator. State said it has
    continued interest in moving toward commercial- style networking and has
    made some progress toward that goal, but it did not address either the
    performance indicator or the fiscal 2001 target. The second indicator is
    the

    percentage of classified and unclassified desktop computers older than 4
    years. The target was to develop a plan to refresh equipment, but does not
    discuss equipment age. State reported that it plans to replace both
    classified and unclassified hardware. State did not meet the target for
    the third indicator, which was that the average post

    would have 16 servers. The last indicator is progress toward elimination
    of the current cable system and processes, but the target

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s fiscal

    Major management challenge year 2001 performance report

    year 2003 performance plan

    is for no improvement. However, the department reported that it did make
    significant progress during fiscal 2001 in

    preparing the groundwork for the elimination of the current cable system.

    Improve financial management Although the department*s principal financial
    State*s plan has one performance goal that

    capabilities: GAO has reported that one of statements for fiscal years
    2000 and 2001

    calls for adequate funding for the department State*s long- standing
    shortcomings has

    received an unqualified opinion, the that is based on results- oriented
    budgeting,

    been the absence of an effective financial independent auditor identified
    several

    effective financial management systems, and management system. significant
    outstanding issues in State*s

    demonstrated financial accountability. State

    Accountability Report for fiscal year 2001. c has several performance
    indicators under These include (1) the security of the

    this goal: (1) complete pilot testing of the department*s information
    systems networks Central Financial Planning System and begin for domestic
    operations that include the

    phased deployment, (2) issue the fiscal year financial management systems
    (based on

    2002 financial statements on time with an GAO findings), (2) access
    vulnerabilities and

    unqualified opinion, (3) submit the 2002 other weaknesses with the Paris
    Financial

    Combined Performance and Accountability

    Service Center*s Accounting and Disbursing

    Report on time and receive the Certificate of

    System, (3) internal control weaknesses

    Excellence in Accountability Reporting for the related to the management
    of unliquidated report, (4) relocate the domestic processing obligations,
    (4) weaknesses related to for American payroll and foreign service
    managerial cost accounting and State*s

    pension to Charleston, and switch posts financial and accounting systems,
    and (5)

    formerly serviced by the Paris Financial the inadequacy of the
    department*s financial

    Services Center to Charleston and Bangkok, management systems. The
    independent

    (5) direct input of the department*s and other auditor*s report also
    stated that the

    agencies* budget requests into the department*s financial management

    International Affairs database, and (6) systems do not comply with six
    federal laws automate the mission performance plan and regulations,
    including the Chief

    process completed and develop pilot for Financial Officer*s Act of 1990.
    These are

    automation of bureau plans. basically the same findings the independent
    auditor reported last year.

    The department responded in the accountability report that it has taken
    steps to address these weaknesses. State is holding periodic meetings with
    staff

    members of the independent audit firm to identify and coordinate actions
    needed to resolve the weaknesses and monitor

    progress. Specifically, the department stated it has made significant
    progress in resolving problems with the Paris Financial Service Center*s
    Accounting and Disbursing system by closing 19 of the 25 recommendations
    (they are working to close the remaining six).

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s fiscal

    Major management challenge year 2001 performance report

    year 2003 performance plan

    State reported one performance goal dealing with improving financial
    management capabilities, to improve financial management with demonstrated
    financial accountability, which had 12 performance indicators. For 11 of
    the 12 indicators, the actual figures for fiscal 2001

    equaled or exceeded the targets. For the 12 th indicator, which was
    qualitative, State reported that the goal was achieved without including
    what was done to meet this goal or why it believed the goal was achieved.

    a U. S. General Accounting Office, Staffing Shortfalls and Ineffective
    Assignment System Compromise Diplomatic Readiness at Hardship Posts, GAO-
    02- 626 (Washington, D. C.: June 18, 2002). b U. S. General Accounting
    Office, Overseas Presence: Framework for Assessing Embassy Staff Levels
    Can Support Rightsizing Initiatives, GAO- 02- 780 (Washington, D. C.: July
    26, 2002). c U. S. Department of State, Accountability Report, Fiscal Year
    2001 (Washington, D. C.: February

    2002).

    Observations on the Department of Transportation*s Efforts to Address Its
    Major

    Appendi x XX

    Management Challenges The following table identifies the major management
    challenges confronting the Department of Transportation*s (DOT) in the
    governmentwide high- risk areas of strategic human capital management and
    information security. The first column lists the challenges identified by
    our office. The second column discusses what progress, as discussed in its
    fiscal year 2001 performance report, DOT made in resolving its challenges.
    The third column discusses the extent to which DOT*s fiscal year 2003
    performance plan includes performance goals and measures to address the
    challenges that we identified. We found that DOT*s performance report

    discussed, in varying levels of detail, the agency*s progress in resolving
    all of its challenges.

    Of the agency*s eight major management challenges, its performance plan
    had 1. goals and measures that were directly related to three of the

    challenges, 2. no goals and measures related to four of the challenges,
    but discussed

    strategies to address the challenges, which were  strategic human capital
    management,  acquisitions and disposals,  financial accountability, and
     enhance competition and consumer protection in aviation and freight

    rail industries to ensure reasonable fares, rates, and service 3. no
    goals, measures or strategies to address one of the challenges,

    which was  strengthen the financial condition of Amtrak.

    Table 21: Major Management Challenges for DOT Progress in resolving major
    management

    Applicable goals, measures, and challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s Major management challenge year 2001
    performance report

    fiscal year 2003 performance plan GAO- designated governmentwide high risk

    Strategic human capital management: DOT*s report describes actions to
    staff the DOT*s plan provides no performance goals

    GAO has identified shortcomings at multiple new Transportation Security
    Administration or measures for this management

    agencies involving key elements of modern (TSA) and a workforce
    reinvention effort in challenge. The plan recognizes that by the strategic
    human capital management, the Coast Guard to take advantage of new

    fall of 2006, large numbers of DOT including strategic human capital
    planning

    information technology and the commercial employees will become eligible
    for

    and organizational alignment; leadership supply chain marketplace. The
    report also

    retirement and describes a number of continuity and succession planning;
    describes FAA*s efforts to redirect 37,300 actions planned to address this
    issue, acquiring and developing a staff whose size, employees into a
    results- oriented Air Traffic

    including skills, and deployment meet agency needs;

    Organization, freeing most of FAA to  competitive sourcing and
    restructuring, and creating results- oriented organizational

    manage better and modernize faster and  revising the human resources
    strategic

    cultures. more efficiently. action plan to align with the President*s

    Management Agenda and DOT*s strategic The specific concern with DOT that
    we plan and budget process, identified in our January 2001 report

     employing the individual performance is the *stovepiped* culture at the
    Federal assessment system to ensure executive Aviation Administration
    (FAA), which has

    performance accountability, and been one of several underlying

     expanding telecommuting. causes of acquisition problems in the agency*s
    multibillion dollar modernization program. The program has experienced
    cost overruns, schedule delays, and significant performance shortfalls.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Information security: Our January 2001 DOT*s report describes a number of
    steps

    DOT*s plan describes a number of actions high- risk update noted that
    agencies* and

    that DOT took to address information that DOT plans to take in 2003,
    including

    governmentwide efforts to strengthen technology (IT) security, including

     achieving at least a one grade information security have gained momentum
     implementing a DOT- wide IT security

    improvement in federal classifications for and expanded. Nevertheless,
    recent audits

    program and establishing an IT security the IT security program;

    continue to show federal computer systems committee to provide a forum for

     fully integrating IT security into egovernment, are riddled with
    weaknesses that make them

    departmentwide discussions of IT security capital planning, and

    highly vulnerable to computer- based attacks issues,

    enterprise architecture processes; and place a broad range of critical
    completing a comprehensive annual  establishing standards for
    authentication operations and assets at risk of fraud,

    agency IT security program review of DOT, and digital signatures
    (reviewing misuse, and disruption. Further, the events

    in accordance with the Government technologies such as Public Key

    of September 11, 2001, underscored the Information Security Reform Act
    (GISRA),

    Infrastructure (PKI) and biometrics) for the need to protect America*s
    cyberspace

    and department that contribute to operational against potentially
    disastrous cyber

     preparing a plan and template for updating and economic efficiencies;
    attacks* attacks that could also be

    the inventory of critical infrastructure  establishing and operating a
    coordinated to coincide with physical

    systems with specific plans for departmentwide monitoring and reporting

    terrorist attacks to maximize the impact of assessment, remediation,
    certification, and

    capability; both.

    authorization.  completing an update of the department IT

    security governance structure;  completing an inventory of critical
    infrastructure systems and developing a

    plan for completing and certifying/ accrediting those systems; and
    developing a PKI prototype, including digital signature capabilities, for
    use within the department.

    In addition to Government Performance and Results Act reporting, the
    Office of Management and Budget*s guidance for

    fiscal year 2002 reporting under GISRA requires specific performance
    measures, as well as corrective action plans with quarterly

    status updates.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    GAO- designated major management challenge

    Improve the safety and security of air, (1) DOT*s report indicated that
    for fiscal year (1) According to DOT*s plan, DOT*s goals

    highway, and pipeline transportation, 2001, FAA are to (1) by 2007, reduce
    the commercial

    including

     met its performance targets for reducing aviation fatal accident rate
    per 100,000

    the rate of fatal aviation accidents a and the departures by 80 percent,
    from a 3- year (1) the implementation of certain aviation number of
    general aviation fatalities, and

    average baseline (for 1994 through 1996) of safety programs,

     did not meet its supplementary 0.051 fatal accidents per 100,000 (2) the
    screening of passengers at airports performance targets for operational
    errors

    departures; and (2) reduce the number of for dangerous objects,

    per 1 million activities or the number of general aviation fatal
    accidents.

    (3) the security of air traffic control computer runway incursions.

    systems and the facilities that house them, The plan includes the
    following 2003

    (4) truck safety initiatives, and According to the report, FAA has (1) in
    performance targets:

    (5) the evaluation of pipeline safety coordination with the aviation
    industry,  the number of fatal commercial aviation

    measures and the involvement of states in formed a Joint Steering
    Committee to focus

    accidents, and the safety programs. on a number of causal factors common
    to  the number of fatal general aviation commercial aviation and (2) is
    using Special

    accidents. Operations Specifications that permit carriers to use advanced
    landing approach

    The report also includes the following procedures to reduce the risk of
    certain

    supplementary performance measures: accidents.

     the number of operational errors per 1 million activities, and (2) The
    terrorist attacks of September 11,

     the number of runway incursions per 2001, changed the landscape for this

    100,000 operations. management challenge, which was established prior to
    that date. DOT*s 2001 The plan discusses a number of strategies report
    states that, in light of those events,

    to improve performance, including DOT did not meet its performance target
    on

     developing a System Approach for Safety the detection rate for
    explosives and

    Oversight to integrate safety information weapons that may be brought
    aboard

    systems and, in turn, enhance FAA*s ability aircraft. to forecast,
    identify, and target critical safety issues; (3) The report does not
    provide specific  enhancing the Online Aviation Safety performance
    measures for securing air

    Inspection System to provide more traffic control systems. The report
    accurate data, leading to improved safetyrelated addresses FAA* s air
    traffic control system decision- making; security within the broader
    context of critical  reducing controlled flight into terrain
    transportation infrastructure protection. accidents in general aviation
    through Concerning protection of FAA*s facilities, the improved pilot
    education, revised test report describes FAA*s concept of

    standards and training materials, and operations, approach, and major
    milestones

    conducting a national media campaign to focusing on protecting its
    operational promote pilot awareness of this type of capability. The report
    also discusses accident and conducting risk- mitigation

    ongoing protection efforts, including training; and

     authorizing and certifying computer  enhancing air traffic controller
    training,

    security systems, deploying modern displays, and improving communication
    systems to reduce

    operational errors.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

     training FAA personnel in security (2) According to the plan, DOT*s
    goals are to

    awareness and vulnerability assessments, (1) ensure that no terrorist or
    other individual and is successful in causing harm or significant
    improving intrusion detection capability.

    disruption to the aviation system and (2) reduce passenger waiting time at
    screening To protect other critical transportation checkpoints to no more
    than 10 minutes, 95

    infrastructure, DOT percent of the time.

     conducted 36,000 visits to identify The plan states that the
    Transportation potential weaknesses in carrier security

    Security Administration is developing longterm programs and report
    potentially serious

    performance measures for aviation security issues to appropriate
    authorities;

    security and screening efficiency. In and

    addition the plan states that DOT will  developed 280 findings of
    suspicious establish a performance target for

    activities resulting from security visits and passenger and cargo
    screening

    made 126 referrals to the Federal Bureau effectiveness and efficiency in
    the fall of of Investigation.

    2002. The plan also lays out targets for having federal employees conduct

    (4) The report states that based on passenger and baggage security
    screening preliminary information, DOT did not meet

    and having explosive detection technology its performance target for
    truck- related in place at 429 airports.

    fatalities and injuries. According to the The plan states that
    Transportation Security

    report, DOT has continued its efforts aimed Administration (TSA) is adding
    intelligence

    at motor carrier safety enforcement, safety personnel to better assess the
    terrorist

    research, and improving crash data and threat; improving technology for
    detecting

    commercial driver licensing. In addition, the explosive devices and
    weapons; and

    report states that DOT is working on purchasing and deploying advanced
    security

    rulemakings on drivers* hours of service equipment for airports and
    smaller, less

    regulations, among other things and staffs a expensive explosive detection
    systems for 24- hour safety telephone hotline. The report less- busy
    airports and air carrier stations.

    does not discuss DOT*s efforts to staff key (3) The plan provides no
    performance goals positions in the Federal Motor Carrier Safety

    or measures for this management Administration, which was a specific

    challenge. DOT*s key 2003 milestones for concern we mentioned under this
    information security, which encompass FAA

    management challenge. computer systems, are discussed above (5) DOT met
    its supplementary performance

    under the governmentwide management target for the number of failures of
    natural

    challenge concerning information security. gas transmission pipelines.
    According to

    (4) According to the performance plan, the report, DOT is establishing a
    new

    DOT*s goal is to reduce large truck- related performance measure for the
    number of fatalities by 50 percent from 5, 374 to 2, 687 times pipelines
    have been damaged during

    in 2009. excavations. The report also states that

    DOT has finalized a rule that requires The plan contains performance
    measures hazardous liquid pipeline operators to

    for the number of fatalities in crashes provide better information on
    causes of involving large trucks and a supplementary

    failures, and has proposed rules to require performance measure on the
    number and these operators to file annual reports, which rate (per 100
    million commercial vehicle are needed to improve trend analysis. miles
    traveled) of injured persons in crashes

    involving large trucks.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    The plan states that DOT*s strategies to improve large truck safety
    involve working through its administrations to, among other

    things, study the causes of crashes, improve crash data, monitor carrier
    safety performance, and conduct public safety awareness campaigns.

    (5) The plan provides a performance goal to, by 2003, reduce excavation
    damages to all types of pipelines by 10 percent from 2000 levels.

    The plan includes a performance measure for the number of times natural
    gas and hazardous liquid pipelines are damaged during excavations and a
    supplementary performance measure for failures of natural gas transmission
    pipelines.

    According to the plan, DOT, through its Research and Special Programs
    Administration, will improve state partnerships by improving data
    integration to permit targeting of safety efforts to high- risk

    areas and working with states on their safety oversight efforts.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Acquisitions and disposals: Enhance (1) DOT*s report provides
    supplementary (1) DOT*s plan states that beginning in 2002,

    major acquisitions and disposals concerning performance measures for
    aviation delays

    FAA will use percentage of on- time flights as per 100,000 activities,
    which FAA did not

    a measure of aviation delay. To reduce (1) FAA*s air traffic control
    modernization meet, and for a cumulative increase in

    delays, FAA plans to program,

    throughput during peak periods at certain  work with airlines and
    airports in planning (2) the Coast Guard*s Deepwater Project, major
    airports and for a cumulative increase airlines* operations at congested
    hubs, and

    in direct routings for the en route flight  modernize the airspace system
    and

    (3) the Maritime Administration*s surplus phase, which FAA did meet. The
    report shorten the time for approving plans and

    ship disposal program. discusses several broad air traffic control for
    building new runways,

    modernization efforts to accommodate air  insert specific technologies to
    improve

    traffic growth, but does not directly address airspace throughput
    capacity, and

    a number of concerns that we raised under  improve the information and
    decisionmaking

    this management challenge, namely (1) process.

    establishing a minimum level of software process maturity before providing
    funding;

    While these plans address air system (2) establishing a cost accounting
    system;

    capacity improvements, they to not directly (3) ensuring the ability of
    the Chief address the concerns that we raised under Information Officer to
    implement and

    this management challenge, as stated in the enforce a number of
    information systems column to the left. architecture, acquisition, and
    security initiatives; (4) issuing guidance for validating (2) The plan
    provides no performance goals investment analysis; (5) instituting a
    process

    or measures for this management for evaluating projects to identify
    lessons

    challenge. learned; and (6) developing free flight

    software, integrating free flight technologies The plan states that the
    Coast Guard will with other modernization projects, and

     use a performance- based acquisition addressing human factor issues
    affecting focused on required mission capabilities

    controllers and pilots. and

     contract with a single System Integrator to (2) The report provided
    performance goals acquire an integrated system of surface, for achieving
    cost and schedule milestones air, command and control, intelligence, and
    and planned benefits, which DOT states

    logistics systems. apply to any major acquisition, including the

    Deepwater Project. However, the report According to the plan, the focus on
    mission provided no performance target directly

    capabilities will allow and encourage the related to the concerns we
    raised for the System Integrator to use innovative, Deepwater Project,
    which include the

    available technologies and processes that development of a carefully
    thought out and will maximize operational effectiveness well- documented
    acquisition plan, and

    while minimizing total ownership cost. documentation and detailed analysis
    of the

    risks associated with various contracting (3) The plan indicates that in
    2003, MARAD

    alternatives. The only target indirectly will dispose of three to five
    high- risk vessels related to the management challenges

    through domestic scrapping. Additionally, provided in the performance
    report was a

    the plan states that MARAD faces a fiscal supplementary target for the
    number of

    year 2006 deadline to dispose of obsolete combat- ready units, which DOT
    did not

    ships in the National Defense Reserve meet.

    Fleet. According to the plan, MARAD plans to also use other means of
    disposal, including artificial reefing and sales to recycling companies.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    (3) According to the report, 133 ships await disposal as of March 2002.
    Legislation enacted in 2001 allowed the Maritime Administration (MARAD)
    for the first time to

    purchase scrapping services, and since the start of fiscal year 2001, nine
    vessels have been disposed of through payment of

    scrapping services, prior year vessel sales, and artificial reefing,
    according to the report.

    Financial Accountability: DOT*s lack of DOT*s report indicates that DOT*s
    fiscal year

    DOT*s plan provides no goals or measures accountability for its financial
    activities

    2001 Consolidated Financial Statement to address this management
    challenge. The impairs its ability to manage programs and received an
    *unqualified* opinion from the

    plan states that DOT (1) is continuing to exposes the department to
    potential waste, Inspector General.

    implement the Delphi core accounting fraud, mismanagement, and abuse.

    system, (2) is making good progress in reporting quarterly financial
    results by 2003 and will be better able to manage unit costs of service
    delivery, and (3) is continuing to address asset management problems
    through detailed corrective action plans extending over multiple years and
    involving numerous offices. The plan also states that FAA planned to
    complete an integrated financial and asset management system in fiscal
    year 2002.

    Strengthen the financial condition of According to DOT*s report, DOT did
    not DOT*s plan provides no performance goals

    Amtrak. meet the 2001 performance target of or measures for this
    management challenge increasing intercity ridership on Amtrak.

    or strategies to meet this challenge. Additionally, the report indicates
    that Amtrak has made no substantial progress in achieving operational
    self- sufficiency by fiscal year 2003, a goal it was legislatively

    obligated to meet or face the threat of liquidation.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Improve the oversight of highway and

    DOT*s report provides no 2001 performance DOT*s plan indicates the
    following

    transit projects to provide maximum measures pertaining to this management
    performance goals, starting in 2002:

    transportation services for the federal

    challenge. According to the report, DOT is  achieve 95 percent of
    schedule milestones

    dollars.

    taking three types of actions: for major federally funded transportation

    (1) establishing project oversight by infrastructure projects or miss
    those  designating competent oversight

    milestones by less than 10 percent and managers who are personally
    accountable

     achieve 95 percent of cost estimates for for proper federal oversight,

    major federally funded transportation  establishing Integrated Product
    Teams, infrastructure projects or miss them by less  funding professional
    certifications for

    than 10 percent. federal oversight managers, and  requiring grant
    recipients* project

    The plan indicates that DOT will measure management staff to have
    professional

    the percentage of federally funded certifications.

    infrastructure projects that meet these (2) establishing a formal
    management and

    performance goals. reporting framework by  creating a DOT Executive
    Council to

    According to the plan, DOT plans to review project oversight,

    strengthen controls against fraud, waste,  fostering collaboration
    between federal and abuse; heighten fraud awareness; and oversight and
    grant management officials,

    maintain good accountability through  designating as *at risk* projects
    with outreach efforts to grant recipients and by significant deviations
    from cost and working with states.

    schedule baselines, and  establishing financial incentives for

    comprehensive management systems. (3) ensuring accountability by
    incorporating mega project oversight into DOT*s performance plans,

     inviting external audits, and  providing performance incentives for DOT

    employees conducting oversight.

    Enhance competition and consumer

    DOT*s states that in response to new- entrant DOT*s plan contains no
    performance goals

    protection in aviation and freight rail

    airlines* complaints against certain airlines* or measures for this
    management

    industries to ensure reasonable fares,

    unfair competitive practices, DOT informally challenge. The plan describes
    continuing rates, and service.

    investigated major airline actions. strategies for addressing this
    challenge for

    aviation competition, stating that DOT Additionally, the report states
    that DOT has

    conducts its own analysis of merger a significant backlog of allegations
    of unfair transactions and provides its views to the competition, hoarding
    airport capacity,

    Department of Justice. The Department of oppressive computer reservation
    system

    Justice is responsible for determining practices, and civil rights
    violations. The whether mergers should be challenged on report does not
    address concerns that we competitive grounds, according to the plan. cited
    regarding whether the Surface

    Transportation Board is adequately protecting rail shippers against
    unreasonable rates and poor service quality. The report states that the
    Surface

    Transportation Board is decisionally independent by law and is not part of
    DOT*s report.

    a Based on preliminary data.

    Observations on the Department of the Treasury*s Efforts to Address Its
    Major

    Appendi x XXI

    Management Challenges The following table identifies the major management
    challenges confronting the Department of the Treasury (Treasury), which
    include the governmentwide high- risk areas of strategic human capital
    management and information security. The first column lists the challenges
    identified by our office. The second column discusses what progress, as
    discussed in its fiscal year 2001 performance report, Treasury made in
    resolving its challenges. The third column discusses the extent to which
    Treasury*s fiscal year 2003 performance plan includes performance goals
    and

    measures to address the challenges that we identified. We found that the
    Treasury*s performance report discussed the agency*s progress in resolving
    all of its challenges.

    Of the agency*s seven major management challenges, its performance plan
    had 1. goals and measures that were directly related to three of the
    challenges, 2. goals and measures that were indirectly applicable to two
    of the

    challenges, including  Internal Revenue Service (IRS) modernization and
    need to improve Customs Service*s regulation of commercial trade

    while protecting against entry of illegal goods at U. S. borders 3. no
    goals, measures or strategies to address two of the challenges,

    including  need to improve the Bureau of Alcohol, Tobacco, and Firearm*s

    performance measures to better determine the progress in denying criminals
    access to firearms, and

     need to improve the management of Treasury*s asset forfeiture program.
    However, Treasury has made significant progress in addressing these two
    challenges.

    Table 22: Major Management Challenges for Treasury Progress in resolving
    major management

    Applicable goals, measures, and challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s Major management challenge year 2001
    performance report

    fiscal year 2003 performance plan GAO- designated governmentwide high risk

    Strategic human capital management:

    According to Treasury*s fiscal year 2001 In its fiscal year 2003
    performance plan,

    GAO has identified shortcomings at multiple performance report, in fiscal
    year 2001, Treasury discontinued two performance agencies involving key
    elements of modern Treasury*s Office of the Deputy Assistant

    measures described in the fiscal year 2002 strategic human capital
    management, Secretary for Human Resources collected

    performance plan: a performance measure including strategic human capital
    planning

    and consolidated workforce information from on the rollout of its new
    human resources

    and organizational alignment; leadership each Treasury bureau to determine
    the system (Treasury intends to track this

    continuity and succession planning; extent of Treasury*s human capital
    planning. internally) and a measure on the increase in acquiring and
    developing a staff whose size,

    A comprehensive workforce analysis report the percentage of major Treasury
    skills, and deployment meet agency needs; was submitted to OMB along with
    an occupations for which workforce- planning and creating results-
    oriented organizational

    analysis of restructuring plans submitted processes have been completed.
    Workforce cultures.

    from each bureau. Feedback from OMB strategies developed as needed has
    also

    directed Treasury to strengthen its strategic been discontinued. As
    mentioned in the

    human resource goals and to focus on fiscal year 2001 performance report,

    future planning, including the use of Treasury reports it has developed a
    personnel flexibilities, technology, and

    comprehensive human resources strategic succession planning.

    plan to measure program success in workforce planning strategies. Treasury
    reported that in fiscal year 2002, it would develop a Treasury human
    resource

    Treasury*s fiscal year 2003 performance strategic plan that will serve as
    a framework plan includes a performance measure, for fiscal year 2002 and
    beyond, and will which started in fiscal year 2002, that assist management
    to create an

    measures the percentage of Treasury environment where the entire workforce
    is bureaus that have developed and valued and can excel. The strategic
    plan will implemented adequate strategies to address skill imbalances in
    mission- critical

    determine skill gaps anticipated during the occupations, and ensure that
    bureaus fully next 5 years in mission- critical occupations. use human
    resource flexibilities and

    The strategies must include an adequate enterprisewide technological
    solutions, data

    succession strategy to anticipate and fill support human resource service
    delivery, vacancies in key leadership positions during effective
    performance management is

    the next 5 years. The Treasury bureaus will emphasized, and bureaus have
    leadership be required to provide copies of their development and
    succession plans in place.

    strategies for anticipating and resolving any skill gaps anticipated in
    mission- critical occupations during the next 5 years and copies of their
    strategies for anticipating and planning for succession for vacancies in
    key leadership positions during the next five years. These plans will be
    evaluated for

    adequacy against OMB/ Office of Personnel Management and internal
    criteria.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Treasury*s 2003 performance plan reports that the Equal Employment
    Opportunity measures were combined and revised into a more meaningful
    measure for the out years, measuring the percentage of allegations of
    discrimination for which Alternative Dispute

    Resolution processes are used. At the bureau level the performance plan
    measures employee satisfaction at Internal Revenue Service (IRS), Treasury
    Inspector General for Tax Administration, and the Federal Law Enforcement
    Training Center, the same three bureaus as in last year*s performance
    plan.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Information security: Our January 2001 Treasury reported it is
    implementing

    Treasury has established a performance high- risk update noted that
    agencies* and Presidential Decision Directive 63, which

    goal to improve computer security across governmentwide efforts to
    strengthen

    requires federal departments and agencies the department by ensuring that
    all Treasury information security have gained momentum to establish and
    implement a program to information technology systems are certified

    and expanded. Nevertheless, recent audits protect their critical
    infrastructure. In fiscal

    and accredited to operate. For fiscal year continue to show federal
    computer systems year 2001, Treasury bureaus identified all

    2003, Treasury has established a are riddled with weaknesses that make
    them

    critical cyber and noncyber assets. The final performance measure that in
    fiscal year highly vulnerable to computer- based attacks

    report from the National Critical 2002 70 percent compared to 65 percent
    of and place a broad range of critical Infrastructure Assurance Office to
    Treasury all information technology systems will be operations and assets
    at risk of fraud,

    revealed a total of 32 assets of Critical currently certified and
    accredited to operate. misuse, and disruption. Further, the events

    Infrastructure Protection (CIP) concern. However, Treasury also noted that
    computer of September 11, 2001, underscored the

    Treasury reports that all of these 32 assets security has been seriously
    under- funded

    need to protect America *s cyberspace have either been scheduled for or
    have had

    throughout Treasury for many years, and against potentially disastrous
    cyber

    a vulnerability assessment completed. The continues to be under- funded.
    Treasury is

    attacks* attacks that could also be next step, which is to identify the
    identifying internal resources that may be

    coordinated to coincide with physical interdependencies of each asset, is

    reallocated to support computer security terrorist attacks to maximize the
    impact of

    scheduled to begin in fiscal year 2002. programs.

    both. All bureaus have a computer security

    Treasury also established a goal to ensure Our January 2001 high- risk
    update also incident response capability (CSIRC), and

    that training provided to key Treasury noted significant and long-
    standing all bureaus receive Federal Critical

    information systems security personnel is weaknesses in controls over the
    IRS*s

    Infrastructure Reporting Center and effective, and a related performance

    information systems, which contributed to National Infrastructure
    Protection Center measure that addresses the percentage of

    GAO designating IRS financial management alerts and advisories, and apply
    patches

    key Treasury information systems security as a high- risk area. Although
    IRS has made

    and other fixes as applicable. A statement of personnel who assess
    security training as significant progress in improving computer work has
    been drafted for an enterprisewide *effective.* However, Treasury did not
    specify security weaknesses, much remains to be

    CSIRC in fiscal year 2002. The September a target percentage for fiscal
    year 2003.

    done to resolve the serious weaknesses 11 attacks increased concern about

    within IRS*s computing environment that systems security. In fiscal year
    2002, cyber

    However, these measures do not fully place its automated systems and
    taxpayer

    CIP guidelines and methodologies will be measure the effectiveness of
    information data at serious risk to both internal and issued to Treasury
    bureaus and special security and the department*s progress in external
    threats. bureau on- site assistance visits are planned.

    implementing corrective actions. NIST A new security awareness- training
    program

    developed a security assessment framework will also begin in fiscal year
    2002. and related tools that agencies can use to

    determine the status of their information Treasury reported that the
    Financial security programs. Also, OMB guidance for Management Service
    (FMS) has developed

    fiscal year 2002 reporting under the an aggressive corrective action plan
    to fully

    Government Information Security Reform address computer security
    deficiencies Act (GISRA) requires agencies to use tools identified by GAO
    and is on target for full developed by NIST to evaluate the security
    implementation of its Entity- wide IT Security

    of unclassified systems or groups of Program by December of 2002. This
    plan systems. includes performance measures using NIST

    and Federal Chief Information Officers In addition, OMB*s GISRA reporting

    Council*s *Self Assessment Framework.* guidance requires specific
    performance

    measures, as well as corrective action plans with quarterly status
    updates.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    According to Treasury, although IRS*s The performance plan discusses FMS*s

    computer security has improved, control actions planned or underway to
    address its

    weaknesses continue to place automated computer security issues. However,
    FMS systems and taxpayer data at serious risk to

    has not established specific performance internal and external threats. In
    response, measures in its plan for addressing IRS implemented programs to
    manage

    computer security issues. security risks and the costs related to
    mitigating them, identifying weaknesses and

    creating corrective action plans. An aroundthe- clock incident response
    capability was established with situation management centers to centralize
    responses. A strong program of awareness about unauthorized access to
    taxpayer information, and a

    security assessment framework for achieving security objectives, was
    adopted. In the weeks following the September 11 terrorist attacks, IRS
    determined what immediate steps needed to be taken, such as screening and
    guard services and consistent security standards for key areas.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    GAO- designated major management challenge

    Internal Revenue Service Modernization: Revamping Business Practices to
    Meet

    In its fiscal year 2001 performance report, Treasury*s fiscal year 2003
    performance Taxpayer Needs. Within the new

    Treasury reported that following plan did not cite specific goals with
    related operating divisions, IRS must take a fresh Restructuring and
    Reform Act of 1998

    measures for meeting this management look at how to enforce the tax laws
    and

    directions, IRS designed and made challenge. meet taxpayer needs in new
    and better substantial progress in implementing a new ways. This will be a
    challenge in

    modernized IRS, organized around GAO found that improving service to

    overcoming cultural barriers and in customers with similar needs. The new

    taxpayers remains a challenge for IRS. coordinating the requisite human
    capital, organization focuses on providing service in

    IRS*s progress in modernizing has laid a data, and information system
    support

    three key program areas: pre- filing, filing, foundation for improvement
    but has not yet

    across IRS. and post- filing compliance. The modernized

    provided the quality of service that taxpayers IRS organization was
    officially inaugurated need. a A theme in recent GAO reports on on October
    1, 2000. The final stages of

    taxpayer service is the need for improved implementation, including the
    redistribution management of IRS*s service functions, of workload, will
    continue through fiscal year such as telephone assistance. Specifically,

    2002. we have recommended explicit goal setting,

    improved performance measures, and more program evaluation. b Implementing
    a Balanced Approach to

    Treasury reported that during fiscal year In Treasury*s fiscal year 2003
    performance

    IRS*s Performance Management System 2001, IRS initiated several actions
    designed plan, we did not find specific goals or to Better Assess
    Progress. IRS is faced to improve the quality of performance

    measures relating to voluntary compliance, with the challenge of aligning
    its individual measures data and increase its ability to burden, overall
    productivity, or overall performance evaluation systems with its

    measure progress through effective customer satisfaction, although IRS
    does

    balanced measurement system to clearly processes. Treasury reports
    significant

    report various measures of customer link the work of individual managers
    and progress was made to automate the process

    satisfaction for specific functional areas. employees to the mission and
    goals of the

    of data reporting at the servicewide level agency.

    and within the new IRS Operating Divisions. Early in fiscal year 2002, IRS
    rolled out its

    Servicewide, IRS moved to a Web- based new employee evaluation system for
    frontline

    Business Performance Management employees. This system was designed

    System that will incrementally provide for to structurally align
    performance

    100- percent automation of data along with expectations for employees with
    IRS*s three tailored reports, templates, and integration

    strategic goals. GAO recommended that of performance information for
    phases of its IRS act to improve the linkage between strategic planning
    and budgeting cycle. The employee*s critical job responsibilities,
    operating divisions are also engaged in supporting behaviors, and
    organizational automated data reporting activities through unit
    performance measures. c IRS has also development of a data mart designed
    to

    made progress in developing a way to serve both the Wage and Investment
    and

    measure the voluntary compliance of Small Business/ Self Employed
    divisions. At

    individual taxpayers without placing undue the same time, IRS enhanced its
    measures burden on them. IRS plans to collect data to data dictionary
    input document to provide measure voluntary compliance. additional detail
    around the purpose,

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    limitations, critical path, and management controls for each of its
    strategic and critical measures. In fiscal year 2001, IRS also began to
    capture baseline data and detailed definitions for its strategic- level
    measures

    and plans to begin reporting on these measures in fiscal year 2002.

    Addressing Financial Management According to Treasury*s performance
    report, The fiscal year 2003 performance plan does

    Weakness to Develop Reliable CostBased

    a major initiative for fiscal year 2001 was not contain any goals with
    related measures Performance Information. IRS

    beginning the development of the Integrated that address this management
    challenge. does not have reliable cost accounting data

    Financial System (IFS). This system is However, IRS does have extensive
    plans to

    to enable it to (1) develop cost- based designed to address material
    weaknesses in address its financial management

    performance information, (2) determine financial reporting and bring the
    IRS into

    weaknesses. In the short- term, IRS is cost/ benefits of its tax
    collection and compliance with FFMIA. The IFS will be

    working to improve existing processes, such enforcement programs, and (3)
    judge deployed in two releases: Release 1 will as those related to
    recognition of expenses whether it is appropriately allocating its

    contain the core financial elements (i. e., and property and equipment.
    IRS is also

    resources among competing management General Ledger, Accounts Receivable,

    continuing to refine the workaround priorities.

    Accounts Payable, Cost Accounting, payroll, procedures it has developed to
    compensate and funds control), and Release 2 will for some of the material
    weaknesses in provide for noncore systems (i. e., fixed

    internal controls. In the long- term, IRS is assets, travel, procurement).
    The

    engaged in a systems modernization project requirements phase of IFS was
    completed

    intended to address its financial in October 2001, with the procurement of
    management problems. This project the software targeted for April 2002.

    involves the replacement of IRS*s current Deployment of Release 1 is
    anticipated to outdated financial management systems be completed by
    October 2003 and Release such as (1) general ledgers, (2) property 2
    should be completed by April 2005.

    and equipment systems, and (3) the master file, which contains the
    detailed records of taxpayer accounts. The project also includes
    implementation of a cost- accounting system to provide IRS current and
    reliable information on the costs of its programs to

    support decision- making. IRS expects the systems modernization project to
    be completed in stages over a period of 10 years or more, beginning with
    its first rollout in 2003. Once fully implemented, IRS expects its
    financial management systems will be in compliance with the requirements
    of FFMIA.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Institutionalizing Effective Systems

    Treasury reported in its fiscal year 2001 IRS*s fiscal year 2003
    performance plan Modernization Management Controls.

    performance report that IRS made the does not identify specific goals or
    Since 1995, IRS has made progress in following improvements to its systems

    performance measures related to this dealing with management and technical

    modernization management controls and management challenge. However, the
    plan weaknesses in its information technology

    capabilities. IRS completed and approved does identify several actions
    planned or systems. However, weaknesses in its Enterprise Architecture
    1.0, which helps underway that IRS believes will enhance the investment
    management, system life- cycle

    to ensure that modernized projects are agency*s ability to modernize its
    information

    management, enterprise architecture coordinated across the entire IRS

    technology systems. These actions include management, and software
    acquisition enterprise, completed high- level strategies ensuring ongoing
    projects are aligned with management remain challenges.

    for tax administration (Tax Administration the Enterprise Architecture,
    fully

    Vision and Strategy* TAVS) and internal implementing a risk management
    program,

    management (Internal Management Vision fully defining and
    institutionalizing standard and Strategy* IMVS), and improved overall

    configuration management procedures, and management of its modernization
    efforts by conducting an independent software further refining the
    configuration

    acquisition capability evaluation. management and release management
    processes and by establishing financial controls and portfolio management

    processes to better align funding and resources with its business
    priorities.

    IRS Faces Challenges in Collecting

    Treasury reported that traditional The fiscal year 2003 Performance plan
    Unpaid Taxes. Weaknesses in IRS*s examination and collection activity have
    contains numerous performance measures information systems and inadequate

    declined over the past several years. To to determine output in terms of
    volume of financial and operational information offset this decline, IRS
    focused on riskbased collection cases closed and timeliness of

    continue to hamper IRS*s ability to collect compliance intervention
    techniques

    certain types of collection action. However, billions of dollars in unpaid
    taxes. coupled with more focused and rapid

    performance measures that would assess intervention to improve the quality
    and

    IRS*s overall progress in improving its speed of collection casework. IRS
    reported collection of delinquent taxes have not been that in fiscal year
    2001 it realized gains

    developed. through  establishment of a strategic, coordinated GAO found
    that available but limited data approach to compliance issues, programs,

    suggest that voluntary compliance may have and systems to ensure that
    cross- cutting deteriorated. d To reverse the compliance and national
    compliance issues were

    and collection program declines, IRS is resolved with multiple compliance

    relying on a strategy of reengineering solutions,

    business processes and using new  implementation of a nationwide database
    technologies. By improving the efficiency of for proper matching of
    dependency

    the compliance programs, IRS hopes to information and more timely
    resolution of significantly increase compliance activity erroneous account
    balances,

    levels. IRS also hopes to develop new  hiring and training additional
    phone

    techniques that will enable it to expand its assistors to increase the
    number of

    compliance coverage and develop delinquent and unreported accounts

    analytically- based techniques to determine resolved and increase the
    number of appropriate compliance action. delinquent returns secured,
    providing employees with access and

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    capability to update account data through a single terminal, and allowing
    Automated Collection System and Service Center Collection Branch employees
    to process cases,  initiating a compliance strategy by capturing data
    from 16. 8 million K- 1 forms

    (reports shareholder*s or partner*s passthrough income) for matching
    reported (IRS stopped against information sending notices under this
    effort in August 2002

    and is seeking to improve its identification of those who may have
    misreported K- 1 income), and  reducing the burden on field employees

    and establishing control on escalating inventories. The first phase of a
    multiyear Collection Reengineering program was implemented to ensure that
    business tax cases are promptly

    assigned to revenue officers. In addition, enhancements made to the
    Electronic Fraud Detection system include selected Business Master File
    data, permitting research, analysis, and evaluation of fraud detection
    scenarios for business returns.

    GAO found large and pervasive declines in five of the six IRS compliance
    programs and in both IRS collection programs from fiscal

    year 1996 through 2001 and recommended that the Commissioner of Internal
    Revenue reexamine the extent to which some quantitative information on the
    impact of

    proposed program changes should be included in strategic assessments. e
    IRS revised its strategic planning, budgeting, and performance management
    process in fiscal year 2000 to make decisions for fiscal

    year 2002. This process provides IRS management with a means to reconcile
    competing priorities with the realities of available resources. Through
    the use of this process in developing its budget request for fiscal year
    2003, IRS identified numerous improvements and enhancements that enabled
    it to redirect resources to higherpriority areas.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Noncompliance with Earned Income Tax According to Treasury*s performance
    report Treasury*s fiscal year 2003 performance Credit (EITC).
    Noncompliance with EITC in fiscal year 2001, mitigation of risk

    plan does not contain any performance exposes the federal government to
    billions associated with tax filing fraud in the EITC measures that cover
    any aspect of IRS*s of dollars of risk. However, IRS does not yet

    area was accomplished by implementation administration of EITC.

    have sufficient data to demonstrate that it of a three- part strategy:
    education and has effective controls over EITC compliance. outreach visits
    to companies with a high

    The Commissioner of Internal Revenue and volume of EITC return preparers,
    visits by Secretary of the Treasury convened a joint agents to review tax
    preparers* compliance task force to develop recommendations to with due
    diligence requirements, and

    better administer the credit and make it *partnering* with the Criminal
    Investigation easier for taxpayers to comply with the rules. to ensure
    investigation of known fraudulent The task force was formed shortly after
    IRS EITC claims and schemes. IRS also began released its latest study of
    EITC compliance, a check of secondary social security

    which found that in 1999 about half of EITC numbers associated with a
    qualifying child claims were in error and about one- third of to reduce
    the number and amount of

    credits should not have been paid out. This ineligible claims made under
    EITC. In fiscal

    level of noncompliance has remained year 2002, IRS will continue to
    emphasize relatively stable even after a multiyear effort improved
    compliance with the EITC to reduce it. provisions of the tax code. One key
    to IRS*s efforts is the use of the dependent database (DDB). Using data
    provided by the

    Department of Health and Human Services and Social Security
    Administration, DDB is designed to identify potential noncompliant returns
    during returns processing.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Need to Improve Customs Service*s

    In its fiscal year 2001 performance report, Treasury reported Customs*
    2003 Regulation of Commercial Trade while

    Treasury did not report specific progress but performance plan was under
    review, so Protecting Against Entry of Illegal Goods

    reported that Customs plans to implement goals applicable to this major
    management

    at U. S. borders: Although Customs has an account view of the trade
    community so

    challenge remain to be determined. The made progress in implementing
    initiatives to

    that companies can be evaluated in terms of events of September 11 changed
    Customs*

    improve security at U. S. borders, the their compliance risk. This will
    allow primary security and enforcement focus. following challenges remain:
    (1) completing

    Customs to focus its resources on Shortly after the September 11 events,
    the an assessment of new trade compliance

    individuals, companies, and industries with Commissioner of Customs said
    that

    initiatives, (2) balancing travelers* rights with poor records. The time
    frame for this terrorism has replaced drug smuggling as Customs*
    responsibility to interdict

    modernization is 2003. Additionally, the the agency*s top priority.
    Customs contraband, (3) using reliable data to

    Automated Commercial Environment completed a Trade Compliance Strategy
    determine staffing needs, and (4) acquiring

    system will integrate and modernize the risk

    Study in 2001. The study concluded that the a new import processing
    system. management system in the commercial

    trade compliance strategy has evolved in a environment, improve targeting
    and logical manner, but has some limitations. selectivity results, and
    provide an extensive

    The study also provided several analytical capability. This modernization
    is recommendations to address these findings. scheduled in 2004.

    The study recommended replacing specific compliance goals with a
    continuous improvement model that will identify significant deficiencies.
    Customs* ongoing effort to acquire a new trade processing

    system is key to modernizing how Customs tracks, controls, and processes
    all commercial goods imported into and exported out of the United States.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Financial Management:

    Treasury reported that it continues to work Treasury*s fiscal year 2003
    Performance Challenges Affecting Certain Bureau closely with its bureaus
    to address and close plan contains performance measures

    Operations. For fiscal year 2000, Treasury the open audit findings and
    will work in fiscal gauging the percentage of Treasury bureaus reported
    that seven of its bureaus* financial

    year 2002 to ensure that actions are taken in compliance with FFMIA
    financial systems

    management systems were not in to mitigate the risk factors involved in
    requirements, accounting standards, and

    substantial compliance with the carrying out its programs. Treasury
    reports

    Standard General Ledger requirements. requirements of FFMIA. (For fiscal
    year on the percentage of bureaus in compliance

    Treasury has a goal of 80 percent for fiscal 2001, Treasury reported that
    five Treasury

    with the requirements of the Federal year 2003.

    bureaus were not in substantial Financial Management Improvement Act of

    compliance.) Also, Customs faces 1996 (FFMIA) as part of its set of
    financial IRS has made progress in addressing its

    weaknesses in its internal control over data management performance
    measures. In

    financial management weaknesses, in its automated systems and problems
    fiscal year 2001, 67 percent of its bureaus including addressing
    deficiencies in its developing and implementing new

    were in compliance, exceeding Treasury*s accountability over property and
    equipment automated systems; IRS also continues to

    target of 62 percent. and controls over budgetary activity. (IRS*s
    experience ongoing deficiencies in its

    financial management weaknesses are financial management and operational

    Treasury reported that FMS took an discussed above under IRS modernization
    systems and processes. aggressive, proactive approach to resolve

    challenges.) the deficiencies in its systems and processes that had
    resulted in a qualified audit opinion on FMS*s fiscal year 1999
    statements. Additionally, FMS developed an

    aggressive corrective action plan to fully address computer security
    deficiencies identified by GAO.

    According to Treasury*s report, Customs* modernization effort will provide
    an essential element of an integrated financial system through the
    development of an accounts receivable subsidiary ledger. Customs has
    selected a primary contractor for building the Automated Commercial
    Environment, of which the subsidiary ledger is one part. The target date
    for completing the subsidiary ledger has not yet been established within

    the overall project schedule currently being developed by the contractor.
    In addition, Customs is working to make its financial systems compliant by
    replacing a variety of financial and administrative systems through the
    use of off- the- shelf software provided by SAP Public Services, Inc.
    Release 1 of this

    project is funded and is due to be completed by April 2002. Releases 2 and
    3 are scheduled to be completed by October

    2004, if funding is made available. Customs is attempting to establish a
    disaster recovery capability through the option of a

    commercial recovery facility.

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    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Preparing Financial Statements for the Treasury reported that FMS received
    an FMS determined that its measure used in Government Continues to be a
    Challenge unqualified audit opinion on its statement of prior years was no
    longer relevant and

    for FMS. As the preparer of the Financial

    the government*s cash position for fiscal replaced this measure with new
    broader

    Report of the U. S. Government (FR), FMS year 2000. This is the fourth
    consecutive measures that FMS stated would better

    continues to face challenges in working with year FMS has received a clean
    opinion. In reflect overall performance. However, the federal agencies,
    including the inability to addition, FMS received an unqualified

    performance measures that have been (1) properly account for billions of
    dollars of opinion on its financial statements for fiscal

    developed relate to other governmentwide basic transactions, especially
    those

    year 2000, with no reportable internal accounting reports published by FMS
    that between government entities, (2) ensure control weaknesses. This
    represents a are not used to compile the FR, nor do they that information
    in the FR is consistent with significant improvement compared to FMS*s
    bear any relationship to the issues agencies* financial statements, and
    (3)

    previous audit. discussed in the challenges that FMS

    effectively reconcile the results of operations continues to face in
    preparing these

    reported in the U. S. government*s financial At the Treasury level, a task
    force brought financial statements.

    statements with budget results. together OMB and GAO to help analyze the

    current process for preparing the FR. It issued recommendations designed
    to resolve the current audit findings on the FR compilation process.

    Challenges Remain in Implementing the According to Treasury, in fiscal
    year 2001, Treasury*s performance plan covering FMS*s

    Debt Collection Improvement Act of

    FMS implemented two more payment types performance contains two
    performance 1996. Challenges remain for FMS to fully

    for offset: Social Security Benefit and federal measures to assess how
    much delinquent

    implement its Treasury Offset Program to salary. It also expanded the
    Continuous

    debt FMS is collecting. The measures include all payment types. Challenges
    also Levy (Offset) Program to include federal

    pertain to (1) the percentage of debt referred remain for full
    implementation of Treasury*s salaries. In addition, FMS developed to
    Treasury for collection by Federal cross- servicing program. For example,
    improved procedures to monitor agencies*

    Program Agencies; and (2) the total amount action is needed to ensure fair
    debt

    plans for referral of delinquent debt for collected through debt
    collection tools

    distribution and to promote competition cross- servicing, requested that
    OMB

    operated by FMS. among private collection agencies. develop audit
    guidelines for eligible debts, and worked with private collection agencies

    In our prior report, we suggested changes to to address their concerns
    with how FMS*s performance measures that would delinquent debt is
    distributed to them for

    provide a more accurate indication of FMS collection.

    performance. f Need to Improve the Bureau of Alcohol,

    Treasury reports that ATF is addressing this While the 2001 performance
    report indicates

    Tobacco, and Firearms (ATF)

    concern by developing a new cross- cutting that ATF is working to develop
    a new

    Performance Measures to Better

    measure, using data provided by the performance measure to address this

    Determine the Progress in Denying

    Department of Justice via Uniform Crime management challenge, the new
    measure is

    Criminals Access to Firearms: Despite Reports from state and local law

    not described in the 2003 performance plan. significant technological
    advances that have enforcement agencies. This measure will

    Treasury has made significant progress on given ATF more investigative
    information to compare the violent crime rates of cities in

    this challenge. carry out its mission, limitations in its which ATF has a
    substantial presence to performance measures make it difficult to

    those cities that do not. This will more fully determine its progress.

    reflect the impact of the ATF Integrated Violence Reduction Strategy and
    its component projects.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Need to Improve the Management of

    According to the fiscal year 2001 The 2003 performance plan does not list
    any

    Treasury*s Asset Forfeiture Program:

    performance report, for the first time since applicable performance goals
    or measures

    Treasury*s Asset Forfeiture Program faces the inception of the Treasury
    Forfeiture Fund related to this major management challenge. inadequate
    information systems and

    in 1992, the auditors of the Fund*s fiscal Treasury has made significant
    progress on financial management weaknesses, year 2001 financial
    statements asserted that

    this challenge. including problems with accountability over the Fund is
    free of any material seized assets.

    weaknesses. Additionally, for the second consecutive year, Fund managers
    asserted compliance with the Federal Managers Financial Integrity Act
    (FMFIA) and FFMIA in the annual Assurance Statements. As a result of the
    progress the Fund has made in resolving all material weaknesses, as well
    as completing the majority of the corrective actions established in
    response to audit

    recommendations, the Office for the Under Secretary (Enforcement) of the
    Department of the Treasury has formally requested

    removal of the Treasury Forfeiture Fund from GAO*s major challenges list.

    a U. S. General Accounting Office Tax Administration: Continued Progress
    Modernizing IRS Depends on Managing Risks. GAO- 02- 715T (Washington, D.
    C.: May 14, 2002). b U. S. General Accounting Office IRS Telephone
    Assistance: Opportunities to Improve Human Capital

    Management. GAO- 01- 144 (Washington, D. C.: Jan. 30, 2001); and U. S.
    General Accounting Office IRS Telephone Assistance: Limited Progress and
    Missed Opportunities to Analyze Performance in the 2001 Filing Season.
    GAO- 02- 212 (Washington, D. C.: Dec. 7, 2001). c U. S. General Accounting
    Office Performance Management Systems: IRS*s Systems for Frontline

    Employees and Managers Align with Strategic Goals but Improvements Can be
    Made. GAO- 02- 804 (Washington, D. C.: July 12, 2002). d U. S. General
    Accounting Office Tax Administration: Impact of Compliance and Collection
    Program Declines on Taxpayers. GAO- 02- 674 (Washington, D. C.: May 22,
    2002). e U. S. General Accounting Office Tax Administration: Impact of
    Compliance and Collection Program

    Declines on Taxpayers. GAO- 02- 674 (Washington, D. C.: May 22, 2002). f
    U. S. General Accounting Office Department of the Treasury: Status of
    Achieving Key Outcomes and Addressing Major Management Challenges. GAO-
    01- 712 (Washington, D. C.: June 15, 2001).

    Observations on the U. S. Agency for International Development*s Efforts
    to

    Appendi x XXII

    Address Its Major Management Challenges The following table identifies the
    major management challenges confronting the U. S. Agency for International
    Development (USAID), which includes the governmentwide high- risk areas of
    strategic human capital management and information security. The first
    column lists the challenges identified by our office. The second column
    discusses what progress, as discussed in its fiscal year 2001 performance
    report, USAID made in resolving its challenges. The third column discusses
    the extent to which USAID*s fiscal year 2003 performance plan includes
    performance goals and measures to address the challenges that we
    identified. We found that USAID*s performance report discussed the
    agency*s progress

    in resolving many of its challenges, but it did not discuss the agency*s
    progress in resolving the following challenge  information security Of
    the agency*s five major management challenges, its performance plan had

    1. goals and measures that were directly related to one of the challenges,
    2. goals and measures that were indirectly applicable to two of the
    challenges, including

     strategic human capital management and  financial management
    information unreliable/ financial statements

    inaccurate and do not measure program results 3. no goals and measures
    related to one of the challenges, but discussed

    strategies to address the challenge, which was  challenges with
    developing reliable performance measures and

    accurately reporting results of programs 4. no goals, measures or
    strategies to address one of the challenges  information security.

    Table 23: Major Management Challenges for USAID Progress in resolving
    major management

    Applicable goals, measures, and challenge as discussed in agency*s fiscal
    year

    strategies as discussed in agency*s Major management challenge 2001
    performance report

    fiscal year 2003 performance plan GAO- designated government wide high
    risk

    Strategic human capital

    USAID stated that it took a number of steps to build USAID reported that
    it intends to management: GAO has identified a stronger and more capable
    human resource strengthen its human capital

    shortcomings at multiple agencies base. The agency continued recruiting
    entry- level

    management capabilities by continuing involving key elements of modern
    staff through its New Entry Professional program

    its recruitment efforts and providing in strategic human capital
    management,

    and increased the level of midcareer professionals, house training.
    including strategic human capital

    specifically contract and legal officers. In addition, planning and
    organizational alignment;

    USAID reported that it increased the number of USAID plans to deploy staff
    rapidly in all

    leadership continuity and succession senior managers trained through
    external sources

    labor categories through intensified planning; acquiring and developing a
    and developed in- house training to enhance the

    recruitment efforts. To do so, the agency staff whose size, skills, and
    deployment

    results- oriented management, financial intends to meet all its foreign
    service and

    meet agency needs; and creating management, acquisitions and assistance,
    and civil service staffing requirements and to results- oriented
    organizational cultures.

    supervisory skills of program managers and their complete a civil service
    recruitment plan.

    staffs. In addition, the agency intends to make Since the early 1990s, we
    have reported *Web- enhanced human resource

    that USAID has made limited progress USAID reported specific performance
    results in management tools* available to human

    in addressing its human capital 2001 that included

    resource management personnel. management issues. A major concern is
    USAID*s inability to establish and

     hiring 77 new entry professionals, 18 presidential USAID intends to
    continue providing in

    integrate a comprehensive workforce management interns, and 46 career
    civil service

    house training in leadership, operations, plan with its strategic goals
    and employees and

    financial management, and overall objectives. Developing such a plan is
    providing training to

    managing for results. The agency plans critical due to a reduction in its
    workforce

    - 385 individuals in supervisory classes and to train 2,500 employees in
    fiscal 2003.

    during the 1990s and expected high seminars,

    continuing attrition. - 348 employees on managing for results, and

    - 480 employees on acquisition and assistance rules and procedures.

    USAID also reported that it is developing a workforce strategy that
    systematically and comprehensively assesses its headquarter*s staffing
    needs.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal year strategies as discussed in
    agency*s Major management challenge

    2001 performance report fiscal year 2003 performance plan

    Information security: Our January USAID reported that it has improved its
    computer

    USAID plans to initiate actions to improve 2001 high- risk update noted
    that security. For example, the agency*s computer its computer security to
    reduce the agencies* and governmentwide efforts to

    security framework includes updated security possibility of unauthorized
    access. strengthen information security have policies and a risk
    assessment process. USAID

    However, the plan does not provide gained momentum and expanded.

    has also improved its security training. However, information on specific
    actions or time Nevertheless, recent audits continue to

    the report does not provide any information on the frames for completion.
    show that federal computer systems are

    content of the security training or the numbers and riddled with
    weaknesses that make them types of personnel who received the training.

    The National Institute of Standards and highly vulnerable to computer-
    based Technology (NIST) developed a security attacks and place a broad
    range of

    assessment framework and related tools critical operations and assets at
    risk of

    that agencies can use in determining the fraud, misuse, and disruption.
    Further, status of their information security the events of September 11,
    2001,

    programs. Also, Office of Management underscored the need to protect

    and Budget (OMB) guidance for fiscal America*s cyberspace against year
    2002 reporting under the potentially disastrous cyber attacks*

    Government Information Security Reform attacks that could also be
    coordinated to Act (GISRA) requires agencies to use coincide with physical
    terrorist attacks to tools developed by NIST to evaluate the maximize the
    impact of both.

    security of unclassified systems or groups of systems.

    In addition, OMB*s GISRA reporting guidance requires specific performance
    measures as well as corrective action plans with quarterly status updates.

    GAO- designated major management challenge

    Challenges with developing reliable USAID reported that it has taken a
    number of steps According to USAID*s 2003 plan, the performance measures
    and

    to address this challenge. USAID*s corrective agency is streamlining,
    simplifying, and

    accurately reporting results of

    actions included (1) developing and disseminating improving its annual
    performance programs: USAID continues to have lists of indicators that can
    be used by missions

    reporting process. In addition, the plan problems developing performance

    seeking appropriate tools to measure performance, includes an annex that
    describes measurement systems that meet

    (2) sending annual reporting guidance cables to performance measurement
    indicators

    external and internal reporting operating units on the types of data
    needed and the and how they are calculated. The annex requirements,
    including the

    documentation required, (3) expanding the also assesses the quality of the
    data.

    requirements of the Government publication of supplementary guidance to
    missions

    However, the 2003 plan does not include Performance and Results Act of
    1993.

    on managing data for maximum quality and utility, specific goals related
    to improving the and (4) holding training seminars for its overseas

    reliability of performance indicators and officers on managing for
    results. reporting of results. In 2001, USAID started to train its staff
    through a

    USAID plans to continue providing series of workshops held at missions
    around the

    training on performance management world. During fiscal 2001, USAID
    reported that it

    and reporting. However, its 2003 plan trained 750 officers on its
    programming policies and

    does not include specific training targets. nearly 500 officers on
    performance management.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal year strategies as discussed in
    agency*s Major management challenge

    2001 performance report fiscal year 2003 performance plan

    Implementing an integrated financial

    USAID acknowledged the cornerstone of its USAID*s performance goal for a
    core management system financial management improvement program is the

    financial management system certified implementation of a core financial
    system that is compliant with federal requirements has fully compliant
    with federal requirements and two indicators: standards. While USAID has
    made progress in improving some areas of financial management, it

     A fully operational, secure, and still needs to make additional
    improvements to compliant core financial system produce timely and
    accurate financial information

    installed with interfaces to major feeder for use by USAID managers in
    carrying out the

    systems. agency*s goal of providing economic, development,

     A system installed in Washington and and humanitarian assistance around
    the world in the field to allocate administrative cost support of United
    States foreign policy. to agency strategic goals.

    The Inspector General has continued to report that USAID*s financial
    management systems do not meet federal financial system requirements. In
    Fiscal 2001, USAID used a variety of nonintegrated systems that required
    data reentry, supplementary

    accounting records, and lengthy and burdensome reconciliation processes.
    Currently USAID uses a variety of nonintegrated systems that require data
    reentry, supplementary accounting records, and lengthy and burdensome
    reconciliation processes. In an attempt to mitigate this long- standing

    problem, USAID recently deployed an off- the- shelf accounting system as a
    component of its financial management system. However, USAID still lacks a
    fully integrated financial management system and

    places a greater reliance on manual processes such as reconciliations,
    because data for the same transactions are entered into multiple systems.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal year strategies as discussed in
    agency*s Major management challenge

    2001 performance report fiscal year 2003 performance plan

    Financial management information

    USAID*s report identified financial management as The plan has no goals or
    measures that unreliable/ financial statements a management challenge and
    recognized the need

    addresses this challenge. However, it

    inaccurate and do not measure

    to improve the quality and availability of financial provides a fiscal
    year 2003 time frame for

    program results and performance data. However, the report does
    establishing an integrated financial

    not directly address agency progress in obtaining management system that
    is certified an unqualified opinion on its financial statements. compliant
    with federal requirements. Also, USAID indicated that in fiscal 2003
    Fiscal year 2001 marked the first time that the

    it has a target to install a system capable USAID Inspector General was
    able to express an

    of allocating costs to strategic objectives opinion on three of USAID*s
    financial statements*

    throughout the agency. the Balance Sheet, Statement of Changes in Net
    Position, and Statement of Budgetary Resources. However, the opinions were
    qualified and achieved only through extensive efforts to overcome material
    internal control weaknesses. Thus, the progress

    made is not necessarily sustainable. Further, the Inspector General was
    still unable to express an opinion on USAID*s Statement of Net Cost and
    Statement of Financing because USAID*s financial management systems could
    not produce accurate, complete, reliable, timely, and consistent financial
    statement and performance information. USAID*s inadequate accounting
    systems make it difficult for the agency to accurately account for
    activity costs and measure its program results.

    Observations on the Department of Veterans Affairs* Efforts to Address Its
    Major

    Appendi x XXIII

    Management Challenges The following table identifies the major management
    challenges confronting the Department of Veterans Affairs (VA), which
    include the governmentwide high- risk areas of strategic human capital
    management and information security. The first column lists the challenges
    identified by our office. The second column discusses what progress, as
    discussed in its fiscal year 2001 performance report, VA has made in
    resolving its challenges. The third column discusses the extent to which
    VA*s fiscal year 2003 performance plan includes performance goals and
    measures to address the challenges that we identified. We found that VA*s
    performance

    report discussed the agency*s progress in resolving all of its major
    challenges that GAO identified or some aspect of those challenges. For
    example, while VA discusses its plan to report to the Congress in 2004 the
    outcomes of its 3- year pilot study of assisted living, it does not
    provide information on the full continuum of services needed to provide
    long- term care.

    Similarly, not all aspects of each of the agency*s six major management
    challenges were fully addressed. For example, the plan notes that it has
    undertaken several initiatives to address third- party collections
    weaknesses, but it does not have a performance measure for third- party

    collections.

    Table 24: Major Management Challenges for VA Progress in resolving major
    management

    Applicable goals, measures, and challenge as discussed in agency*s fiscal

    strategies as discussed in agency*s Major management challenge year 2001
    performance report

    fiscal year 2003 performance plan GAO- designated governmentwide high risk

    Strategic human capital management: In response to the President*s
    Management VA reported that the overall goal of its

    GAO has identified shortcomings at multiple Agenda, VA reported that it
    has developed a workforce planning initiative is to create an agencies
    involving key elements of modern human capital workforce and succession
    ongoing process* integrated with VA*s strategic human capital management,

    plan, which articulates specific strategies to strategic and budget
    planning cycles* to

    including strategic human capital planning address recruitment, retention,
    and

    predict future workforce trends and avert and organizational alignment;
    leadership

    development issues. For example, to help potential workforce crises. VA
    has continuity and succession planning;

    retain a skilled and competent workforce, VA developed an *interim*
    objective* and acquiring and developing a staff whose size, developed a
    childcare tuition assistance related performance measures and skills, and
    deployment meet agency needs;

    program for lower- income employees. targets* to recruit, develop, and
    retain a

    and creating results- oriented organizational competent, committed, and
    diverse

    cultures. In addition, VA reported that it is engaged in workforce that
    provides high- quality service

    multiple efforts to assess its current nursing to veterans and their
    families.

    We found that VA faces a potential shortage workforce and plan for the
    future. For of skilled nurses, which could have a

    example, a workgroup reported on the effect VA reported that the national
    nursing

    significant effect on VA*s quality of care of the nursing shortage and
    barriers to

    shortage continues to be a priority for the initiatives. VA also needs to
    be vigilant in its

    recruitment and retention of nurses. The health care industry, although
    there is no

    human capital strategies to ensure that it report contains a reference
    guide for the

    indication that the quality of care in VA maintains the necessary
    expertise to optimal use of hiring and pay authorities and

    medical centers has been adversely process claims as newly hired employees

    recommends legislative and nonlegislative affected by this shortage. VA
    plans to

    replace many experienced claims initiatives to address the nursing
    shortage.

    maintain an active recruitment process, and processors over the next 5
    years. legislation authorizing higher salaries for VA Finally, VA reported
    that it launched a nurses should help these efforts. However, centralized
    training initiative* the standard VA does not describe other strategies
    for

    for training future hires* for veterans service addressing this shortage.
    representatives, who request and obtain information on and evaluate
    veterans claims

    VA also reported that it plans to test national and assign a disability
    rating.

    performance standards for claims processors.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Information security: Our January 2001 VA continues to report information
    security

    For fiscal year 2003, VA*s information high- risk update noted that
    agencies* and

    controls as a material weakness on its security measure and target is to
    have 100

    governmentwide efforts to strengthen Federal Managers Financial Integrity
    Act

    percent of GISRA reviews and reporting information security have gained
    momentum (FMFIA) report for 2001. Similarly, the VA completed. Further, VA
    reported that its and expanded. Nevertheless, recent audits

    Office of Inspector General (OIG) reported efforts to revamp security
    policies into a

    continue to show federal computer systems widespread weaknesses in
    computer usable framework is still ongoing.

    are riddled with weaknesses that make them security. highly vulnerable to
    computer- based attacks

    However, this measure may not specifically and place a broad range of
    critical To improve the department*s information gauge the effectiveness
    of information operations and assets at risk of fraud,

    security program, VA reported that it met its security and the agency*s
    progress in misuse, and disruption. Further, the events

    fiscal year 2001 target to have 20 percent of implementing corrective
    actions. The of September 11, 2001, underscored the

    the departmentwide information security National Institute of Standards
    and

    need to protect America*s cyberspace program implemented. VA reported that
    the

    Technology (NIST) developed a security against potentially disastrous
    cyber

    Office of Cyber Security undertook assessment framework and related tools

    attacks* attacks that could also be numerous efforts, including

    that agencies can use in determining the coordinated to coincide with
    physical

    status of their information security programs. terrorist attacks to
    maximize the impact of

     developing and issuing a revised VA Also, the Office of Management and
    Budget both.

    Information Security Management Plan, (OMB) guidance for fiscal year 2002

    which identified security enhancement reporting under GISRA requires
    agencies to

    actions, use tools developed by NIST for evaluating  establishing a
    central security fund to

    the security of unclassified systems or consistently pursue departmentwide
    groups of systems. In addition, OMB*s security efforts,

    GISRA reporting guidance requires specific  implementing an
    enterprisewide integrated performance measures, as well as antivirus
    solution that will facilitate the corrective action plans with quarterly
    status rapid distribution of antivirus updates to

    updates. more than 150,000 VA desktops and servers at over 800 locations,

     initiating a contract to develop a certification and accreditation
    program to bring discipline, formality, and technical excellence to the
    security planning activities of VA offices during the design of systems
    and applications,

     providing VA facilities access to a single security incident response
    service to which they can report security incidents and receive advice
    related to scope, effect, and suggested remedies,

     establishing a national program in security training and education of
    computer professional staff,  beginning to revamp security policies into

    usable frameworks, and  developing and submitting to OMB the

    Government Information Security Reform Act (GISRA) report and corrective
    action plans.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    GAO- designated major management challenge

    Ensure timely and equitable access to

    In fiscal year 2001, VA reported that it VA set the performance goal to
    increase the quality VA health care: VA cannot ensure

    established baselines for two of its waiting percent of primary care and
    specialty care

    that veterans receive timely care at VA time performance goals: scheduling
    patients appointments scheduled within

    medical facilities. Nor can it ensure that it for nonurgent primary care
    and specialty 30 days of desired date to 89 percent and 87

    has maintained the capacity to provide care visits within 30 days. VA*s
    third waiting percent (from 87 and 84 percent),

    veterans who have spinal cord injuries, time goal* to have 73 percent of
    patients

    respectively. For its third waiting time goal, serious mental illnesses,
    or other special

    seen within 20 minutes of their scheduled VA established a fiscal year
    2003 target of

    needs the care that they require, as appointment* was not met overall, but
    half

    72 percent. Efforts described focus on mandated by the Congress. VA must
    also of VA*s 22 networks exceeded the goal.

    improving the quality of the data used to assess its capacity to provide
    long- term care (Early in 2002, VA combined two networks

    measure performance. for its aging veteran population and respond and now
    has 21.) to emerging health care needs, such as

    VA*s fiscal year 2003 performance target treating veterans for hepatitis
    C. VA reported that it exceeded its goal to

    related to care for veterans with spinal cord maintain at 95 percent the
    proportion of

    injuries remains at 95 percent. Its discharges from spinal cord injury
    centers to

    performance target for caring for homeless noninstitutional settings. VA
    also reported veterans with mental illness also remains at that it met its
    goal to have

    the fiscal year 2001 target of 63 percent of homeless veterans with

    63 percent; however, its strategic target for mental illness receive
    follow- up mental this goal is 68 percent. VA established three health
    outpatient care or admission to a

    new measures for caring for veterans with work, transitional, or
    rehabilitation program. hepatitis C as well as targets for two of these VA
    did not establish a target for its one measures: the fiscal year 2003
    performance hepatitis C measure, but it said that it did not

    target for percentage of all patients achieve its hepatitis C goal.
    Regarding longterm screened and percentage of all patients

    care, VA is conducting a 3- year pilot tested for hepatitis C is

    study of assisted living and plans to report 61 percent and 65 percent,
    respectively, with the outcomes to the Congress in 2004.

    strategic targets set at 80 percent and 82 percent. The fiscal year 2003
    performance target and strategic target for the third measure* percentage
    of patients with hepatitis C who have annual assessment of liver function*
    are to be determined. While VA acknowledges GAO*s concern regarding long-
    term care, its strategy for ensuring adequate capacity is not addressed in
    its fiscal year 2003 performance plan.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Maximize VA*s ability to provide health

    VA*s report addresses two of these In its fiscal year 2003 plan, VA
    established a care within available resources: VA must

    concerns* capital asset management and performance goal of attaining a

    continue to aggressively pursue procurement reform* under its *enabling 30
    percent cumulative reduction in excess

    opportunities to use its health care goal,* which aims to create an
    environment

    capacity as a result of the implementation of resources. VA could achieve
    more that fosters the delivery of *world- class* VA CARES. The national
    CARES plan will efficiencies by further modifying its

    services. The enabling goal has no key identify total excess capacity. VA
    reports

    infrastructure to support its increased performance measures. that this
    first phase of CARES, implementing

    reliance on outpatient health care services, VA reported that its Capital
    Asset

    the program in the Network 12, will take 5 expanding its use of
    alternative methods for

    Realignment for Enhanced Services years or more. acquiring support
    services, and pursuing

    (CARES) program is ongoing. additional opportunities with the Department

    VA reported that its Procurement Reform VA established the performance
    goal of of Defense (DOD) to determine costeffective Task Force, formed in
    July 2001, established

    increasing the number and dollar volume of ways to serve both veterans and

    five major goals: leverage purchasing power, sharing agreements with DOD
    by military personnel. In addition, VA must

    standardize commodities, obtain 10 percent over the previous year. This
    ensure that it collects the money it is due comprehensive VA procurement

    sharing includes joint procurement activities from third- party payers.

    information, improve VA procurement as well as sharing resources. The
    fiscal year

    organizational effectiveness, and ensure 2003 plan reiterates the creation
    of the

    sufficient and talented acquisition workforce. President*s task force but
    does not provide

    an update on the task force*s progress. VA also reported that in May 2001,
    the President*s Task Force to Improve Health While VA*s fiscal year 2003
    plan notes that it

    Care Delivery for Our Nation*s Veterans was has undertaken several
    initiatives to address

    established. The task force*s mission is to third- party collections
    weaknesses, it does

    identify ways to improve benefits and not have a performance measure for
    thirdparty services for DOD military retirees who are

    collections. Moreover, it does not also VA beneficiaries, review barriers
    and report on the status of the Revenue challenges that impede VA and DOD

    Enhancement Work Group and Steering coordination, and identify
    opportunities for Committee*s 24 recommendations. improved resource
    utilization through partnerships.

    In addition, VA reported that its Revenue Enhancement Work Group and
    Steering Committee identified 24 major

    recommendations that require action in order to bring VA*s revenue
    operation to the next level of success in improving third- party

    collections.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Process veterans* disability claims

    VA reported that it exceeded its fiscal year VA set its fiscal year 2003
    timeliness target promptly and accurately: VA has had longstanding 2001
    timeliness goal to complete ratingrelated at 165 days, and its strategic
    target at 74 difficulties in ensuring timely and

    actions on compensation and days. (The Secretary set a goal of an accurate
    decisions on veterans* claims for

    pension claims on average within 202 days; average of 100 days processing
    time for the

    disability compensation. Veterans have also however, this performance was
    worse than

    last quarter of fiscal year 2003.) However, raised concerns that claims
    decisions are the previous year*s* a trend VA for fiscal year 2002, VA
    projected that it inconsistent across VA*s regional offices. VA
    characterized as *unacceptable.* VA also

    would take an average of 208 days to needs better analyses of its
    processes in reported exceeding its goal of a national

    process rating- related actions* 27 days order to target error- prone
    types of cases

    accuracy rate of 72 percent. The fiscal year more than in fiscal year
    2001. Conversely,

    and identify processing bottlenecks* as well 2001 rate of 78 percent was
    significantly

    the accuracy rate for VA*s claims processing as determine if its
    performance goals are better than the fiscal year 2000 rate of 59 was
    expected to continue to improve. For realistic.

    percent. fiscal year 2002, VA projected that the rate

    would be 85 percent. VA*s fiscal year 2003 target is 88 percent, and its
    strategic target is 96 percent.

    VA has numerous initiatives planned for fiscal year 2003 aimed at
    improving claims processing. These initiatives focus on automation,
    training, performance

    assessment, and program evaluation.

    (Continued From Previous Page)

    Progress in resolving major management Applicable goals, measures, and

    challenge as discussed in agency*s fiscal strategies as discussed in
    agency*s Major management challenge

    year 2001 performance report fiscal year 2003 performance plan

    Develop sound agencywide management VA reported that it and OMB jointly
    Discussions of the details of the new

    strategies to build a high- performing

    developed a proposal to restructure and structure for the budget accounts
    are

    organization: VA must revise its budgetary simplify VA*s budget accounts
    and to base

    ongoing with OMB and congressional structure* to link funding to
    performance

    its budgeting on performance. VA plans to appropriations committees. The
    fiscal year goals, rather than program operations* and implement the
    proposal with the fiscal year 2003 plan states that VA intends to develop
    long- term, agencywide strategies

    2004 budget. implement the new account structure with for ensuring an
    appropriate IT infrastructure

    the 2004 budget. However, VA continues to and sound financial management.

    In fiscal year 2001, VA also reported that it work with OMB and has yet to
    delineate made numerous advances regarding its

    specific measures for this goal. enterprise architecture, including
    creating the Office of the Chief Architect, developing VA*s fiscal year
    2003 plan identifies

    and issuing the *One VA* enterprise milestones for its IT approach and

    architecture strategy and implementation implementation* part of VA*s
    enabling goal. plan, and organizing and developing the

    VA also set one IT measure and target: 100 Information Technology Board.

    percent of Chief Information Officerdesignated major IT systems conform to
    the In addition, VA reported that it received an

    *One VA* enterprise architecture. unqualified opinion on the consolidated
    financial statements for fiscal year 2000 and

    VA*s plan acknowledges the significant fiscal year 1999. VA also made
    progress in material weaknesses identified by its OIG correcting material
    weaknesses in

    and by GAO, such as noncompliance with numerous areas and committed to
    FFMIA requirements, but does not have addressing the remaining weaknesses.
    goals, measures, or strategies for

    addressing these weaknesses. Corrective actions needed to address
    noncompliance are expected to take several years to complete. In addition,
    the risk of materially

    misstating financial information remains high because of the need to
    perform extensive manual compilations and extraneous processes.

    Appendi x XXIV

    GAO Contact and Staff Acknowledgments GAO Contact Elizabeth H. Curda,
    (202) 512- 4040 Acknowledgments In addition to the individual named above,
    the following individuals made

    significant contributions to this report: Charles M. Adams, Michael
    Alexander, Cornelia M. Ashby, Sheila K. Avruch, James Beard, Ronald W.
    Beers, Steven J. Berke, Daniel Bertoni, Amy Bevan, J. Michael Bollinger,
    Elaine M. Boudreau, Barbara D. Bovbjerg, Lisa M. Brown, John Brummet,

    Jeannie M. Bryant, Susan H. Campbell, Richard Cheston, Amy M. Choi, Steven
    L. Cohen, Robert F. Dacey, Kirk Daubenspeck, Peter J. Del Toro, William J.
    Dowdal, Patrick Dugan, E. Jeanette Espinola, Fred Felder,

    Charles R. Fox, Mark Gaffigan, Jonathan M. Gill, Dianne D. Guensberg,
    Richard Harada, Margaret K. Harris, Richard J. Herley, Anne M. Hilleary,
    Samuel L. Hinojosa, Tim D. Hopkins, Albert H. Huntington, III, David W.
    Irvin, Ronald Y. Ito, Shirley B. Johnson, John V. Kelly, Karen L. Kemper,

    Edward D. Kennedy, Jeffrey Knott, Edward A. Kratzer, Carol Langelier,
    Kathy Larin, Lynn Lavalle, Evelyn Logue, Jeffery D. Malcolm, Charles W.
    Malphurs, Patty Manthe, Weldon McPhail, Carolyn K. McGowan, Valerie
    Melvin, Edmond E. Menoche, Mary A. Mohiyuddin, Robin M. Nazzaro, Tim
    Outlaw, Robert Owens, Susan Ragland, Paula M. Rascona, Patricia Rennie,
    William B. Ritt, William H. Roach, Jr., Mark Shaw, Andrew Sherrill, Nancy
    A. Simmons, Karen Sloan, George H. Stalcup, Gerald Stankosky, Keith Steck,
    Tamara Stenzel, Edward H. Stephenson, John B. Stephenson, Carolyn M.
    Taylor, Anjali Tekchandani, William Thompson, Charles Vrabel, William F.
    Wadsworth, Elwood D. White, Gregory C. Wilshusen, Ellen T. Wolfe, Ronnie
    E. Wood, and Anthony J. Wysocki.

    (450153)

    a

    GAO United States General Accounting Office

    Overall, 18 of the 23 federal agencies in our review reported in their
    fiscal year 2001 performance reports that they had taken action on all of
    the major management challenges. In their fiscal year 2003 performance
    plans, the agencies discussed, for the most part, performance goals and
    measures directly or indirectly related to the major management
    challenges. Specifically, 8 of the 23 agencies discussed directly related
    goals and measures for all of the challenges, and 8 others listed directly
    related goals and measures for most of the challenges.

    The 15 agencies that did not provide directly related goals and measures
    for all of their challenges varied in the extent to which they did address
    the challenges. Nine of the 15 agencies discussed goals and measures that
    were indirectly related to at least one of their major management
    challenges. Nine of the 15 agencies discussed strategies for addressing at
    least one of the challenges, but did not provide goals or measures. Five
    agencies mentioned no goals, measures, or strategies for one or more
    challenges.

    PERFORMANCE AND ACCOUNTABILITY

    Reported Agency Actions and Plans to Address 2001 Management Challenges
    and Program Risks

    www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 225. To view the full report,
    including the scope and methodology, click on the link above. For more
    information, contact Patricia A. Dalton at (202) 512- 6806 or daltonp@
    gao. gov.

    Highlights of GAO- 03- 225, a report to the Committee on Governmental
    Affairs, U. S. Senate

    October 2002

    In January 2001, GAO issued its special series of reports entitled the

    Performance and Accountability Series: Major Management Challenges and
    Program Risks

    which described major management challenges and highrisk areas facing 21
    federal agencies. This report describes both agency- specific challenges
    and two governmentwide high- risk areas* strategic human capital
    management and information security* that were identified in our January
    2001 reports and how agencies have reported responding to these
    challenges.

    GAO was asked to review for each of the major management challenges
    discussed in our January 2001 series, the actions agencies reported in
    their fiscal year 2001 performance reports, and the goals, measures, and
    strategies agencies reported in their fiscal year 2003 performance plans.

    We did not address the progress agencies may have made in addressing their
    management challenges during fiscal year 2002 because this information had
    not yet been published.

    22% of agencies (5) did not report progress on all the challenges in their
    fiscal year 2001 performance reports

    78% of agencies (18) reported progress on all the challenges in their
    fiscal year 2001 performance reports

    Most Agencies Did Report Progress on Management Challenges Most Agencies
    Did Not Provide Directly Related Measures for All Challenges

    65% of agencies (15) did not provide directly related goals or measures
    for all of the challenges in their fiscal year 2003 performance plans

    35% of agencies (8) provided directly related goals or measures for all of
    the challenges in their fiscal year 2003 performance plans

    9 9 5 0 2

    4 6

    8 10

    Agencies with indirect goals and measures Agencies with no goals,measures,
    or strategies Agencies with strategies but no goals and measures Agencies
    That Did Not Provide Directly

    Related Goals for All Challenges Varied in the Extent to Which They
    Address Them

    Note: Agencies that have at least one challenge in category.

    Source: GAO analysis.

    Page i GAO- 03- 225 Status of Addressing Major Management Challenges

    Contents

    Contents

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    Contents

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    Contents

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    Contents

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    Page 1 GAO- 03- 225 Status of Addressing Major Management Challenges
    United States General Accounting Office

    Washington, D. C. 20548 Page 1 GAO- 03- 225 Status of Addressing Major
    Management Challenges

    A

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    Appendix I

    Appendix I Observations on the Department of Agriculture*s Efforts to
    Address Its Major Management Challenges

    Page 8 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix I Observations on the Department of Agriculture*s Efforts to
    Address Its Major Management Challenges

    Page 9 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix I Observations on the Department of Agriculture*s Efforts to
    Address Its Major Management Challenges

    Page 10 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix I Observations on the Department of Agriculture*s Efforts to
    Address Its Major Management Challenges

    Page 11 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix I Observations on the Department of Agriculture*s Efforts to
    Address Its Major Management Challenges

    Page 12 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix I Observations on the Department of Agriculture*s Efforts to
    Address Its Major Management Challenges

    Page 13 GAO- 03- 225 Status of Addressing Major Management Challenges

    Page 14 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix II

    Appendix II Observations on the Department of Commerce*s Efforts to
    Address Its Major Management Challenges

    Page 15 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix II Observations on the Department of Commerce*s Efforts to
    Address Its Major Management Challenges

    Page 16 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix II Observations on the Department of Commerce*s Efforts to
    Address Its Major Management Challenges

    Page 17 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix II Observations on the Department of Commerce*s Efforts to
    Address Its Major Management Challenges

    Page 18 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix II Observations on the Department of Commerce*s Efforts to
    Address Its Major Management Challenges

    Page 19 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix II Observations on the Department of Commerce*s Efforts to
    Address Its Major Management Challenges

    Page 20 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix II Observations on the Department of Commerce*s Efforts to
    Address Its Major Management Challenges

    Page 21 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix II Observations on the Department of Commerce*s Efforts to
    Address Its Major Management Challenges

    Page 22 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix II Observations on the Department of Commerce*s Efforts to
    Address Its Major Management Challenges

    Page 23 GAO- 03- 225 Status of Addressing Major Management Challenges

    Page 24 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix III

    Appendix III Observations on the Department of Education*s Efforts to
    Address Its Major Management Challenges

    Page 25 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix III Observations on the Department of Education*s Efforts to
    Address Its Major Management Challenges

    Page 26 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix III Observations on the Department of Education*s Efforts to
    Address Its Major Management Challenges

    Page 27 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix III Observations on the Department of Education*s Efforts to
    Address Its Major Management Challenges

    Page 28 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix III Observations on the Department of Education*s Efforts to
    Address Its Major Management Challenges

    Page 29 GAO- 03- 225 Status of Addressing Major Management Challenges

    Page 30 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix IV

    Appendix IV Observations on the Department of Energy*s Efforts to Address
    Its Major Management

    Challenges Page 31 GAO- 03- 225 Status of Addressing Major Management
    Challenges

    Appendix IV Observations on the Department of Energy*s Efforts to Address
    Its Major Management

    Challenges Page 32 GAO- 03- 225 Status of Addressing Major Management
    Challenges

    Appendix IV Observations on the Department of Energy*s Efforts to Address
    Its Major Management

    Challenges Page 33 GAO- 03- 225 Status of Addressing Major Management
    Challenges

    Appendix IV Observations on the Department of Energy*s Efforts to Address
    Its Major Management

    Challenges Page 34 GAO- 03- 225 Status of Addressing Major Management
    Challenges

    Appendix IV Observations on the Department of Energy*s Efforts to Address
    Its Major Management

    Challenges Page 35 GAO- 03- 225 Status of Addressing Major Management
    Challenges

    Appendix IV Observations on the Department of Energy*s Efforts to Address
    Its Major Management

    Challenges Page 36 GAO- 03- 225 Status of Addressing Major Management
    Challenges

    Appendix IV Observations on the Department of Energy*s Efforts to Address
    Its Major Management

    Challenges Page 37 GAO- 03- 225 Status of Addressing Major Management
    Challenges

    Appendix IV Observations on the Department of Energy*s Efforts to Address
    Its Major Management

    Challenges Page 38 GAO- 03- 225 Status of Addressing Major Management
    Challenges

    Appendix IV Observations on the Department of Energy*s Efforts to Address
    Its Major Management

    Challenges Page 39 GAO- 03- 225 Status of Addressing Major Management
    Challenges

    Appendix IV Observations on the Department of Energy*s Efforts to Address
    Its Major Management

    Challenges Page 40 GAO- 03- 225 Status of Addressing Major Management
    Challenges

    Page 41 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix V

    Appendix V Observations on the Environmental Protection Agency*s Efforts
    to Address Its Major Management Challenges

    Page 42 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix V Observations on the Environmental Protection Agency*s Efforts
    to Address Its Major Management Challenges

    Page 43 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix V Observations on the Environmental Protection Agency*s Efforts
    to Address Its Major Management Challenges

    Page 44 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix V Observations on the Environmental Protection Agency*s Efforts
    to Address Its Major Management Challenges

    Page 45 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix V Observations on the Environmental Protection Agency*s Efforts
    to Address Its Major Management Challenges

    Page 46 GAO- 03- 225 Status of Addressing Major Management Challenges

    Page 47 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix VI

    Appendix VI Observations on the Federal Emergency Management Agency*s
    Efforts to Address Its Major Management Challenges

    Page 48 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix VI Observations on the Federal Emergency Management Agency*s
    Efforts to Address Its Major Management Challenges

    Page 49 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix VI Observations on the Federal Emergency Management Agency*s
    Efforts to Address Its Major Management Challenges

    Page 50 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix VI Observations on the Federal Emergency Management Agency*s
    Efforts to Address Its Major Management Challenges

    Page 51 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix VI Observations on the Federal Emergency Management Agency*s
    Efforts to Address Its Major Management Challenges

    Page 52 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix VI Observations on the Federal Emergency Management Agency*s
    Efforts to Address Its Major Management Challenges

    Page 53 GAO- 03- 225 Status of Addressing Major Management Challenges

    Page 54 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix VII

    Appendix VII Observations on the General Services Administration*s Efforts
    to Address Its Major Management Challenges

    Page 55 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix VII Observations on the General Services Administration*s Efforts
    to Address Its Major Management Challenges

    Page 56 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix VII Observations on the General Services Administration*s Efforts
    to Address Its Major Management Challenges

    Page 57 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix VII Observations on the General Services Administration*s Efforts
    to Address Its Major Management Challenges

    Page 58 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix VII Observations on the General Services Administration*s Efforts
    to Address Its Major Management Challenges

    Page 59 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix VII Observations on the General Services Administration*s Efforts
    to Address Its Major Management Challenges

    Page 60 GAO- 03- 225 Status of Addressing Major Management Challenges

    Page 61 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix VIII

    Appendix VIII Observations on the Department of Health and Human Service*s
    Efforts to Address Its Major Management Challenges

    Page 62 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix VIII Observations on the Department of Health and Human Service*s
    Efforts to Address Its Major Management Challenges

    Page 63 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix VIII Observations on the Department of Health and Human Service*s
    Efforts to Address Its Major Management Challenges

    Page 64 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix VIII Observations on the Department of Health and Human Service*s
    Efforts to Address Its Major Management Challenges

    Page 65 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix VIII Observations on the Department of Health and Human Service*s
    Efforts to Address Its Major Management Challenges

    Page 66 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix VIII Observations on the Department of Health and Human Service*s
    Efforts to Address Its Major Management Challenges

    Page 67 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix VIII Observations on the Department of Health and Human Service*s
    Efforts to Address Its Major Management Challenges

    Page 68 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix VIII Observations on the Department of Health and Human Service*s
    Efforts to Address Its Major Management Challenges

    Page 69 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix VIII Observations on the Department of Health and Human Service*s
    Efforts to Address Its Major Management Challenges

    Page 70 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix VIII Observations on the Department of Health and Human Service*s
    Efforts to Address Its Major Management Challenges

    Page 71 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix VIII Observations on the Department of Health and Human Service*s
    Efforts to Address Its Major Management Challenges

    Page 72 GAO- 03- 225 Status of Addressing Major Management Challenges

    Page 73 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix IX

    Appendix IX Observations on the Department of Housing and Urban
    Development*s Efforts to Address Its Major Management Challenges

    Page 74 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix IX Observations on the Department of Housing and Urban
    Development*s Efforts to Address Its Major Management Challenges

    Page 75 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix IX Observations on the Department of Housing and Urban
    Development*s Efforts to Address Its Major Management Challenges

    Page 76 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix IX Observations on the Department of Housing and Urban
    Development*s Efforts to Address Its Major Management Challenges

    Page 77 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix IX Observations on the Department of Housing and Urban
    Development*s Efforts to Address Its Major Management Challenges

    Page 78 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix IX Observations on the Department of Housing and Urban
    Development*s Efforts to Address Its Major Management Challenges

    Page 79 GAO- 03- 225 Status of Addressing Major Management Challenges

    Page 80 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix X

    Appendix X Observations on the Department of the Interior*s Efforts to
    Address Its Major Management Challenges

    Page 81 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix X Observations on the Department of the Interior*s Efforts to
    Address Its Major Management Challenges

    Page 82 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix X Observations on the Department of the Interior*s Efforts to
    Address Its Major Management Challenges

    Page 83 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix X Observations on the Department of the Interior*s Efforts to
    Address Its Major Management Challenges

    Page 84 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix X Observations on the Department of the Interior*s Efforts to
    Address Its Major Management Challenges

    Page 85 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix X Observations on the Department of the Interior*s Efforts to
    Address Its Major Management Challenges

    Page 86 GAO- 03- 225 Status of Addressing Major Management Challenges

    Page 87 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XI

    Appendix XI Observations on the Department of Justice*s Efforts to Address
    Its Major Management Challenges

    Page 88 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XI Observations on the Department of Justice*s Efforts to Address
    Its Major Management Challenges

    Page 89 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XI Observations on the Department of Justice*s Efforts to Address
    Its Major Management Challenges

    Page 90 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XI Observations on the Department of Justice*s Efforts to Address
    Its Major Management Challenges

    Page 91 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XI Observations on the Department of Justice*s Efforts to Address
    Its Major Management Challenges

    Page 92 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XI Observations on the Department of Justice*s Efforts to Address
    Its Major Management Challenges

    Page 93 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XI Observations on the Department of Justice*s Efforts to Address
    Its Major Management Challenges

    Page 94 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XI Observations on the Department of Justice*s Efforts to Address
    Its Major Management Challenges

    Page 95 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XI Observations on the Department of Justice*s Efforts to Address
    Its Major Management Challenges

    Page 96 GAO- 03- 225 Status of Addressing Major Management Challenges

    Page 97 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XII

    Appendix XII Observations on the Department of Labor*s Efforts to Address
    Its Major Management

    Challenges Page 98 GAO- 03- 225 Status of Addressing Major Management
    Challenges

    Appendix XII Observations on the Department of Labor*s Efforts to Address
    Its Major Management

    Challenges Page 99 GAO- 03- 225 Status of Addressing Major Management
    Challenges

    Appendix XII Observations on the Department of Labor*s Efforts to Address
    Its Major Management

    Challenges Page 100 GAO- 03- 225 Status of Addressing Major Management
    Challenges

    Appendix XII Observations on the Department of Labor*s Efforts to Address
    Its Major Management

    Challenges Page 101 GAO- 03- 225 Status of Addressing Major Management
    Challenges

    Appendix XII Observations on the Department of Labor*s Efforts to Address
    Its Major Management

    Challenges Page 102 GAO- 03- 225 Status of Addressing Major Management
    Challenges

    Appendix XII Observations on the Department of Labor*s Efforts to Address
    Its Major Management

    Challenges Page 103 GAO- 03- 225 Status of Addressing Major Management
    Challenges

    Page 104 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XIII

    Appendix XIII Observations on the National Aeronautics and Space
    Administration*s Efforts to Address Its Major Management Challenges

    Page 105 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XIII Observations on the National Aeronautics and Space
    Administration*s Efforts to Address Its Major Management Challenges

    Page 106 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XIII Observations on the National Aeronautics and Space
    Administration*s Efforts to Address Its Major Management Challenges

    Page 107 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XIII Observations on the National Aeronautics and Space
    Administration*s Efforts to Address Its Major Management Challenges

    Page 108 GAO- 03- 225 Status of Addressing Major Management Challenges

    Page 109 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XIV

    Appendix XIV Observations on the Nuclear Regulatory Commission*s Efforts
    to Address Its Major Management Challenges

    Page 110 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XIV Observations on the Nuclear Regulatory Commission*s Efforts
    to Address Its Major Management Challenges

    Page 111 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XIV Observations on the Nuclear Regulatory Commission*s Efforts
    to Address Its Major Management Challenges

    Page 112 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XIV Observations on the Nuclear Regulatory Commission*s Efforts
    to Address Its Major Management Challenges

    Page 113 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XIV Observations on the Nuclear Regulatory Commission*s Efforts
    to Address Its Major Management Challenges

    Page 114 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XIV Observations on the Nuclear Regulatory Commission*s Efforts
    to Address Its Major Management Challenges

    Page 115 GAO- 03- 225 Status of Addressing Major Management Challenges

    Page 116 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XV

    Appendix XV Observations on the National Science Foundation*s Efforts to
    Address Its Major Management Challenges

    Page 117 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XV Observations on the National Science Foundation*s Efforts to
    Address Its Major Management Challenges

    Page 118 GAO- 03- 225 Status of Addressing Major Management Challenges

    Page 119 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XVI

    Appendix XVI Observations on the Office of Personnel Management*s Efforts
    to Address Its Major Management Challenges

    Page 120 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XVI Observations on the Office of Personnel Management*s Efforts
    to Address Its Major Management Challenges

    Page 121 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XVI Observations on the Office of Personnel Management*s Efforts
    to Address Its Major Management Challenges

    Page 122 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XVI Observations on the Office of Personnel Management*s Efforts
    to Address Its Major Management Challenges

    Page 123 GAO- 03- 225 Status of Addressing Major Management Challenges

    Page 124 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XVII

    Appendix XVII Observations on the Small Business Administration*s Efforts
    to Address Its Major Management Challenges

    Page 125 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XVII Observations on the Small Business Administration*s Efforts
    to Address Its Major Management Challenges

    Page 126 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XVII Observations on the Small Business Administration*s Efforts
    to Address Its Major Management Challenges

    Page 127 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XVII Observations on the Small Business Administration*s Efforts
    to Address Its Major Management Challenges

    Page 128 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XVII Observations on the Small Business Administration*s Efforts
    to Address Its Major Management Challenges

    Page 129 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XVII Observations on the Small Business Administration*s Efforts
    to Address Its Major Management Challenges

    Page 130 GAO- 03- 225 Status of Addressing Major Management Challenges

    Page 131 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XVIII

    Appendix XVIII Observations on the Social Security Administration*s
    Efforts to Address Its Major Management Challenges

    Page 132 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XVIII Observations on the Social Security Administration*s
    Efforts to Address Its Major Management Challenges

    Page 133 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XVIII Observations on the Social Security Administration*s
    Efforts to Address Its Major Management Challenges

    Page 134 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XVIII Observations on the Social Security Administration*s
    Efforts to Address Its Major Management Challenges

    Page 135 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XVIII Observations on the Social Security Administration*s
    Efforts to Address Its Major Management Challenges

    Page 136 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XVIII Observations on the Social Security Administration*s
    Efforts to Address Its Major Management Challenges

    Page 137 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XVIII Observations on the Social Security Administration*s
    Efforts to Address Its Major Management Challenges

    Page 138 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XVIII Observations on the Social Security Administration*s
    Efforts to Address Its Major Management Challenges

    Page 139 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XVIII Observations on the Social Security Administration*s
    Efforts to Address Its Major Management Challenges

    Page 140 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XVIII Observations on the Social Security Administration*s
    Efforts to Address Its Major Management Challenges

    Page 141 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XVIII Observations on the Social Security Administration*s
    Efforts to Address Its Major Management Challenges

    Page 142 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XVIII Observations on the Social Security Administration*s
    Efforts to Address Its Major Management Challenges

    Page 143 GAO- 03- 225 Status of Addressing Major Management Challenges

    Page 144 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XIX

    Appendix XIX Observations on the Department of State*s Efforts to Address
    Its Major Management Challenges

    Page 145 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XIX Observations on the Department of State*s Efforts to Address
    Its Major Management Challenges

    Page 146 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XIX Observations on the Department of State*s Efforts to Address
    Its Major Management Challenges

    Page 147 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XIX Observations on the Department of State*s Efforts to Address
    Its Major Management Challenges

    Page 148 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XIX Observations on the Department of State*s Efforts to Address
    Its Major Management Challenges

    Page 149 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XIX Observations on the Department of State*s Efforts to Address
    Its Major Management Challenges

    Page 150 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XIX Observations on the Department of State*s Efforts to Address
    Its Major Management Challenges

    Page 151 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XIX Observations on the Department of State*s Efforts to Address
    Its Major Management Challenges

    Page 152 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XIX Observations on the Department of State*s Efforts to Address
    Its Major Management Challenges

    Page 153 GAO- 03- 225 Status of Addressing Major Management Challenges

    Page 154 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XX

    Appendix XX Observations on the Department of Transportation*s Efforts to
    Address Its Major Management Challenges

    Page 155 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XX Observations on the Department of Transportation*s Efforts to
    Address Its Major Management Challenges

    Page 156 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XX Observations on the Department of Transportation*s Efforts to
    Address Its Major Management Challenges

    Page 157 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XX Observations on the Department of Transportation*s Efforts to
    Address Its Major Management Challenges

    Page 158 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XX Observations on the Department of Transportation*s Efforts to
    Address Its Major Management Challenges

    Page 159 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XX Observations on the Department of Transportation*s Efforts to
    Address Its Major Management Challenges

    Page 160 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XX Observations on the Department of Transportation*s Efforts to
    Address Its Major Management Challenges

    Page 161 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XX Observations on the Department of Transportation*s Efforts to
    Address Its Major Management Challenges

    Page 162 GAO- 03- 225 Status of Addressing Major Management Challenges

    Page 163 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XXI

    Appendix XXI Observations on the Department of the Treasury*s Efforts to
    Address Its Major Management Challenges

    Page 164 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XXI Observations on the Department of the Treasury*s Efforts to
    Address Its Major Management Challenges

    Page 165 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XXI Observations on the Department of the Treasury*s Efforts to
    Address Its Major Management Challenges

    Page 166 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XXI Observations on the Department of the Treasury*s Efforts to
    Address Its Major Management Challenges

    Page 167 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XXI Observations on the Department of the Treasury*s Efforts to
    Address Its Major Management Challenges

    Page 168 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XXI Observations on the Department of the Treasury*s Efforts to
    Address Its Major Management Challenges

    Page 169 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XXI Observations on the Department of the Treasury*s Efforts to
    Address Its Major Management Challenges

    Page 170 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XXI Observations on the Department of the Treasury*s Efforts to
    Address Its Major Management Challenges

    Page 171 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XXI Observations on the Department of the Treasury*s Efforts to
    Address Its Major Management Challenges

    Page 172 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XXI Observations on the Department of the Treasury*s Efforts to
    Address Its Major Management Challenges

    Page 173 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XXI Observations on the Department of the Treasury*s Efforts to
    Address Its Major Management Challenges

    Page 174 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XXI Observations on the Department of the Treasury*s Efforts to
    Address Its Major Management Challenges

    Page 175 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XXI Observations on the Department of the Treasury*s Efforts to
    Address Its Major Management Challenges

    Page 176 GAO- 03- 225 Status of Addressing Major Management Challenges

    Page 177 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XXII

    Appendix XXII Observations on the U. S. Agency for International
    Development*s Efforts to Address Its Major Management Challenges

    Page 178 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XXII Observations on the U. S. Agency for International
    Development*s Efforts to Address Its Major Management Challenges

    Page 179 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XXII Observations on the U. S. Agency for International
    Development*s Efforts to Address Its Major Management Challenges

    Page 180 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XXII Observations on the U. S. Agency for International
    Development*s Efforts to Address Its Major Management Challenges

    Page 181 GAO- 03- 225 Status of Addressing Major Management Challenges

    Page 182 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XXIII

    Appendix XXIII Observations on the Department of Veterans Affairs* Efforts
    to Address Its Major

    Management Challenges Page 183 GAO- 03- 225 Status of Addressing Major
    Management Challenges

    Appendix XXIII Observations on the Department of Veterans Affairs* Efforts
    to Address Its Major

    Management Challenges Page 184 GAO- 03- 225 Status of Addressing Major
    Management Challenges

    Appendix XXIII Observations on the Department of Veterans Affairs* Efforts
    to Address Its Major

    Management Challenges Page 185 GAO- 03- 225 Status of Addressing Major
    Management Challenges

    Appendix XXIII Observations on the Department of Veterans Affairs* Efforts
    to Address Its Major

    Management Challenges Page 186 GAO- 03- 225 Status of Addressing Major
    Management Challenges

    Appendix XXIII Observations on the Department of Veterans Affairs* Efforts
    to Address Its Major

    Management Challenges Page 187 GAO- 03- 225 Status of Addressing Major
    Management Challenges

    Appendix XXIII Observations on the Department of Veterans Affairs* Efforts
    to Address Its Major

    Management Challenges Page 188 GAO- 03- 225 Status of Addressing Major
    Management Challenges

    Page 189 GAO- 03- 225 Status of Addressing Major Management Challenges

    Appendix XXIV

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