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.

(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

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.

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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.

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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

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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

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

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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 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.

(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 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

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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

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

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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

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.

(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 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;

(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

 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.

(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

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.

(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

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.

(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 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,

(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

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

(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

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.

(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

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.

(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

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

(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

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.

(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 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.

(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 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.

(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

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

(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

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.

(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 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.

(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 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.

(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 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.

(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 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

(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

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

(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

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

(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

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.

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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

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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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: 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

(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

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.

(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

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.

(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 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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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

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.

(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

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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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 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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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 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.

(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

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.

(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: 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.

(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

(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.

(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 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.

(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

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.

(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 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.

(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

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.

(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

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,

(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

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.

(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

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

(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

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.

(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

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.

(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

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

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

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

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

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

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

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Appendix II

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

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

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

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

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

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

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

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

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

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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

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

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

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

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

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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

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Appendix V

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

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

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

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

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

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Appendix VI

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

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

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

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

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

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

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Appendix VII

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

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

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

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

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

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

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Appendix VIII

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

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

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

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

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

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

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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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