Posthearing Questions Related to Agencies' Implementation of the
Chief Human Capital Officers (CHCO) Act (18-JUN-04, GAO-04-897R).
This letter responds to the request by the Chairwoman,
Subcommittee on Civil Service and Agency Organization, House
Committee on Government Reform that GAO provide answers to
follow-up questions from recent hearing entitled "First Year on
the Job: Chief Human Capital Officers."
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-04-897R
ACCNO: A10588
TITLE: Posthearing Questions Related to Agencies' Implementation
of the Chief Human Capital Officers (CHCO) Act
DATE: 06/18/2004
SUBJECT: Agency missions
Federal agencies
Hiring policies
Human resources utilization
Interagency relations
Personnel management
Strategic planning
Human capital
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GAO-04-897R
United States General Accounting Office Washington, DC 20548
June 18, 2004
The Honorable Jo Ann Davis
Chairwoman
Subcommittee on Civil Service and Agency
Organization
Committee on Government Reform
House of Representatives
Subject: Posthearing Questions Related to Agencies' Implementation of the
Chief Human Capital Officers (CHCO) Act
Dear Madam Chairwoman:
On May 18, 2004, I testified before your Subcommittee at a hearing
entitled "First Year on the Job: Chief Human Capital Officers."1 This
letter responds to your request that I provide answers to follow-up
questions from the hearing. Your questions, along with my responses,
follow.
1. You indicated the importance of a strategic plan to provide a sense of
direction for the Council and that a draft plan has been prepared. Do you
anticipate a timely completion of the plan?
We have not identified any barriers or obstacles that would prevent the
Council from completing its strategic plan, which is in draft, in a timely
manner, although the Council has not established a target date for
completion. The strategic plan is an organization's starting point and
foundation for defining what the organization seeks to accomplish,
identifying the strategies it will use to achieve desired results, and
then determining how well it succeeds in reaching results-oriented goals
and achieving objectives. Developing a strategic plan can help the Council
clarify organizational priorities and unify the Council's members in the
pursuit of shared goals.
2. Aside from winning the war on talent as alluded to in your testimony,
what, in your view, are other pressing human capital issues facing the
federal government today and how should the CHCO Council address those
issues?
The nation's large and growing long-term fiscal imbalance and a range of
other 21st century challenges are driving a fundamental transformation of
the federal
1 U.S. General Accounting Office, Human Capital: Observations on Agencies'
Implementation of the Chief Human Capital Officers Act, GAO-04-800T
(Washington, D.C.: May 18, 2004).
government. This transformation requires a comprehensive reexamination of
what the government does, how it does business, and in some cases, who
does its business. Ultimately, to successfully transform, the federal
government must change its culture to become more results-oriented,
customer-focused, and collaborative. Specifically, agencies continue to
face pervasive human capital challenges in four key areas:
o Leadership: Top leadership in agencies must provide the committed and
inspired attention needed to address human capital and related
organization transformation issues.
o Strategic human capital planning: Agencies' human capital planning
efforts need to be more fully and demonstrably integrated with mission and
critical program goals.
o Acquiring, developing, and retaining talent: Additional efforts are
needed to improve recruiting, hiring, professional development, and
retention strategies to ensure that agencies have the needed talent.
o Results-oriented organizational cultures: Agencies continue to lack
organizational cultures that promote high performance and accountability
and empower and include employees in setting and accomplishing
programmatic goals.
The Council can play an important leadership role in developing policies
that are sensitive to implementation concerns and gain consensus and
consistent followthrough within the executive branch. In addition to
working to streamline hiring and recruitment, we believe that the Council
has the opportunity to address several immediate and significant needs of
the government's human capital community. These needs include the
following:
o Modernizing agency performance management systems and creating a clear
linkage between individual performance and organizational success.
o Developing the capabilities required for successful implementation of
human capital reform.
o Implementing strategic human capital planning to ensure that an
agency's human capital program optimizes its workforce's strengths.
o Transforming the human capital office and its processes to more fully
contribute to key agency decisions.
3. Where do you think the CHCO Council should most focus their oversight
attention?
The Council can play a key role in helping agencies implement human
capital policies and facilitating the oversight responsibilities of OPM.
For example, we recently testified that agencies appear to be making
limited use of new hiring flexibilities.2 According to OPM, the agencies
have not as fully embraced the new tools and
2 U.S. General Accounting Office, Human Capital: Status of Efforts to
Improve Hiring, GAO-04-796T (Chicago, Ill.: June 7, 2004).
flexibilities as OPM had hoped.3 In our prior work, we recommended that
OPM work with and through the CHCO Council to more thoroughly research,
compile, and analyze information on the effective and innovative use of
human capital flexibilities. We noted that sharing information about when,
where, and how the broad range of personnel flexibilities is being used,
and should be used, could help agencies meet their human capital
management challenges. OPM and agencies need to continue to work together
to improve the hiring process, and the CHCO Council should be a key
vehicle for this needed collaboration. To accomplish this effort, agencies
need to provide OPM with timely and comprehensive information about their
experiences in using various approaches and flexibilities to improve their
hiring processes. OPM- working through the CHCO Council-can, in turn, help
by serving as a facilitator in the collection and exchange of information
about agencies' effective practices and successful approaches to improved
hiring. Such additional collaboration between OPM and the agencies could
go a long way in helping the government as a whole and individual agencies
to improve the processes for quickly hiring highly qualified candidates to
fill important federal jobs.
4. In your research, are CHCOs becoming integrated into the leadership
teams of the agencies in which they now exist? If not, is this the
direction in which they are moving?
The successful integration of CHCOs into the leadership teams of the
agencies is best evidenced and evaluated by how well they help the agency
achieve strategic results and pursue its mission. Because the CHCOs have
only been in place a little over a year, it is too early to assess
results. However, agency CHCOs told us that the CHCO Act has lent support
to their efforts by establishing a single point within the agencies with
the perspective, responsibility, and authority to ensure the successful
implementation of strategic human capital initiatives. They indicated that
their designation as Chief Human Capital Officer has strengthened
agencies' human capital direction by providing strategic human capital
management attention at the highest level of the agencies and the
opportunity to advance issues directly to the head of the agency.
In addition, the CHCOs identified different strategies the agencies
employed to integrate the CHCO position into their leadership teams,
underscoring that there is no single best model for all agencies and all
circumstances. The significant differences included:
o Significant additional management responsibilities or focused scope of
responsibility for human capital: As we testified, half of the CHCOs have
major responsibilities in addition to human capital management. These
responsibilities include financial management, information management,
administrative services, facilities management, and procurement. According
to CHCOs who occupy positions that oversee significant management
functions in addition to human capital, they already have a "seat at the
table," and have a voice in the strategic activities of their agency.
However, a number of CHCOs who are responsible only for human capital
matters also reported
3 U.S. Office of Personnel Management, Statement of the Honorable Dan G.
Blair, Deputy Director, Office of Personnel Management (Chicago, Ill.:
June 7, 2004).
that they fully participate in the strategic decision making of their
agency. While the CHCO Act provides for agencies integrating the position
into the leadership team as best fits their needs, we have previously
reported that agency leaders are including human capital leaders in key
agency strategic planning and decision making and, as a result, the
agencies are engaging the human capital organization as a strategic
partner in achieving desired outcomes relating to the agency's mission.4
o Reporting directly to the agency head or reporting to another senior
leadership position: Underscoring the CHCOs statements that they are
functioning as an integral part of the agency's senior leadership team,
more than half (15 of 24) of the CHCOs report directly to the agency head.
OPM's guidance to agencies urged agency leaders to ensure that if the CHCO
did not report directly to the agency head, the CHCO should serve as an
integral part of the agencies' leadership team, participating fully in its
deliberations and decisions and sharing accountability with the other
members of that team for the agency's bottom line performance and mission
results. Such a role clearly provides the opportunity to integrate the
human capital initiatives with the other key processes and decisionmaking
in the agency.
o Career executive or political appointee: The CHCOs were evenly split
between career executives and political appointees. Since the inaugural
CHCO appointments, two agencies have changed their CHCO designation from
the incumbent career executive to a higher-level political appointee,
although this is not sufficient to draw conclusions as to the general
direction of appointments.
Although the so-called "seat-at-the-table" is significant, CHCOs are
ultimately valued not by place, but by the value they add to the agencies'
strategic human capital approaches in attaining organizational goals. We
have found that CHCOs are positioned in roles where they have the
opportunity to more directly affect agency decisions and achievement of
goals.
5. As you stated in your report, many CHCOs are currently holding multiple
positions, in addition to their CHCO title. Is this a good thing for the
future of the position and the agencies?
We believe as time passes and agency CHCOs become more established in
their roles and responsibilities, it will become exceedingly difficult for
CHCOs to devote the necessary time and attention to the CHCO role if CHCOs
are "dual-headed" with other key functions. As we testified, half of the
CHCOs have significant management responsibilities in multiple areas. A
number of these CHCOs told us that they believe such multiple
responsibilities work well for them in their agency. For example, some
CHCOs with key responsibilities in multiple areas told us they believe
this enables them to achieve quicker decisionmaking on strategic human
capital issues. On the other hand, other CHCOs said they prefer devoting
all their attention to human capital issues.
4 U.S. General Accounting Office, Human Capital: Selected Agency Actions
to Integrate Human Capital Approaches to Attain Mission Results,
GAO-03-446 (Washington, D.C.: Apr. 11, 2003).
6. To follow up on the last question, what other positions are compatible
with the CHCO such that one could hold that title along with another
position?
Early in the federal experience of establishing the CFO and CIO positions,
we testified that the challenges facing most agencies in financial and
information management required full-time leadership by separate
individuals with appropriate talent, skills, and experience in these two
areas. For smaller agencies, an executive wearing several management hats
may be appropriate. There is not necessarily any one model that is either
the most appropriate for or that will guarantee success at every federal
department and agency. The mission, size, and culture unique to each
federal agency make it unwise to prescribe any single approach. This
concern will be best considered in light of the progress CHCOs demonstrate
in moving forward on their human capital strategies and plans.
More generally, we have suggested that Congress consider establishing
Chief Operating Officer (COO) or equivalent positions in selected agencies
as one element of an overall strategy to address certain systemic federal
governance and management challenges. These COOs would be part of a
broader effort to elevate attention to management and transformation
issues, integrate various key management and transformation efforts, and
institutionalize accountability for addressing management issues leading a
transformation.5 By their very nature, the problems and challenges facing
agencies are crosscutting and thus require coordinated and integrated
solutions. However, the risk is that management responsibilities
(including, but not limited to information technology, financial
management, and human capital) will be "stovepiped" and thus will not be
implemented in a comprehensive, ongoing, and integrated manner. While
officials with management responsibilities often have successfully worked
together, there needs to be a single point within agencies with the
perspective and responsibilities- as well as the authority-to ensure
successful implementation of functional management initiatives and, if
appropriate, transformation efforts.
7. Do you anticipate the CHCO Council playing a key role in making
government-wide recommendations for improving personnel policy?
We anticipate the CHCO Council will play a key role in leading the federal
government's human capital reform efforts. Our experience with the CFO Act
shows the importance of having a central advisory group to help promote
the implementation of financial management reform. The CFO has played a
lead role in creating goals for improving federal financial management
practices, providing sound advice to OMB on revisions to executive branch
guidance and policy, and building a professional community of
governmentwide financial management expertise. The CHCO Council can play a
similarly useful role.
5For additional information on the COO concept and how it might apply to
federal agencies, see U.S. General Accounting Office, Highlights of a GAO
Roundtable: The Chief Operating Officer Concept: A Potential Strategy to
Address Federal Governance Challenges, GAO-03-192SP (Washington D.C.:
October 2002).
Our past work has found that approaches to interagency collaboration, such
as the CHCO council, have emerged as an important central leadership
strategy in both developing policies that are sensitive to implementation
concerns and gaining consensus and consistent follow through within the
executive branch. In effect, agency collaboration can serve to
institutionalize many management policies initiated by either Congress or
OMB. We believe it is reasonable that the success that OMB has achieved
with other interagency councils in fostering communication across the
executive branch, building commitment to reform efforts, tapping the
talents that exist within agencies, keeping management issues in the
forefront, and initiating improvement projects can be expected of the CHCO
Council under the leadership of OPM.
8. Are there any notable successes or glaring weaknesses that the CHCO
Council should address as it enters into its second year of activity?
As we testified, the Council has successfully set an agenda by creating
five subcommittees to address and recommend change for five key areas
identified by the Council's leadership as critical to the success of the
strategic management of the human capital initiative outlined in the
President's Management Agenda. Several of the issues coincide with the
four key areas: leadership; strategic human capital planning; acquiring,
developing, and retaining talent; and results-oriented organizational
cultures, which we identified in our high-risk series on strategic human
capital management.6
Identifying priority human capital issues, organizing the leadership and
talent to analyze them, proposing actions to be taken, and frequently
meeting to share information and perspectives are good first steps. We
understand that the full Council will meet over the coming months to
consider the recommendations of the subcommittees and advance an agenda of
needed improvements to better address the issues.
The urgency of addressing the key human capital challenges the government
faces will require the CHCO Council to become very active in providing
input to OPM on the results of its activities and OPM to effectively use
the Council to enhance the ability of agencies to strategically manage
their human capital to accomplish transformational change.
_ _ _ _ _ _
6 U.S. General Accounting Office, High-Risk Series: Strategic Human
Capital Management, GAO-03120 (Washington, D.C.: January 2003).
For additional information on our work on governmentwide human capital
issues, please contact me on 512-6806 or at [email protected].
Sincerely yours,
J. Christopher Mihm
Managing Director, Strategic Issues
(450195)
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