Organizational Transformation: Implementing Chief Operating
Officer/Chief Management Officer Positions in Federal Agencies
(13-DEC-07, GAO-08-322T).
As agencies across the federal government embark on large-scale
organizational change needed to address 21st century challenges,
there is a compelling need for leadership to provide the
continuing, focused attention essential to completing these
multiyear business-related transformations. At the same time,
many agencies are suffering from a range of long-standing
management problems that are undermining their ability to
accomplish their missions and achieve results. One proposed
approach to address these challenges is to have COO/ CMO
positions in federal agencies. This statement is mostly drawn
from GAO's report released today (GAO-08-34) that discusses
criteria that can be used to determine the type of COO/CMO that
ought to be established in federal agencies and strategies for
implementing these positions. To do this, GAO reviewed four
organizations with COO/CMO-type positions and convened a forum.
GAO also discusses previous GAO work on DOD and DHS. GAO's report
recommends that the Office of Management and Budget (OMB),
working with the President's Management Council use the
identified criteria when assessing the type of COO/CMO positions
appropriate for federal agencies and the strategies for
implementing these positions. Also, GAO suggests that Congress
consider these criteria and strategies as it develops and reviews
legislative proposals for these positions.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-08-322T
ACCNO: A78869
TITLE: Organizational Transformation: Implementing Chief
Operating Officer/Chief Management Officer Positions in Federal
Agencies
DATE: 12/13/2007
SUBJECT: Accountability
Continuity of operations
Employees
Evaluation criteria
Executive agencies
Federal agencies
Federal agency reorganization
Financial management
Human capital
Internal controls
Organizational change
Program evaluation
Reorganization
Reporting requirements
Strategic planning
Business planning
Business transformation
Program implementation
GAO High Risk Series
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GAO-08-322T
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Testimony:
Before the Subcommittee on Oversight of Government Management, the
Federal Workforce, and the District of Columbia, Committee on Homeland
Security and Governmental Affairs, U.S. Senate:
United States Government Accountability Office:
GAO:
For Release on Delivery Expected at 10:00 a.m. EST:
December 13, 2007:
Organizational Transformation:
Implementing Chief Operating Officer/Chief Management Officer
Positions in Federal Agencies:
Statement of David M. Walker Comptroller General of the United States:
GAO-08-322T:
GAO Highlights:
Highlights of GAO-08-322T, a testimony to the Subcommittee on Oversight
of Government Management, the Federal Workforce, and the District of
Columbia, Committee on Homeland Security and Governmental Affairs, U.S.
Senate.
Why GAO Did This Study:
As agencies across the federal government embark on large-scale
organizational change needed to address 21st century challenges, there
is a compelling need for leadership to provide the continuing, focused
attention essential to completing these multiyear business-related
transformations. At the same time, many agencies are suffering from a
range of long-standing management problems that are undermining their
ability to accomplish their missions and achieve results. One proposed
approach to address these challenges is to have COO/CMO positions in
federal agencies.
This statement is mostly drawn from GAO�s report released today (GAO-08-
34) that discusses criteria that can be used to determine the type of
COO/CMO that ought to be established in federal agencies and strategies
for implementing these positions. To do this, GAO reviewed four
organizations with COO/CMO-type positions and convened a forum. GAO
also discusses previous GAO work on DOD and DHS.
What GAO Found:
GAO has long advocated that the Department of Defense (DOD) and the
Department of Homeland Security (DHS) could benefit from a full-time
and senior-level chief operating officer (COO)/chief management officer
(CMO) position, with a term appointment of at least 5 to 7 years, and a
performance agreement. In fact, every federal agency can benefit from a
senior leader acting as a COO/CMO. While the type of COO/CMO may vary
depending on the characteristics of the organization, a number of
criteria can be used to determine the appropriate type of COO/CMO
position in a federal agency. These criteria include the history of
organizational performance, degree of organizational change needed,
nature and complexity of mission, organizational size and structure,
and current leadership talent and focus. For example, the existing
deputy position could carry out the integration and business
transformation role�this type of COO/CMO might be appropriate in a
relatively stable or small organization. Or, a second deputy position
could be created to bring strong focus to the integration and business
transformation of the agency. This might be the most appropriate type
of COO/CMO for a large and complex organization undergoing a
significant transformation to reform long-standing management problems.
GAO identified six key strategies that agencies can follow in
implementing COO/CMO positions in federal agencies. However, the
implementation of any one approach should be determined within the
context of the agency�s specific facts and circumstances.
Key Strategies for Implementing COO/CMO Positions:
Define the specific roles and responsibilities of the COO/CMO position:
Once clearly defined, these specific roles and responsibilities should
be communicated throughout the organization.
Ensure that the COO/CMO has a high level of authority and clearly
delineated reporting relationships:
The organizational level and span of control of the COO/CMO position is
crucial in affecting the incumbent�s authority and status within the
organization.
Foster good executive-level working relationships for maximum
effectiveness:
Effective working relationships can help greatly to ensure that the
people, processes, and technology are well-aligned in support of the
agency�s mission.
Establish integration and transformation structures and processes in
addition to the COO/CMO position:
These structures and processes could include business transformation
offices, senior executive committees, functional councils, and
crosscutting teams that are actively involved in strategic planning,
budgeting, performance monitoring, information sharing, and decision
making.
Promote individual accountability and performance through specific job
qualifications and effective performance management:
A specific set of job qualification standards could aid in ensuring
that the incumbent has the necessary knowledge and experience. A
clearly defined, realistic performance agreement would also assist in
clarifying expectations and reinforcing accountability.
Provide for continuity of leadership in the COO/CMO position:
The administration and Congress could also consider options of other
possible mechanisms to help agencies in maintaining leadership
continuity for the COO/CMO position, such as term and career
appointments.
Source: GAO analysis.
[End of table]
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.GAO-08-322T]. For more information, contact
Bernice Steinhardt at (202) 512-6806 or [email protected].
[End of section]
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss one proposed approach to
address systemic federal governance and management challenges: the use
of chief operating officer (COO)/chief management officer (CMO)
positions in federal agencies, particularly in the Department of
Defense (DOD) and Department of Homeland Security (DHS). As agencies
across the federal government embark on large-scale organizational
change needed to address 21st century challenges, there is a compelling
need for leadership to provide the continuing, focused attention
essential to completing these multiyear business-related
transformations. At the same time, many agencies are suffering from a
range of long-standing management problems that are undermining their
ability to efficiently, economically, and effectively accomplish their
missions and achieve results. New leadership models are needed to help
elevate, integrate, and institutionalize these business transformation
and management reform efforts.
As you know, I share your views on the need for a COO/CMO position for
DOD and DHS. However, these are not the only agencies that could
benefit from such a senior leadership position. While the type of COO/
CMO may vary depending on the characteristics of the organization--
whether, for example, it is a large organization undergoing significant
transformation or a small or stable agency--every federal agency can
benefit from a senior leader serving as a COO/CMO. Each agency, of
course, faces its own unique circumstances and challenges in attempting
to improve and transform its business operations. For that reason, at
your request, in the report that is being released today we looked at
the experiences of several organizations with COOs/CMOs and used this
and other information to outline the criteria that can be used to
determine the most appropriate type of COO/CMO for a particular agency
as well as the strategies that agencies can follow in implementing
these positions.[Footnote 1] These strategies include making sure that
the COO/CMO has a sufficiently high level of authority and continuity
in the position. We believe that these criteria and strategies can be
helpful to the Congress, as it considers legislation for COO/CMO
positions, and to the Office of Management and Budget (OMB) and the
President's Management Council as they consider the leadership
positions necessary to carry out business transformation and management
reforms.
My statement today is primarily drawn from our report released today on
implementing COO/CMO positions in federal agencies and previously
issued GAO work on DOD and DHS, all of which were developed in
accordance with generally accepted government auditing
standards.[Footnote 2] To develop these criteria and strategies, we (1)
gathered information on the experiences and views of officials at four
organizations with COO/CMO-type positions and (2) convened a forum to
gather insights from individuals with experience and expertise in
business transformation, federal and private sector management, and
change management. The four organizations included in our review are
three federal agencies and one nonprofit organization: the Department
of the Treasury (Treasury), the Internal Revenue Service (IRS), the
Department of Justice (Justice), and the Massachusetts Institute of
Technology (MIT).[Footnote 3] To select the organizations to include in
our study, we collected and reviewed literature on general management
integration approaches and organizational structures of public and
private sector organizations, reviewed our prior work, and consulted
with various nonprofit organizations with experience in the federal
government. We sought to identify organizations that had senior-level
officials with responsibility for integrating key management functions,
and who generally did not have direct responsibility for the mission
programs and policies of their organizations. For the four
organizations included in our review, the COOs/CMOs either reported to
the organization head or reported to an individual who reports to the
organization head. Attachment I depicts the reporting relationships of
the four COO/CMO positions. We also hosted a forum on April 24, 2007,
to bring together former and current government executives and
officials from private business and nonprofit organizations to discuss
when and how a COO/CMO might effectively provide the continuing,
focused attention essential for integrating key management functions
and undertaking multiyear organizational business-related
transformations.
Background:
The concept of the COO/CMO position largely came out of the creation of
performance-based organizations (PBO) in the federal government in the
late 1990s and early in this decade. During that time, the
administration and Congress renewed their focus on the need to
restructure federal agencies and hold them accountable for achieving
program results. To this end, three PBOs were established,[Footnote 4]
which were modeled after the United Kingdom's executive
agencies.[Footnote 5] A PBO is a discrete departmental unit that is
intended to transform the delivery of public services by having the
organization commit to achieving specific measurable goals with targets
for improvement in exchange for being allowed to operate without the
constraints of certain rules and regulations to achieve these targets.
The clearly defined performance goals are to be coupled with direct
ties between the achievement of the goals and the pay and tenure of the
head of the PBO, often referred to as the COO. The COO is appointed for
a set term of typically 3 to 5 years, subject to an annual performance
agreement, and is eligible for bonuses for improved organizational
performance.
With the backdrop of these PBOs and an ongoing focus on transforming
organizational cultures in the federal government, we convened a
roundtable of government leaders and management experts on September 9,
2002, to discuss the COO concept and how it might apply within selected
federal departments and agencies.[Footnote 6] The intent of the
roundtable was to generate ideas and to engage in an open dialogue on
the possible application of the COO concept to selected federal
departments and agencies. It was generally agreed at this roundtable
discussion that the implementation of any approach should be determined
within the context of the specific facts and circumstances that relate
to each individual agency. Nonetheless, there was general agreement on
the importance of the following actions for organizational
transformation and management reform:
* Elevate attention on management issues and transformational change.
Top leadership attention is essential to overcome organizations'
natural resistance to change, marshal the resources needed to implement
change, and build and maintain the organizationwide commitment to new
ways of doing business.
* Integrate various key management and transformation efforts. There
needs to be a single point within agencies with the perspective and
responsibility--as well as authority--to ensure the successful
implementation of functional management and, if appropriate,
transformational change efforts.
* Institutionalize accountability for addressing management issues and
leading transformational change. The management weaknesses in some
agencies are deeply entrenched and long-standing, and it can take at
least 5 to 7 years of sustained attention and continuity to fully
implement transformations and change management initiatives.
In the time since the 2002 roundtable, legislative proposals have been
introduced and are still pending in this Congress to establish CMO
positions at DOD and DHS to help address transformation efforts at the
two departments, both of which are responsible for various areas
identified on our biennial update of high-risk programs.[Footnote 7]
These legislative proposals differ somewhat in content but would
essentially create a senior-level position to serve as a principal
advisor to the secretary on matters related to the management of the
department, including management integration and business
transformation.[Footnote 8] Some of these legislative proposals also
include specific provisions that spell out qualifications for the
position, require a performance contract, and provide for a term
appointment of 5 or 7 years. At the present time, no federal department
has a COO/CMO-type position with all these characteristics. In August
2007, the proposal for the Undersecretary for Management position at
DHS to become the CMO at an Executive Level II,[Footnote 9] but without
a term appointment, was enacted into law.[Footnote 10] DOD issued a
directive on September 18, 2007, that assigned CMO responsibilities to
the current Deputy Secretary of Defense in addition to his other
responsibilities. However, as I will discuss later in this statement,
we do not believe that these actions go far enough.
The heads of federal departments and selected agencies designate a COO,
who is usually the deputy or another official with agencywide
authority, to sit on the President's Management Council. However,
deputy secretaries and the other senior officials designated as COOs do
not have all of the characteristics of a COO/CMO that I just described,
including a term appointment and performance agreement. The council was
created by President Clinton in 1993 in order to advise and assist the
President and Vice President in ensuring that management reforms are
implemented throughout the executive branch.[Footnote 11] The Deputy
Director for Management of OMB chairs the council, and the council is
responsible for:
* improving overall executive branch management, including
implementation of the President's Management Agenda (PMA);[Footnote 12]
* coordinating management-related efforts to improve government
throughout the executive branch and, as necessary, resolving specific
interagency management issues;
* ensuring the adoption of new management practices in agencies
throughout the executive branch; and:
* identifying examples of, and providing mechanisms for, interagency
exchange of information about best management practices.
Specific Criteria Can Help in Assessing the Type of COO/CMO Position
Needed in a Federal Agency:
Because each agency has its own set of characteristics, challenges, and
opportunities, the type of COO/CMO to be established in a federal
agency should be determined within the context of the specific facts
and circumstances surrounding that agency. Nevertheless, a number of
criteria can be used to determine the type of COO/CMO position for an
agency. These criteria are the agency's:
* history of organizational performance, such as the existence of long-
standing management weaknesses and the failure rates of major projects
or initiatives;
* degree of organizational change needed, such as the status of ongoing
major transformational efforts and the challenge of reorganizing and
integrating disparate organizational units or cultures;
* nature and complexity of mission, such as the range, risk, and scope
of the agency's mission;
* organizational size and structure, such as the number of employees,
geographic dispersion of field offices, number of management layers,
types of reporting relationships, and degree of centralization of
decision making; and:
* current leadership talent and focus, such as the extent of knowledge
and the level of focus of the agency's managers on management functions
and change initiatives, and the number of political appointees in key
positions.
These five criteria are important for determining the appropriate type
of COO/CMO position, which in turn can inform many other elements of
the position, including roles and responsibilities, job qualifications,
reporting relationships, and decision-making structures and processes.
Based on these criteria, there could be several types of COO/CMO
positions, including the following:
* The existing deputy position could carry out the integration and
business transformation role. This type of COO/CMO might be appropriate
in a relatively stable or small organization.
* A senior-level executive who reports to the deputy, such as a
principal undersecretary for management, could be designated to
integrate key management functions and lead business transformation
efforts in the agency. This type of COO/CMO might be appropriate for a
larger organization.
* A second deputy position could be created to bring strong focus to
the integration and business transformation of the agency, while the
other deputy position would be responsible for leading the operational
policy and mission-related functions of the agency. For a large and
complex organization undergoing a significant transformation to reform
long-standing management problems, this might be the most appropriate
type of COO/CMO.
To address long-standing management and business transformation
problems, we have long advocated that DOD and DHS could benefit from a
senior-level COO/CMO position, with a term appointment of at least 5 to
7 years, and a performance agreement. We continue to identify DOD's
approach to business transformation and implementing and transforming
DHS on GAO's biennial high-risk list of programs. DOD dominates our
list of agencies with high-risk programs designated as vulnerable to
waste, fraud, and abuse of funds, bearing responsibility, in whole or
in part, for 15 of 27 high-risk areas.[Footnote 13]
While DOD has recently designated the current DOD Deputy Secretary as
the CMO in addition to his other responsibilities, we believe this
action does not go far enough to change the status quo and ensure
sustainable success of the overall business transformation effort
within the department. We recognize the commitment and elevated
attention that the current Deputy Secretary of Defense and other senior
leaders have clearly shown in addressing deficiencies in the
department's business operations. For example, the Deputy Secretary has
overseen the creation of various business-related entities, such as the
Defense Business Systems Management Committee and the Business
Transformation Agency, and has been closely involved in monthly
meetings of both the Defense Business Systems Management Committee and
the Deputy's Advisory Working Group, a group that provides
departmentwide strategic direction on various issues. In our view,
subsuming the duties within the responsibilities of the individual
currently serving as the Deputy Secretary largely represents a
continuation of the status quo and will not provide full-time attention
or continuity as administrations change. While the Deputy Secretary may
be at the right level, the substantial demands of the position make it
exceedingly difficult for the incumbent to maintain the focus,
oversight, and momentum needed to resolve business operational
weaknesses, including the many high-risk areas within DOD. Furthermore,
the assignment of CMO duties to an individual with a limited term in
the position does not ensure continuity of effort or sustained success
within and across administrations. We continue to believe a CMO
position should be codified in statute as a separate position, at the
right level, and with the appropriate term in office. In fact,
consensus exists among GAO's work and other studies (e.g. the Defense
Business Board and the Institute for Defense Analysis),that DOD needs a
full-time senior management official with a term appointment to provide
focused and sustained leadership over business transformation efforts.
Additionally, DHS is experiencing particularly significant challenges
in integrating its disparate organizational cultures, and multiple
management processes and systems, which make it an appropriate
candidate for a COO/CMO as a second deputy position or alternatively as
a principal undersecretary for management position. Designating the
Undersecretary for Management at DHS as the CMO at an Executive Level
II is a step in the right direction, but this change does not go far
enough. A COO/CMO for DHS with a limited term that does not transition
across administrations will not help to ensure the continuity of focus
and attention needed to protect the security of our nation. DHS faces
significant management and organizational transformation challenges as
it works to protect the nation from terrorism and simultaneously
establish itself. DHS must integrate approximately 180,000 employees
from 22 originating agencies, consolidate multiple management systems
and processes, and transform into a more effective organization with
robust planning, management, and operations. However, DHS continues to
lack not only a comprehensive management integration strategy with
overall goals and a timeline, but also a dedicated team with the
authority and responsibility to help develop and implement this
strategy. A COO/CMO at the appropriate organizational level at DHS,
with a term appointment, would provide the elevated senior leadership
and concerted and long-term attention required to marshal this effort.
Strategies for Implementing COO/CMO Positions at Federal Agencies:
Once the type of COO/CMO is determined, the following six key
strategies can be useful in implementing COO/CMO positions in federal
agencies, including making sure that the COO/CMO has a sufficiently
high level of authority and continuity in the position:
Define the specific roles and responsibilities of the COO/CMO position.
For carrying out the role of management integration, it should be clear
which of the agency's key management functions are under the direct
purview of the COO/CMO. Depending on the agency, the COO/CMO might have
responsibility for human capital, financial management, information
resources management, and acquisition management as well as other
management functions in the agency, such as strategic planning, program
evaluation, facilities and installations, or safety and security, as
was the case with the four organizations we reviewed. As the COO/CMO is
a leader of business transformation in the organization, it should
likewise be clear which major change efforts are the direct
responsibility of the COO/CMO. Once clearly defined, these specific
roles and responsibilities should be communicated throughout the
organization.
Ensure that the COO/CMO has a high level of authority and clearly
delineated reporting relationships. The COO/CMO concept is consistent
with the governance principle that there needs to be a single point
within agencies with the perspective and responsibility to ensure the
successful implementation of functional management and business
transformation. The organizational level and span of control of the
COO/CMO position is crucial in affecting the incumbent's authority and
status within the organization. At both IRS and MIT, the COO/CMO
reports to the head of the organization (i.e., second-level reporting
position), and at Justice and Treasury, the COO/CMO reports through the
deputy secretary (i.e., third-level reporting position). Although our
interviews and the forum discussion uncovered differing views about the
appropriate level and reporting relationships for a COO/CMO position,
it was broadly recognized that any COO/CMO should have the high level
of authority needed to ensure the successful implementation of
functional management and business transformation efforts in the
agency.
Foster good executive-level working relationships for maximum
effectiveness. Effective working relationships of the COO/CMO with the
agency head and his or her peers can help greatly to ensure that the
people, processes, and technology are well-aligned in support of the
agency's mission. For example, officials at IRS stressed the importance
of the working relationship between the agency's two deputy
commissioners--one serving as the COO/CMO--in carrying out their
respective roles and responsibilities in leading the mission and
mission support offices of the agency.
Establish integration and transformation structures and processes in
addition to the COO/CMO position. While the position of COO/CMO can be
a critical means for transforming and integrating business and
management functions, other structures and processes need to be in
place to support the COO/CMO in business transformation and management
integration efforts across the organization. These structures and
processes can include business transformation offices, senior executive
committees, functional councils, and crosscutting teams that are
actively involved in strategic planning, budgeting, performance
monitoring, information sharing, and decision making. To bring focus
and direction and help enforce decisions in the agency, the COO/CMO
should be a key player in actively leading or supporting these
integration structures and processes.
Promote individual accountability and performance through specific job
qualifications and effective performance management. A specific set of
job qualification standards could aid in ensuring that the incumbent
has the necessary knowledge and experience. Our interviews at the four
organizations revealed that essential qualifications for a COO/CMO
position include having broad management experience and a proven track
record of making decisions in complex settings as well as having direct
experience in, or solid knowledge of, the respective department or
agency, but there were varying views as to whether qualifications
should be statutory. To further clarify expectations and reinforce
accountability, a clearly defined performance agreement with measurable
organizational and individual goals would be warranted as well. Such
agreements should contain clear expectations as well as appropriate
incentives and rewards for outstanding performance and consequences for
those who do not perform.
Provide for continuity of leadership in the COO/CMO position. The
administration and Congress could also consider options of other
possible mechanisms to help agencies in maintaining leadership
continuity for the COO/CMO position, such as term and career
appointments, because organizational results and transformational
efforts can take years to achieve. I share your concern about
leadership continuity particularly for those DOD and DHS programs that
we consider to be high risk as the administration heads for a
presidential transition in early 2009. Foremost, an agency needs to
have an executive succession and transition planning strategy that
ensures a sustained commitment and continuity of leadership as
individual leaders arrive or depart or serve in acting capacities. The
administration and Congress could also consider other possible
mechanisms to help agencies in maintaining leadership continuity for
the position. For example, the benefits of a 5-to 7-year term
appointment for the position, such as instilling a long-term focus,
need to be weighed along with the potential challenges of a term
appointment, such as a lack of rapport between members of a new senior
leadership team with any change in administration. Term appointments
for key leadership positions already exist at a number of agencies.
(Attachment II provides a list of term appointments at a variety of
U.S. agencies.) Moreover, as emphasized in our interviews and in the
forum discussion, the appointment of career civil servants to the COO/
CMO position could be considered when assessing the position's roles,
responsibilities, and reporting relationships. High turnover among
politically appointed leaders in federal agencies can make it difficult
to follow through with organizational transformation because of the
length of time often needed to provide meaningful and sustainable
results.
Conclusions:
As Congress considers COO/CMO positions for federal agencies, the
criteria and strategies we identified should help to highlight key
issues that need to be considered, both in design of the positions and
in implementation. While Congress is currently focused on two of the
most challenging agencies--DOD and DHS--the problems they face are, to
varying degrees, shared by the rest of the federal government. Each
agency, therefore, should consider the type of COO/CMO that would be
appropriate for its organization, either by designating an existing
position as the COO/CMO or creating a new position, and adopt the
strategies we outline to implement such a position. Because it is
composed of the senior management officials in each department and
agency, we recommend in the report being released today that the
President's Management Council, working closely with OMB, play a role
in leading such an assessment and helping to ensure that due
consideration is given to how each agency can improve its leadership
structure for management. Moreover, given the council's charter to
oversee government management reforms, it can help institutionalize a
leadership position that will be essential to overseeing current and
future reform efforts.
Recent legislative proposals have called for certain features of the
COO/CMO position that we have endorsed, including a direct reporting
relationship to the departmental secretary, responsibility for
integrating key management functions and overseeing overall business
transformation efforts, the requirement for a performance agreement,
and the designation of a term appointment. We are suggesting that
Congress consider the criteria and strategies that I have discussed
today as it continues to develop and review legislative proposals for
the appropriate type of COO/CMO positions for all major federal
agencies, recognizing that the implementation of any approach should be
determined within the context of the specific facts and circumstances
that relate to each agency.
Mr. Chairman and members of the subcommittee, this concludes my
prepared statement. I would be pleased to respond to any questions that
you or other members of the subcommittee may have at this time.
Contacts and Acknowledgements:
For further information on this testimony, please contact Bernice
Steinhardt, Director, Strategic Issues, at (202) 512-6806 or
[email protected]. Contact points for our Office of Congressional
Relations and Public Affairs may be found on the last page of this
testimony. Individuals making key contributions to this testimony
include Sarah Veale, Assistant Director; K. Scott Derrick; and
Katherine Wulff.
[End of section]
Attachment I: Reporting Relationships for the COO/CMO Positions in Four
Case-Study Organizations:
[See PDF for image]
This figure is a series of flow charts of reporting relationships, with
the following data depicted:
Second-level reporting positions:
Internal Revenue Service:
Commissioner: receives reports from Deputy Commissioner for Services
and Enforcement;
Commissioner: receives reports from Deputy Commissioner for Operations
Support.
Second-level reporting positions:
Massachusetts Institute of Technology:
President: receives reports from Provost;
President: receives reports from Chancellor;
President: receives reports from Executive Vice-President.
Third-level reporting positions:
Department of the Treasury:
Secretary: receives reports from Deputy Secretary;
Deputy Secretary: receives reports from:
* Under Secretary (three positions);
* Heads of mission bureaus;
* Assistant Secretary for Management.
Third-level reporting positions:
Department of Justice:
Attorney General: receives reports from Deputy Attorney General;
Deputy Attorney: General receives reports from:
* Solicitor General;
* Associate Attorney General;
* Heads of mission bureaus;
* Assistant Attorney General for Administration.
Source: GAO presentation of IRS, MIT, Treasury, and Justice
information.
[End of figure]
[End of section]
Attachment II: Term Appointments at Selected U.S. Agencies:
Agency: Air Traffic Organization,[A] Federal Aviation Administration
(FAA);
Position title and length of term: Chief Operating Officer; 5 years;
Method of appointment and provision for reappointment: Appointed
by the FAA Administrator, with the approval of the Air Traffic Services
Committee. There is no statutory provision on reappointment of the
officeholder;
Conditions for removal and provisions for filling unexpired terms: The
COO is to serve at the pleasure of the Administrator, and the
Administrator is to make every effort to ensure stability and
continuity in the leadership of the air traffic control system;
Appointments to fill a vacancy occurring before the expiration
of term shall be only for the remainder of that term.
Agency: Architect of the Capitol;
Position title and length of term: Architect of the Capitol; 10 years;
Method of appointment and provision for reappointment: Appointed by the
President, following recommendations from a special congressional
commission, and confirmed by the Senate. May be appointed to more than
one 10-year term;
Conditions for removal and provisions for filling unexpired terms:
There are no statutory conditions on the authority of the President to
remove the officeholder. No statutory provision.
Agency: Federal Bureau of Investigation;
Position title and length of term: Director; 10 years;
Method of appointment and provision for reappointment: Appointed by the
President with the advice and consent of the Senate. The officeholder
may not be reappointed;
Conditions for removal and provisions for filling unexpired terms:
There are no statutory conditions on the authority of the President to
remove the officeholder. No statutory provision.
Agency: Federal Reserve Board;
Position title and length of term: Chairman; 4 years[B];
Method of appointment and provision for reappointment: Appointed by the
President with the advice and consent of the Senate. There is no
statutory limitation on a Chairman serving more than one 4-year
term.[C];
Conditions for removal and provisions for filling unexpired terms:
President may remove members for cause. An individual appointed to fill
a vacancy among the seven members of the board shall hold office only
for the unexpired term of his or her predecessor.
Agency: Federal Student Aid, Department of Education;
Position title and length of term: Chief Operating Officer; 3 to 5
years;
Method of appointment and provision for reappointment: Appointed by the
Secretary of Education. May be reappointed by the Secretary to
subsequent terms of 3 to 5 years as long as the incumbent's performance
is satisfactory per required annual performance agreement;
Conditions for removal and provisions for filling unexpired terms: The
COO may be removed by the President or by the Secretary for misconduct
or failure to meet performance goals set forth in the performance
agreement. The President or the Secretary must communicate the reasons
for any such removal to the appropriate committees of Congress. No
statutory provision.
Agency: Government Accountability Office;
Position title and length of term: Comptroller General; 15 years;
Method of appointment and provision for reappointment: Appointed by the
President, following recommendations from a special congressional
commission, and confirmed by the Senate. The officeholder is limited to
a single 15-year term;
Conditions for removal and provisions for filling unexpired terms: The
Comptroller General may be removed by impeachment or by adoption of a
joint resolution of Congress. Removal by joint resolution can occur
only after notice and an opportunity for a hearing and only for certain
specified reasons: permanent disability, inefficiency, neglect of duty,
malfeasance, felony, or conduct involving moral turpitude. No
statutory provision.
Agency: Internal Revenue Service;
Position title and length of term: Commissioner; 5 years;
Method of appointment and provision for reappointment: Appointed by the
President with the advice and consent of the Senate. May be appointed
to more than one 5-year term;
Conditions for removal and provisions for filling unexpired terms:
There are no statutory conditions on the authority of the President to
remove the officeholder. Appointments to fill a vacancy occurring
before the expiration of term shall be only for the remainder of that
term.
Agency: Office of Personnel Management;
Position title and length of term: Director; 4 years[D];
Method of appointment and provision for reappointment: Appointed by the
President with the advice and consent of the Senate. There is no
statutory provision on reappointment of the officeholder;
Conditions for removal and provisions for filling unexpired terms:
There are no statutory conditions on the authority of the President to
remove the officeholder. No statutory provision.
Agency: Office of the Comptroller of the Currency;
Position title and length of term: Comptroller of the Currency; 5
years;
Method of appointment and provision for reappointment: Appointed by the
President with the advice and consent of the Senate. There is no
statutory provision on reappointment of the officeholder;
Conditions for removal and provisions for filling unexpired terms: May
be removed by the President for reasons to be communicated by him or
her to the Senate. No statutory provision.
Agency: Office of Thrift Supervision;
Position title and length of term: Director; 5 years[E];
Method of appointment and provision for reappointment: Appointed by the
President with the advice and consent of the Senate. There is no
statutory provision on reappointment of the officeholder;
Conditions for removal and provisions for filling unexpired terms:
There are no statutory conditions on the authority of the President to
remove the officeholder. Appointments to fill a vacancy occurring
before the expiration of a term shall be appointed only for the
remainder of that term.
Agency: Social Security Administration;
Position title and length of term: Commissioner; 6 years[F];
Method of appointment and provision for reappointment: Appointed by the
President with the advice and consent of the Senate. There is no
statutory provision on reappointment of the officeholder;
Conditions for removal and provisions for filling unexpired terms: The
officeholder may be removed only pursuant to a finding by the President
of neglect of duty or malfeasance in office. Appointments to fill a
vacancy occurring before the expiration of a term shall be appointed
only for the remainder of that term.
Agency: U.S. Patent and Trademark Office;
Position title and length of term: Commissioner for Patents; 5 years;
Method of appointment and provision for reappointment: Appointed by the
Secretary of Commerce. May be reappointed to subsequent terms by the
Secretary as long as the incumbent's performance is satisfactory per
required annual performance agreement;
Conditions for removal and provisions for filling unexpired terms: The
Secretary may remove the Commissioner for misconduct or unsatisfactory
performance under the required performance agreement. The Secretary
must provide notification of any such removal to both Houses of
Congress. No statutory provision.
Agency: U.S. Patent and Trademark Office;
Position title and length of term: Commissioner for Trademarks; 5
years;
Method of appointment and provision for reappointment: Appointed by the
Secretary of Commerce. May be reappointed to subsequent terms by the
Secretary as long as the incumbent's performance is satisfactory per
required annual performance agreement;
Conditions for removal and provisions for filling unexpired terms: The
Secretary may remove the Commissioner for misconduct or unsatisfactory
performance under the required performance agreement. The Secretary
must provide notification of any such removal to both Houses of
Congress. No statutory provision.
Source: GAO.
[A] Executive Order No. 13180 (Dec. 7, 2000) established the Air
Traffic Organization within FAA and gave responsibility to head the Air
Traffic Organization to the Chief Operating Officer for the Air Traffic
Control System of FAA, a position created pursuant to Pub. L. No. 106-
181 (Apr. 5, 2000).
[B] Members of the Federal Reserve Board, including the Chairman, serve
terms of 14 years from the expiration of the terms of their
predecessors. The Chairman's term is 4 years.
[C] A Chairman may not be reappointed after serving a full 14-year term
as a member.
[D] The 4-year term does not have to coincide with the President's term
in office.
[E] An individual may continue to serve after the expiration of his or
her term until a successor is appointed.
[F] An individual may continue to serve after the expiration of his or
her term until a successor enters office.
[End of table]
[End of section]
Footnotes:
[1] See GAO, Organizational Transformation: Implementing Chief
Operating Officer/Chief Management Officer Positions in Federal
Agencies, GAO-08-34 (Washington, D.C.: Nov. 1, 2007).
[2] See GAO, Defense Business Transformation: Achieving Success
Requires a Chief Management Officer to Provide Focus and Sustained
Leadership, GAO-07-1072 (Washington, D.C.: Sept. 5, 2007), Department
of Homeland Security: A Comprehensive and Sustained Approach Needed to
Achieve Management Integration, GAO-05-139 (Washington, D.C.: Mar. 16,
2005) and Chief Operating Officer Concept and its Potential Use as a
Strategy to Improve Management at the Department of Homeland Security,
GAO-04-876R (Washington, D.C.: June 28, 2004).
[3] IRS is a bureau of Treasury. In this statement, we will often refer
to the three federal organizations as agencies.
[4] The three PBOs are Federal Student Aid in the Department of
Education, the U.S. Patent and Trademark Office in the Department of
Commerce, and the Air Traffic Organization in the Federal Aviation
Administration.
[5] For additional information, see GAO, Performance-Based
Organizations: Lessons from the British Next Steps Initiative, GAO/
T-GGD-97-151 (Washington, D.C.: July 8, 1997).
[6] GAO, Highlights of a GAO Roundtable: The Chief Operating Officer
Concept: A Potential Strategy to Address Federal Governance Challenges,
GAO-03-192SP (Washington, D.C.: Oct. 4, 2002).
[7] GAO, High-Risk Series: An Update, GAO-07-310 (Washington, D.C.:
January 2007).
[8] For example, see S. 179 and H.R. 1585 (DOD) and S. 547 (DHS).
[9] In this statement, "Level II" and "Level III" are used to refer to
the level of compensation under the federal government's Executive
Schedule, which does not necessarily correspond to the reporting level
in the agency. We use "second level" and "third level" in reference to
reporting relationships.
[10] See Section 2405 of Pub. L. No. 110-53, 121 Stat. 266, 548-550
(August 3, 2007).
[11] The President's Management Council was reconstituted by President
Bush in 2001. The council has focused its efforts on the management
agendas of each administration.
[12] The PMA was launched in August 2001 as a strategy for improving
the management and performance of the federal government and includes
five governmentwide initiatives: strategic management of human capital,
competitive sourcing, improved financial performance, expanded
electronic government, and budget and performance integration. OMB
developed criteria to measure success and a PMA scorecard to track
agency progress for each of the five initiatives.
[13] GAO-07-310.
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