GAO's Downsizing Efforts (Testimony, 05/23/96, GAO/T-OCG-96-4).

This testimony discusses GAO's downsizing efforts, including its
reduction in force (RIF). It addresses (1) GAO's strategic planning
process to restructure GAO's workforce, (2) the development and
implementation of GAO's new RIF rules, and (3) differences between GAO's
RIF rules and appeal rights and those for the executive branch. It also
discusses the impact of the downsizing on veterans at GAO.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-OCG-96-4
     TITLE:  GAO's Downsizing Efforts
      DATE:  05/23/96
   SUBJECT:  Federal downsizing
             Reductions in force
             Employee buyouts
             Federal agency reorganization
             Strategic planning
             Personnel management
             Attrition rates

             
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Cover
================================================================ COVER


Before the Subcommittee on Civil Service,
Committee on Government Reform and Oversight,
House of Representatives

For Release on Delivery
Expected at
9:00 a.m., EDT
Thursday
May 23, 1996

GAO'S DOWNSIZING EFFORTS

Statement of John H.  Luke, Deputy Assistant
Comptroller General for Human Resources

GAO/T-OCG-96-4

GAO/OCG-96-4T



Abbreviations
=============================================================== ABBREV


============================================================ Chapter 0

Mr.  Chairman and Members of the Subcommittee: 

I am pleased to be here today to discuss GAO's downsizing efforts,
including our ongoing reduction in force (RIF).  Specifically, as you
requested, I will address (1) our strategic planning process to
restructure our workforce, (2) the development and implementation of
our new RIF rules, and (3) the differences between our RIF rules and
appeal rights and those for executive branch agencies.  In addition,
I would like to discuss the impact of our downsizing efforts on our
veteran workforce. 

In summary, we believe that we used a thorough and rational process
to guide our downsizing efforts and to develop new RIF procedures. 
While the changes we made to our RIF rules were not dramatic
departures from those governing the executive branch, they provided
us with the tools required to meet our needs.  These new rules also
eased the burden for some staff who were affected by the RIF. 


      GAO'S DOWNSIZING PLANS
-------------------------------------------------------- Chapter 0:0.1

In 1992, GAO began a gradual reduction in its staff levels.  At that
time, GAO had about 5,300 staff on board; on July 31, 1995, we had
around 4,350 staff.  Over the three-year period, this reduction was
accomplished principally through a general hiring freeze (which
remains in effect today), buyouts, and normal attrition. 

Last year, the Congress directed a 25 percent reduction in our
funding--15 percent to be accomplished in fiscal year 1996 and an
additional 10 percent in fiscal year 1997.  Because nearly 80 percent
of our budget pays for salaries and personnel-related costs, we
reached the unavoidable conclusion that the agency could not absorb
these reductions without significantly downsizing our workforce. 

In response to this budget situation, the Comptroller General
established a team of senior level managers to assess the impact of
the funding reductions and develop a plan for achieving these
reductions.  In July 1995, the Comptroller General approved the
team's plan to reduce GAO's workforce by about 850 employees over 14
months.  Under the plan, GAO's workforce would be reduced to about
3,500 by the beginning of fiscal year 1997.  The goal of the plan was
to achieve large reductions in a way that would avoid major
disruptions in our workplace, while leaving us with the skills
required to carry out our mission and maintain current production
levels. 

These reductions were to be achieved in three phases. 

  -- Phase 1 was a separation incentive program that ended in
     September 1995.  During this program, 393 employees left GAO. 
     Of those, 179 were from headquarters mission offices, 149 from
     field offices, and 65 from headquarters support offices. 

  -- Phase 2 was the November 1995 closure of three field offices--
     New York, Cincinnati, and Detroit.  A total of 143 staff were
     separated from these offices, including 104 evaluators. 

  -- Phase 3 is the ongoing RIF of support staff agency wide.  Under
     this RIF, which will be completed in June 1996, 143 employees
     will be separated. 

In addition, we anticipate that 171 staff will be off our rolls by
October 1, 1996.  This includes staff to be transferred with GAO's
claims function to other agencies and normal attrition.  In all, as
shown in table 1, since July 1995, 850 staff will have left GAO.  At
this level of operation, we believe we will be able to maintain
productivity while avoiding major disruptions and imbalances in our
staff mix. 



                                Table 1
                
                   Staff Leaving GAO July 31, 1995 -
                            October 1, 1996

                                            HQ              HQ
                                        Missio          Suppor
                                             n   Field       t    GAO-
                                        Office  Office  Office    Wide
                                             s       s       s   Total
--------------------------------------  ------  ------  ------  ------
Sept. 1995 Buyout                          179     149      65     393
Nov. 1995 RIF                                0     143       0     143
Jun. 1996 RIF                               46      19      78     143
Other Attrition                            107      30      34     171
Totals                                     332     341     177     850
----------------------------------------------------------------------
Note:  Other attrition includes 37 staff being transferred with the
Claims function to other agencies, as well as anticipated attrition
through October 1, 1996. 

To summarize, by October 1, 1996, GAO's staff will have been reduced
from about 5,300 in 1992 to 3,500 -- a reduction of nearly 35
percent. 


      DEVELOPING AND IMPLEMENTING
      NEW RIF RULES
-------------------------------------------------------- Chapter 0:0.2

The 1996 Legislative Branch Appropriations Act granted GAO authority
to develop and implement its own RIF regulations.  We were to
minimize disruption and promote efficiency in GAO, while using the
same retention criteria as the executive branch.  As you are aware,
those criteria are tenure, veterans preference, length of service and
performance. 

A draft RIF order was developed with employee and management input by
a group of experts under the general direction of a top management
team.  Staff and managers were briefed on the new rules, given a
draft of the order and the opportunity to review it and provide
written comments.  Many comments were received, and to the extent
feasible, changes were made to the order to address concerns.  The
order was finalized and distributed to all staff in February 1996. 
To implement our support staff reductions, in April 1996 we issued
154 RIF notices, (143 separations, and 11 downgrades/reassignments). 

In implementing the order GAO followed procedures standard in the
executive branch, such as

  -- maintaining existing organizational structure

  -- freezing staff transfers

  -- reviewing position descriptions

  -- verifying staff personnel data

  -- establishing job groups

  -- developing retention registers

  -- identifying positions to be eliminated

  -- releasing staff in inverse order of their standing on the
     retention registers. 

In addition, we are providing our separated staff with considerable
assistance in starting new careers.  We have expanded our career
counseling offices to provide staff with computer-based access to job
information.  We are also providing training in resume preparation
and interviewing skills, and offering individual counselling as
needed. 


      DIFFERENCES BETWEEN GAO AND
      EXECUTIVE BRANCH RIF
      REGULATIONS AND APPEAL
      RIGHTS
-------------------------------------------------------- Chapter 0:0.3

GAO's RIF rules differ very little from executive branch rules.  As
previously discussed, our legislation required that we give due
effect to tenure, veterans preference, performance, and length of
service -- the same factors used in the executive branch. 
Additionally, the Comptroller General made a commitment to the
Congress to maintain veterans rights in RIF as they are provided in
the executive branch.  Among the major differences in our new RIF
rules are the following: 

  -- GAO staff are in four different pay systems, thusly we decided
     to recognize this condition by separating them in our new RIF
     rules.  This is not currently possible in the executive branch. 
     This allowed us to reduce our support staff and bring it in line
     with a staff level of 3,500 without disrupting audit operations. 

  -- We developed a more graduated system for granting performance
     credit than the steep step system used in the executive branch. 
     However, the maximum performance credit of 20 years available
     under executive branch rules was retained. 

  -- We included permanent full-time and part-time employees in the
     same competitive grouping in order to minimize the impact of
     employee work schedules on retention. 

  -- We allowed employees within 1 year of retirement eligibility to
     defer the effective date of separation until their first date of
     retirement eligibility.  This prevented staff from losing
     retirement benefits. 

Further, GAO made only limited changes to the procedures governing
challenges to its RIF actions.  As before, a GAO employee who
receives a RIF notice and believes that the RIF action was improper
may file an appeal with GAO's Personnel Appeals Board (PAB), rather
than with the Merit Systems Protection Board, which hears executive
branch appeals.  Two changes were made in the appeals procedures. 
First, the period for filing an appeal was extended from 20 to 30
days, to be consistent with timeliness requirements governing other
PAB appeals.  Second, as directed in the legislation, the revised RIF
regulations now provide that the PAB is not authorized to stay a RIF
action pending resolution of the appeal.  The PAB has established
special procedures for considering appeals on an expedited basis. 


      IMPACT OF DOWNSIZING ON
      VETERANS
-------------------------------------------------------- Chapter 0:0.4

Our downsizing strategy has had little impact on our veteran
workforce.  In July 1995, GAO employed 761 veterans, about 17.3
percent of our total population.  As of May 1996, we have 623
veterans on board, or 16.6 percent of our total population.  This
reduction is due primarily to the 120 veterans who voluntarily left
through the most recent buyout program. 

As discussed, because of funding cuts by the Congress, GAO has
conducted two RIFs since November 1995.  The first, which occurred in
November 1995, resulted in the closure and separation of all staff in
three field offices.  Of the 143 staff who were separated, 13 were
veterans (9.1%).  In the second RIF, which will be completed in June
1996, 143 staff will also be separated.  Of these, 5 (3.4%) are
veterans. 

In addition to the RIFs, veterans took part in our most recent buyout
program.  Congress authorized GAO to offer buyouts to all staff and a
total of 120 veterans (30.5 percent of the total veteran population)
took advantage of this program.  The vast majority of the veterans
who left under this program were eligible for retirement. 

In closing, Mr.  Chairman, I would like to publicly recognize our
staff, those being involuntarily released as well as those remaining. 
They have made the best of a very difficult situation.  We are proud
of them. 


-------------------------------------------------------- Chapter 0:0.5

Thank you for the opportunity to be here to discuss these matters
with you.  I will be glad to answer any questions you may have. 


*** End of document. ***