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United States Government Accountability Office:

Human Capital Transformation: GAO's Own Experience:

The Honorable David M. Walker:
Comptroller General of the United States:

OPM Conference:
Baltimore, MD:
September 9, 2004:

The Case for Change:

* Government is on a "burning platform," and the status quo way of 
doing business is unacceptable for a variety of reasons, including:

* Past fiscal trends and significant long-range challenges;

* Rising public expectations for demonstrable results and enhanced 
responsiveness;

* Selected trends and challenges having no boundaries;

* Additional resource demands due to recent terrorism events in the 
United States;

* Government performance/accountability and high risk challenges, 
including the lack of effective human capital strategies;

Selected GAO-Related Activities:

* Speeches and Outreach Efforts;

* Financial Literacy Efforts;

* CG Forums;

* High Risk Update Report;

* 21st Century Challenges Report;

* Various Congressional Consultation and Assistance Efforts;

* Public Education Assistance;

* Constructive engagement efforts (e.g., best practices guides, self 
assessment tools, benchmarking statistics);

* Leading by example.

Transformation: 

Webster's definition: An act, process, or instance of change in 
structure appearance, or character;

A conversion, revolution, makeover, alteration, or renovation.

Transformation is about CREATING the future rather than PERFECTING the 
past. Effective HUMAN CAPITAL strategy is key to any SUCCESSFUL 
transformation effort.

Transformation Has Different Dimensions:

DOD;
DHS;
U. S. Postal Service;
IRS;
DOE;
NASA.

Human Capital Strategy;
Financial Management;
Information Technology;
Sourcing Strategy;
Disability Programs;
Real Property Management;

Note: All of the above are on GAO's High Risk List to one extent or the 
other.

GAO's High Risk List:

High Risk Areas: Designated High Risk Addressing Challenges in Broad-
based Transformations:

Protecting Information Systems Supporting the Federal Government and 
The Nation's Critical Infrastructures;
Designated High Risk: 1997;

Strategic Human Capital Management*;
Designated High Risk: 2001;

U.S. Postal Service Transformation Efforts and Long-Term Outlook*;
Designated High Risk: 2001;

Implementing and Transforming the New Department of Homeland Security;
Designated High Risk: 2003;

Modernizing Federal Disability Programs*;
Designated High Risk: 2003;

Federal Real Property*;
Designated High Risk: 2003;

Ensuring Major Technology Investments Improve Services FAA Air Traffic 
Control Modernization;
Designated High Risk: 1995;

IRS Business Systems Modernization;
Designated High Risk: 1995;

DOD Systems Modernization;
Designated High Risk: 1995;

Providing Basic Financial Accountability DOD Financial Management;
Designated High Risk: 1995;

IRS Financial Management;
Designated High Risk: 1995;

Forest Service Financial Management;
Designated High Risk: 1999;

FAA Financial Management;
Designated High Risk: 1999;

Reducing Inordinate Program Management Risks Medicare Program*;
Designated High Risk: 1990;

Collection of Unpaid Taxes;
Designated High Risk: 1990;

DOD Inventory Management;
Designated High Risk: 1990;

Student Financial Aid Programs;
Designated High Risk: 1990;

HUD Single-Family Mortgage Insurance and Rental Assistance Programs;
Designated High Risk: 1994;

Earned Income Credit Noncompliance;
Designated High Risk: 1995;

DOD Support Infrastructure Management;
Designated High Risk: 1997;

Medicaid Program*;
Designated High Risk: 2003;

Pension Benefit Guaranty Corporation Single-Employer Insurance 
Program*;
Designated High Risk: 2003;

Managing Large Procurement Operations More Efficiently DOD Weapon 
Systems Acquisition;
Designated High Risk: 1990;

Department of Energy Contract Management;
Designated High Risk: 1990;

NASA Contract Management;
Designated High Risk: 1990;

DOD Contract Management;
Designated High Risk: 1992.

*Additional authorizing legislation is likely to be required as one 
element of addressing this high risk area.

[End of table]

Transformation: A New Model for Government Organizations:

Government organizations will need to:

* Become less hierarchical, process-oriented, stovepiped, and inwardly 
focused.

* Become more partnership-based, results-oriented, integrated, and 
externally focused.

* Achieve a better balance between results, customer, and employee 
focus.

* Work better with other governmental organizations, non-governmental 
organizations, and the private sector, both domestically and 
internationally, to achieve results.

Keys to Making Change Happen:

* Commitment and sustained leadership;

* Demonstrated need for change (i.e., burning platform);

* Start at the top and with the new people (transformation takes 7+ 
years);

* Process matters (e.g., employee involvement) - Don't fight a two-
front war;

* 15-percent rule;

* Identifiable and measurable progress over time;

* Communication, communication, communication;

* Figure out what's right versus what's popular;

* Patience, persistence, perseverance to pain before you prevail.

Keys to Making Change Happen:

Several other actions needed:

* Strategic Plan;

* Core values;

* Organizational alignment;

* Recruiting, development, and succession planning strategies;

* Modernizing and integrating institutional, unit and individualized 
performance measurement and reward systems.

Key Transformation Elements:

* People;

* Process;

* Partnerships;

* Technology;

* Environment.

GAO's Strategic Plan:

[See PDF for image] - graphic text:

Serving the Congress and the Nation: GAO's Strategic Plan Framework:

Mission:

GAO exists to support the Congress in meeting its constitutional 
responsibilities and to help improve the performance and ensure the 
accountability of the federal government for the benefit of the 
American people.

Themes:

* Long-term Fiscal Imbalance;

* National Security;

* Global interdependence;

* Changing Economy;

* Demographics;

* Science and Technology;

* Quality of Life;

* Governance;

Goals and Objectives:

Provide Timely, Quality Service to the Congress and the Federal 
Government to Address Current and Emerging Challenges to the Well-
Being and Financial Security of the American People related to:

* Health care needs and financing;

* Education and protection of children;

* Work opportunities and worker protection;

* Retirement income security;

* Effective system of justice;

* Viable communities;

* Natural resources use and environmental protection;

* Physical infrastructure;

Respond to Changing Security Threats and the Challenges of Global 
Interdependence involving:

* Emerging threats;

* Military capabilities and readiness;

* Advancement of U.S. interests;

* Global market forces;

Help Transform the Federal Government's Role and How It Does Business 
to Meet 21st Century Challenges by assessing:

* Roles in achieving federal objectives;

* Government transformation;

* Key management challenges and program risks;

* Fiscal position and financing of the government;

Maximize the Value of GAO by Being a Model Federal Agency and a World-
Class Professional Services Organization in the areas of:

* Client and customer service;

* Strategic leadership;

* Institutional knowledge and experience;

* Process improvement;

* Employer of choice;

Core Values:

* Accountability;

* Integrity;

* Reliability;

Source: GAO.

GAO Strategic Plan 2004-2009.

[End of strategic plan framework]

Selected Success Measures:

* Results;

* Clients/customers;

* People;

* Partnerships.

Annual Performance Measures (1998 and 2003):

Performance measure: Financial benefits (billions);
FY 1998: Actual: $19.7;
FY 2003: Actual: $35.4.

Performance measure: Other benefits;
FY 1998: Actual: 537;
FY 2003: Actual: 1043.

Performance measure: Past recommendations implemented;
FY 1998: Actual: 69%;
FY 2003: Actual: 82%.

Performance measure: Return on investment (ROI);
FY 1998: Actual: 58:1;
FY 2003: Actual: 78:1.

Performance measure: Financial benefits per employee (millions);
FY 1998: Actual: $6.1;
FY 2003: Actual: $10.8.

Performance measure: Timeliness;
FY 1998: Actual: 93%;
FY 2003: Actual: 97%.

[End of table]

Client Feedback FY02-04 (through June 2004):

[See PDF for image] --graphic text:

Fiscal year 2002: 92% favorable;
Fiscal year 2003: 96% favorable;
Fiscal year 2004: 97% favorable;

Response rates were 46% in FY02, 31% in FY03, and 34% in FY04 to date.

[End of figure]

Key GAO Partnerships:

INTOSAI;
National Audit Forum;
Good Government Organizations;
Professional Associations;
GAO Advisory Groups.

GAO: Leading by Example: (Change, Performance, and Human Capital 
Management):

* Mission and vision clarification;
* Core values: accountability, integrity, reliability;
* Strategic planning;
* Organizational realignment;
* Definitions of success;
* Multi-tasking and matrix management;
* Procurement, contracting, and acquisition;
* Human capital;
* Information technology;
* Knowledge management;
* Financial management;
* Client service/external agency relations and protocols;
* Enhanced products and services;
* Constructive engagement with agencies;
* Partnering with other accountability and "good government" 
organizations.

How GAO Has Addressed Its Human Capital Challenges:

Administrative:

* HQ realignment & field office restructuring;

* Self-assessment checklist;

* Human capital profile;

* Workforce & succession planning;

* Employee feedback survey & suggestion program;

* Employee Advisory Council;

* Enhanced employee communications & participation;

* Skills & knowledge inventory;

* Employee preference survey;

* Frequent flyer miles;

* Student loan repayment;

* Recruitment & college relations;

* Phased retirement initiative;

* Training/development;

* Recognition & rewards;

* Business casual dress & business cards;

* Enabling technologies;

* Opportunity/inclusiveness;

* Mentor/buddy programs;

* Commuting subsidy;

* Competency-based employee appraisal system;

* Human Capital Officer;

* Office of Opportunity & Inclusiveness;

* Flexitime and telework;

* Total compensation communications;

* Classification and compensation review;

* Human Capital Strategic Plan.

Legislation Addressing GAO's Human Capital Challenges:

Past:

Broad-banding system for mission staff;

* Expedited hiring authority (e.g., internship program);

* Special pay rates;

* Senior level for technical staff;

* Targeted early out and buyout authority (3 years);

* Revised RIF rules.

Recent:

* Targeted early out and buyout authority (permanent);

* Annual pay adjustment rates;

* Pay retention provisions;

* Relocation benefits;

* Increased annual leave for upper level employees;

* Executive exchange program;

* Re-designation of "General Accounting Office" to "Government 
Accountability Office."

Competency-Based Performance Appraisal:

Objective of new system are to provide a:

* Clear link to our strategic plan, professional standards, protocols 
and core values;

* Fair, honest, accurate and non-discriminatory assessment of 
performance based on standards that are valid, properly applied, and 
transparent to employees;

* A sound basis for enhancing the performance capacity of all staff, 
rewarding high-performing staff, and dealing with "below expected" 
performers;

Competency Model:

[See PDF for image] --graphic text:

Octagonal diagram with eight broad human capital topics and 12 
competency areas:

* Succession Planning;

* Promotions;

* Recruitment;

* Work Assignments;

* Performance Management;

* Pay Decisions;

* Career Planning;

* Training.

Competencies:

* Achieving Results;

* Maintaining Client and Customer Focus;

* Developing People;

* Thinking Critically;

* Improving Professional Competence;

* Collaborating with Others;

* Presenting Information Orally;

* Presenting Information in Writing;

* Facilitating and Implementing Change;

* Representing GAO;

* Investing Resources;

* Leading Others.

[End of figure]

Analyst/Specialist Appraisal Scores (1984-2003):

[See PDF for image] -graphic text:

Combination bar/line graph with two bars and one line.

'84;
Percent of all Ratings: Ratings = 4.7 and above: 7%;
Percent of All Ratings: Ratings: 5.0: 2%;
Average Rating (5-point scale): 3.84. 

'85;
Percent of all Ratings: Ratings = 4.7 and above: 7%;
Percent of All Ratings: Ratings: 5.0: 1%;
Average Rating (5-point scale): 3.9. 

'86;
Percent of all Ratings: Ratings = 4.7 and above: 9%;
Percent of All Ratings: Ratings: 5.0: 1%;
Average Rating (5-point scale): 3.98. 

'87;
Percent of all Ratings: Ratings = 4.7 and above: 10%;
Percent of All Ratings: Ratings: 5.0: 1%;
Average Rating (5-point scale): 4.02. 

'88;
Percent of all Ratings: Ratings = 4.7 and above: 11%;
Percent of All Ratings: Ratings: 5.0: 2%;
Average Rating (5-point scale): 4.07. 

'89;
Percent of all Ratings: Ratings = 4.7 and above: 19%;
Percent of All Ratings: Ratings: 5.0: 3%;
Average Rating (5-point scale): 4.14. 

'90;
Percent of all Ratings: Ratings = 4.7 and above: 19%;
Percent of All Ratings: Ratings: 5.0: 3%;
Average Rating (5-point scale): 4.26. 

'91;
Percent of all Ratings: Ratings = 4.7 and above: 24%;
Percent of All Ratings: Ratings: 5.0: 4%;
Average Rating (5-point scale): 4.33. 

'92;
Percent of all Ratings: Ratings = 4.7 and above: 31%;
Percent of All Ratings: Ratings: 5.0: 6%;
Average Rating (5-point scale): 4.39. 

'93;
Percent of all Ratings: Ratings = 4.7 and above: 36%;
Percent of All Ratings: Ratings: 5.0: 7%;
Average Rating (5-point scale): 4.46. 

'94;
Percent of all Ratings: Ratings = 4.7 and above: 41%;
Percent of All Ratings: Ratings: 5.0: 10%;
Average Rating (5-point scale): 4.54. 

'95;
Percent of all Ratings: Ratings = 4.7 and above: 43%;
Percent of All Ratings: Ratings: 5.0: 12%;
Average Rating (5-point scale): 4.59. 

'96;
Percent of all Ratings: Ratings = 4.7 and above: 50%;
Percent of All Ratings: Ratings: 5.0: 16%;
Average Rating (5-point scale): 4.61. 

'97;
Percent of all Ratings: Ratings = 4.7 and above: 51%;
Percent of All Ratings: Ratings: 5.0: 16%;
Average Rating (5-point scale): 4.63. 

'98;
Percent of all Ratings: Ratings = 4.7 and above: 50%;
Percent of All Ratings: Ratings: 5.0: 18%;
Average Rating (5-point scale): 4.62. 

'99;
Percent of all Ratings: Ratings = 4.7 and above: 11%;
Percent of All Ratings: Ratings: 5.0: 2%;
Average Rating (5-point scale): 4.16. 

'00;
Percent of all Ratings: Ratings = 4.7 and above: 12%;
Percent of All Ratings: Ratings: 5.0: 2%;
Average Rating (5-point scale): 4.18. 

'01;
Percent of all Ratings: Ratings = 4.7 and above: 17%;
Percent of All Ratings: Ratings: 5.0: 2%;
Average Rating (5-point scale): 4.26. 

'02;
Average Rating (5-point scale): 2.19. 

'03;
Average Rating (5-point scale): 2.3. 

[End of figure]

GAO's Classification & Compensation Review:

* The following four principles are consistent with GAO's overall 
objective to attract and retain top talent both for today and 
tomorrow. 

* Assure that our classification and compensation systems result in 
equal pay for work of equal value over time.

* Assure that our classification system reflects the roles and 
responsibilities that we expect GAO staff to perform.

* Assure that our systems are reasonable and competitive.

* Assure that all our related systems are both affordable and 
sustainable on the basis of current and expected resource levels.

People Measures: Staff Development: (Percent of staff responding 
favorably):

[See PDF for image] -graphic text:

Stacked bar graph with 2 bars containing five items apiece and one bar 
containing four items.

Internal training (delivered by GAO staff or contractors):
FY03: 63%;
FY04: 68%.

External training/conferences:
FY03: 85%;
FY04: 66%.

On the job training I received:
FY03: 69%;
FY04: 72%.

Computer-based training delivered by Internet, IPTV or CD:
FY03: 25%;
FY04: 57%.

Total:
FY03: 67%;
FY04: 70%.

[End of figure]

People Measures: Staff Utilization: (Percent of staff responding 
favorably):

[See PDF for image] -graphic text:

Stacked bar graph with 2 bars containing four items apiece and one bar 
containing three items.

My job made good use of my skills and abilities;
FY03: 71%;
FY04: 72%.

GAO provided me with opportunities to do challenging work;
FY03: 69%;
FY04: 70%.

In general, I was used effectively;
FY03: 73%;
FY04: 74%.

Total: 
FY03: 71%;
FY04: 72%.

[End of figure]

People Measures: Organizational Climate: (Percent of staff responding 
favorably):

[See PDF for image] -graphic text:

Stacked bar graph with 2 bars containing six items apiece and one bar 
containing five items.

A spirit of cooperation and teamwork exists in my work;
FY03: 73%;
FY04: 78%.

I am treated fairly and with respect;
FY03: 74%;
FY04: 77%.

My morale is good;
FY03: 67%;
FY04: 69%.

Sufficient effort is made to get the opinions and thinking of people;
FY03: 67%;
FY04: 74%.

Overall I am satisfied with my job at GAO;
FY03: 74%;
FY04: 74%.

Total: 
FY03: 71%;
FY04: 74%.

[End of figure]

People Measures: Leadership: (Percent of staff responding favorably):

[See PDF for image] -graphic text:

Stacked bar graph with 2 bars containing eleven items apiece and one 
bar containing ten items.

Gave me the opportunity to do what I do best;
FY03: 79%;
FY04: 79%.

Treated me fairly;
FY03: 86%;
FY04: 87%.

Acted with honesty and integrity toward me;
FY03: 85%;
FY04: 86%.

Gave me the sense my work is valued;
FY03: 75%;
FY04: 77%.

Ensured a clear link between my performance and recognition of it;
FY03: 69%;
FY04: 72%.

Provide meaningful incentives for high performance;
FY03: 57%;
FY04: 58%.

Implemented change effectively;
FY03: 74%;
FY04: 75%.

Dealt effectively with EEO and discrimination issues;
FY03: 92%;
FY04: 92%.

Demonstrated GAO's core values;
FY03: 86%;
FY04: 88%.

Made decisions in a timely manner;
FY03: 76%;
FY04: 77%.

Total;
FY03: 78%;
FY04: 79%.

[See PDF for image]

GAO Benchmarking Results for 2004:

GAO exceeded the government-wide average in 9 of 11 OPM benchmark 
questions, and it exceeded the private sector benchmark in all 4 
questions, as shown below.

Personal Experiences: I am given a real opportunity to improve my 
skills in my organization;
Benchmarking Results: Private Industry 1999-2000: 59%;
Benchmarking Results: OPM 2002: 57%;
Benchmarking Results: GAO 2004: 70%.

Personal Experiences: My job makes good use of my skills and abilities;
Benchmarking Results: Private Industry 1999-2000: 70%;
Benchmarking Results: OPM 2002: 64%;
Benchmarking Results: GAO 2004: 71%.

Personal Experiences: My work gives me a feeling of personal 
accomplishment;
Benchmarking Results: Private Industry 1999-2000: 68%;
Benchmarking Results: OPM 2002: 70%;
Benchmarking Results: GAO 2004: 79%.

Personal Experiences: Considering everything, how satisfied are you 
with your job? 
Benchmarking Results: Private Industry 1999-2000: 67%;
Benchmarking Results: OPM 2002: 68%;
Benchmarking Results: GAO 2004: 76%.

[End of table]

GAO will continue to LEAD by example and pursue benchmark opportunities 
with entities in both the Public and Private Sectors.

In today's world, organizations that do not change may find themselves 
headed for extinction. At the same time, every organization should have 
a set of core values that can stand the test of time.

Three Key Ingredients Needed for These Challenging and Changing Times:

* Leadership:

* Integrity:

* Innovation:

Selected TR Quotes:

"In a moment of decision the best thing you can do is the right thing. 
The worst thing you can do is nothing."

"Aggressive fighting for the right [cause] is the noblest sport the 
world affords."

President Theodore Roosevelt:

[End of slide presentation]