Intelligence Reform
Human Capital Considerations Critical to 9/11 Commission's Proposed Reforms Gao ID: GAO-04-1084T September 14, 2004GAO has performed extensive work and gained experience on government transformation and the critical role that human capital management can play in driving this change. Valuable lessons from these efforts could help guide the proposed reforms in the intelligence community envisioned by the 9/11 Commission. This statement focuses on (1) the lessons GAO has learned from successful mergers and organizational transformations; particularly the need for committed and sustained leadership and the role of performance management systems in these changes; (2) human capital flexibilities that can be used as essential tools to help achieve these reforms; (3) how the Federal Bureau of Investigation (FBI) is using these lessons and human capital flexibilities to transform to meet its evolving mission in the post 9/11 environment, and (4) GAO's findings to date on the factors that must be considered in the approach to the government's security clearance process, as a means to accelerate the process for national security appointments.
Recognizing that people are the critical element in transformation initiatives is key to a successful transformation of the intelligence community and related homeland security organizations. GAO's work in successful mergers and transformations shows that incorporating strategic human capital management approaches will help sustain any reforms in the intelligence community. Successful major change management initiatives in large public and private sector organizations can often take at least 5 to 7 years to create the accountability needed to ensure this success. As a result, committed and sustained leadership is indispensable to making lasting changes in the intelligence community. Accordingly, the Congress may want to consider lengthening the terms served by the directors of the intelligence agencies, similar to the FBI Director's 10-year term. One of the major challenges facing the intelligence community is moving from a culture of a "need to know" to a "need to share" intelligence information. The experience of leading organizations suggests that performance management systems--that define, align, and integrate institutional, unit, and individual performance with organizational outcomes--can provide incentives and accountability for sharing information to help facilitate this shift. Significant changes have been underway in the last 3 years regarding how the federal workforce is managed. The Congress passed legislation providing certain governmentwide human capital flexibilities, such as direct hire authority. While many federal agencies have received human capital flexibilities, others may be both needed and appropriate for intelligence agencies, such as providing these agencies with the authority to hire a limited number of term-appointed positions on a noncompetitive basis. Human capital challenges are especially significant for the intelligence organizations, such as the FBI, that are undergoing a fundamental transformation in the aftermath of September 11, 2001. For the last 3 years, we have been using the lessons learned from successful transformations to monitor the FBI's progress as it transforms itself from its traditional crime enforcement mission to its post 9/11 homeland security priorities--counterterrorism, counterintelligence and cyber crimes. For example, the FBI has undertaken a variety of human capital related initiatives, including major changes in realigning, retraining, and hiring special agents and analysts with critical skills to address its top priorities. The 9/11 Commission recommended that a single federal security clearance agency should be created to accelerate the government's security clearance process. Several factors must be considered in determining the approach to this process. The large number of requests for security clearances for service members, government employees, and others taxes a process that already is experiencing backlogs and delays. Existing impediments--such as the lack of a governmentwide database of clearance information, a large clearance workload, and too few investigators--hinder efforts to provide timely, high-quality clearance determinations.
GAO-04-1084T, Intelligence Reform: Human Capital Considerations Critical to 9/11 Commission's Proposed Reforms
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Testimony:
Before the Subcommittee on Oversight of Government Management, the
Federal Workforce, and the District of Columbia, Committee on
Governmental Affairs:
For Release on Delivery Expected at 9:30 a.m. EST Tuesday, September
14, 2004:
INTELLIGENCE REFORM:
Human Capital Considerations Critical to 9/11 Commission's Proposed
Reforms:
J. Christoper Mihm, Managing Director:
Strategic Issues:
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-1084T]:
GAO Highlights:
Highlights of GAO-04-1084T, a testimony to Subcommittee on Oversight of
Government Management, the Federal Workforce, and the District of
Columbia, Committee on Governmental Affairs
Why GAO Did This Study:
GAO has performed extensive work and gained experience on government
transformation and the critical role that human capital management can
play in driving this change. Valuable lessons from these efforts could
help guide the proposed reforms in the intelligence community
envisioned by the 9/11 Commission.
At the request of this subcommittee, this statement focuses on (1) the
lessons GAO has learned from successful mergers and organizational
transformations; particularly the need for committed and sustained
leadership and the role of performance management systems in these
changes; (2) human capital flexibilities that can be used as essential
tools to help achieve these reforms; (3) how the Federal Bureau of
Investigation (FBI) is using these lessons and human capital
flexibilities to transform to meet its evolving mission in the post
9/11 environment, and (4) GAO‘s findings to date on the factors that
must be considered in the approach to the government‘s security
clearance process, as a means to accelerate the process for national
security appointments.
What GAO Found:
Recognizing that people are the critical element in transformation
initiatives is key to a successful transformation of the intelligence
community and related homeland security organizations. GAO‘s work in
successful mergers and transformations shows that incorporating
strategic human capital management approaches will help sustain any
reforms in the intelligence community. Successful major change
management initiatives in large public and private sector organizations
can often take at least 5 to 7 years to create the accountability
needed to ensure this success. As a result, committed and sustained
leadership is indispensable to making lasting changes in the
intelligence community. Accordingly, the Congress may want to consider
lengthening the terms served by the directors of the intelligence
agencies, similar to the FBI Director‘s 10-year term. One of the major
challenges facing the intelligence community is moving from a culture
of a ’need to know“ to a ’need to share“ intelligence information. The
experience of leading organizations suggests that performance
management systems”that define, align, and integrate institutional,
unit, and individual performance with organizational outcomes”can
provide incentives and accountability for sharing information to help
facilitate this shift.
Significant changes have been underway in the last 3 years regarding
how the federal workforce is managed. The Congress passed legislation
providing certain governmentwide human capital flexibilities, such as
direct hire authority. While many federal agencies have received human
capital flexibilities, others may be both needed and appropriate for
intelligence agencies, such as providing these agencies with the
authority to hire a limited number of term-appointed positions on a
noncompetitive basis.
Human capital challenges are especially significant for the
intelligence organizations, such as the FBI, that are undergoing a
fundamental transformation in the aftermath of September 11, 2001. For
the last 3 years, we have been using the lessons learned from
successful transformations to monitor the FBI‘s progress as it
transforms itself from its traditional crime enforcement mission to
its post 9/11 homeland security priorities”counterterrorism,
counterintelligence and cyber crimes. For example, the FBI has
undertaken a variety of human capital related initiatives, including
major changes in realigning, retraining, and hiring special agents and
analysts with critical skills to address its top priorities.
The 9/11 Commission recommended that a single federal security
clearance agency should be created to accelerate the government‘s
security clearance process. Several factors must be considered in
determining the approach to this process. The large number of requests
for security clearances for service members, government employees, and
others taxes a process that already is experiencing backlogs and
delays. Existing impediments”such as the lack of a governmentwide
database of clearance information, a large clearance workload, and too
few investigators”hinder efforts to provide timely, high-quality
clearance determinations.
www.gao.gov/cgi-bin/getrpt?GAO-04-1084T.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact J. Christopher Mihm
(202) 512-6806 or mihmj@gao.gov.
[End of section]
Chairman Voinovich, Senator Durbin, and Members of the Subcommittee:
I am pleased to be here today to discuss how strategic human capital
management can drive the transformational challenges of the
intelligence community. The work of the 9/11 Commission has clearly
demonstrated the need to fundamentally change the organization and
culture of the intelligence community to enhance its ability to
collect, analyze, share, and use critical intelligence information--a
crucial mission of the community. In a knowledge-based federal
government, including the intelligence community, people--human
capital--are the most valuable asset. How these people are organized,
incentivized, enabled, empowered, and managed are key to the reform and
ultimate effectiveness of the intelligence community and other
organizations involved with homeland security.
To this end, we have conducted extensive work on government
transformation, and the critical role that human capital management
plays in driving this change over the past several years. In August
2004, Comptroller General David M. Walker testified before the
Committee on Government Reform, U.S. House of Representatives, on how
the valuable lessons we learned from this work can be applied to
address the challenges of reform in the intelligence
community.[Footnote 1] He stated that while the intelligence community
has historically been addressed separately from the remainder of the
federal government, and while it undoubtedly performs some unique
missions that present unique issues (e.g. the protection of sources and
methods), many of its major transformational challenges are similar, or
identical to those that face most government agencies, such as changing
their cultures to fit evolving missions. Experience has shown that
strategic human capital management must be the centerpiece of any
serious change management initiative. As the Comptroller General also
recently noted, many of the challenges facing the intelligence
community as knowledge-based organizations, are similar to those he
faced when he began his tenure at GAO. As a result, GAO has gained
valuable experience and knowledge in government transformation that can
be shared with the intelligence community. We also stand ready to use
the experience and knowledge we have gained to offer GAO's assistance
in support of the Congress' legislative and oversight activities for
the intelligence community.
As I recently testified before your subcommittee, more progress in
addressing human capital challenges has been made in the last 3 years
than in the last 20 years; nevertheless, much more needs to be
done.[Footnote 2] Federal human capital strategies are not yet
appropriately constituted to meet current and emerging challenges or to
drive the needed transformation across the federal government. The
basic problem has been the long-standing lack of a consistent approach
to marshaling, managing, and maintaining the human capital needed to
maximize government performance and ensure accountability because
people define the organization's culture, drive its performance, and
embody its knowledge base. Human capital (or people) strategy is the
critical element to maximizing performance and ensuring accountability.
Thus, federal agencies, including our intelligence and homeland
security communities, will need the most effective human capital
systems to address these challenges and succeed in their transformation
efforts during a period of sustained budget constraints.
Under the leadership of this subcommittee and others in Congress, we
have seen major efforts to address the human capital challenges
involved in transforming these communities, such as the transformation
of the Federal Bureau of Investigation (FBI) and the creation of the
Department of Homeland Security (DHS). Nevertheless, as the 9/11
Commission and our work indicate, much more needs to be done to ensure
that agencies' cultures are results-oriented, customer-focused, and
collaborative in nature--characteristics critical to high performing
organizations.[Footnote 3] As agreed, my statement today will cover
four major points. First, I will discuss how we can use the lessons we
have learned to date from successful private and public sector mergers
and transformations to guide the intelligence community's human capital
reforms; particularly the need for committed and sustained leadership,
and the use of performance management systems to help achieve the
necessary change. Second, I will discuss several human capital
flexibilities that could be used as essential tools to help achieve
these reforms, such as providing agencies with the authority to hire a
limited number of term-appointed positions. Third, I will also discuss
GAO's prior work on FBI's efforts to use these lessons and human
capital flexibilities as it transforms to meet its evolving mission in
the post 9/11 environment. Finally, I will summarize our findings to
date on the factors that must be considered in the approach to the
government security clearance process, as a means to accelerate the
process for national security appointments.
My comments are based on our completed GAO work and our institutional
knowledge on organizational transformation and human capital issues, as
well as on homeland security. We conducted our work in accordance with
generally accepted government auditing standards.
Key Mergers and Transformation Practices Can Be Used to Guide
Intelligence Community Reforms:
Experience shows that failure to adequately address--and often even
consider--a wide variety of people and cultural issues are at the heart
of unsuccessful organizational transformations. Recognizing the people
element in these initiatives and implementing strategies to help
individuals maximize their full potential in the new environment are
key to a successful transformation of the intelligence community and
related homeland security organizations. Mergers and transformations
require more than just changing organizational charts. They require
fundamental changes in strategic human capital management approaches,
particularly in defining, aligning, and integrating key institutional,
unit, and individual performance management and reward systems to
achieve desired outcomes.
The 9/11 Commission has recommended several transformational changes,
such as the establishment of a National Counterterrorism Center for
joint operational planning and intelligence, and the creation of a
National Intelligence Director position to oversee national
intelligence centers across the federal government. The Director would
manage the national intelligence program, oversee agencies that
contribute to it, and establish important aspects of a human capital
system. Specifically, the Director would be able to set common
personnel and information technology policies across the intelligence
community. In addition, the Director would have the authority to
evaluate the performance of the people assigned to the Center.
The creation of a National Counterterrorism Center and a National
Intelligence Director would clearly represent major changes for the
intelligence community. Recent structural and management changes have
occurred and are continuing to occur in government that provide lessons
for the intelligence community's transformation. For example, in
anticipation of the creation of DHS, in September 2002, the Comptroller
General convened a forum of private and public sector experts to help
identify useful practices and lessons learned from mergers,
acquisitions, and transformations that DHS and other federal agencies
could use to successfully transform their cultures.[Footnote 4] In a
follow-up report, we also identified specific steps that organizations
can adopt to help implement these practices, as seen in table
1.[Footnote 5] These practices and steps also provide guidance on what
must occur to effectively transform the intelligence community.
Table 1: Key Practices and Implementation Steps for Mergers and
Transformations:
Practice: Ensure top leadership drives the transformation;
Implementation Steps:
* Define and articulate a succinct and compelling reason for change;
* Balance continued delivery of services with merger and
transformation activities.
Practice: Establish a coherent mission and integrated strategic goals
to guide the transformation;
Implementation Steps:
* Adopt leading practices for results-oriented strategic planning and
reporting.
Practice: Focus on a key set of principles and priorities at the
outset of the transformation;
Implementation Steps:
* Embed core values in every aspect of the organization to reinforce
the new culture.
Practice: Set implementation goals and a timeline to build momentum
and show progress from day one;
Implementation Steps:
* Make public implementation goals and timeline;
* Seek and monitor employee attitudes and take appropriate follow-up
actions;
* Identify cultural features of merging organizations to increase
understanding of former work environments;
* Attract and retain key talent;
* Establish an organizationwide knowledge and skills inventory to
exchange knowledge among merging organizations.
Practice: Dedicate an implementation team to manage the transformation
process;
Implementation Steps:
* Establish networks to support implementation team;
* Select high-performing team members.
Practice: Use the performance management system to define the
responsibility and assure accountability for change;
Implementation Steps:
* Adopt leading practices to implement effective performance management
systems with adequate safeguards.
Practice: Establish a communication strategy to create shared
expectations and report related progress;
Implementation Steps:
* Communicate early and often to build trust;
* Ensure consistency of message;
* Encourage two-way communication;
* Provide information to meet specific needs of employees.
Practice: Involve employees to obtain their ideas and gain ownership
for the transformation;
Implementation Steps:
* Use employee teams;
* Involve employees in planning and sharing performance information;
* Incorporate employee feedback into new policies and procedures;
* Delegate authority to appropriate organizational levels.
Practice: Build a world-class organization;
Implementation Steps:
* Adopt leading practices to build a world-class organization.
Source: GAO.
[End of table]
I would now like to discuss how two of these key practices, providing
leadership commitment and using performance management systems, can
help guide the intelligence community reforms.
Ensuring Committed and Sustained Leadership Is a Key Practice to Drive
Transformation in the Intelligence Community:
Committed, sustained, highly qualified, and inspired leadership, and
persistent attention by all key parties in the successful
implementation of organizational transformations are indispensable to
making lasting changes in the intelligence community. Experience shows
that successful major change management initiatives in large public and
private sector organizations can often take at least 5 to 7 years to
help to create the accountability needed to ensure that long-term
management and transformation initiatives are successfully completed.
This length of time and the frequent turnover of political leadership
in the federal government have often made it difficult to obtain the
sustained and inspired attention to make the needed changes. For
example, while the FBI Director has a 10-year term appointment, most of
the intelligence agency heads have shorter term appointments. In his
August 2004 testimony on the proposed 9/11 Commission reforms, the
Comptroller General suggested that the Congress may want to place
attention on lengthening the period of time served by the directors of
the other intelligence agencies to provide the continuity and
management needed to make the tremendous changes that occur during
organizational transformations.
We have also reported that the appointment of agency chief operating
officers is one mechanism that should be considered to provide
continuity by elevating attention on management issues and
transformation, integrating these various initiatives, and
institutionalizing accountability for addressing them.[Footnote 6] We
believe that to provide such leadership continuity during reform of the
intelligence community, one option that the Congress could consider is
for the National Intelligence Director to appoint a Chief Operating
Officer. This executive could serve under a term appointment to
institutionalize accountability over extended periods and to help
ensure that the long-term management and organizational initiatives of
the National Counterterrorism Center and the Director are successfully
completed. In general, the Chief Operating Officer could be responsible
to the National Intelligence Director for the overall direction,
operation, and management within the intelligence community to improve
its performance. These responsibilities include implementing strategic
goals, and assisting the National Intelligence Director in promoting
reform, measuring results, and other responsibilities.
Finally, there are also leadership continuity challenges that occur
during transitions between administrations, and in the Presidential
appointment process. For example, the 9/11 Commission noted that recent
administrations did not have their full leadership teams in place for
at least 6 months after the transitions occurred. The Commission
recommended that the disruption of national security policymaking
during a change of administrations be minimized as much as possible.
The Comptroller General suggests that one way to avoid disruption and
to provide continuity during transitions is that if the Congress
creates Deputy or Assistant National Intelligence Directors, to
designate one of them as the Principal Deputy, such as the Director of
the Central Intelligence Agency (CIA), whose term appointment, as
previously discussed, would not coincide with the term of the National
Intelligence Director.
Using Performance Management Systems Is Another Key Practice to Help
Transform the Intelligence Community:
A central theme of the 9/11 Commission report was that one of the major
challenges facing the intelligence community is moving from a culture
of a "need to know" to a "need to share." The Congress and the
President are separately considering a series of important structural
and policy changes that would facilitate this shift. The experiences of
leading organizations suggest that a performance management system can
also be a part of the solution. Senator Voinovich, at your request and
others, we previously identified leading performance management
practices that should prove helpful for intelligence agencies seeking
to move to a culture of "need to share" and thus improve their
performance.[Footnote 7] The key practices are as follows:
Figure 1: Key Practices for Effective Performance Management:
1. Align individual performance expectations with organizational goals.
An explicit alignment helps individuals see the connection between
their daily activities and organizational goals.
2. Connect performance expectations to crosscutting goals. Placing an
emphasis on collaboration, interaction, and teamwork across
organizational boundaries helps strengthen accountability for
results.
3. Provide and routinely use performance information to track
organizational priorities. Individuals use performance information to
manage during the year, identify performance gaps, and pinpoint
improvement opportunities.
4. Require follow-up actions to address organizational priorities. By
requiring and tracking follow-up actions on performance gaps,
organizations underscore the importance of holding individuals
accountable for making progress on their priorities.
5. Use competencies to provide a fuller assessment of performance.
Competencies define the skills and supporting behaviors that
individuals need to effectively contribute to organizational results.
6. Link pay to individual and organizational performance. Pay,
incentive, and reward systems that link employee knowledge, skills, and
contributions to organizational results are based on valid, reliable,
and transparent performance management systems with adequate
safeguards.
7. Make meaningful distinctions in performance. Effective performance
management systems strive to provide candid and constructive feedback
and the necessary objective information and documentation to reward top
performers and deal with poor performers.
8. Involve employees and stakeholders to gain ownership of performance
management systems. Early and direct involvement helps increase
employees' and stakeholders' understanding and ownership of the system
and belief in its fairness.
9. Maintain continuity during transitions. Because cultural
transformations take time, performance management systems reinforce
accountability for change management and other organizational goals.
Source: GAO.
[End of figure]
An effective performance management system is a vital tool for aligning
the organization with desired results and creating a "line of sight"
showing how team, unit, and individual performance can contribute to
overall organizational results. In addition, to be successful,
transformation efforts, such as the one envisioned for the intelligence
community, must have leaders, managers, and employees who are capable
of integrating and creating synergy among the multiple organizations
involved. A performance management system can help send unmistakable
messages about the behavior that the organization values and that
support the organization's mission and goals, as well as provide a
consistent message to employees about how they are expected to achieve
results. Thus, as transformation efforts are implemented, individual
performance and contributions are evaluated on competencies such as
change management, cultural sensitivity, teamwork, collaboration, and
information sharing. Leaders, managers, and employees who demonstrate
these competencies are rewarded for their successful contributions to
the achievement of the transformation process.
Human Capital Flexibilities Are Also Essential Tools for Intelligence
Community Transformation:
Significant changes have been underway in the last 3 years regarding
how the federal workforce is managed. For example, the Congress passed
legislation providing certain governmentwide human capital
flexibilities, such as direct hire authority.[Footnote 8] In addition,
individual agencies--such as the National Aeronautical and Space
Administration, the Department of Defense (DOD), and DHS--received
flexibilities intended to help them manage their human capital
strategically to achieve results. While many federal agencies have
received additional human capital flexibilities, others may be both
needed and appropriate for the intelligence and other selected
agencies. For example, the 9/11 Commission recommends rebuilding CIA's
analytical capabilities, enhancing the agency's human intelligence
capabilities, and developing a stronger language program. Human capital
flexibilities can help agencies like the CIA meet these critical human
capital needs.
Therefore, to further enable the intelligence agencies to rapidly meet
their critical human capital needs and workforce plans, the Comptroller
General suggests that Congress could consider, as necessary,
legislation granting selected agency heads the authority to hire a
limited number of positions for a stated period of time (e.g., up to 3
years) on a noncompetitive basis. The Congress has passed legislation
granting this authority to the Comptroller General of the United States
and it has helped GAO address a range of critical needs in a timely,
effective, and prudent manner over many years. The Comptroller General
was also provided the authority to carry out early retirement offers
which may be made to any employee or group of employees based on a
number of factors including (1) geographic area, organizational unit,
or occupational series or level; or (2) skills, knowledge, or
performance, which he suggests would further assist intelligence
agencies in planning and shaping their future workforces. For GAO, the
Comptroller General can deny any requests for early retirement if he
determines that granting them would jeopardize GAO's ability to achieve
its mission.
As the Congress considers reforms to the intelligence community's human
capital policies and practices, it should also consider whether
agencies have the necessary institutional infrastructure to effect
these changes. At a minimum, this infrastructure includes a human
capital planning process that integrates the agency's human capital
policies, strategies, and programs with its program goals, mission and
desired outcomes; the capabilities to effectively develop and implement
a new human capital system; and importantly, a performance management
system with a set of appropriate principles and safeguards--including
reasonable transparency and appropriate accountability mechanisms--to
ensure the fair, effective, credible, nondiscriminatory implementation
and application of a new system.
FBI Is Using Strategic Human Capital Management to Transform and Meet
Post 9/11 Challenges:
Human capital challenges are especially significant for the
intelligence organizations, such as the FBI, that are undergoing a
fundamental transformation in the aftermath of September 11, 2001. For
the last 3 years, we have been monitoring the FBI's progress as it
transforms itself from its traditional crime enforcement mission to its
post September 11 homeland security priorities--counterterrorism,
counterintelligence, and cyber crimes. In terms of human capital, this
has meant major changes in recruiting, training, and deploying FBI's
staff resources. Specifically, the 9/11 Commission recommends that the
FBI create a specialized and integrated national security workforce,
consisting of agents, analysts, linguists, and surveillance specialists
who are recruited, trained, rewarded, and retained to ensure the
development of an institutional culture with expertise in intelligence
and national security. While the FBI has made admirable progress on a
number of these human capital fronts, substantial challenges
remain.[Footnote 9]
Linchpins of any successful transformation are (1) a strategic plan to
guide an organization's mission, vision, and the steps necessary to
achieve its long-term goals; and (2) a strategic human capital plan
linked to the strategic plan that guides recruitment, hiring, training,
and retention decisions for staff with skills critical to the
organization's mission and goals. In March 2004, we reported that the
FBI had completed both of these plans.[Footnote 10] With respect to
strategic human capital planning, FBI has developed a strategic human
capital plan that contains many of the principles that we have laid
out for an effective human capital system.[Footnote 11] For example,
it highlights the need for the FBI to fill identified skill gaps, in
such areas as language specialists and intelligence analysts, by using
various personnel flexibilities including recruiting and retention
bonuses.[Footnote 12]
In addition, in the immediate aftermath of September 11, 2001, the FBI
undertook a variety of human capital-related initiatives to align with
its transformation efforts. These initiatives included realigning,
retraining, and hiring special agents and analysts with critical skills
to address its top priorities, and taking initial steps to revamp its
performance management system.
In relation to realigning resources to fit the new agency priorities,
the FBI has transferred agents from its drug, white-collar crime, and
violent crime programs to focus on counterterrorism and
counterintelligence priorities. This realignment of resources has
permanently shifted 674 field agent positions from drug, white-collar,
and violent crime program areas to counterterrorism and
counterintelligence since September 11, 2001. About 550 of these
positions were drawn from the drug crime area. Yet because of demands
in the counterterrorism and counterintelligence programs, the FBI has
had a continuing need to temporarily redirect special agent resources
from traditional criminal investigative programs to address its top
priorities.[Footnote 13]
In terms of retraining its existing staff, the FBI also revamped its
special agent training curriculum to enhance skills in counterterrorism
investigation techniques. The revised training for new agents was
instituted in April 2003 and by the end of that calendar year, it was
expected that agents transferring from more traditional crime areas to
work in the priority areas would have received specialized training. To
enhance the skills and abilities of FBI analysts, the FBI created the
College of Analytic Studies at the Quantico training facility in
October 2001. This program, with assistance from CIA personnel,
provides training to both new and in-service analysts in tools and
techniques for both strategic and technical analysis.
The FBI set ambitious goals for hiring in many specialty areas over the
last few years. While it has achieved success in some areas, such as
increasing the number of special agents hired with intelligence and
foreign language proficiency, achieving other hiring goals has been
more challenging. Specifically, the FBI has had some difficulty in
retaining and competing with other government agencies and the private
sector for intelligence analysts. These problems may be related to the
truncated career ladder for intelligence analysts at the FBI compared
to the career ladders for the same types of positions at other federal
agencies. For example, both the CIA and the National Security Agency
(NSA) maintain a career ladder for intelligence staff that includes
both senior executive (managerial) and senior level (nonmanagerial)
positions. Although, the FBI has actively moved towards establishing a
GS-15 senior managerial level position for its intelligence staff, this
would still not create a level playing field with the rest of the
intelligence community that has the authority to provide positions at
the Senior Executive Service (SES) level. Should the FBI decide to
adopt senior managerial and SES positions for its intelligence staff,
the agency will need to develop and implement a carefully crafted plan
that includes specific details on how such an intelligence career
service would integrate into its strategic plan as well as its
strategic human capital plan, the expectations and qualifications for
the positions, and how performance would be measured.
As discussed previously, an effective performance management system is
a vital tool for aligning the organization with desired results and
showing how team, unit, and individual performance can contribute to
overall organizational results. As we have previously reported, the
current FBI system for rating agents and analysts--a pass/fail system-
-is inadequate to achieve that needed linkage. A successful performance
management system should make meaningful distinctions in performance so
that staff can understand their role in relation to agency objectives.
It should also map a course of progress to improve performance so that
it more closely aligns with agency goals. The FBI has made progress in
adjusting its performance management system for senior executives to
conform to the performance management principles that I previously
discussed. Although FBI's human capital plan indicates that it is also
moving in the direction of changing the performance management system
for agents and analysts, a major effort will be needed before it is
operational.
As we have highlighted, in recent years, the FBI has used a variety of
available human capital flexibilities, such as recruitment bonuses and
retention allowances, to help recruit and retain valuable staff
resources. As with any organization undergoing transformation and
considering the use of additional human capital strategies, the FBI
would have to weigh all options that are available to it before
implementing a successful human capital strategy, including using
existing administrative flexibilities and requesting new legislative
alternatives. The FBI would also need to ensure that it has the
institutional infrastructure in place so that any human capital
flexibilities are used appropriately.
Many Factors Must Be Considered in Approach to Government Security
Clearance Process:
The 9/11 Commission also raised concerns about minimizing national
security policymaking disruptions during the change of administrations
by accelerating the process for national security appointments. The
Commission recommended that a single federal agency should be
responsible for providing and maintaining security clearances and for
ensuring uniform security clearance standards, including maintaining a
single governmentwide database of clearance information, as a way to
address this concern. In prior work, we have found that many factors
must be considered in addressing the government security clearance
process. These factors include the personnel security clearance
criteria and process, recent actions that DOD has taken to consolidate
investigative and adjudicative functions, and existing impediments and
internal control concerns for security clearance programs.
All Security Clearances Are Already Governed by the Same Criteria and
General Process:
In considering ways in which to approach the government's security
clearance process, it is helpful to note that since 1997, all agencies
have been subject to a common set of personnel security investigative
standards and adjudicative guidelines for determining whether service
members, government employees, industry personnel, and others are
eligible to receive a security clearance.[Footnote 14] Classified
information is categorized into three levels--top secret, secret, and
confidential.[Footnote 15] The expected damage to national defense or
foreign relations that unauthorized disclosure could reasonably be
expected to cause is "exceptionally grave damage" for top secret
information, "serious damage" for secret information, and "damage" for
confidential information.
In addition, all agencies generally follow a similar clearance process.
DOD's process for determining eligibility is used here to illustrate
the stages required in making such a determination for federal
agencies. We are highlighting DOD's process because, as of September
30, 2003, DOD was responsible for the clearances issued to
approximately 2 million personnel, including nearly 700,000 industry
personnel who work on contracts issued by DOD and 22 other federal
agencies[Footnote 16] as well as staff in the legislative branch of the
federal government. (see fig. 2).
Figure 2: DOD's Personnel Security Clearance Process:
[See PDF for image]
[End of figure]
Recent Attempts to Consolidate Some Investigative and Adjudicative
Functions:
In terms of centralizing personnel investigations, The National Defense
Authorization Act for Fiscal Year 2004 authorized an action that, if
taken, would result in the Office of Personnel Management (OPM) being
responsible for an estimated 80 percent of the personnel investigations
conducted for the federal government.[Footnote 17] The Act authorized
the transfer of DOD's personnel security investigative functions and
1,855 investigative employees to OPM. OPM indicated that it will not
accept the transfer at least during fiscal year 2004 because of
concerns about the financial risk associated with the authorized
transfer. DOD and OPM have, however, signed a memorandum of
understanding that, among other things, results in OPM providing DOD
investigative staff with training on OPM's investigative procedures as
well as training on and access to OPM's case management system.
As for centralizing the adjudication steps in the clearance process, in
May 2004, we reported that DOD's Senior Executive Council was
considering the consolidation of the clearance adjudicative functions
that two of DOD's 10 central adjudication facilities perform.[Footnote
18] A DOD official told us that the consolidation would provide greater
flexibility in using adjudicators to meet changes in the clearance
approval workload and could eliminate some of the time required to
transfer cases between adjudication facilities. A wider-ranging
adjudicative initiative is also being undertaken in DOD. When fully
implemented, the Joint Personnel Adjudication System (JPAS) is supposed
to enhance DOD's adjudicative capabilities by--among other things--
consolidating information into a DOD-wide security clearance data
system (instead of maintaining the data on 10 adjudication facility-
specific systems), providing near real-time input and retrieval of
clearance-related information, and improving the ability to monitor
overdue reinvestigations and estimate the size of that portion of
delayed clearances. JPAS, identified as mission critical by the DOD
Chief Information Officer, was supposed to be implemented in fiscal
year 2001 and is now projected for full implementation sometime in
fiscal year 2004. Even though JPAS may consolidate adjudicative data on
the approximately 2 million clearances that DOD had on September 30,
2003, other agencies, such as the FBI, maintain their own databases
with adjudicative information.
Addressing Existing Impediments and Internal Control Concerns is
Important to Any Consolidation Decision:
Regardless of the decision about whether or not to consolidate
investigative and adjudicative functions governmentwide, existing
impediments--such as the lack of a governmentwide database of clearance
information--hinder efforts to provide timely, high-quality clearance
determinations. I will discuss two of those major impediments--large
workloads and too few investigators, and two internal control issues.
The remainder of this section relies heavily on work that we conducted
on DOD's investigative and adjudicative functions because there is a
dearth of reports available on these functions in other federal
departments and agencies.
The large number of requests for security clearances for service
members, government employees, and industry personnel taxes a process
that already is experiencing backlogs and delays. In fiscal year 2004,
GAO published reports documenting the numbers of clearance requests and
delays in completing investigations by DOD (for service members,
government employees and industry personnel), OPM (for DOD and the
Federal Air Marshal Service), and the FBI (for state and local law
enforcement officials).[Footnote 19] In fiscal year 2003, DOD submitted
over 775,000 requests for investigations. The large number of
investigative and adjudicative workload requirements is also found in
the form of a growing portion of the requests requiring top secret
clearances, in at least one segment of the population. From fiscal year
1995 through fiscal year 2003, the proportion of all requests requiring
top secret clearances for industry personnel grew from 17 to 27
percent. According to DOD, top secret clearances take 8 times more
investigative effort to complete and 3 times more adjudicative effort
to review than do secret clearances. In addition, a top secret
clearance must be renewed twice as often as a secret clearance--every 5
years instead of every 10 years. The full effect of requesting a top
secret, rather than a secret clearance, thus is 16 times the
investigative effort and 6 times the adjudicative effort.
The limited number of investigative staff available to process requests
hinders efforts to issue timely clearances. According to a senior OPM
official, DOD and OPM together need roughly 8,000 full-time-equivalent
investigative staff to eliminate the security clearance backlogs and
deliver timely investigations to their customers. However, in our
February report, GAO estimated that DOD and OPM have around 4,200 full-
time-equivalent investigative staff who are either federal employees or
contract investigators, slightly more than half as many as
needed.[Footnote 20]
Internal control concerns are also present with regard to personnel
security clearances. A 1999 GAO report documented problems with the
quality of DOD personnel security clearance investigations. The
severity of these problems led DOD to declare its investigations
program a systemic weakness under the Federal Managers' Financial
Integrity Act.[Footnote 21] That declaration has continued to be made
each year in DOD's annual statement of assurance. We continued to track
these issues and in 2001, we recommended DOD establish detailed
documentation requirements to support adjudicative decisions as a way
to strengthen internal controls.[Footnote 22] Three years earlier, the
DOD Office of the Inspector General stated that no DOD office is
assigned the responsibility to ensure that the various adjudication
facilities consistently implement adjudicative policies and
procedures.
When OPM was privatizing its investigative function in 1996 to create
the company that still conducts the vast majority of OPM's
investigations for the federal government, we raised an internal
control concern, namely that OPM's contract with the newly created
company would require the contractor to conduct personnel security
clearance investigations on its own employees.[Footnote 23] This
remains one area of concern because OPM officials told us in April 2003
that its contractors were still conducting the investigations on its
own personnel.
Conclusions:
The 9/11 Commission recognized that fundamental changes in the
management of human capital in the intelligence and homeland security
communities will improve the efforts of these communities to
effectively carry out its fundamental mission--to gather and share
intelligence that will ultimately help to protect the American people.
Human capital considerations, such as the recruitment and retention of
key skills and competencies, performance incentives to share
information, and more flexible approaches to the management of human
capital, are crucial to the success of the intelligence community
reforms envisioned by the 9/11 Commission, and agencies involved with
the intelligence community will need the most effective human capital
systems to succeed in their transformation efforts. Thus, strategic
management of human capital is one such reform critical to maximizing
the performance of the intelligence community.
Committed, sustained, highly qualified, and inspired leadership, and
persistent attention by all key parties to the successful
implementation of these reforms and organizational transformations will
be essential, if lasting changes are to be made and the challenges we
are discussing today are to be effectively addressed.
Chairman Voinovich and Members of the Subcommittee, this concludes my
prepared statement. I would be pleased to answer any questions you may
have.
Contacts and Acknowledgments:
For further information regarding this statement, please contact J.
Christopher Mihm, Managing Director, Strategic Issues, on (202) 512-
6806 or at [Hyperlink, mihmj@gao.gov] or Eileen Larence, Acting
Director, Strategic Issues, at [Hyperlink, larencee@gao.gov].
Individuals making key contributions to this statement included Carole
Cimitile, Dewi Djunaidy, Jack Edwards, Laurie Ekstrand, Charles
Johnson, Lisa Shames, Derek Stewart, and Sarah Veale.
(450360):
FOOTNOTES
[1] GAO, 9/11 Commission Report: Reorganization, Transformation, and
Information Sharing, GAO-04-1033T (Washington, D.C.: Aug. 3, 2004).
[2] GAO, Human Capital: Building on the Current Momentum to Transform
the Federal Government, GAO-04-976T (Washington, D.C.: July 20, 2004).
[3] GAO, Comptroller General's Forum: High-Performing Organizations:
Metrics, Means and Mechanisms for Achieving High Performance in the
21ST Century Public Management Environment, GAO-03-343SP (Washington,
D.C.: Feb. 13, 2004).
[4] GAO, Highlights of a GAO Forum: Mergers and Transformation: Lessons
Learned for a Department of Homeland Security and Other Federal
Agencies, GAO-03-293SP (Washington, D.C.: Nov. 14, 2002).
[5] GAO, Results-Oriented Cultures: Implementation Steps to Assist
Mergers and Organizational Transformations, GAO-03-669 (Washington,
D.C.: July 2, 2003).
[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, Results-Oriented Cultures: Creating a Clear Linkage Between
Individual Performance and Organizational Success, GAO-03-488
(Washington, D.C.: Mar. 14, 2003).
[8] GAO, Human Capital: Increasing Agencies' Use of New Hiring
Flexibilities, GAO-04-959T (Washington, D.C.: July 13, 2004).
[9] GAO, FBI Transformation: Human Capital Strategies May Assist the
FBI in Its Commitment to Address Its Top Priorities, GAO-04-817T
(Washington, D.C.: June 3, 2004).
[10] GAO, FBI Transformation: FBI Continues to Make Progress in Its
Efforts to Transform and Address Priorities, GAO-04-578T (Washington,
D.C.: Mar. 23, 2004).
[11] GAO, A Model of Strategic Human Capital Management, GAO-02-373SP
(Washington, D.C.: March 2002).
[12] GAO, Human Capital: Effective Use of Flexibilities Can Assist
Agencies in Managing Their Workforces, GAO-03-2 (Washington, D.C.: Dec.
6, 2002).
[13] GAO, FBI Transformation: Data Inconclusive on Effects of Shift to
Counterterrorism-Related Priorities on Traditional Crime Enforcement,
GAO-04-1036 (Washington, D.C.: Aug. 31, 2004).
[14] The White House, "Implementation of Executive Order 12968,"
Memorandum, (Washington, D.C.: Mar. 24, 1997). This memorandum approves
the adjudication guidelines, temporary eligibility standards, and
investigative standards required by Executive Order 12968, Access to
Classified Information, (Aug. 2, 1995).
[15] Classification of National Security Information, 5 C.F. R. §1312.4
(2003).
[16] GAO, DOD Personnel Clearances: Additional Steps Can Be Taken to
Reduce Backlogs and Delays in Determining Security Clearance
Eligibility for Industry Personnel, GAO-04-632 (Washington, D.C.: May
26, 2004) for a listing of the 22 agencies. DOD Regulation 5200.2-R,
DOD Personnel Security Program (Feb. 23, 1996) describes the clearance
process for legislative staff.
[17] Pub. L. 108-136 § 906 (Nov. 24, 2003).
[18] GAO-04-632; GAO, DOD Personnel Clearances: DOD Needs to Overcome
Impediments to Eliminating Backlog and Determining Its Size, GAO-04-344
(Washington, D.C.: Feb. 9, 2004) lists DOD's current 10 central
adjudication facilities and the roles that each plays in awarding
clearances.
[19] GAO-04-344; GAO-04-632; GAO, DOD Personnel Clearances: Preliminary
Observations Related to Backlogs and Delays in Determining Security
Clearance Eligibility for Industry Personnel, GAO-04-202T (Washington,
D.C.: May 6, 2004); GAO, Aviation Security: Federal Air Marshal Service
Is Addressing Challenges of Its Expanded Mission and Workforce, but
Additional Actions Needed, GAO-04-242 (Washington, D.C.: Nov. 19,
2003); and GAO, Security Clearances: FBI Has Enhanced Its Process for
State and Local Law Enforcement Officials, GAO-04-596 (Washington,
D.C.: Apr. 30, 2004).
[20] GAO-04-344.
[21] GAO, DOD Personnel: Inadequate Personnel Security Investigations
Pose National Security Risks, GAO/NSIAD-00-12 (Washington, D.C.: Oct.
27, 1999).
[22] GAO, DOD Personnel: More Consistency Needed in Determining
Eligibility for Top Secret Security Clearances, GAO-01-465 (Washington,
D.C.: Apr. 18, 2001).
[23] GAO, Privatization of OPM's Investigations Service, GAO/GGD-96-97R
(Washington, D.C.: Aug. 22, 1996).
