Posthearing Questions Related to Agencies' Implementation of the Chief Human Capital Officers (CHCO) Act
Gao ID: GAO-04-897R June 18, 2004This letter responds to the request by the Chairwoman, Subcommittee on Civil Service and Agency Organization, House Committee on Government Reform that GAO provide answers to follow-up questions from recent hearing entitled "First Year on the Job: Chief Human Capital Officers."
GAO has not identified any barriers or obstacles that would prevent the Chief Human Capital Officers (CHCO) Council from completing its strategic plan, which is in draft, in a timely manner, although the Council has not established a target date for completion. Developing a strategic plan can help the Council clarify organizational priorities and unify the Council's members in the pursuit of shared goals. The nation's large and growing long-term fiscal imbalance and a range of other 21st century challenges are driving a fundamental transformation of the federal government. This transformation requires a comprehensive reexamination of what the government does, how it does business, and in some cases, who does its business. Ultimately, to successfully transform, the federal government must change its culture to become more results-oriented, customer-focused, and collaborative. The Council can play a key role in helping agencies implement human capital policies and facilitating the oversight responsibilities of the Office of Personnel Management (OPM). OPM and agencies need to continue to work together to improve the hiring process, and the CHCO Council should be a key vehicle for this needed collaboration. The successful integration of CHCOs into the leadership teams of the agencies is best evidenced and evaluated by how well they help the agency achieve strategic results and pursue its mission. Because the CHCOs have only been in place a little over a year, it is too early to assess results. However, agency CHCOs told us that the CHCO Act has lent support to their efforts by establishing a single point within the agencies with the perspective, responsibility, and authority to ensure the successful implementation of strategic human capital initiatives. In addition, the CHCOs identified different strategies the agencies employed to integrate the CHCO position into their leadership teams, underscoring that there is no single best model for all agencies and all circumstances. As time passes and agency CHCOs become more established in their roles and responsibilities, it will become exceedingly difficult for CHCOs to devote the necessary time and attention to the CHCO role if CHCOs are "dual-headed" with other key functions. GAO has testified that the challenges facing most agencies in financial and information management required full-time leadership by separate individuals with appropriate talent, skills, and experience in these two areas. There is not necessarily any one model that is either the most appropriate for or that will guarantee success at every federal department and agency. The mission, size, and culture unique to each federal agency make it unwise to prescribe any single approach. GAO anticipates that the CHCO Council will play a key role in leading the federal government's human capital reform efforts. Our experience with the CFO Act shows the importance of having a central advisory group to help promote the implementation of financial management reform. The Council has successfully set an agenda by creating five subcommittees to address and recommend change for five key areas identified by the Council's leadership as critical to the success of the strategic management of the human capital initiative outlined in the President's Management Agenda. Several of the issues coincide with the four key areas (leadership; strategic human capital planning; acquiring, developing, and retaining talent; and results-oriented organizational cultures), which GAO identified in its high-risk series on strategic human capital management. The urgency of addressing the key human capital challenges the government f aces will require the CHCO Council to become very active in providing input to OPM on the results of its activities and OPM to effectively use the Council to enhance the ability of agencies to strategically manage their human capital to accomplish transformational change.
GAO-04-897R, Posthearing Questions Related to Agencies' Implementation of the Chief Human Capital Officers (CHCO) Act
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June 18, 2004:
The Honorable Jo Ann Davis:
Chairwoman:
Subcommittee on Civil Service and Agency Organization:
Committee on Government Reform:
House of Representatives:
Subject:Posthearing Questions Related to Agencies' Implementation of
the Chief Human Capital Officers (CHCO) Act:
Dear Madam Chairwoman:
On May 18, 2004, I testified before your Subcommittee at a hearing
entitled "First Year on the Job: Chief Human Capital
Officers."[Footnote 1] This letter responds to your request that I
provide answers to follow-up questions from the hearing. Your
questions, along with my responses, follow.
1. You indicated the importance of a strategic plan to provide a sense
of direction for the Council and that a draft plan has been prepared.
Do you anticipate a timely completion of the plan?
We have not identified any barriers or obstacles that would prevent the
Council from completing its strategic plan, which is in draft, in a
timely manner, although the Council has not established a target date
for completion. The strategic plan is an organization's starting point
and foundation for defining what the organization seeks to accomplish,
identifying the strategies it will use to achieve desired results, and
then determining how well it succeeds in reaching results-oriented
goals and achieving objectives. Developing a strategic plan can help
the Council clarify organizational priorities and unify the Council's
members in the pursuit of shared goals.
2. Aside from winning the war on talent as alluded to in your
testimony, what, in your view, are other pressing human capital issues
facing the federal government today and how should the CHCO Council
address those issues?
The nation's large and growing long-term fiscal imbalance and a range
of other 21ST century challenges are driving a fundamental
transformation of the federal government. This transformation requires
a comprehensive reexamination of what the government does, how it does
business, and in some cases, who does its business. Ultimately, to
successfully transform, the federal government must change its culture
to become more results-oriented, customer-focused, and collaborative.
Specifically, agencies continue to face pervasive human capital
challenges in four key areas:
Leadership: Top leadership in agencies must provide the committed and
inspired attention needed to address human capital and related
organization transformation issues.
Strategic human capital planning: Agencies' human capital planning
efforts need to be more fully and demonstrably integrated with mission
and critical program goals.
Acquiring, developing, and retaining talent: Additional efforts are
needed to improve recruiting, hiring, professional development, and
retention strategies to ensure that agencies have the needed talent.
Results-oriented organizational cultures: Agencies continue to lack
organizational cultures that promote high performance and
accountability and empower and include employees in setting and
accomplishing programmatic goals.
The Council can play an important leadership role in developing
policies that are sensitive to implementation concerns and gain
consensus and consistent follow-through within the executive branch. In
addition to working to streamline hiring and recruitment, we believe
that the Council has the opportunity to address several immediate and
significant needs of the government's human capital community. These
needs include the following:
Modernizing agency performance management systems and creating a clear
linkage between individual performance and organizational success.
Developing the capabilities required for successful implementation of
human capital reform.
Implementing strategic human capital planning to ensure that an
agency's human capital program optimizes its workforce's strengths.
Transforming the human capital office and its processes to more fully
contribute to key agency decisions.
3. Where do you think the CHCO Council should most focus their
oversight attention?
The Council can play a key role in helping agencies implement human
capital policies and facilitating the oversight responsibilities of
OPM. For example, we recently testified that agencies appear to be
making limited use of new hiring flexibilities.[Footnote 2] According
to OPM, the agencies have not as fully embraced the new tools and
flexibilities as OPM had hoped.[Footnote 3] In our prior work, we
recommended that OPM work with and through the CHCO Council to more
thoroughly research, compile, and analyze information on the effective
and innovative use of human capital flexibilities. We noted that
sharing information about when, where, and how the broad range of
personnel flexibilities is being used, and should be used, could help
agencies meet their human capital management challenges. OPM and
agencies need to continue to work together to improve the hiring
process, and the CHCO Council should be a key vehicle for this needed
collaboration. To accomplish this effort, agencies need to provide OPM
with timely and comprehensive information about their experiences in
using various approaches and flexibilities to improve their hiring
processes. OPM--working through the CHCO Council--can, in turn, help by
serving as a facilitator in the collection and exchange of information
about agencies' effective practices and successful approaches to
improved hiring. Such additional collaboration between OPM and the
agencies could go a long way in helping the government as a whole and
individual agencies to improve the processes for quickly hiring highly
qualified candidates to fill important federal jobs.
4. In your research, are CHCOs becoming integrated into the leadership
teams of the agencies in which they now exist? If not, is this the
direction in which they are moving?
The successful integration of CHCOs into the leadership teams of the
agencies is best evidenced and evaluated by how well they help the
agency achieve strategic results and pursue its mission. Because the
CHCOs have only been in place a little over a year, it is too early to
assess results. However, agency CHCOs told us that the CHCO Act has
lent support to their efforts by establishing a single point within the
agencies with the perspective, responsibility, and authority to ensure
the successful implementation of strategic human capital initiatives.
They indicated that their designation as Chief Human Capital Officer
has strengthened agencies' human capital direction by providing
strategic human capital management attention at the highest level of
the agencies and the opportunity to advance issues directly to the head
of the agency.
In addition, the CHCOs identified different strategies the agencies
employed to integrate the CHCO position into their leadership teams,
underscoring that there is no single best model for all agencies and
all circumstances. The significant differences included:
Significant additional management responsibilities or focused scope of
responsibility for human capital: As we testified, half of the CHCOs
have major responsibilities in addition to human capital management.
These responsibilities include financial management, information
management, administrative services, facilities management, and
procurement. According to CHCOs who occupy positions that oversee
significant management functions in addition to human capital, they
already have a "seat at the table," and have a voice in the strategic
activities of their agency. However, a number of CHCOs who are
responsible only for human capital matters also reported that they
fully participate in the strategic decision making of their agency.
While the CHCO Act provides for agencies integrating the position into
the leadership team as best fits their needs, we have previously
reported that agency leaders are including human capital leaders in key
agency strategic planning and decision making and, as a result, the
agencies are engaging the human capital organization as a strategic
partner in achieving desired outcomes relating to the agency's
mission.[Footnote 4]
Reporting directly to the agency head or reporting to another senior
leadership position: Underscoring the CHCOs statements that they are
functioning as an integral part of the agency's senior leadership team,
more than half (15 of 24) of the CHCOs report directly to the agency
head. OPM's guidance to agencies urged agency leaders to ensure that if
the CHCO did not report directly to the agency head, the CHCO should
serve as an integral part of the agencies' leadership team,
participating fully in its deliberations and decisions and sharing
accountability with the other members of that team for the agency's
bottom line performance and mission results. Such a role clearly
provides the opportunity to integrate the human capital initiatives
with the other key processes and decisionmaking in the agency.
Career executive or political appointee: The CHCOs were evenly split
between career executives and political appointees. Since the inaugural
CHCO appointments, two agencies have changed their CHCO designation
from the incumbent career executive to a higher-level political
appointee, although this is not sufficient to draw conclusions as to
the general direction of appointments.
Although the so-called "seat-at-the-table" is significant, CHCOs are
ultimately valued not by place, but by the value they add to the
agencies' strategic human capital approaches in attaining
organizational goals. We have found that CHCOs are positioned in roles
where they have the opportunity to more directly affect agency
decisions and achievement of goals.
5. As you stated in your report, many CHCOs are currently holding
multiple positions, in addition to their CHCO title. Is this a good
thing for the future of the position and the agencies?
We believe as time passes and agency CHCOs become more established in
their roles and responsibilities, it will become exceedingly difficult
for CHCOs to devote the necessary time and attention to the CHCO role
if CHCOs are "dual-headed" with other key functions. As we testified,
half of the CHCOs have significant management responsibilities in
multiple areas. A number of these CHCOs told us that they believe such
multiple responsibilities work well for them in their agency. For
example, some CHCOs with key responsibilities in multiple areas told us
they believe this enables them to achieve quicker decisionmaking on
strategic human capital issues. On the other hand, other CHCOs said
they prefer devoting all their attention to human capital issues.
6. To follow up on the last question, what other positions are
compatible with the CHCO such that one could hold that title along with
another position?
Early in the federal experience of establishing the CFO and CIO
positions, we testified that the challenges facing most agencies in
financial and information management required full-time leadership by
separate individuals with appropriate talent, skills, and experience in
these two areas. For smaller agencies, an executive wearing several
management hats may be appropriate. There is not necessarily any one
model that is either the most appropriate for or that will guarantee
success at every federal department and agency. The mission, size, and
culture unique to each federal agency make it unwise to prescribe any
single approach. This concern will be best considered in light of the
progress CHCOs demonstrate in moving forward on their human capital
strategies and plans.
More generally, we have suggested that Congress consider establishing
Chief Operating Officer (COO) or equivalent positions in selected
agencies as one element of an overall strategy to address certain
systemic federal governance and management challenges. These COOs would
be part of a broader effort to elevate attention to management and
transformation issues, integrate various key management and
transformation efforts, and institutionalize accountability for
addressing management issues leading a transformation.[Footnote 5] By
their very nature, the problems and challenges facing agencies are
crosscutting and thus require coordinated and integrated solutions.
However, the risk is that management responsibilities (including, but
not limited to information technology, financial management, and human
capital) will be "stovepiped" and thus will not be implemented in a
comprehensive, ongoing, and integrated manner. While officials with
management responsibilities often have successfully worked together,
there needs to be a single point within agencies with the perspective
and responsibilities--as well as the authority--to ensure successful
implementation of functional management initiatives and, if
appropriate, transformation efforts.
7. Do you anticipate the CHCO Council playing a key role in making
government-wide recommendations for improving personnel policy?
We anticipate the CHCO Council will play a key role in leading the
federal government's human capital reform efforts. Our experience with
the CFO Act shows the importance of having a central advisory group to
help promote the implementation of financial management reform. The CFO
has played a lead role in creating goals for improving federal
financial management practices, providing sound advice to OMB on
revisions to executive branch guidance and policy, and building a
professional community of governmentwide financial management
expertise. The CHCO Council can play a similarly useful role.
Our past work has found that approaches to interagency collaboration,
such as the CHCO council, have emerged as an important central
leadership strategy in both developing policies that are sensitive to
implementation concerns and gaining consensus and consistent follow
through within the executive branch. In effect, agency collaboration
can serve to institutionalize many management policies initiated by
either Congress or OMB. We believe it is reasonable that the success
that OMB has achieved with other interagency councils in fostering
communication across the executive branch, building commitment to
reform efforts, tapping the talents that exist within agencies, keeping
management issues in the forefront, and initiating improvement projects
can be expected of the CHCO Council under the leadership of OPM.
8. Are there any notable successes or glaring weaknesses that the CHCO
Council should address as it enters into its second year of activity?
As we testified, the Council has successfully set an agenda by creating
five subcommittees to address and recommend change for five key areas
identified by the Council's leadership as critical to the success of
the strategic management of the human capital initiative outlined in
the President's Management Agenda. Several of the issues coincide with
the four key areas: leadership; strategic human capital planning;
acquiring, developing, and retaining talent; and results-oriented
organizational cultures, which we identified in our high-risk series on
strategic human capital management.[Footnote 6]
Identifying priority human capital issues, organizing the leadership
and talent to analyze them, proposing actions to be taken, and
frequently meeting to share information and perspectives are good first
steps. We understand that the full Council will meet over the coming
months to consider the recommendations of the subcommittees and advance
an agenda of needed improvements to better address the issues.
The urgency of addressing the key human capital challenges the
government faces will require the CHCO Council to become very active in
providing input to OPM on the results of its activities and OPM to
effectively use the Council to enhance the ability of agencies to
strategically manage their human capital to accomplish transformational
change.
For additional information on our work on governmentwide human capital
issues, please contact me on 512-6806 or at mihmj@gao.gov.
Sincerely yours,
Signed by:
J. Christopher Mihm:
Managing Director, Strategic Issues:
(450195):
FOOTNOTES
[1] U.S. General Accounting Office, Human Capital: Observations on
Agencies' Implementation of the Chief Human Capital Officers Act, GAO-
04-800T (Washington, D.C.: May 18, 2004).
[2] U.S. General Accounting Office, Human Capital: Status of Efforts to
Improve Hiring, GAO-04-796T (Chicago, Ill.: June 7, 2004).
[3] U.S. Office of Personnel Management, Statement of the Honorable Dan
G. Blair, Deputy Director, Office of Personnel Management (Chicago,
Ill.: June 7, 2004).
[4] U.S. General Accounting Office, Human Capital: Selected Agency
Actions to Integrate Human Capital Approaches to Attain Mission
Results, GAO-03-446 (Washington, D.C.: Apr. 11, 2003).
[5] For additional information on the COO concept and how it might
apply to federal agencies, see U.S. General Accounting Office,
Highlights of a GAO Roundtable: The Chief Operating Officer Concept: A
Potential Strategy to Address Federal Governance Challenges, GAO-03-
192SP (Washington D.C.: October 2002).
[6] U.S. General Accounting Office, High-Risk Series: Strategic Human
Capital Management, GAO-03-120 (Washington, D.C.: January 2003).
