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entitled 'Posthearing Questions Related to Agencies' Implementation of 
the Chief Human Capital Officers (CHCO) Act' which was released on June 
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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).