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United States Government Accountability Office: 
GAO: 

National Mediation Board: 

Report to Congressional Committees: 

December 2013: 

National Mediation Board: 

Strengthening Planning and Controls Could Better Facilitate Rail and 
Air Labor Relations: 

GAO-14-5: 

GAO Highlights: 

Highlights of GAO-14-5, a report to congressional committees. 

Why GAO Did This Study: 

A small federal agency, NMB facilitates labor relations in two key 
transportation sectors—-railroads and airlines—-through mediation and 
arbitration of labor disputes and overseeing union elections. 
Established under the Railway Labor Act, NMB’s primary responsibility 
is to prevent work stoppages in these critical industries. The FAA 
Modernization and Reform Act of 2012 required GAO to evaluate NMB 
programs and activities. GAO examined NMB’s (1) strategic planning and 
performance measurement practices; (2) controls for key management 
areas; and (3) challenges, if any, in overseeing elections. GAO 
assessed NMB’s management practices using internal control standards 
and other GAO criteria; interviewed NMB officials, current and former 
board members, and key stakeholders from rail and air labor and 
management groups; and reviewed relevant federal laws, regulations, 
and NMB policies. 

What GAO Found: 

The National Mediation Board (NMB) recently updated its strategic plan 
but is not meeting some federal strategic planning and performance 
measurement requirements. NMB missed deadlines for updating its 
strategic plan and lacks performance measures to assess its progress 
in meeting its goals, even though an agency’s strategic plan should 
form the basis for everything an agency does. 

NMB also lacks some controls in key management areas that could risk 
its resources and its success: 

Financial accountability: NMB contracts for annual financial statement 
audits and internal control reviews. However, it lacks a formal 
process for addressing identified deficiencies, a key internal control. 

Information technology: NMB recently transitioned to new information 
technology systems but is missing key management and security 
controls, including an information security program that fully 
implements federal requirements. 

Human capital: NMB has taken steps to improve its human capital 
program but improvements are still needed. Although all NMB senior 
managers are eligible for retirement, NMB has not engaged in formal 
workforce planning to identify gaps in staff skills, and strategies, 
such as training, to address them. 

Procurement: NMB has established some key procurement policies and 
controls but weaknesses remain. For example, in a recent purchase of 
tablet computers for some staff, NMB did not follow its own procedures 
to assess the need for the devices or solicit competition. 

Other management issues: NMB does not have an Inspector General (IG), 
and oversight by other federal agencies is limited. NMB also has a 
significant number of pending rail arbitration cases, and it lacks 
complete data on the types of cases filed to help it address the 
backlog and the costs. 

Figure: Management and Program Areas Key to Achieving NMB’s Mission: 

[Refer to PDF for image: illustration] 

Key management areas: 
* Strategic planning; 
* Financial management; 
* Information technology; 
* Human capital; 
* Procurement. 

NMB program areas: 
* Representation; 
* Mediation; 
* Arbitration. 

NMB’s mission: 
Facilitating harmonious labor management relations within two of the 
nation’s key transportation modes 

Source: GAO analysis of NMB documents. 

[End of figure] 

NMB has adapted to challenges presented by large union elections 
resulting from airline mergers and has implemented improvements such 
as online voting. In 2010, NMB changed its rules for determining a 
majority in union elections. While this process caused disagreement 
among some stakeholders, NMB data suggest that the percentage of 
elections in which a union was certified has, thus far, remained 
relatively constant in the years before and after the rule change. 

What GAO Recommends: 

Congress should consider authorizing an appropriate federal agency’s 
IG to provide oversight of NMB. NMB should implement a formal 
strategic planning process and develop performance goals and measures 
to meet federal requirements, develop a process to address audit 
findings, implement key components of an information security and 
privacy program, and engage in strategic workforce planning. NMB 
should also collect and analyze data on the types of rail grievances 
filed to help improve efficiency in its arbitration process. In 
commenting on a draft of this report, NMB said it would address our 
recommendations and described actions it plans to take. 

View [hyperlink, http://www.gao.gov/products/GAO-14-5]. For more 
information, contact Revae Moran at (202) 512-7215, or moranr@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

NMB Is Missing Key Elements of Successful Performance Planning and 
Reporting: 

NMB Lacks Some Key Management Controls: 

NMB Has Responded to Industry Changes and Stakeholder Disagreements in 
Conducting Elections: 

Conclusions: 

Matter for Congressional Consideration: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: Comments from the National Mediation Board: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Comparison of NMB to Other Federal Labor Relations Agencies: 

Table 2: Extent to Which NMB Is Following Key Practices for Financial 
Accountability and Control: 

Table 3: Extent to Which NMB Is Following Key Practices for 
Information Security and Privacy: 

Table 4: Extent to Which NMB Is Following Key Practices for Effective 
Workforce Planning: 

Table 5: Extent to Which NMB Is Following Key Practices for 
Procurement: 

Figures: 

Figure 1: NMB Organization and Key Responsibilities: 

Figure 2: The Process for Resolving "Major Disputes" under the RLA: 

Figure 3: Example of NMB Performance Goals, for Mediation and ADR, 
Fiscal Year 2014 Budget Submission: 

Figure 4: NMB Issued Information Technology Devices with Similar 
Functions to Almost Half Its Workforce, as of July 2013: 

Abbreviations: 

ADR: Alternative dispute resolution: 

CIO: Chief Information Officer: 

FedRAMP: Federal Risk and Authorization Management Program: 

FISMA: Federal Information Security Management Act of 2002: 

FMCS: Federal Mediation & Conciliation Service: 

FLRA: Federal Labor Relations Authority: 

GPRA: Government Performance and Results Act of 1993: 

GPRAMA: GPRA Modernization Act of 2010: 

IG: Inspector General: 

NLRB: National Labor Relations Board: 

NMB: National Mediation Board: 

OMB: Office of Management and Budget: 

OPM: Office of Personnel Management: 

RLA: Railway Labor Act: 

[End of section] 

GAO:
United States Government Accountability Office: 
441 G St. N.W. 
Washington, DC 20548: 

December 3, 2013: 

The Honorable John D. Rockefeller, IV: 
Chair: 
The Honorable John Thune: 
Ranking Member: 
Committee on Commerce, Science, and Transportation: 
United States Senate: 

The Honorable Tom Harkin: 
Chair: 
The Honorable Lamar Alexander: 
Ranking Member: 
Committee on Health, Education, Labor, and Pensions: 
United States Senate: 

The Honorable Bill Shuster: 
Chair: 
The Honorable Nick J. Rahall, II: 
Ranking Member: 
Committee on Transportation and Infrastructure: 
House of Representatives: 

Railroads and airlines are two key transportation sectors, and 
disruptions to these industries can be costly for passengers, workers, 
consumers, and businesses. For example, as a result of an 89-day pilot 
strike in spring 2001 at Comair, a regional carrier for Delta Air 
Lines, the carrier did not operate its 815 daily flights for an 
estimated 25,000 passengers. The airline's 1,350 striking pilots lost 
an estimated $14 million in salaries, and the airline reported laying 
off an additional 1,600 nonstriking workers. Recognizing the 
significant consequences of work stoppages as a result of disputes 
between labor and management, in 1926, Congress enacted the Railway 
Labor Act (RLA) to provide a framework for ensuring harmonious labor 
relations in the railroad industry. A 1934 amendment to the RLA 
created the National Mediation Board (NMB), an independent federal 
agency that provides mediation and other services to help resolve 
labor disputes over issues such as working conditions and rates of 
pay. In addition, NMB is responsible for resolving disputes over union 
representation and the interpretation of collective bargaining 
agreements. A 1936 amendment to the RLA expanded coverage to the 
airline industry. The FAA Modernization and Reform Act of 2012 further 
amended the RLA and mandated GAO to evaluate NMB's programs and 
management practices.[Footnote 1] Specifically, this report examines: 

1. the extent to which the National Mediation Board follows federal 
strategic planning requirements and leading practices, 

2. the extent to which the National Mediation Board has key management 
controls in place--for financial management; information management, 
security, and privacy; human capital and workforce development; and 
procurement--to fulfill its mission, and: 

3. how the National Mediation Board addresses challenges, if any, in 
its process for overseeing employee representation elections. 

To address these objectives, we reviewed relevant federal laws and 
regulations and interviewed NMB officials, current board members, and 
all board members who served from 2000 through 2012. We also 
interviewed key stakeholders, including representatives from rail and 
air labor and management groups. We reviewed key NMB documents, 
including its most recent 5-year strategic plan, its annual 
Performance and Accountability Report, and congressional budget 
justification documents, and compared NMB's performance planning and 
reporting practices with requirements in the Government Performance 
and Results Act of 1993 (GPRA) as updated by the GPRA Modernization 
Act of 2010 (GPRAMA) and related leading practices identified in our 
previous work. We also reviewed NMB's financial statement audits for 
fiscal years 2004 through 2012 and the most recent cycle of internal 
control reviews of program and management areas, and interviewed NMB's 
independent auditors about identified internal control weaknesses. We 
did not independently assess the findings in these financial audits 
and program reviews. We also reviewed NMB policies and procedures for 
representation, mediation, and arbitration, including the NMB 
Representation Manual, board member briefing book, sample ballots, and 
rulemaking procedures. 

In addition, we assessed NMB's plans, policies, and practices in 
financial management; information management, security, and privacy; 
human capital; and procurement using GAO's Standards for Internal 
Control in the Federal Government,[Footnote 2] the Federal Information 
Security Management Act of 2002, Privacy Act of 1974, E-Government Act 
of 2002, guidelines developed by the Office of Management and Budget 
(OMB) and the National Institute of Standards and Technology, and 
criteria developed by GAO in prior work.[Footnote 3] We identified key 
practices from these criteria and assessed whether NMB is following 
these practices (NMB is taking appropriate actions and has a formal 
plan, policy, or other document), partially following (NMB is taking 
some actions but does not have a formal plan or policy and/or some 
additional steps are needed to consider this practice implemented), or 
minimally following (NMB is taking little or no action to address this 
practice). We also tested the security settings on NMB information 
technology devices, such as laptops, smartphones, and tablets. 

We interviewed officials at OMB and the Office of Personnel Management 
(OPM) to determine how these agencies provide oversight and guidance 
to NMB. We assessed the reliability of data from OPM's annual human 
capital survey of NMB staff, and data provided by NMB on 
representation election outcomes, and determined that these data were 
sufficiently reliable for our purposes. See appendix I for a detailed 
description of our scope and methodology. 

We conducted this performance audit from September 2012 through 
December 2013 in accordance with generally accepted government 
auditing standards. Those standards require that we plan and perform 
the audit to obtain sufficient, appropriate evidence to provide a 
reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a 
reasonable basis for our findings and conclusions based on our audit 
objectives. 

Background: 

The RLA was passed in 1926, in part to establish a legal framework for 
avoiding disruptions in rail service and interstate commerce. The RLA 
was later amended to extend its provisions to the airline industry, 
and also to establish NMB as a federal agency to administer the law. 
According to NMB, the original bill was drafted jointly by rail 
management and labor representatives and was enacted by Congress 
without amendment. The RLA establishes several key principles. For 
example: 

* It requires parties (rail and air carriers and their employees' 
representatives) to "exert every reasonable effort" to settle disputes 
to avoid interruption to commerce or to the operation of any railroad 
or airline.[Footnote 4] 

* It gives participants the right to designate their representatives 
under the Act without interference from the other party and assures 
employees the right to determine a collective bargaining 
representative without interference from their employers.[Footnote 5] 

* It establishes procedures for resolving disputes over pay, rules, or 
working conditions during collective bargaining, as well as disputes 
resulting from the interpretation or application of existing 
collective bargaining agreements.[Footnote 6] 

NMB's Organization and Resources: 

NMB is headed by a three-member board, with each member appointed by 
the President and confirmed by the Senate for a term of 3 years. No 
more than two members of the board can be from the same political 
party.[Footnote 7] In August 2013, a third board member was confirmed 
by the Senate, filling a board position that had been vacant since 
June 2012. The board members typically designate a chairman annually. 
The board members provide overall leadership and strategic direction 
for NMB, and retain responsibility for key functions such as releasing 
the parties from the mediation of major disputes if no agreement can 
be reached. The board has delegated day-to-day administration and 
oversight to NMB's Chief of Staff and General Counsel (see figure 1). 
As of August 2013, NMB had 49 employees, including the 3 board 
members. NMB also contracts with approximately 430 arbitrators. In 
fiscal year 2013, NMB had an operating budget of $12.7 million. 

Figure 1: NMB Organization and Key Responsibilities: 

[Refer to PDF for image: organization chart] 

Top level: The Board: 

Administers the RLA but has delegated most program and management 
functions to staff. The board retains several key functions, including: 
* Determining when to release the parties from mediation on the 
provisions of a collective bargaining agreement; 
* Determining whether a carrier or labor union has interfered with an 
employee election for union representation; 
* Determining whether a carrier is subject to the RLA or the National 
Labor Relations Act; 
* Determining whether two merged carriers represent a single 
transportation system; 
* Determining whether a group of employees constitutes a craft or 
class for purposes of labor relations; 
* Deciding appeals of decisions by NMB attorneys related to elections, 
such as the eligibility of a voter. 

Second level, reporting to The Board: 

Office of the Chief of Staff: 
Manages all agency programs except those under the Office of Legal 
Affairs. The Chief of Staffhas delegated management responsibilities 
to the program office directors but retains functions including: 
* Supervising and directing all NMB employees, except those in the 
Office of Legal Affairs and the board members’ confidential assistants; 
* Serving as the selecting official for NMB hiring, and initiating and 
progressing personnel decisions for all employees except those in the 
Office of Legal Affairs and the confidential assistants; 
This office also includes the Chief Technology Officer, who manages 
onsite information technology contractors and staff working in 
Information and Communication Technology and Public Information. 

General Counsel: 
Serves as Chief Legal Officer of the agency and supervises staff in 
the Office of Legal Affairs. The General Counsel handles litigation, 
provides legal advice to board members and agency staff, and ensures 
compliance with the Freedom of Information Act, Government in the 
Sunshine Act, and other statutes. 

Third level, reporting to General Counsel: 

Office of Legal Affairs: 
Conducts and oversees employee elections for union representation. 
Attorneys also investigate allegations of interference by a carrier or 
union during an election and provide general legal support to the 
board members and agency staff. 

Third level, reporting to Office of the Chief of Staff: 

Office of Administration: 
Responsible for NMB’s management and support functions, including 
strategic planning, budgeting, accounting and finance, human resource 
management, procurement and contracting, information technology 
management, property management, internal audit and evaluation, and 
office support. The director holds numerous titles or designations, 
including:
* Chief Financial Officer; 
* Chief Human Capital Officer; 
* Chief Information Officer; 
* Senior Procurement Official. 

Office of Mediation and Alternative Dispute Resolution (ADR) Services: 
Administers and manages mediation cases in the airline and railroad 
industries, and in NMB’s ADR program. 

Office of Arbitration Services: 
Administers arbitration in the airline and railroad industries. The 
director serves as the administrator for the National Railroad 
Adjustment Board in Chicago. This office maintains a roster of about 
400 arbitrators and pays the arbitrators to decide cases with rail 
arbitration boards. 

Source: GAO analysis of NMB delegation orders, board member briefing 
book, and other documents. 

[End of figure] 

Union Representation Elections: 

NMB has sole jurisdiction to certify employee unions in the rail and 
air industries. Under the RLA, employees have a right to select a 
union free from influence, interference, or coercion from their 
employer.[Footnote 8] Eligible employees in a craft or class at a 
given carrier--those who perform the same duties and functions, such 
as locomotive engineers or pilots--select a union representative on a 
systemwide basis. For example, the pilots at an airline must be 
represented by the same union regardless of where they are located 
geographically. Unions are selected through secret-ballot elections 
conducted by NMB. 

If there is a question concerning representation of a craft or class, 
NMB is charged with resolving the representation dispute through its 
Office of Legal Affairs. For an election to occur, at least 50 percent 
of the eligible employees in the craft or class must submit signed 
authorization cards indicating their interest in being represented by 
a union.[Footnote 9] An NMB investigator compares signatures on those 
cards to signature samples for all eligible voters in the craft or 
class provided by the carrier to assess their authenticity and 
determine if there is a sufficient percentage to hold an election. The 
investigator also addresses any challenges to the eligibility of 
individual voters. Votes are cast by phone or via the Internet, in an 
election overseen by NMB. If a union receives a majority of the votes, 
NMB certifies the union as the employee representative. Additionally, 
NMB protects against "interference, influence, or coercion by either 
party" during this process, and it can order a new election or shorten 
the time before another union may apply to represent the employees if 
it determines any of these have occurred. 

In 2010, NMB changed its rules for certifying a union.[Footnote 10] 
Previously, a union had to receive votes from a majority of all 
employees in a craft or class who were eligible to vote in order to be 
certified, or approved, as the employee representative. This meant 
that employees who did not vote were, in effect, counted as voting 
against union representation. Under the rule change, an employee who 
chooses not to vote is no longer counted because union representation 
is now determined by a majority of votes cast. Numerous stakeholders, 
including union and carrier groups and members of Congress, submitted 
comments for and against the change.[Footnote 11] In addition, one NMB 
board member at the time wrote a dissenting opinion in the proposed 
and final rules published in the Federal Register. 

Resolution of "Major Disputes" in Collective Bargaining: 

Once a union has been certified to represent a group of employees, the 
carrier is required to negotiate with--and only with--that union in a 
process known as collective bargaining. When the parties cannot reach 
agreement on the terms of a new or revised collective bargaining 
agreement--such as working conditions or rates of pay--it is 
classified as a "major dispute."[Footnote 12] Either party can apply 
for NMB's mediation services to resolve their differences or NMB may 
impose mediation if it finds that resolving the dispute is in the 
public's interest. In general, mediation is a process through which 
disputing parties, with assistance from a neutral third party (known 
as a mediator), seek ways to settle their dispute. In fiscal year 
2012, NMB provided mediation services in 144 cases, 46 of which were 
closed and 98 of which were pending at the end of that year. Mediation 
continues until the parties reach agreement or NMB determines that 
further mediation will not be effective and offers the parties the 
option of interest arbitration, in which case a neutral arbitrator 
would determine what provisions to include in the new or modified 
collective bargaining agreement. Either party may, however, refuse 
arbitration. If either party refuses, a 30-day cooling off period is 
triggered before the parties can exercise what is known as self help. 
Self help includes actions such as the union going on strike or the 
carrier denying employment or refusing to admit union employees onto 
the property in a lockout. To prevent this work stoppage, the 
President may create a Presidential Emergency Board to help settle the 
dispute.[Footnote 13] In fiscal year 2012, there was one Presidential 
Emergency Board created in a dispute involving the five largest U.S. 
railroads and numerous short-line and regional railroads. (See figure 
2 for a description of the process for resolving major disputes under 
the RLA.) 

Figure 2: The Process for Resolving "Major Disputes" under the RLA: 

[Refer to PDF for image: process illustration] 

A major dispute arises during the creation or modification of the 
collective bargaining agreement: 

1. Negotiation: The parties attempt to resolve the dispute with direct 
negotiations: 
a. If resolved: Parties reach a settlement; 
b. If not resolved: 

2. Mediation: Either party may ask for help from the National 
Mediation Board (NMB), or NMB may become involved in negotiations in 
the public interest. 
a. If resolved: Parties reach a settlement; 
b. If not resolved: 

3. Arbitration: NMB decides that further mediation won’t help and 
proffers voluntary binding arbitration. 
a. If both parties agree: Arbitration board holds a hearing and issues 
a binding decision; 
b. If Either party refuses: 

4. Cooling Off Period: Parties are released from NMB mediation and a 
30-day cooling off period begins. 

5. Strikes, lockouts, or other forms of self help can only occur after 
NMB determines further mediation won’t help. 
a. If resolved: Parties reach a settlement; 
b. If essential transportation services are threatened: 

6. Presidential Intervention: The NMB may notify the President, who 
may create a Presidential Emergency Board that can delay self help for 
up to 60 days and provide recommendations for resolving the dispute. 

7. Parties reach a settlement. 

Source: GAO analysis of NMB documents. 

[End of figure] 

In addition to mediation and arbitration, NMB provides voluntary 
alternative dispute resolution (ADR) services, such as facilitation 
and training, to help unions and carriers learn to resolve disputes 
using less confrontational methods. 

Resolution of "Minor Disputes" under Collective Bargaining Agreements: 

The RLA also offers another type of arbitration--grievance arbitration-
-to help resolve "minor disputes."[Footnote 14] As opposed to major 
disputes, which involve the establishment or modification of a 
collective bargaining agreement, minor disputes are disagreements over 
how to interpret and apply existing agreements. For example, an 
employee may file a grievance if he or she believes they were 
wrongfully fired or disciplined. If the carrier and employee cannot 
resolve their dispute, the RLA permits a party to refer the dispute to 
arbitration before an adjustment board created by the rail or air 
industry.[Footnote 15] The adjustment board consists of a carrier 
representative, a union representative, and a neutral arbitrator. In 
most instances, the neutral is selected by the two representatives. If 
they are unable to agree on an individual, they may request that NMB 
appoint a neutral. Grievances that the parties have been unable to 
resolve themselves are submitted to this board for resolution. In this 
capacity, the neutral is called upon to break a tie. Unlike major 
disputes, minor disputes cannot trigger self-help actions such as 
strikes or lockouts. 

NMB does not directly provide arbitration services through its own 
staff, but rather maintains a list of registered arbitrators from 
which the parties can select someone to review and decide their case. 
In the airline industry, the parties pay the costs of arbitration. In 
the railroad industry, however, consistent with the requirements of 
the RLA, NMB pays the fee (currently $300 per day) and travel expenses 
of the arbitrator. In fiscal year 2012, NMB's arbitrators closed 3,869 
rail grievance arbitration cases and 2,084 were pending at year's end. 
In that year, NMB's arbitration budget was $2 million, not including 
NMB staff salaries. 

Other Federal Labor Relations Agencies: 

NMB differs in several key ways from the other three labor relations 
agencies in the United States: the National Labor Relations Board 
(NLRB), Federal Mediation & Conciliation Service (FMCS), and Federal 
Labor Relations Authority (FLRA) (see table 1). 

Table 1: Comparison of NMB to Other Federal Labor Relations Agencies: 

Table 1: Comparison of NMB to Other Federal Labor Relations Agencies: 

Agency: National Mediation Board; 
Authorizing statute: Railway Labor Act; 
Target populations: Railroad and airline carriers and workers; 
Union certification: 
* Voluntary recognition by carrier and workers; 
* Secret ballot election; 
Union decertification: 
* No formal decertification process; 
Dispute resolution: 
* Mediation and arbitration; 
* Mediation is mandatory before the parties can exercise self help 
(e.g., strike); 
* NMB pays for railroad arbitration; the parties pay for airline 
arbitration. 

Agency: National Labor Relations Board; 
Authorizing statute: National Labor Relations Act; 
Target populations: Private sector employers and workers, with some 
exclusions such as certain agricultural, gaming and religious 
entities. U.S. Postal Service employees are also covered; 
Union certification: 
* Voluntary recognition by employer and workers; 
* Secret ballot election; 
* NLRB-mandated recognition[A]; 
Union decertification: 
Formal decertification process and voluntary disclaimer of interest[B]; 
Dispute resolution: n/a. 

Agency: Federal Mediation & Conciliation Service; 
Authorizing statute: Labor-Management Relations Act of 1947 (Taft-
Hartley Act); 
Target populations: Private, public, and federal sector employers and 
workers; 
Union certification: 
n/a - FMCS does not oversee union certification; 
Union decertification: n/a; 
Dispute resolution: 
* Mediation and arbitration; 
* Mediation is voluntary (except in the health care industry); 
* Parties pay for arbitration (FMCS only provides lists of potential 
arbitrators.) Arbitration is based on a private agreement between an 
employer and a union. 

Agency: Federal Labor Relations Authority; 
Authorizing statute: Federal Service Labor-Management Relations 
Statute; 
Target populations: Most federal employers and workers; 
Union certification: 
* Secret ballot election; 
Union decertification: Formal decertification process; 
Dispute resolution: 
* Impasse procedures for bargaining disputes[C] and arbitration; 
* Parties pay for arbitration. 

Source: GAO analysis of applicable federal statutes and agency 
documents, and interviews with agency officials. 

[A] NLRB also may require an employer to recognize and bargain with a 
union if a majority of employees signed authorization cards and the 
employer engaged in unfair labor practices that make a fair election 
unlikely. 

[B] A union may submit a Disclaimer of Interest, stating that it waives 
and disclaims any right to represent a group of employees. 

[C] The Federal Service Impasses Panel is an entity within FLRA that 
provides additional assistance in resolving disputes if FMCS services 
cannot resolve the dispute or if the parties request the Panel's 
services. 

Source: GAO analysis of applicable federal statutes and agency 
documents, and interviews with agency officials. 

[A] NLRB also may require an employer to recognize and bargain with a 
union if a majority of employees signed authorization cards and the 
employer engaged in unfair labor practices that make a fair election 
unlikely. 

[B] A union may submit a Disclaimer of Interest, stating that it 
waives and disclaims any right to represent a group of employees. 

[C] The Federal Service Impasses Panel is an entity within FLRA that 
provides additional assistance in resolving disputes if FMCS services 
cannot resolve the dispute or if the parties request the Panel's 
services. 

[End of table] 

Executive Branch Oversight Responsibilities: 

OMB and OPM have key oversight responsibilities for all federal 
agencies, including NMB. Among other things, OMB is responsible for 
providing oversight of agencies' management, including information 
technology and procurement. OMB is also responsible for preparing and 
implementing the President's annual budget and for providing guidance 
to agencies on how to comply with the GPRA Modernization Act of 2010 
(GPRAMA).[Footnote 16] OPM is the central personnel management agency 
of the federal government charged with administering and enforcing 
federal civil service laws, regulations, and rules. OPM also maintains 
a personnel management oversight program to ensure that agencies 
comply with merit system principles and standards set by the office. 
[Footnote 17] As part of this program, OPM conducts audits of 
agencies' human capital programs.[Footnote 18] In addition, OPM 
administers a survey of federal employees to measure employees' 
perceptions of whether, and to what extent, conditions characterizing 
successful organizations are present in their agencies. 

Federal Performance Planning and Reporting Requirements under GPRA and 
GPRAMA: 

In 1993, Congress passed GPRA, which established strategic planning, 
performance planning, and performance reporting as a framework for 
agencies to communicate progress in achieving their missions. GPRAMA, 
enacted in 2011, established some important changes to existing 
requirements by placing a heightened emphasis on priority-setting, 
cross-organizational collaboration to achieve shared goals, and the 
use and analysis of goals and measurements to improve outcomes. GPRAMA 
enhanced agency-level planning and reporting requirements and requires 
agencies to have additional leadership involvement and accountability. 

NMB Is Missing Key Elements of Successful Performance Planning and 
Reporting: 

NMB Lacks a Robust Strategic Planning Process for Meeting Federal 
Requirements: 

NMB lacks a robust strategic planning process, with formal mechanisms 
for gathering congressional and stakeholder input, and as a result, 
the agency has not met some federal requirements for performance 
planning. For example, NMB updated its previous strategic plan, which 
covered fiscal years 2005 to 2010, in November 2012, 7 years after it 
was issued.[Footnote 19] NMB also missed a February 2012 deadline set 
by GPRAMA for agencies to update their existing strategic plans to be 
consistent with new requirements. NMB officials said they engage in 
strategic planning but have not made the development of a strategic 
planning document a high priority.[Footnote 20] The agency had delayed 
the start of the strategic planning process until the completion of 
changes in the agency's information technology systems. The sequencing 
of NMB's strategic plan development--after the roll-out of other 
initiatives--runs counter to our previous findings on leading results-
oriented organizations. Strategic planning should provide the basis 
for everything an organization does. For example, all decisions, 
including those involving resources such as information technology 
systems and human capital investments, should flow from an agency's 
strategic plan. Developing a strategic plan can help clarify 
organizational priorities and unify an agency's staff in the pursuit 
of shared goals.[Footnote 21] 

Side bar: 

Key Requirements for Agencies' Strategic Planning Process (GPRAMA): 
* Cover at least a 4-year period; 
* Issued approximately 1 year after a Presidential term begins; 
* Involve stakeholder input when developing or adjusting the plan; 
* Consult with appropriations, authorizing, and oversight 
congressional committees, both majority and minority, at least every 2 
years; 
* Made available online and notify the President and Congress. 
Source: GAO analysis of GPRAMA. 

[End of side bar] 

Agencies are also required to issue a new strategic plan in February 
2014, and every 4 years thereafter, concurrent with the President's 
budget (issued no later than the first Monday in February). (See 
sidebar for key strategic planning requirements.) In August 2013, NMB 
officials said they intend to complete a new strategic plan by 
December 2013, before the February 2014 deadline. 

NMB lacks a systematic way of involving congressional and other 
stakeholders in its strategic planning process. As noted earlier, 
agencies should consult with Congress and other stakeholders for input 
when developing and adjusting their strategic plans. NMB officials 
told us they do not have a routine process for gathering input from 
congressional stakeholders during the strategic planning process, a 
key focus of GPRAMA. Consultations with Congress are intended, in 
part, to ensure that agency performance information is useful for 
congressional oversight and decision making. As we have previously 
reported, having pertinent and reliable performance information 
available is necessary for Congress to adequately assess agencies' 
progress in making performance and management improvements and ensure 
accountability for results.[Footnote 22] 

In addition, many stakeholders in the rail and air industries, both in 
labor and management, told us NMB does not seek out and incorporate 
stakeholder input in its strategic planning efforts, and NMB officials 
confirmed that they do not have a formal mechanism for involving 
stakeholders in this process. NMB officials told us that the agency 
instead receives input from stakeholders in informal ways, such as 
getting feedback from parties during the course of mediation, or from 
members of two joint labor-management groups: the Dunlop II Committee, 
which has reviewed NMB's mediation function, and the Section 3 
Subcommittee, which has reviewed NMB's rail arbitration function. 
However, when we interviewed officials from both groups, they reported 
that NMB hasn't always involved them in planning. Stakeholder 
involvement is important to help agencies ensure their efforts and 
resources are being targeted to the highest priorities.[Footnote 23] 

NMB's Performance Plan Lacks Objective and Quantifiable Goals and 
Measures for Reporting on Results: 

Without a robust strategic planning process as a guide, NMB is also 
not meeting federal requirements for annual performance planning and 
reporting. Federal agencies are required to develop annual performance 
plans. These plans use performance measurement to reinforce the 
connection between the long-term strategic goals outlined in an 
agency's strategic plan and the day-to-day activities of its managers 
and staff. 

Annual performance plans are to include performance goals which cover 
each agency's program activities as listed in the budget, a 
description of the necessary resources and strategies to achieve these 
goals, a balanced set of performance measures for each goal, and a 
discussion of how the measures will be verified. (See sidebar for key 
performance planning requirements.): 

An agency's performance goals establish desired performance levels, 
and performance measures are used to assess progress toward achieving 
those goals. Yet the goals and sub-goals listed in NMB's fiscal year 
2014 budget submission do not consistently meet the basic GPRAMA 
requirements of being objective, measurable, and quantifiable. 
[Footnote 24] For example, NMB states that it has a goal to "better 
track the history of cases" within its mediation and ADR programs. 
However, this goal does not contain a target number of mediation cases 
to be tracked (quantifiable), what would be considered "better" 
(objective), a performance indicator to gauge progress (measurable), 
or a time period in which to accomplish this goal (see figure 3). 
Without measurable targets or timeframes, these goals do not establish 
intended performance or allow NMB and the public to assess progress. 

Side bar: 

Key Requirements for Agencies' Performance Plans (GPRAMA): 
* Cover 2 fiscal years--the current and upcoming timeframes are 
concurrent with the President's budget (issued no later than the first 
Monday in February of each year); made available online and notify the 
President and Congress; 
* Must contain: (1) objective, quantifiable, measurable performance 
goals for all program activities, (2) a description of how performance 
goals contribute to agency strategic plan goals and objectives and 
federal government performance goals, (3) goal leaders, (4) 
contributing programs and activities, (5) strategies and resources 
needed, (6) milestones, (7) a balanced set of performance measures/ 
indicators, (8) the basis for comparing actual results with 
performance goals, (9) the means to be used to verify/validate data 
(description of how the agency will ensure data accuracy and 
reliability), (10) a description of how the agency is working with 
other agencies to achieve its performance goals and relevant federal 
government performance goals, and (11) major management challenges. 
Source: GAO analysis of GPRAMA. 

[End of side bar] 

Figure 3: Example of NMB Performance Goals, for Mediation and ADR, 
Fiscal Year 2014 Budget Submission: 

[Refer to PDF for image: list] 

NMB’s goals are not: Objective, Measurable, or Quantifiable. 

FY 2014 Mediation and ADR Performance Goals: 

Strategic Plan General Goal 1: Mediation and Alternative Dispute 
Resolution: 
Mediation and ADR will continue to foster the prompt and peaceful 
resolution of collective bargaining disputes in the airline and 
railroad industries. 

I. Continue to develop standard training for mediators to ensure they
are kept abreast of the latest trends in mediation and gain additional
industry and technical knowledge in both air and rail. 

II. Better track the history of cases. 
* Work with Arbitration and Representation to revise and improve the 
agency case management system. 

III. Expand current ADR capabilities to address the changing labor
environment in the airline and railroad industries and provide more
varied assistance in dispute resolution both between and during
contract negotiations.
* Use outreach and promotion efforts to raise the visibility of the ADR
program. 
* Continue to utilize partnerships with institutions of higher 
learning to improve and expand ADR Services. 
* Review ADR services for potential deletions, additions, or changes. 

IV. Pursue interagency projects, including personnel exchange 3
programs, to enhance labor-management relations throughout the
airline and railroad industries. 
* Implement and develop interagency projects with other labor and
transportation agencies with the goal of enhancing labor-management
relations In the airline and railroad industries. 

IV. Engage in outreach and education programs to ensure that the NMB
is seen as a world leader in airline and issues. 
* Submit proposals for presentations at dispute resolution conferences. 

Source: GAO analysis of NMS's FY 2014 budget submission. 

[End of figure] 

Since NMB has not developed objective, measurable, or quantifiable 
goals, it is not well positioned to develop performance measures to 
use in reporting progress or results in any program area. NMB's fiscal 
year 2011-2016 strategic plan stated that the agency plans to 
formulate performance measures for its strategic goals and each of the 
related performance goals in its annual budget submission.[Footnote 
25] However, the performance goals in NMB's fiscal year 2014 budget 
submission did not contain indicators or measures that could be used 
to gauge agency performance. NMB officials said they are currently 
working to develop more quantifiable, time-based performance measures 
for NMB program areas in its next strategic plan. Our previous work on 
results-oriented organizations shows that many agencies need years to 
develop a sound set of performance measures.[Footnote 26] NMB 
officials told us they internally track measurable targets, such as 
the number of days NMB mediators meet with parties before reaching 
resolution on a specific collective bargaining agreement, but the 
agency does not report these metrics publicly.[Footnote 27] Without 
objective, measurable, and quantifiable performance goals made 
available to the public, Congress and stakeholders lack information on 
the extent to which NMB is making annual progress toward its strategic 
goals and how NMB is planning to use its resources. 

NMB Lacks Some Key Management Controls: 

NMB Has Most Key Controls for Financial Accountability but Lacks a 
Formal Mechanism to Address Deficiencies: 

NMB is following most key practices for financial accountability and 
control, an integral part of an organization's management that should 
reach throughout all departments and programs as well as financial 
management and reporting functions. There are two key practices, 
however, that NMB is following only partially or minimally (see table 
2).[Footnote 28] 

Table 2: Extent to Which NMB Is Following Key Practices for Financial 
Accountability and Control: 

Practice: Prepare annual, comprehensive, agencywide financial 
statements; 
Extent NMB is following: Following; 
Example: NMB prepares annual, comprehensive, agencywide financial 
statements. 

Practice: Have an independent audit performed of the most recent fiscal 
year financial statements; 
Extent NMB is following: Following; 
Example: NMB contracts for an independent audit of its most recent 
fiscal year financial statements. 

Practice: Receive an unqualified (clean) audit opinion on the most 
recent fiscal year's financial statements; 
Extent NMB is following: Following; 
Example: NMB reports it has received 15 years of unqualified financial 
audit opinions. 

Practice: Annually obtain an auditor's opinion or report on internal 
controls over financial reporting; 
Extent NMB is following: Following; 
Example: NMB contracts for a report on internal controls over financial 
reporting. 

Practice: Annually receive an auditor's opinion or report on internal 
controls over financial reporting that contains no material internal 
control weaknesses; 
Extent NMB is following: Partially following; 
Example: NMB's fiscal year 2010 and 2011 reports on internal controls 
over financial reporting each contained a material weakness. 

Practice: Conduct an annual assessment of internal control for 
compliance with standards for internal control and OMB requirements; 
Extent NMB is following: Following; 
Example: NMB contracts for an assessment of internal controls over one 
key program or management area annually. 

Practice: Monitor corrective actions to ensure systemic weaknesses and 
identified deficiencies are resolved; 
Extent NMB is following: Minimally following; 
Example: NMB does not have a formal mechanism for tracking resolution 
of findings and recommendations. 

Practice: Obtain an annual auditor's report on compliance with laws and 
regulations; 
Extent NMB is following: Following; 
Example: NMB contracts for an annual auditor's report on compliance 
with laws and regulations. 

Practice: Annually receive an auditor's report on compliance with laws 
and regulations that contains no reported noncompliance; 
Extent NMB is following: Following; 
Example: NMB's reports on compliance with laws and regulations for 
fiscal years 2004 through 2012 contained no reported noncompliance. 

Source: GAO analysis of NMB documents and interviews with NMB officials 
and independent auditors. 

Note: In this and other management areas, we assessed whether NMB is 
following key practices (NMB is taking appropriate actions and has a 
formal plan, policy, or other document), partially following (is taking 
some actions but does not have a formal plan or policy and/or some 
additional steps must be taken to consider this practice implemented), 
or minimally following (NMB is taking little or no action to address 
this particular practice). 

[End of table] 

NMB routinely prepares comprehensive, agencywide financial statements 
and contracts for independent audits of those financial statements. 
The agency has reported that it received 15 years of unqualified 
financial audit opinions.[Footnote 29] As part of these audits, the 
auditors also provide NMB with a report on internal controls over 
financial reporting.[Footnote 30] In those reports, the auditors 
identified a material weakness in two of the years audited (2010 and 
2011).[Footnote 31] The material weakness in both years was related to 
the untimely recording of obligations related to NMB's arbitration 
services. This issue was downgraded to a significant deficiency in 
fiscal year 2012 after NMB took steps to address the issue.[Footnote 
32] According to a senior NMB official, the agency expects to address 
all recommendations related to the 2012 significant deficiency with 
full implementation of its Arbitrator Workspace, a web-based 
information system that replaces multiple electronic forms used by NMB 
to track arbitrator activity and financial obligations to contracted 
arbitrators. 

In addition to annual financial statement audits, NMB contracts with 
the same independent auditors to review its internal controls over one 
key program area (mediation, arbitration, representation, and ADR) or 
management area (procurement and personnel/payroll) annually.[Footnote 
33] The law commonly known as the Federal Managers' Financial 
Integrity Act of 1982[Footnote 34] and its implementing guidance from 
OMB[Footnote 35] require federal agencies to develop and implement 
appropriate and cost-effective internal controls for results-oriented 
management, assess the adequacy of those internal controls, identify 
needed areas of improvement, take corresponding corrective action, and 
provide an annual statement of assurance regarding internal controls 
and financial systems. 

However, NMB does not have a mechanism for ensuring prompt resolution 
of findings, a key internal control. When asked how the agency 
monitors the status of recommendations or findings in its internal 
control reviews, NMB officials said it is assumed, based on 
management's written response in the reports, that any weaknesses will 
be addressed and resolved by the date of the next review of that 
topic. However, that review may not occur for as many as 8 years. For 
example, the representation function was last reviewed in fiscal year 
2005, and auditors began their next review of that topic in June 2013. 
In addition, NMB has not consistently provided management responses, 
which are written descriptions of the actions the agency plans to take 
to address deficiencies. For example, in the 2009-2010 report on 
internal controls over arbitration, NMB did not submit a management 
response to the five findings and recommendations in the report. 
[Footnote 36] In addition, NMB did not submit responses to findings 
and recommendations in the auditors' management letters that 
accompanied NMB's financial statement reports in fiscal years 2011 and 
2012.[Footnote 37] 

It is also not clear that top NMB management officials are monitoring 
the resolution of findings and recommendations made by independent 
auditors.[Footnote 38] Within NMB, department heads are responsible 
for implementing the auditors' recommendations. The Chief of Staff and 
the board do not assume operational responsibility for addressing the 
findings of independent auditors. In addition, it is not clear that 
NMB's board members are given routine, formal reports on the status of 
findings or how they are resolved. While some NMB officials told us 
board members are briefed or given reports on the status of resolving 
findings, officials could not provide documentation, such as minutes 
of meetings in which audit findings or internal control reviews and 
their resolution were discussed. Officials told us that it is the 
agency's policy not to keep minutes of board meetings. Furthermore, 
NMB's auditors do not follow up on the status of recommendations in 
the internal control reviews until the date of the next review unless 
the recommendation is related to NMB's annual financial statement 
audit.[Footnote 39] As a result, some recommendations made by auditors 
to improve internal controls or NMB operations may not be addressed. 
In the 2008-2009 report on NMB's personnel and payroll, auditors found 
the same deficiency they identified in their fiscal year 2003 review 
on the same topic.[Footnote 40] In addition, auditors made the same 
recommendation to NMB in their management letters for fiscal years 
2008, 2010, 2011, and 2012.[Footnote 41] 

NMB Has Not Fully Implemented Key Information Security and Privacy 
Controls: 

NMB relies on information technology to carry out its mission. The 
agency uses computer systems and networks to host applications, files, 
email services, and web access, and to manage its records and 
financial information. During fiscal year 2013, NMB switched its 
network infrastructure, including its email, files, web access, and 
other applications, to a commercial vendor. Further, in May 2013, it 
switched its financial management system to the Bureau of the Public 
Debt's Administrative Resource Center.[Footnote 42] NMB also plans to 
bring its records management system into its cloud computing 
environment in fiscal year 2014. 

Federal laws and policies require federal agencies to implement key 
practices to effectively manage and secure their information systems 
and information, and protect the privacy of personal information they 
collect and use. For example, the Federal Information Security 
Management Act of 2002 (FISMA)[Footnote 43] requires federal agencies 
to develop, document, and implement an agencywide information security 
program to provide security for the information and information 
systems that support the operations and assets of the agency, 
including those operated on behalf of the agency by a contractor or 
another agency. Such a program includes eight key practices.[Footnote 
44] To improve information security and reduce overall information 
technology operating costs for agencies, OMB also issued a memorandum 
[Footnote 45] instructing the heads of departments and agencies to 
implement common security settings for computers running Windows 
operating systems. In addition, the Privacy Act of 1974 and E-
Government Act of 2002 describe, among other things, agency 
responsibilities with regard to protecting personally identifiable 
information.[Footnote 46] 

NMB has not fully implemented key information security and privacy 
practices (see table 3). 

Table 3: Extent to Which NMB Is Following Key Practices for 
Information Security and Privacy: 

Information management and security practices: 

Practice: Conduct periodic risk assessments that consider cyber threats 
and vulnerabilities; 
Extent NMB is following: Partially following; 
Example: NMB conducted a risk assessment in 2011 for its network, 
records management, and financial systems. However, NMB has not 
documented a risk assessment for its new network environment and 
financial management systems. 

Practice: Develop and implement risk-based policies and procedures to 
ensure compliance with applicable standards and guidance including 
system configuration requirements; 
Extent NMB is following: Partially following; 
Example: NMB has developed draft policies and procedures for managing 
agency documents, information, records, and its new network 
environment. However, it did not fully adopt 26 of 63 required security 
settings on its Windows laptop computers that we reviewed. 

Practice: Develop system security plans that cover networks, 
facilities, and systems or groups of systems, as appropriate; 
Extent NMB is following: Partially following; 
Example: A system security plan had been developed for NMB's network, 
records management, and financial systems. NMB has a draft security 
plan for its new network. However, NMB has not developed a security 
plan for its new financial management system. 

Practice: Provide security awareness training for agency employees and 
contractors; 
Extent NMB is following: Partially following; 
Example: NMB employees have taken the required annual security 
awareness training. However, NMB did not provide sufficient evidence 
to support that its contractors have received the required training. 

Practice: Conduct periodic management testing and evaluation that 
includes testing of all major systems at least annually; 
Extent NMB is following: Partially following; 
Example: NMB last tested and evaluated its Enterprise Network, records 
management, and financial systems in 2011. 

Practice: Establish a remedial action process to address identified 
information security control weaknesses; 
Extent NMB is following: Partially following; 
Example: NMB has developed a preliminary plan of actions; however, it 
does not include milestones. In addition, NMB has not established and 
documented a remedial action process for its information security 
control weaknesses. 

Practice: Establish security-incident procedures for detecting, 
reporting, and responding to incidents; 
Extent NMB is following: Minimally following; 
Example: NMB has not developed procedures for detecting, reporting, 
and responding to security incidents. 

Practice: Establish and maintain up-to-date continuity of operations 
plans and procedures for information systems; 
Extent NMB is following: Partially following; 
Example: NMB's disaster recovery plan has not been updated since May 
2006. Its continuity of operations plan has not been updated since 
June 2011 and does not reflect the current information technology 
environment. 

Privacy Practices: 

Practice: Assign agency official for privacy; 
Extent NMB is following: Following; 
Example: NMB has designated its Chief Information Officer as its 
senior agency official for privacy. 

Practice: Establish policies and procedures for privacy protections; 
Extent NMB is following: Minimally following; 
Example: NMB did not provide evidence to support it has established 
policies and procedures governing privacy protections. 

Practice: Conduct privacy impact assessments[A] for systems containing 
personally identifiable information; 
Extent NMB is following: Minimally following; 
Example: NMB did not provide a privacy impact assessment for its 
Enterprise Network, records management, and financial management
systems. In addition, NMB did not provide evidence to support that a 
privacy impact assessment will not be required for its new computing 
environments. 

Practice: Issue systems of records notice[B]; 
Extent NMB is following: Minimally following; 
Example: NMB did not issue systems of records notice for its 
Enterprise Network, records management, and financial systems. In 
addition, NMB did not provide evidence to support that systems of 
records notice would not be required for its Enterprise Network and 
financial management systems. 

Source: GAO analysis of NMB documents and interviews with agency 
officials. 

[A] A privacy impact assessment is an analysis of how personal 
information is collected, stored, shared, and managed in a federal 
system. 

[B] A system of records is a collection of information about 
individuals under control of an agency from which information is 
retrieved by the name of an individual or other identifier. System of 
records notices are posted to agency websites to identify, among other 
things, the purpose of and individuals covered by information in a 
system of records, the category of records that are maintained about 
the individuals, and how the information is shared and routinely used 
by the agency. 

[End of table] 

According to agency officials, key practices were not followed because 
NMB has been in the process of transitioning its information 
technology network and systems. NMB plans to update and finalize all 
of its information security policies and procedures to reflect its new 
information technology environment. It also plans to conduct a test 
and evaluation of its information security controls to ensure that 
they are appropriately designed and operating effectively. However, 
the agency has not established timeframes or milestones for completing 
these actions. Until NMB fully develops, documents, and implements an 
agencywide information security program, increased risk exists that 
the confidentiality, integrity, and availability of its information 
will be compromised. 

Finally, although NMB officials stated that the agency has taken steps 
to provide privacy protections for personal information accessed or 
held by NMB, they did not provide supporting documents to demonstrate 
how the agency plans to ensure the privacy of personal information 
that may be contained in its new computer environments. Until it 
establishes privacy policies, NMB will have limited assurance that the 
personal information it collects and uses is adequately protected. 

NMB Has Taken Steps to Improve Its Human Capital Program but Does Not 
Follow Key Planning Practices: 

NMB has taken steps to improve its human capital program, such as 
increasing oversight of mediators and providing additional training 
opportunities to its staff. For example, in 1997, in response to 
recommendations made by the rail and air labor-management committees, 
NMB relocated all its mediators from the field to its headquarters in 
Washington, D.C.[Footnote 47] In 2000, NMB established individual 
development plans to improve staff training, and, in 2010, began 
providing free or low cost training to its staff through partnerships 
with two universities and other efforts. More specifically, NMB 
officials teach classes at those universities, or the agency provides 
office space for the universities to hold training sessions for labor 
relations practitioners in exchange for several NMB staff attending 
the training sessions at no charge. 

Despite these improvements, NMB's actions are not guided by a 
strategic workforce plan, which is essential for every federal agency 
in that it addresses two critical needs: (1) aligning an 
organization's human capital program with its current and emerging 
mission and programmatic goals; and (2) developing long-term 
strategies for acquiring, developing, and retaining staff to achieve 
programmatic goals. Workforce planning is a key internal control, as 
agency management should ensure that skill needs are continually 
assessed and that the organization is able to obtain and maintain a 
workforce with the skills necessary to achieve organizational goals. 
[Footnote 48] Although agencies may take a variety of approaches to 
workforce planning, GAO has identified some principles that agencies 
should follow, including determining critical skills and competencies, 
and developing strategies for closing any gaps.[Footnote 49] 

NMB has not developed a strategic workforce plan that incorporates 
these key practices (see table 4). Although the agency indicated in 
2009 that it would develop one as part of its last human capital plan, 
it has yet to do so. NMB's lack of strategic workforce planning was 
also identified by OPM in its last evaluation of the agency's human 
capital program in 2007.[Footnote 50] 

Table 4: Extent to Which NMB Is Following Key Practices for Effective 
Workforce Planning: 

Practice: Involve top management, employees, and other stakeholders in 
developing, communicating, and implementing the strategic workforce 
plan; 
Extent NMB is following: Minimally following; 
Example: NMB does not have a strategic workforce plan, although it 
indicated it would develop one in its last human capital plan in 2009. 
Any human capital plans to date were developed by the Director of the 
Office of Administration without substantive input from other senior 
managers, employees, or stakeholders. 

Practice: Determine the critical skills and competencies that will be 
needed to achieve current and future programmatic results; 
Extent NMB is following: Minimally following; 
Example: NMB has not determined the critical skills and competencies 
needed to achieve current and future program results, although it 
indicated it would do so in its last human capital plan in 2009. 
Instead, NMB identifies needed competencies and skills on a case-by-
case basis when it hires to fill a vacancy. 

Practice: Develop strategies tailored to address gaps in number, 
deployment, and alignment of human capital approaches for enabling and 
sustaining the contributions of all critical skills and competencies; 
Extent NMB is following: Minimally following; 
Example: NMB does not have an up-to-date succession plan or other 
strategies to address gaps in competencies or skills. For example, the 
agency once had a mentoring program, but has not renewed it following 
an organizational realignment. 

Practice: Build the capability needed to address administrative, 
educational, and other requirements important to support workforce 
planning strategies; 
Extent NMB is following: Minimally following; 
Example: NMB uses human capital flexibilities, such as recruitment and 
retention incentives and a telework program, but the use of these 
flexibilities is not tied to a strategic workforce planning effort. 

Practice: Monitor and evaluate agency's progress toward its human 
capital goals and the contribution human capital results have made 
toward achieving programmatic results; 
Extent NMB is following: Minimally following; 
Example: NMB does not have measurable goals and objectives related to 
strategic workforce planning. NMB has goals and objectives in its 2009 
human capital plan, but it does not have a process for evaluating its 
plan and ensuring that it takes the included steps. As a result, NMB 
reported not completing many of the actions laid out in the plan. 

Source: GAO analysis of NMB documents and interviews with NMB 
officials. 

[End of table] 

NMB has not determined the skills and competencies it needs to achieve 
current and future program results, nor has it systematically 
identified gaps or strategies to fill them. Instead, senior NMB 
officials said they identify needed skills and competencies on a case-
by-case basis, such as when hiring to fill a specific vacancy. 
Officials added that NMB does not have difficulty hiring staff. 
However, some stakeholders identified, and NMB officials acknowledged, 
possible gaps in skills and competencies among NMB mediators, an 
occupation NMB has identified as critical to its mission. For example, 
several NMB officials and most of the labor and management 
stakeholders we interviewed said NMB staff, particularly mediators, 
lack rail industry experience. NMB officials confirmed that 10 of its 
13 mediators come from the airline industry, 2 come from the railroad 
industry, and 1 does not have a background in either industry. 
[Footnote 51] NMB officials said it is difficult to recruit mediators 
from the rail industry because there are few rail employees willing to 
leave their railroad jobs, particularly because industry salaries and 
benefits are greater than what NMB can offer. NMB officials described 
a few strategies they have used to recruit more staff with rail 
experience through networking at industry conferences, but they do not 
have a formal recruiting strategy. In addition, NMB officials said 
they cross-train staff in both the rail and air industries and, in 
2013, took mediators on a tour of a rail property to learn more about 
the rail industry. Similarly, an NMB official and some carrier 
officials we interviewed said most NMB mediators come from labor 
union, rather than management, backgrounds. NMB officials confirmed 
that 8 of its 13 mediators formerly held union labor relations 
positions while 4 held labor relations positions with carriers. (One 
mediator did not have a labor relations background with either a union 
or carrier.) NMB officials told us the agency values professional 
experience in rail or air labor relations over mediation experience 
because they have found that mediators need to understand the 
industries in order to be effective. However, two airline management 
officials said that having more mediators with union backgrounds than 
with management backgrounds could create the perception that the 
agency is not completely neutral in collective bargaining. 

Further, NMB has not employed strategies, such as succession planning 
or leadership development, to help close gaps in critical skills and 
competencies. Succession planning and leadership development were also 
identified as problems by OPM in its 2007 evaluation of NMB.[Footnote 
52] NMB officials identified succession planning as the agency's 
greatest human capital challenge: All senior managers are eligible to 
retire and all of the mediators are in their second careers and 
eligible to retire. However, NMB has not revised its succession plan 
since it was first drafted in 2006, even though it has since made 
organizational changes, such as reinstituting the Chief of Staff 
position in 2010.[Footnote 53] The Director of the Office of 
Administration said NMB's small size and limited budget make it 
difficult to hire additional staff to succeed retirement-eligible 
senior staff. The director also told us the agency is taking some 
steps, such as establishing agreements with other agencies to provide 
administrative services and free up NMB staff time for developmental 
opportunities. 

Training also can be an important strategy to address gaps in skills 
or competencies, and NMB has taken steps to improve its training 
program. In July 2013, NMB revised its training policy, which 
establishes a process through which the agency identifies training 
priorities and needs. Specifically, the policy states that training 
for new staff or to correct performance deficiencies takes priority 
over training to improve satisfactory performance or to prepare 
employees for career advancement. Each department prepares an annual 
training plan that identifies training needs, in line with agency 
training priorities. Then each employee and his or her supervisor 
develop an individual development plan that identifies specific 
training opportunities to meet that employee's needs. These individual 
development plans are approved by the department director. Employees 
are required to fill out evaluations after completing courses. 
Officials said training opportunities usually consist of industry 
conferences, on-the-job training, or training developed through 
partnerships with individual carriers, unions, or universities. 
However, NMB has not established minimum training requirements for all 
staff beyond training required of all government employees, such as 
information security training, or training required to maintain 
professional certifications, such as continuing legal education 
courses. OPM made several recommendations to NMB regarding training in 
its 2007 evaluation.[Footnote 54] According to OPM's fiscal year 2012 
Federal Employee Viewpoint Survey, 85 percent of NMB staff said the 
agency's workforce has the job-relevant knowledge and skills necessary 
to accomplish organizational goals, but only 50 percent were satisfied 
with the training they received for their present job. Thirty-six 
percent of NMB employees were unsatisfied, compared with 24 percent at 
all small agencies combined.[Footnote 55] 

Although NMB officials said that mediators arrive at the agency with 
significant industry experience, stakeholders identified a need for 
improved training. Most of the stakeholders we interviewed said that 
the quality of NMB mediators varies. Most said mediators need to 
continually update their training to stay abreast of industry trends 
and effective mediation techniques. Similarly, the April 2010 report 
by a joint rail and air labor-management committee, the Dunlop II 
Committee, found that the level of initial and continuing training for 
mediators was inadequate, and that mediators would benefit from more 
standardized, comprehensive, and regular training, particularly in 
mediation skills. The committee noted that most mediators were 
formerly advocates, not neutral parties, and needed training in 
mediation skills. NMB has taken some steps to address concerns about 
mediator training. For example, two stakeholders we interviewed said 
mediators could use training to interpret and evaluate cost estimates 
provided by the parties as part of collective bargaining, and in July 
2013, NMB officials told us that they brought in two experts to 
provide training on evaluating cost estimates. In addition, NMB 
officials said that the agency is developing a core curriculum for new 
mediators consisting of two courses on mediation and negotiation 
skills. The first 5-day course, on mediation, is now available, and 
officials said the negotiation skills course will be available 
starting in spring 2014. 

Finally, because NMB has not established a strategic workforce plan, 
the agency has not monitored and evaluated the results of its 
workforce planning efforts, including whether they contribute to 
accomplishing the agency's strategic goals. While NMB set human 
capital goals and objectives in its 2009 human capital plan, it has 
not tracked or evaluated its progress in meeting them and has not 
taken many of the actions detailed in the plan. For example, under a 
goal to "guide human capital decisions by using a data-driven, results-
oriented planning and accountability system," NMB had a strategic 
objective to "develop an NMB accountability program based on OPM's 
accountability system." However, as of April 2013--4 years later--a 
senior official reported that NMB has not developed such an 
accountability system, citing other pressing priorities. In its 2007 
evaluation, OPM also noted that NMB did not have an accountability 
system that met OPM requirements. 

NMB Follows Some Key Procurement Practices but Weaknesses Remain: 

NMB is partially following key practices we have identified as 
critical for agencies to manage their procurement functions, but we 
found some shortcomings (see table 5).[Footnote 56] NMB is following a 
key practice of appropriately placing the procurement function within 
the organization: The procurement function is at an equal 
organizational level as other key mission offices, such as the Offices 
of Arbitration and Mediation, the primary internal customers for whom 
goods and services are acquired. Further, as Director of the Office of 
Administration, the senior procurement official also oversees the 
financial and information technology functions, thereby providing 
direct insight into other key internal functions involved in the 
procurement process. The placement of the office facilitates proper 
management support and visibility within the organization to help the 
agency meet its overall mission and needs--key principles that we 
previously identified.[Footnote 57] In addition, NMB involves its 
internal stakeholders in the procurement process. For example, NMB's 
procurement procedures call for a multidisciplinary approach in that 
relevant NMB departments and subject matter experts are to be involved 
in making purchase requests, identifying requirements, and reviewing 
vendors' proposals. 

Table 5: Extent to Which NMB Is Following Key Practices for 
Procurement: 

Practice: Align acquisition with agency mission and needs; 
Extent NMB is following: Following; 
Example: NMB has a designated procurement official to manage the 
procurement function who is appropriately positioned to coordinate 
NMB's procurement activities and enforce procurement policies. 

Practice: Establish policies and processes to govern the procurement 
function; 
Extent NMB is following: Partially following; 
Example: Procurement policies and processes have been established and 
some are shared in NMB's employee handbook. NMB's independent auditors 
found that NMB generally established adequate controls over the 
procurement process, but some weaknesses exist in following procedures 
and maintaining appropriate documentation. NMB lacks goals or measures 
for procurement in NMB's agencywide strategic plan. 

Practice: Establish knowledge and information tools to help make well-
informed acquisition decisions; 
Extent NMB is following: In progress[A]; 
Example: NMB transitioned to a new system in May 2013 intended to 
integrate its financial management and procurement systems and 
facilitate accurate and timely spend analyses and reporting. 

Source: GAO analysis of NMB documents and interviews with NMB 
officials, compared to practices in GAO's Framework for Assessing the 
Acquisition Function at Federal Agencies. The framework includes a 
fourth area, human capital, which is discussed more broadly earlier in 
the report. 

[A] We did not score NMB on this procurement area because, during the 
course of our review, the agency was in the process of transitioning to 
new financial management and procurement systems and had not fully 
implemented the related information tools. 

[End of table] 

While NMB has established policies and procedures to oversee the 
procurement process, we and others have identified some weaknesses in 
following procedures and maintaining appropriate documentation. NMB's 
independent auditors reviewed the internal controls over NMB's 
procurement activities in fiscal year 2011 and identified some 
weaknesses. For example, auditors recommended that NMB improve its 
process for organizing and maintaining records because it found that 
NMB was unable to provide certain documents for about 25 percent of 
its purchases under $3,000. NMB officials said they have made changes 
to the agency's processes to maintain greater control over documents 
that support its procurement decisions. 

We found that NMB did not follow its own policies and procedures in 
purchasing laptops and iPads. NMB spent about $110,000 to purchase 55 
laptop computers for its staff in September 2012. Before making the 
purchase, NMB solicited quotations from three vendors and received 
quotations from two of the vendors for the laptops. However, NMB chose 
a quotation representing different technical specifications than the 
specifications originally provided to vendors. When we asked for the 
business case for purchasing these laptops, an NMB official drafted a 
memo, dated March 2013, stating that the agency chose the more 
expensive laptops because of features such as durability, touch-screen 
capability, and a design that switches easily between laptop and 
tablet. This official further stated that the laptops NMB did not 
select were largely viewed as inferior to the laptops NMB selected. 
However, when requesting quotations, NMB did not include these 
criteria--touch-screen capability and a convertible laptop and tablet 
design--in its technical specifications. Rather, the specifications it 
provided to vendors were that of a more traditional laptop. The vendor 
whose quotation NMB selected submitted two quotations at NMB's request-
-one meeting NMB's original specifications and one for the convertible 
laptop and tablet NMB ultimately selected. There was no documentation 
that NMB notified the other vendors of its revised specifications and 
provided these vendors with an opportunity to submit additional 
quotations. 

NMB also purchased iPads in October 2012 for half its staff over the 
written objection of the individual who serves as Chief Financial 
Officer, senior procurement official, and Chief Information Officer. 
However, according to federal information technology management policy 
and internal NMB documents, the Chief Information Officer should have 
direct authority over developing and implementing information 
technology policy, including information technology investments. 
[Footnote 58] In a memo, this official said the purchase of the iPads, 
in addition to new laptops that also function as tablet computers, and 
new smartphones, was not in keeping with a November 2011 Executive 
Order to limit the number of devices provided to employees.[Footnote 
59] Instead of NMB purchasing the iPads, this official recommended 
that employees make use of NMB's policy allowing employees to use 
their own information technology devices. In total, NMB spent more 
than $130,000 to purchase 25 iPads and 55 laptops, and to upgrade 22 
smartphones for agency staff.[Footnote 60] The devices have many 
common features, calling into question the necessity for having all 
three (see figure 4). We calculated that, as of July 2013, NMB had 
issued all three devices to 19 staff members, including the 2 board 
members--about 40 percent of NMB's workforce. 

Figure 4: NMB Issued Information Technology Devices with Similar 
Functions to Almost Half Its Workforce, as of July 2013: 

[Refer to PDF for image: illustrated table] 

Touch screen: 
Apple iPad (Tablet): Yes; 
Lenovo ThinkPad x230t (Laptop): Yes; 
Droid 4 (Smartphone): Yes. 

Camera: 
Apple iPad (Tablet): Yes; 
Lenovo ThinkPad x230t (Laptop): Yes; 
Droid 4 (Smartphone): Yes. 

Supports videoconferencing: 
Apple iPad (Tablet): Yes; 
Lenovo ThinkPad x230t (Laptop): Yes; 
Droid 4 (Smartphone): Yes. 

Wireless Internet access: 
Apple iPad (Tablet): Yes; 
Lenovo ThinkPad x230t (Laptop): Yes; 
Droid 4 (Smartphone): Yes. 

Access to Web and email: 
Apple iPad (Tablet): Yes; 
Lenovo ThinkPad x230t (Laptop): Yes; 
Droid 4 (Smartphone): Yes. 

Physical keyboard: 
Apple iPad (Tablet): No; 
Lenovo ThinkPad x230t (Laptop): Yes; 
Droid 4 (Smartphone): Yes. 

Phone calls and voicemail: 
Apple iPad (Tablet): No; 
Lenovo ThinkPad x230t (Laptop): [A]; 
Droid 4 (Smartphone): Yes. 

NMB personnel issued device: 
Apple iPad (Tablet): 21 (of 48); 
Lenovo ThinkPad x230t (Laptop): 48 (of 48); 
Droid 4 (Smartphone): 22 (of 48). 

Source: GAO analysis of NMB documents and specifications from the 
device manufacturers. 

[A] The laptop has videoconferencing capabilities. 

[End of figure] 

NMB also did not follow its own procurement procedures in purchasing 
the iPads. Based on the documents NMB provided us, the agency did not 
follow procedures to identify the requirements before purchasing the 
iPads, as required.[Footnote 61] There was no statement of 
requirements prepared, in accordance with NMB procedures, and a senior 
NMB official told us the purchase was made without outlining specific 
requirements or assessing whether the iPad, or a tablet device by 
another manufacturer, would meet those requirements. After we 
requested documentation of the agency's business case, the Chief of 
Staff, who approved the purchase request for the iPads submitted by a 
board member in September 2012, drafted a memo dated March 2013 
stating that the agency's move to a cloud computing environment and 
the functionality of the iPads, in addition to their light weight and 
relatively low cost, makes them ideal for use at the bargaining table 
and in training. The memo also stated that, prior to the purchase, 
many mediators were using their own iPads. 

In addition, NMB did not seek competition in making the iPad purchase. 
NMB's procurement procedures call for full and open competition if the 
agency does not use the General Services Administration Federal Supply 
Schedules to select vendors in making purchases.[Footnote 62] However, 
NMB did not take steps to consult the General Services Administration 
schedule or use full and open competition. NMB officials explained 
that they initially wanted to use the government's primary 
telecommunications provider to obtain these devices but they learned 
that they could not purchase the devices without also purchasing the 
data plan offered by that provider. Officials then contacted the 
iPad's manufacturer, who referred them to a federal reseller but did 
not provide a list of additional resellers. NMB also did not maintain 
documentation for this purchase that explained the absence of 
competition, as called for in the Federal Acquisition Regulation for 
procurements under $150,000.[Footnote 63] 

At the time NMB purchased the laptops, iPads, and smartphones, it 
lacked a mechanism for ensuring that its procurement procedures were 
consistently adhered to, such as a checklist for taking required steps 
in the procurement process or maintaining proper documentation. 
Internal control standards specify that agencies should implement 
mechanisms that enforce management's directives. This would include, 
for example, the process of adhering to procedures and requirements 
for procuring goods and services.[Footnote 64] Such actions are 
integral to ensuring effective stewardship of government resources and 
obtaining the best possible value for the government. In July 2013, 
NMB officials told us they had recently created such a checklist, as 
part of its transition to a new procurement system. This checklist 
includes required steps, such as conducting market research and 
checking the General Services Administration schedule for available 
equipment and vendors, and requires staff to include documentation of 
such steps in the contract file. The checklist also requires staff to 
list three vendors and, if the vendor with the lowest bid is not 
selected, provide a rationale and additional documentation on the 
decisions made. 

NMB Faces Additional Management Issues: 

Although our review focused on internal controls in specific 
management areas at NMB, we identified several broader management 
issues as well. 

Lack of Federal Oversight: 

OMB and OPM provide limited budgetary and human capital oversight of 
NMB. OMB reviews NMB's budget request and strategic plans, among other 
documents, but it has not focused on NMB management issues. According 
to OMB officials, OMB does not provide the same level of oversight for 
organizations with small budgets and staff as it does for larger 
organizations. The same is true for OPM. Until 2012, OPM annually 
reviewed and provided feedback on NMB's human capital management 
report.[Footnote 65] However, beginning in 2013, OPM officials told us 
that OPM no longer requires small agencies to submit their human 
capital management reports for review. OPM last audited NMB's human 
capital program in 2007. OPM followed up with NMB and, as of 2008, 
considered that evaluation closed. It has no plans for future 
evaluations. However, OPM surveys NMB's employees as part of its 
Federal Employee Viewpoint Survey of federal agencies, which captures 
NMB employees' views of the agency's strengths and challenges. 

Although NMB contracts for annual financial statement audits and 
rotating internal control reviews of program and management areas, the 
agency does not have continual, internal mechanisms in place to 
monitor and review its operations and programs, such as an audit 
committee or internal audit function as recommended by internal 
control standards. In addition, top NMB management officials do not 
take operational responsibility for addressing the findings of the 
independent auditors. As a result, problems identified in those 
auditors' reviews of program and management areas may not be revisited 
for 5 or more years, when that topic again comes up for review. 

NMB does not have a statutory Inspector General (IG) to fill this 
oversight role.[Footnote 66] In comparison, two other federal agencies 
with similar missions, the National Labor Relations Board (NLRB) and 
the Federal Labor Relations Authority (FLRA), have statutory IGs. 
NMB's independent auditors said they can only perform the reviews NMB 
hires them to do. In contrast, an IG can target any area of an 
agency's operations for an audit, inspection, or investigation. The 
House version of the FAA Modernization and Reform Act of 2012, H.R. 
658, contained a provision that would have authorized the IG of the 
Department of Transportation to review NMB operations, issue findings 
and recommendations to address any identified problems, and keep the 
chairman of the NMB Board and Congress informed on agency efforts to 
address them. The bill also would have authorized $125,000 in 
Department of Transportation appropriations for each of fiscal years 
2011 through 2014 to cover these services. However, these provisions 
were removed from the bill during conference and therefore were not 
enacted.[Footnote 67] 

Lack of Data on Rail Arbitration Cases: 

NMB has long struggled with a large volume of railroad grievance 
arbitration cases related to minor disputes. At the beginning of 
fiscal year 2000, there were 11,237 pending arbitration cases. More 
recently, NMB has taken steps to reduce the number of pending cases. 
For example, it now performs annual checks to identify cases the 
parties no longer want heard and remove them from the list of pending 
work. In addition, NMB has been exploring using alternatives to 
arbitration to resolve minor disputes, such as grievance mediation. In 
fiscal years 2008, 2009, and 2010, Congress provided NMB with 
supplemental appropriations ($657,000, $560,000, and $29,000, 
respectively) to reduce the arbitration backlog.[Footnote 68] By the 
beginning of fiscal year 2013, NMB had reduced the number of pending 
cases to 2,084. However, rail carriers and unions filed more than 
3,500 new cases in fiscal year 2012. 

While stakeholders told us NMB has done a good job reducing the number 
of these pending rail cases, several also said they are unable to get 
an arbitrator assigned in a timely manner. Grievance arbitration cases 
in the rail industry can involve a wide range of grievances, such as 
wrongful dismissals, unfair labor practices, and rights to additional 
pay. For example, we reviewed several arbitration decisions issued in 
2012, including a "time claim" case that involved a group of employees 
requesting a day's pay because their employer had violated a term of 
their collective bargaining agreement. Another case involved an 
employee who believed she was wrongfully suspended because of an 
alleged violation of the employer's code of conduct policy. Although 
NMB has some information from the parties on the types of claims 
filed, officials said they do not track or analyze these data, nor 
prioritize cases by type of case or level of urgency. NMB assigns 
arbitrators to cases in the order the requests are received. Since NMB 
apportions its annual funding for arbitrators into 12 monthly 
allocations, once NMB officials have obligated all funds for a month, 
they will not fulfill requests to assign arbitrators to additional 
cases. As a result, according to rail union and carrier officials we 
interviewed, some disputes are not heard in a timely manner. For 
example, they said cases involving a dispute over whether a rail 
employee was improperly fired are sometimes delayed because an 
arbitrator is not assigned immediately. 

Several former board members and a senior NMB official told us that 
the large number of rail grievance arbitration cases submitted to NMB 
occurs because the parties do not bear any of these costs and so lack 
a financial incentive to only file claims with merit. Unique among 
labor relations agencies in the federal government, NMB uses federal 
funding to pay the fees and travel expenses for an arbitrator to 
resolve minor disputes between a specific employer and a union, in 
accordance with the requirements of the RLA. In the airline industry, 
as with all other private sector industries and the federal 
government, the parties pay for the arbitrator and all other 
arbitration expenses.[Footnote 69] 

In 2004, to encourage more efficient use of its resources and citing 
its authority under the RLA, NMB issued a notice of proposed 
rulemaking to, among other things, establish application fees for 
certain grievance arbitration services, including, for example, a $50 
fee for certification of an arbitrator to a board.[Footnote 70] The 
preamble to the proposed rule noted that these fees, which represented 
only a small portion of the actual costs of providing the respective 
services, would help reduce the large numbers of pending cases by 
encouraging parties to only file and proceed with those with merit and 
to consolidate as many grievances as possible. However, NMB did not 
cite any data on the numbers and types of rail arbitration cases that 
compose the backlog as justification for its proposal. In January 
2005, at an NMB hearing on the proposed rule, an organization 
representing rail carriers expressed support for fees, stating that 
the current system imposes few restraints on the pursuit of any 
grievance, regardless of its merit. The organization said that 
requiring parties in the rail industry, like those in all other 
industries, to internalize the costs of arbitration would result in a 
more effective and efficient system. However, numerous union 
stakeholders voiced opposition to fees, asserting that NMB is required 
by the RLA to cover these costs and NMB does not have authority under 
the Act to charge fees. Union representatives also said that when the 
parties jointly crafted the RLA, the unions gave up their right to 
strike over minor grievances in exchange for government-financed 
arbitration. Among other concerns, opponents said fees would 
discourage unions and individual employees from pursuing valid 
arbitration of minor disputes because costs are more difficult for 
them to bear than they are for carriers. In addition, more than 125 
members of Congress signed a letter urging NMB to reconsider the 
proposed rule. NMB did not issue a final rule regarding fees. 

Although NMB did not finalize its proposed rule to establish fees, the 
agency has taken other actions to manage its grievance arbitration 
workload. In a memo issued June 10, 2013, during the course of our 
review, NMB's Chief of Staff discussed month-to-month delays for rail 
arbitration cases and said cases that are not assigned an arbitrator 
in a given month for lack of funds no longer have to be re-filed the 
following month. Instead, those cases will now go to the top of a wait 
list for the next month. The memorandum stated that this change, 
assuming the parties do not flood the system with requests, should 
mean that no case will go more than 2 months without being assigned to 
an arbitrator. 

NMB Has Responded to Industry Changes and Stakeholder Disagreements in 
Conducting Elections: 

NMB Has Addressed Challenges in Conducting Representation Elections: 

Both NMB officials and stakeholders said the agency has addressed 
challenges presented by railroad and airline industry changes, such as 
mergers, in conducting its representation work. Because union 
representation of rail and air employees is based on their inclusion 
in a craft or class systemwide and not by worksite, some recent 
elections overseen by NMB have involved tens of thousands of employees 
in multiple locations. For example, a 2010 merger of United and 
Continental airlines prompted an election in 2011 involving 24,000 
eligible flight attendants. In comparison, elections at NLRB typically 
involve a single worksite and substantially smaller numbers of voters. 
In fiscal year 2012, more than 88,000 rail and air employees were 
involved in NMB representation elections. NMB officials said mergers 
and bankruptcies in recent years, primarily in the airline industry, 
have taxed agency resources. While NMB can set longer timeframes for 
large elections, officials said they must meet those deadlines with 
the same number of NMB staff. Senior officials in NMB's Office of 
Legal Affairs said they borrow other NMB employees, such as mediators, 
to assist with large elections. At least one union official expressed 
concern that when mediators are drafted to assist with representation, 
their work in mediating collective bargaining agreements can be 
delayed. While the size of elections may have increased, the number of 
representation cases handled annually by NMB's Office of Legal Affairs 
has remained constant at about 45 cases for each of the last 10 years. 
[Footnote 71] 

NMB has also made changes in its representation work as a result of 
evolving technology, but some key steps remain labor intensive. Moving 
to online voting in 2007 was a challenge to implement, NMB officials 
said, but stakeholders were supportive. NMB instituted online voting 
after several years of planning. NMB also implemented e-filing for 
election applications and other required documents in September 2009. 
However, authorization cards submitted by unions to demonstrate 
sufficient interest to hold an election are still authenticated by NMB 
staff by hand. They must compare the signature on the authorization 
card to a signature sample provided by the carrier. One NMB attorney 
told us she has had instances when she checked more than 4,000 cards, 
and NMB officials said all NMB staff check cards when necessary. 

NMB has also faced challenges in its investigations of alleged 
interference, influence, or coercion as communications about elections 
increasingly occur via the Internet. The use of social media, 
hyperlinks to online voting websites, and other evolving communication 
tools have expanded the agency's investigative responsibilities. An 
NMB attorney said one investigation occurred after airline employees 
posted photos of themselves holding confidential voting materials on 
Facebook. Another case required an investigation of potential coercion 
when employees hosted voting parties that were shared on YouTube. 
Sharing voting materials and voting in groups violates federal law, 
NMB officials said. In February 2008, NMB issued a policy prohibiting 
hyperlinks to an online voting site from any website other than its 
own. For example, in 2011, while investigating an allegation of 
interference after an airline merger election, NMB found that posting 
a hyperlink on a union website to the voting website might constitute 
interference because, while it did not compromise the voting process, 
it had the potential to reveal a voter's identity through his or her 
Internet identification. As a result, the union's win in the election 
stood but NMB shortened the timeframe for holding another election 
from 2 years to 18 months.[Footnote 72] 

Disagreement during Past Rulemaking on Union Elections Created 
Challenges: 

NMB in 2010 changed its rules for certifying a union in an election, 
[Footnote 73] and several stakeholders told us and a former NMB board 
member wrote at the time that this process harmed the perception of 
NMB as a nonpartisan arbiter and caused disagreement. Prior to the 
change, which was effective July 1, 2010, employees who did not vote 
in an election were counted as having cast a vote against certifying 
the union under NMB regulations. After the change, only votes cast are 
counted in determining whether a union has achieved the majority 
needed to be certified as the employee representative. 

Several stakeholders said NMB was hasty and lacked input in making a 
change that overturned 75 years of precedent. NMB received almost 
25,000 comments in response to its notice of proposed rulemaking. 
[Footnote 74] NMB held a public hearing on December 7, 2009, on the 
proposed rule. While a union official said that NMB used a 
deliberative process for making the rule change, one management 
stakeholder said NMB should have alerted them that such a change was 
being considered far in advance of a hearing. In addition, an airline 
carrier official said that because the change was suggested in a 
letter to NMB from one large union, and this union's involvement was 
not initially disclosed by NMB officials, some stakeholders were 
suspicious about NMB's motives for changing the rule. In the past, 
according to another official from a regional air carrier, NMB 
involved stakeholders before making significant changes. For example, 
the official said NMB consulted with stakeholders over several years 
before moving to online voting. A railroad official said the process 
was very damaging to NMB's reputation for neutrality. However, another 
railroad official said trust in NMB remains intact.[Footnote 75] 

Despite concerns, NMB officials reported that the percentage of 
elections resulting in certification of a union has remained 
relatively constant in the years before and after NMB's 2010 
rulemaking. NMB data for the 11 fiscal years (2000 to 2010) before the 
rule change show that, on average, about 61 percent of all elections 
resulted in certification of a union. NMB data for the 3 fiscal years 
after the change (2011 to 2013) show that, on average, about 62 
percent of all elections resulted in certification of a union. At the 
time of our report, figures for fiscal year 2013 were incomplete. In 
addition, these percentages are not weighted to account for the size 
of the elections, nor controlled for other factors that can affect the 
outcome of an election, for example, job market conditions. 

Some stakeholders also wanted NMB, as part of the 2010 rulemaking, to 
clarify the process for decertifying, or removing, a union 
representative. The RLA does not specify a decertification process, 
and NMB offers minimal guidance on its website on steps to remove an 
employee representative. In its preamble to the 2010 rule, NMB noted 
that, while not as direct as some commenters might like, the existing 
election procedures allow employees to "rid themselves of a 
representative," and that the 2010 change further gives these 
employees the opportunity to affirmatively cast a ballot for no 
representation. However, an airline carrier official and a former 
board member said the process in place remains ineffective and highly 
confusing. For example, a ballot currently may contain two options 
that are each a vote for no representation: "no representative," and 
an applicant who is on the ballot as a "straw man" who intends, if 
elected, to step down so as to remove representation for the craft or 
class. This applicant seeking removal of representation has to collect 
sufficient authorization cards to prompt an election in order for the 
craft or class to make this change. A former NMB board member said 
there is the potential for votes opposed to union representation to be 
split by votes for "no representative" and for a straw man. The result 
is that these vote counts will not be consolidated in favor of 
decertification, which can then happen only if either the "no 
representative" or straw man receives a majority of the votes cast. 
When asked whether NMB has developed written guidance to walk parties 
through the process should they wish to drop union representation, 
attorneys in the Office of Legal Affairs said adequate guidance is 
available on NMB's website and in the NMB Representation Manual. 

According to stakeholders we interviewed, NMB improved its outreach 
when issuing a more recent rule in 2012.[Footnote 76] The final rule, 
published in December 2012, made some changes to NMB's representation 
process to conform with requirements in the FAA Modernization and 
Reform Act of 2012.[Footnote 77] For example, the Act amended the RLA 
to require that an application as part of a merger and requesting an 
organization or individual be certified for representation must be 
supported by not less than 50 percent of the employees in a the craft 
or class.[Footnote 78] Previously, the NMB Representation Manual 
required a 35-percent showing when a group of employees not already 
represented by a union wished to have an election. In its notice of 
proposed rulemaking, NMB explicitly sought comments on whether the 50-
percent requirement applied to mergers.[Footnote 79] One stakeholder 
we interviewed said NMB did a better job of reaching out to 
stakeholders in the most recent rulemaking, and an airline carrier 
official characterized this as a positive "returning to form" for NMB. 

Conclusions: 

The National Mediation Board is a small agency with a vital role in 
facilitating labor relations and helping avoid work stoppages in two 
key transportation sectors: the railroads and airlines. To better 
fulfill this role, NMB has in recent years instituted organizational 
changes, technology upgrades, and several new management practices. 
However, its initiatives are not guided by a robust strategic planning 
process, which--if done well--provides the basis for everything an 
organization does. Without such a process that includes mechanisms for 
obtaining stakeholder and congressional input, NMB lacks assurance 
that its limited resources are effectively targeted toward the highest 
priorities. Further, without performance goals needed to gauge agency 
progress, NMB, Congress, and stakeholders lack the information needed 
to improve management practices and better link resources to results 
at the agency. 

Implementing cost-effective and appropriate internal controls can help 
an agency achieve results and minimize operational problems. While NMB 
has controls in key management areas, such as financial management, 
there are challenges. For example, without a formal mechanism to track 
and promptly resolve deficiencies identified in reviews of its program 
and management areas, NMB misses opportunities to improve performance 
and mitigate risks. NMB's failure to follow federal requirements for 
recent upgrades of its information technology systems and equipment 
means NMB cannot ensure the best use of its limited resources or the 
protection of sensitive information. A lack of strategic workforce 
planning means NMB does not have assurance that its staff will 
continue to possess the skills necessary to the agency's mission and 
receive the training they require, particularly to meet challenges 
presented by the impending retirements of senior staff. 

NMB faces additional management issues. There is minimal internal 
programmatic oversight of its activities, for example, by an Inspector 
General, to identify management challenges and to hold it accountable 
to Congress and the public. NMB also struggles to efficiently manage 
grievance cases in the rail industry, partly because the parties do 
not pay for the arbitrator and thus lack an incentive to only file and 
progress cases with merit. NMB has considered ways to increase 
efficiency, such as charging application fees for its arbitration 
services, and has undertaken other efforts, such as conducting reviews 
of pending cases. However, it lacks data on the types of grievances 
that are filed to inform its deliberations on how to more efficiently 
manage the process. If NMB does not address this demand on its limited 
resources, it may again face a growing and unmanageable backlog of 
arbitration cases. 

Matter for Congressional Consideration: 

To provide for independent audit and investigative oversight of NMB, 
Congress should consider authorizing an appropriate federal agency's 
Office of Inspector General to provide such oversight. 

Recommendations for Executive Action: 

In order to improve NMB's planning and make the most effective use of 
its limited resources, we recommend that the Chairman of the National 
Mediation Board take the following seven actions: 

1. Develop a formal strategic planning process to fully implement key 
required elements of strategic planning, including a formal process to 
obtain congressional and stakeholder input. 

2. Develop, and include in its performance plan, performance goals and 
measures that contain required elements to demonstrate results. 

3. Develop and implement a formal mechanism to ensure the prompt 
resolution of findings and recommendations by independent auditors, 
including clearly assigning responsibility for this follow-up to 
agency management. 

4. Develop and fully implement key components of an information 
security program in accordance with FISMA. 

5. Establish a privacy program that includes conducting privacy impact 
assessments and issuing system of record notices for systems that 
contain personally identifiable information. 

6. Develop a strategic workforce plan that (1) involves input from top 
management, employees, and other stakeholders; (2) identifies critical 
skills and competencies needed by NMB; (3) identifies strategies, such 
as training, to address any gaps; and (4) provides for cost-effective 
evaluations of these strategic workforce planning efforts. This plan 
should also address succession for the significant proportion of NMB 
staff and senior managers who are eligible to retire in the next few 
years. 

7. In order to better inform its decisions about managing the rail 
grievance arbitration process, including addressing the backlog of 
cases, NMB should collect and analyze data on the types of grievances 
filed, and their disposition. NMB should use these data to improve the 
efficiency of the arbitration process and consider, as part of this 
effort, whether to establish fees for arbitration services. If NMB 
determines that the establishment of fees would improve the efficiency 
of the arbitration process, it should impose such fees or seek 
legislative authority to do so, as necessary. 

Agency Comments and Our Evaluation: 

We provided a draft of this product to the National Mediation Board 
(NMB) for comment. We also shared a draft with the Office of 
Management and Budget (OMB) and Office of Personnel Management (OPM). 
OMB and OPM had no comments. In its written comments, reproduced in 
appendix II, NMB noted that it will review and address all of the 
recommendations and discussed ways that the agency plans to address 
them. NMB also provided technical comments that were incorporated, as 
appropriate. 

Although our matter for congressional consideration was not directed 
to NMB, the agency suggested that having another federal agency's 
Office of Inspector General provide oversight of NMB would be 
redundant with GAO's biennial audits and evaluations, which were 
mandated by the FAA Modernization and Reform Act of 2012. As we have 
previously reported, GAO and agency Inspectors General (IGs) have 
complementary, rather than duplicative, roles. The IGs have been on 
the front line of combating fraud, waste, and abuse within their 
respective agencies, and their work has generally concentrated on 
audits and investigations of specific program-related issues of 
immediate concern. We continue to believe that, in addition to the 
periodic oversight provided by GAO and the annual audits of NMB's 
financial statements by independent public accountants, an IG office 
assigned with the responsibility of providing ongoing audits and 
investigations of NMB and its operations would result in more 
effective oversight. 

Regarding our first recommendation to establish a formal strategic 
planning process, including a formal process to obtain congressional 
and stakeholder input, NMB noted that it would replace its current 
strategic plan by February 2014 using guidelines we outlined in this 
report. These guidelines include soliciting comments on a draft 
strategic plan from the Congress and stakeholders. In its comments, 
NMB asserted it currently has formal avenues to obtain stakeholder 
input and listed several stakeholder groups and industry conferences. 
While we acknowledge in our report that NMB consults with such groups, 
representatives of key groups told us they are not currently involved 
in NMB's strategic planning process. Formally involving stakeholders 
and the Congress in the strategic planning process is critical for 
ensuring that NMB's efforts and resources are targeted to the highest 
priorities. Moreover, such consultations should occur during the 
development of a strategic plan, not after it is developed. We have 
long noted the importance of the executive branch considering Congress 
a partner in shaping goals at the outset. If an agency waits to consult 
with relevant congressional stakeholders until a strategic plan has 
been substantially drafted and fully vetted, it foregoes important 
opportunities to learn about and address early on specific concerns 
that could be critical to successful implementation of the plan. 

NMB noted, with respect to our second recommendation to develop 
performance goals and measures, that it will include such goals and 
measures in its new February 2014 strategic plan. It is also important 
for NMB to include these goals and measures in its annual performance 
plans, as required by law, which can be consolidated with the agency's 
congressional budget submissions or annual performance reports, per 
OMB guidance. These documents are updated on an annual basis--while 
strategic plans are updated every 4 years--and allow for greater 
transparency in reporting NMB's progress toward meeting its goals. NMB 
also indicated it will soon develop and publish a plan to address our 
third recommendation to establish a mechanism to ensure prompt 
resolution of findings and recommendations by independent auditors and 
clearly assign responsibility for follow-up to agency management. 

Regarding recommendation four to develop and fully implement 
components of an information security program, NMB stated that it was 
meeting its information security requirements through the Federal Risk 
and Authorization Management Program (FedRAMP) and that the program is 
compliant with the Federal Information Security Management Act of 2002 
and based on National Institute of Standards and Technology 
guidelines. NMB further discussed its plans to create standards for 
security and that they plan to be fully FedRAMP compliant by June 
2014. We acknowledge in our report some of the actions NMB has taken 
to comply with federal information security program requirements but 
also noted weaknesses with the implementation of these requirements. 
While the FedRAMP assessment process is compliant with federal 
information security program requirements, for those FedRAMP services 
NMB is using, that does not diminish NMB's responsibility with regard 
to the development and implementation of its information security 
program, including the development of its own requirements. For 
example, NMB should ensure that it completes its draft policies and 
procedures, provides information security training to its users and 
contractors, and updates its disaster recovery and continuity of 
operations plans and procedures. We continue to believe that our 
recommendation to develop and fully implement components of an 
information security program is still valid. 

In response to recommendation five regarding the establishment of a 
privacy program, NMB stated that it holds very little personally 
identifiable information and that it has or is in the process of 
contracting with other agencies to ensure that they handle virtually 
all of NMB's personally identifiable information. However, as we noted 
in our report, NMB has not developed policies or procedures that 
discuss privacy protections for the personally identifiable 
information it currently holds, and does not comply with federal 
requirements to conduct privacy impact assessments and issue system of 
records notices if deemed necessary. Thus we believe our 
recommendation is still valid. 

In commenting, NMB did not identify any specific actions it plans to 
take to address our sixth recommendation to develop a strategic 
workforce plan. NMB stated that the board and Chief of Staff regularly 
review staffing and personnel issues and plan for succession, but the 
agency's relatively small workforce means NMB is less able to use 
workforce planning. NMB also discussed its training process, which we 
describe in detail in the report, and said no request for training has 
been refused in the past 3 fiscal years. We continue to believe a 
strategic workforce plan is essential for every federal agency, 
regardless of its size. Such a plan helps ensure an organization's 
human capital program is aligned with its mission and programmatic 
goals, and that it has long-term strategies for acquiring, developing, 
and retaining staff to achieve those goals. 

Finally, in commenting on recommendation seven to analyze data on the 
types and disposition of rail grievance arbitration cases to better 
inform its management of those processes, NMB officials stated that 
they plan to collect additional data on the types of cases they 
receive from all arbitration boards and make the information available 
on the agency's website. We reiterate the importance of analyzing this 
information in order to better manage this process. NMB also cited its 
efforts to reduce the backlog, noting that the number of arbitration 
cases pending at the end of fiscal year 2012 was the lowest in 5 
years. However, as we note in the report, there were 2,084 claims 
pending at the beginning of fiscal year 2013, which is still 
significant, and more than 3,500 new claims were filed in fiscal year 
2012. We encourage NMB to maintain its focus on managing the 
arbitration process and continue to consider options, such as a fee 
structure, for achieving a more efficient use of resources. 

We are sending copies of this report to the Chairman of NMB and 
appropriate congressional committees. In addition, the report is 
available at no charge on the GAO website at [hyperlink, 
http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-7215 or moranr@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. GAO staff who made key contributions to 
this report are listed in appendix III. 

Signed by: 

Revae Moran: 
Director, Education, Workforce, and Income Security Issues: 

List of Committees: 

The Honorable John D. Rockefeller, IV: 
Chairman: 
Committee on Commerce, Science, and Transportation: 
United States Senate: 

The Honorable John Thune: 
Ranking Member: 
Committee on Commerce, Science, and Transportation: 
United States Senate: 

The Honorable Tom Harkin: 
Chairman: 
Committee on Health, Education, Labor, and Pensions: 
United States Senate: 

The Honorable Lamar Alexander: 
Ranking Member: 
Committee on Health, Education, Labor, and Pensions: 
United States Senate: 

The Honorable Bill Shuster: 
Chairman: 
Committee on Transportation and Infrastructure: 
United States House of Representatives: 

The Honorable Nick J. Rahall, II: 
Ranking Member: 
Committee on Transportation and Infrastructure: 
United States House of Representatives: 

[End of section] 

Appendix I: Scope and Methodology: 

Overall Approach: 

To conduct our work, we assessed how the National Mediation Board 
(NMB) carried out selected key management functions--strategic 
planning and performance measurement, financial management, 
information technology, human capital, and procurement--we have found 
are critical to creating and sustaining high-performing organizations. 
[Footnote 80] We also assessed how NMB is addressing challenges in one 
of its three program areas--oversight of union representation 
elections. Most of these areas were specifically identified in the FAA 
Modernization and Reform Act of 2012 as required subjects of our 
review. We also selected strategic planning and performance 
measurement for our review because we have found that an agency's 
strategic planning effort is the most important element in results-
oriented management.[Footnote 81] 

To perform our work, we reviewed relevant federal laws and regulations 
and key NMB documents, such as the agency's most recent strategic plan 
and annual report, policies and procedures for NMB's three program 
areas (mediation, arbitration, and representation), board member 
briefing book, and delegation orders for duties of board and staff for 
fiscal years 1990 through 2013. We also assessed NMB's management 
plans, policies, and practices in financial management, information 
management and security, human capital, and procurement using GAO's 
Standards for Internal Control in the Federal Government[Footnote 82] 
and other criteria developed by GAO in prior work for these management 
areas, as described later in this appendix. We identified key 
practices from these criteria and assessed whether NMB is following 
these practices (NMB is taking appropriate actions and has a formal 
plan, policy, or other document), partially following (is taking some 
actions but does not have a formal plan or policy and/or some 
additional steps must be taken to consider this practice implemented), 
or minimally following (NMB is taking little or no action to address 
this particular practice). 

We also interviewed officials at the Office of Management and Budget 
(OMB) and the Office of Personnel Management (OPM) to determine how 
these agencies provide oversight and guidance to NMB, as well as to 
obtain officials' perspectives on NMB's management strengths and 
challenges. In cases where other entities had conducted recent work in 
any of the management functions we reviewed--such as financial 
management--we did not duplicate that work. For example, we obtained 
the most recent nine financial statement reports NMB provided to us, 
but we did not independently assess the findings in the audits. In 
addition, we reviewed but did not duplicate the work performed by 
NMB's independent auditors in the six most recently issued internal 
control reviews of NMB program areas: 

* Report on Review of Internal Controls Over Representation Functions 
(fiscal year 2005): 

* Report on Review of Internal Controls Over Alternative Dispute 
Resolution (ADR) Services (fiscal year 2006): 

* Report on Review of Internal Controls Over Mediation Services 
(October 2006-September 2007): 

* Report on Review of Internal Controls Over Personnel/Payroll (April 
2008-March 2009): 

* Report on Review of Internal Controls Over Arbitration Services 
Functions (April 2009-March 2010): 

* Report on Review of Internal Controls Over Procurement (October 2010-
September 2011): 

To gain additional perspectives on NMB's program and management 
functions, we interviewed officials at the two primary federal labor 
relations agencies that cover labor relations in the private sector. 
We interviewed senior officials from the Federal Mediation & 
Conciliation Service to obtain information on its strategic planning 
and performance measurement efforts, human capital and training 
practices, and its role in mediation and arbitration. We also 
interviewed senior officials from the National Labor Relations Board 
to obtain information on strategic planning and performance 
measurement, human capital practices, and its role in overseeing union 
representation elections. We interviewed the chairman of a third labor 
relations agency--the Federal Labor Relations Authority, which covers 
labor relations in the federal government--but the primary purpose of 
the interview was to obtain this individual's perspective as a former 
NMB board member. 

In addition, we conducted in-depth interviews with current and former 
NMB officials, including all senior managers (Chief of Staff, General 
Counsel, and the directors of the Office of Administration, 
Arbitration Services, and Mediation and ADR Services); current board 
members; and all former board members who served from 2000 to 2012. We 
interviewed several rail and air industry experts, identified by issue 
area experts within GAO and from our literature review. We also 
interviewed representatives from key rail and air labor and management 
groups, including Airlines for America, Regional Airline Association, 
National Railway Labor Conference, AFL-CIO Transportation Trades 
Department and affiliated rail and air unions, and the International 
Brotherhood of Teamsters. In addition, we interviewed representatives 
from the National Association of Railroad Referees, an association 
representing railroad arbitrators. We also interviewed members of NMB 
informal advisory groups, including the Dunlop II Committee and 
Section 3 Subcommittee, which made recommendations to NMB on mediation 
and arbitration issues, respectively. Finally, to gain a better 
understanding of the types of rail grievance arbitration cases that 
NMB funds, we reviewed a judgmental sample of several arbitration 
cases available on NMB's website that were decided by arbitration 
boards in calendar year 2012. 

We conducted this performance audit from September 2012 through 
December 2013 in accordance with generally accepted government 
auditing standards. Those standards require that we plan and perform 
the audit to obtain sufficient, appropriate evidence to provide a 
reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a 
reasonable basis for our findings and conclusions based on our audit 
objectives. 

Strategic Planning and Performance Reporting: 

We reviewed NMB's most recent 5-year strategic plan (fiscal years 2011-
2016), its most recent annual Performance and Accountability Report 
(fiscal year 2012), and fiscal year 2014 congressional budget 
justification documents. We also compared NMB's strategic planning and 
performance planning and reporting practices with key requirements in 
the Government Performance and Results Act of 1993 (GPRA), the GPRA 
Modernization Act of 2010 (GPRAMA), and OMB performance guidance for 
federal agencies.[Footnote 83] In addition to these federal 
requirements, we assessed NMB's plans and practices against leading 
practices identified in prior GAO work.[Footnote 84] 

Financial Management: 

We also obtained NMB's financial statement audits for fiscal years 
2004 to 2012, auditors' management letters to NMB for fiscal years 
2008, 2010, 2011, and 2012,[Footnote 85] and the six most recently 
issued internal control reviews of NMB program and management areas, 
as discussed earlier. We also interviewed NMB's independent auditors 
about their processes, findings, and recommendations for NMB. We did 
not independently assess the findings in these financial statement 
audits and internal control reviews. 

Information Technology: 

We interviewed NMB officials responsible for the overall planning and 
management of NMB's information management, security, and privacy. We 
collected and assessed information on NMB's information systems, 
including its plans, policies, and practices using the Federal 
Information Security Management Act, guidelines developed by OMB, 
guidelines developed by the National Institute of Standards and 
Technology, the Privacy Act and the E-Government Act. We also randomly 
selected and tested NMB user workstations for compliance with U.S. 
Government Configuration Baseline settings, randomly selected and 
reviewed NMB-issued smartphones and tablets for mobile device security 
settings, and reviewed NMB cloud computing security settings within 
its new cloud environment. 

Human Capital: 

We reviewed NMB's most recent human capital plans, policies, and key 
documents, including NMB's 2011 human capital management report to 
OPM, its 2009 human capital plan, and its 2006 succession plan. We 
also obtained information on the training NMB staff received in fiscal 
years 2011 and 2012. We reviewed OPM's fiscal year 2007 audit of NMB's 
human capital program, its most recent assessment (2011) of NMB's 
human capital management report, and the results of its 2012 Federal 
Employee Viewpoint Survey of NMB employees.[Footnote 86] We also 
reviewed data regarding NMB's human capital strengths (defined by OPM 
as the 10 survey items with the highest percent of positive responses) 
and challenges (the 10 survey items with the highest percent of 
negative responses). On the basis of our interview with knowledgeable 
OPM officials and review of prior GAO work concerning survey design, 
administration, and processing, we determined that the data were 
sufficiently reliable for the purpose of our review. 

We assessed NMB's strategic workforce planning efforts against 
government internal control standards and key practices identified in 
prior GAO work.[Footnote 87] We focused on workforce planning in this 
review because it is a critical, foundational element of an agency's 
human capital program in that it helps ensure that agencies are making 
sound investments in the human capital issues that most affect their 
ability to achieve mission results. 

Procurement: 

We reviewed NMB's procurement contracting cycle procedures as of March 
2012 and NMB's independent auditors' most recent report on internal 
controls over the procurement function. We reviewed key documents, 
such as purchase requests and purchase orders, for the agency's recent 
acquisition of information technology equipment, including tablet 
computers, laptops, and smartphones. We assessed NMB's policies and 
practices against federal internal control standards and standards 
outlined in the Federal Acquisition Regulation and GAO's Framework for 
Assessing the Acquisition Function at Federal Agencies.[Footnote 88] 

Union Representation Elections: 

To describe NMB's process for overseeing employee representation 
elections and any challenges related to this process, we reviewed 
relevant federal laws and regulations and records related to NMB 
rulemakings on this subject, including proposed and final rules issued 
in 2010 and 2012. We also reviewed key documents, such as the National 
Mediation Board Representation Manual (effective March 25, 2013), 
notices and memorandums on revisions to phone and Internet voting 
instructions, electronic filing procedures for elections and 
challenges, frequently asked questions (revised 2013), and sample 
ballots. We obtained NMB officials' and stakeholders' perspectives on 
the challenges the agency faces in this process, as well as steps it 
has taken to address any challenges. For example, we reviewed select 
opinions issued by attorneys in the Office of Legal Affairs in fiscal 
years 2000 to 2013 to resolve challenges to voter eligibility and to 
allegations of election interference, influence, and coercion. We also 
reviewed and assessed the reliability of NMB data on the number and 
outcomes of union representation elections by fiscal year before and 
after implementation of the 2010 rule change. We compared NMB's 
figures to our own calculations of the annual number of and outcomes 
for representation elections for fiscal years 2000 to 2013 (before and 
after the 2010 rule change), and the percentages of total elections 
that resulted in certification of a union representative, using data 
for each fiscal year posted on NMB's website. In addition, we 
interviewed knowledgeable NMB officials responsible for compiling and 
reviewing these data. We determined the data were sufficiently 
reliable for the purpose of our review. 

[End of section] 

Appendix II: Comments from the National Mediation Board: 

National Mediation Board: 
Washington, D.C. 20572: 
(202) 692-5000: 

November 1, 2013: 

Revae E. Moran, Director: 
Education, Workforce, and Income Security Issues: 
Government Accountability Office: 
441 G Street, N.W. 
Washington, DC 20548: 

Dear Ms. Moran: 

This letter is provided in response to the Government Accountability 
Office draft report GAO-14-5, National Mediation Board: Strengthening 
Planning and Controls Could Better Facilitate Rail and Air Labor 
Relations, dated October 2013. 

The National Mediation Board appreciates the opportunity to provide 
comments before final publication of the report, and the honest 
efforts of the GAO to conduct its congressionally mandated review. The 
Board will review and address all of the recommendations: the 
following specific comments relate to the major recommendations as 
presented in the report. 

I. Matter for Congressional Consideration: 

To provide for independent audit and investigative oversight of NMB, 
Congress may wish to consider authorizing an appropriate Federal 
agency's Office of Inspector General to provide such oversight. 

Consideration of an Inspector General to provide independent audit and 
oversight to the National Mediation Board is ultimately a 
congressional deCision, but would seem to be somewhat redundant. The 
FAA Reauthorization Act of 2012 provides for biennial audits of all 
NMB functions by the GAO, and for more frequent audits upon request from
CongreSSional committees. Such iterative GAO audits and oversight will 
provide more immediate and informed oversight than likely could be 
expected from an Inspector General located in another agency who has 
no experience with the NMB. NMB also has an independent audit of its 
financial statements, which has been unqualified for over a decade,
included in every annual report to Congress, and the NMB has its 
independent auditor conduct separate rotating audits of specific NMB 
functions each year. 

II. Recommendations for Executive Action: 

Recommendation #1: Develop a formal strategic planning process to fully
implement key required elements of strategic planning, including a 
formal process to obtain congressional and stakeholder input. 

The NMB has in place a strategic planning process, and will have 
replaced the currently posted strategic plan with a plan developed 
using GAO's guidelines on or before the February, 2014, deadline. The 
Board would note that planning for the changes in the information and 
communication technology (ICT) environment have been pursued under an
industry standard "sprint" process that discourages final 
specifications and standards and encourages the incremental 
development of ICT systems. This approach has resulted in successful 
implementation of changes in a timely manner, with significant cost 
savings to the agency. 

The Board would also note that formal avenues to obtain stakeholder 
input exist in regular interaction with, among other organizations: 
The Dunlop II Independent Joint Labor-Management Committee, the 
Section 3 working group, the Arbitrator Forum, Passenger Rail 
Conferences, Regional Airline Conferences, the National Association of 
Railroad Referees Conference, the American Law Institute-American Bar 
Association meeting, the Association for Conflict Resolution 
conference, the American Bar Association Labor and Employment Law
meeting, the Freight Rail Labor/Management Symposium, the Airlines for 
America (A4A) meeting, National Rail Labor Conference meetings, and an 
annual meeting with the Labor Relations Association of Passenger 
Railroads. We also plan to publish a draft strategic plan and solicit 
comments from stakeholders and Congress before finalizing the plan. 

Recommendation #2: Develop and include in its performance plan,
performance goals and measures that contain required elements to
demonstrate results. 

The new strategic plan will include performance goals and measures 
appropriate to the nature of the work done with parties in the airline 
and railroad industries, and in accordance with requirements of the 
Railway Labor Act. 

Recommendation #3: Develop and implement a formal mechanism to ensure
the prompt resolution of findings and recommendations by independent
auditors, including clearly assigning responsibility for this follow-
up to agency management. 

The agency will promptly develop and publish a plan for addressing 
audit findings, placing responsibility in the Chief of Staff. 

Recommendation #4: Develop and fully implement key components of an
information security program in accordance with FISMA. 

GAO suggested in its report that the agency was not properly managing 
and securing information systems and therefore was not Federal 
Information Security Management Act of 2002 (FISMA) compliant. GAO, 
however, failed to note in its report that the NMB is meeting its 
information security requirements through the Federal Risk and 
Authorization Management (FedRAMP). FedRAMP is an assessment process 
initiated by agencies or cloud service providers which is FISMA 
compliant and based on National Institute of Standards and Technology 
800-53, rev3. 

The agency is operating under draft policies and extensions of our 
previous information security policies while in the process of what we 
think is the first full conversion to cloud applications in the 
Federal government. In this process, we are beginning to create 
standards for security in a cloud environment. Our target goal is to 
be fully Fed RAMP compliant with all of our new systems by June of 
2014, with interim milestones of: (1) internal review and development 
of security action items (POAMS) throughout the remainder of calendar 
2013; (2) work with a third party auditor early in calendar 2014 to
review our security systems, culminating in; (3) submitting for 
FedRAMP approval in April or May of 2014. These actions are well 
within guidelines supplied and approved by FedRAMP, and therefore 
address FISMA and other requirements that GAO questioned. 

Recommendation #5: Establish a privacy program that includes conducting
privacy impact assessments and issuing a system of record notices for 
systems that contain personally identifiable information. 

The agency holds very little personally identifiable information (PH). 
The NMB has or is in the process of contracting with the Bureau of 
Public Debt (BPD) and the Department of Interior (001) to have 
virtually all documents with personally identifiable Information 
handled outside the agency and within the security boundaries 
established by the contractors. Additionally, the agency's use of 
USAJOBS to handle information related to job applicants further 
removes PH from the agency's control. When the transfer is complete to
001 and BPD, the NMB will review the contractors security systems and 
integrate them into a new information security plan for the NMB. 
Following these actions, in the unlikely event that the agency still 
finds it holds PH in its systems, an impact assessment and records
notice for any systems holding PH will be issued. 

Recommendation #6: Develop a strategic workforce plan that (1) involves
input from top management, employees, and other stakeholders; (2)
identifies critical skills and competencies needed by NMB; (3) 
identifies strategies, such as training, to address any gaps; and (4) 
provides for cost effective evaluations of these strategic workforce 
planning efforts. This plan should also address succession for the 
significant proportion of NMB staff and senior managers who are 
eligible to retire in the next few years. 

The Board Members and the Chief of Staff regularly review staffing and 
personnel issues, forecasting needs and planning for succession. With 
a total workforce of 51 individuals, most of whom work in single-
occupancy jobs, there is by necessity less ability to use internal 
workforce planning to manage succession. 

However, training, as a strategy for workforce development, has in the 
tenure of the current Chief of Staff been made a high priority. The 
approval of training funds has been centralized in the Chief of Staff, 
each employee has been required to develop an individual development 
plan (lOP), each department has been required to develop a departmental
training plan, and priorities have been set for training funds 
(remedial training as the highest priority when the need exists, with 
current career development and future career development as ongoing 
priorities). 

Due to innovative training programs and partnerships, no request for 
training has been refused during the past three fiscal years. In FY 
2013, agency staff attended 96 formal training events (this does not 
include informal training offered to mediators and others internally 
and by guests at mediator meetings and staff meetings). Of the 96 formal
training events, 34 (35%) were attended at no cost to the agency. 
Additionally, the agency has now developed standard mandatory 
mediation and negotiation training for incoming mediators, and has 
made attendance at dispute resolution conferences a routine part of
each mediator's IDP. 

Recommendation #7: In order to better inform its decisions about 
managing the rail grievance arbitration process, including addressing 
the backlog of cases, NMB should collect and analyze data on the types 
of grievances filed, and their disposition. NMB should use these data 
to improve the efficiency of the arbitration process and consider, as 
part of this effort, whether to establish fees for arbitration 
services. If NMB determines that the establishment of fees would 
improve the efficiency of the arbitration process, it should impose such
fees or seek legislative authority to do so, as necessary. 

For reference, the agency started planning for changes in the Section 
3 (arbitration) process in the early 2000's. Those changes have been 
implemented, largely within the past five years, and have resulted in 
an arbitration case load for which there is, essentially, no backlog. 
In fact, the NMB processed almost 4000 cases in FY 2012, and the 
number of cases pending at the end of FY 2012 as noted in NMB's annual 
report was the smallest number over the past five years. 

The NMB has data on the types of cases submitted by the National 
Railroad Adjustment Board (NRAB), based upon the categories they have 
established and use in their submissions. That information accounts 
for the vast majority of grievance arbitration cases, and is available 
on the NMB web site. We plan to collect Similar data for Public Law 
Boards (PLB) and System Boards of Adjustment (SBA), and the agency 
will make that information available on its web site when that process 
is complete. 

Fees for arbitration services were offered as one reform through a 
notice of proposed rulemaking and public comment process. Feedback 
from the parties generally indicated little enthusiasm for a fee 
structure, but we appreciate GAO's suggestion to continue considering 
that option. 

If you have any questions or if you require further discussion of any 
of the comments contained in this response, please have your staff 
contact the NMB Chief of Staff, Daniel Rainey, at rainey@nmb.gov or 
202-692-5015. 

Sincerely, 

Signed by: 

Linda Puchala, Chairman: 
Th National Mediation Board: 

Signed by: 

Nicholas Geale, Member: 
The National Mediation Board: 

Signed by: 

Harry Hoglander, Member: 
The National Mediation Board: 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Revae Moran, (202) 512-7215, moranr@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, Gretta Goodwin (Assistant 
Director), Rachael Chamberlin, Susan Aschoff, Alison Grantham, Shirley 
Abel, Alexander Galuten, Anjalique Lawrence, James Rebbe, Shaunyce 
Wallace, and Candice Wright made significant contributions to this 
report. In addition, key support was provided by Edward Alexander, 
Jr.; Elizabeth Curda; Benjamin Licht; Steven Lozano; and Walter Vance. 

[End of section] 

Footnotes: 

[1] Pub. L. No. 112-95, § 1004, 126 Stat. 11,147. FAA stands for the 
Federal Aviation Administration. The Act also required GAO to review 
the processes applied by NMB to certify and decertify representation 
of employees by labor organizations and the extent to which those 
processes are consistent with the processes of other agencies with 
jurisdiction over labor relations. See GAO, National Mediation Board 
Mandates in the FAA Modernization and Reform Act of 2012, GAO-12-835R 
(Washington, D.C.: June 27, 2012). 

[2] GAO, Standards for Internal Control in the Federal Government, 
GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999). 

[3] Specifically, we used GAO's prior work on strategic workforce 
planning to assess NMB's human capital practices. GAO, Human Capital: 
Key Principles for Effective Strategic Workforce Planning, GAO-04-39 
(Washington, D.C.: Dec. 11, 2003). To assess NMB's procurement 
function, we used GAO, Framework for Assessing the Acquisition 
Function at Federal Agencies, GAO-05-218G (Washington, D.C.: September 
2005). 

[4] 45 U.S.C. § 152, First. 

[5] 45 U.S.C. § 152, Third. 

[6] 45 U.S.C. §§ 152, Sixth, 153 and 155. 

[7] 45 U.S.C. §154, First. 

[8] 45 U.S.C. § 152, Fourth. We use the terms "carrier" and "employer" 
synonymously in this report. 

[9] 45 U.S.C. § 152, Ninth. NMB has stated that the RLA does not 
preclude an employer from voluntarily recognizing a union as the 
employee representative. See, e.g., Galveston Wharves, 4 NMB 200, 203 
(1962). If employees do not have representation and only one union is 
under consideration, NMB can certify the union if the parties agree in 
writing and upon presentation by the union of authorization cards 
signed by a majority of the represented employees. 

[10] Representation Election Procedure, 75 Fed. Reg. 26,062 (May 11, 
2010)(codified at 29 C.F.R. pts. 1202 and 1206). 

[11] One stakeholder group sued NMB to stop implementation of the 
rule. On December 16, 2011, the U.S. Court of Appeals for the District 
of Columbia affirmed a District Court decision which held that NMB had 
the authority to make the rule change and that it was consistent with 
the RLA. Air Transport Association of America, Inc. v. National 
Mediation Board, 663 F.3d 476 (2011). 

[12] The terms "major dispute" and "minor dispute" are not found in 
the RLA. Rather, NMB and federal courts have, over the years, used 
these terms, common in the history of railway labor issues, to 
differentiate types of disputes. As the Supreme Court defined these 
terms in 1945, major disputes "[relate] to disputes over the formation 
of collective agreements or efforts to secure them. They arise where 
there is no such agreement or where it is sought to change the terms 
of one…. They look to the acquisition of rights for the future, not to 
assertion of rights claimed to have vested in the past." Elgin, Joliet 
& Eastern Railway Co. v. Burley, 325 U.S. 711, 723 (1945). Minor 
disputes, on the other hand, "[relate] either to the meaning or proper 
application of a particular provision with reference to a specific 
situation..." Id. 

[13] Under the RLA, if a dispute between a carrier and its employees, 
in the judgment of NMB, threatens "substantially to interrupt 
interstate commerce to a degree such as to deprive any section of the 
country of essential transportation service," NMB shall notify the 
President, who may, in his discretion, create a board to investigate 
and report on the dispute. 45 U.S.C. § 160. Creation of an emergency 
board delays a strike, lockout, or other form of self help, generally 
for 60 days. The emergency board has 30 days to issue a report with 
recommendations for settling the dispute. The parties to the dispute 
have another 30-day period to consider the recommendations and reach 
an agreement. There are different Presidential Emergency Board 
provisions for publicly funded commuter railroads. 

[14] Unless it is otherwise clear from context, in this report, when 
we refer to arbitration, we are generally referring to grievance 
arbitration to resolve minor disputes, rather than interest 
arbitration, which can be used to resolve major disputes. 

[15] 45 U.S.C. § 153, First (i). The arbitration of unresolved minor 
disputes in the rail industry takes place before either the National 
Railroad Adjustment Board or adjustment boards established by the 
parties (rail carriers and unions), known as Public Law Boards or 
Special Boards of Adjustment. 45 U.S.C. § 153, First (i) and Second; 
29 C.F.R. § 1207.1. These adjustment boards generally are made up of 
an equal number of carrier and union representatives. The RLA gave NMB 
the power to create a National Air Transport Adjustment Board (45 
U.S.C. § 185), but it has not done so. Instead, in the airline 
industry, parties jointly create their own temporary special boards of 
adjustment, called System Boards, through collective bargaining 
agreements. 

[16] GPRA stands for the Government Performance and Results Act. Pub. 
L. No. 111-352, 124 Stat. 3866 (2011). 

[17] 5 U.S.C. § 1104(b)(2). 

[18] These reviews are conducted to determine how well an agency's 
human resources programs, operations, and use of personnel authorities 
contribute to accomplishment of the agency's mission and whether the 
actions taken comply with merit systems principles, laws, and 
regulations. Merit systems principles constitute the framework for 
federal human resources management. See, 5 U.S.C. § 2301. 

[19] GPRA required strategic plans to be updated at least every 3 
years. 

[20] Since 1993, GPRA has required executive agencies to complete 
strategic plans in which they define their missions, establish results-
oriented goals, and identify the strategies that will be needed to 
achieve those goals. The accompanying committee report noted that a 
multi-year strategic plan articulates the fundamental mission (or 
missions) of an organization, and lays out its long-term general goals 
for implementing that mission, including the resources needed to reach 
these goals. The clearer and more precise these goals are, the better 
able the organization will be to maintain a consistent sense of 
direction, regardless of leadership changes at the top. S. Rep. No. 
103-58, at 15 (1993). 

[21] GAO, Agencies' Strategic Plans Under GPRA: Key Questions to 
Facilitate Congressional Review, GAO/GGD-10.1.16 (Washington, D.C.: 
May 1997); and Executive Guide: Effectively Implementing the 
Government Performance and Results Act, GAO/GGD-96-118 (Washington, 
D.C.: June 1996). 

[22] At the request of Congress, we developed a guide in June 2012 to 
assist members of Congress and their staffs in ensuring that the 
consultations required by GPRAMA are useful for assessing agency 
performance. See GAO, Managing for Results: A Guide for Using the GPRA 
Modernization Act to Help Inform Congressional Decision Making, GAO-12-
621SP (Washington, D.C.: June 15, 2012). See also, GAO, Financial and 
Performance Management: More Reliable and Complete Information Needed 
to Address Federal Management and Fiscal Challenges, GAO-13-752T 
(Washington, D.C.: July 10, 2013). 

[23] GAO/GGD-96-118. 

[24] OMB defines a performance goal as a statement of the level of 
performance to be accomplished within a timeframe, expressed as a 
tangible, measurable objective or as a quantitative standard, value, 
or rate. For the purposes of this guidance and implementation of 
GPRAMA, a performance goal includes a performance indicator, a target, 
and a time period. GPRAMA requires performance goals to be expressed 
in an objective, quantifiable, and measurable form unless agencies, in 
consultation with OMB, determine that it is not feasible. In such 
cases an "alternative form" performance goal may be used. See OMB, 
Preparation and Submission of Strategic Plans, Annual Performance 
Plans, and Annual Program Performance Reports, OMB Circular No. A-11, 
Part 6 (August 2012). 

[25] Prior to July 2013, NMB had not made current and past 
congressional budget submission documents, which contain detailed 
performance and budget information, available on the agency's website. 
Since fiscal year 2008, OMB has required agencies to make their budget 
justification materials, including performance plans, available to the 
public by posting materials on the Internet within 2 weeks after they 
are transmitted to Congress. In July 2013, during the course of our 
review, NMB posted these materials on the agency's website for the 
first time. 

[26] GAO/GGD-96-118. 

[27] In the past, NMB included time-based targets in its performance 
reporting. For example, NMB's fiscal year 2005 Performance and 
Accountability Report contained the following performance goals for 
mediation: (1) mediation applications will be responded to within 3 
business days; (2) a mediator will be assigned within 10 calendar days 
following docketing of all mediation cases; and (3) the mediator and 
board will endeavor to assist the parties in reaching an agreement 
within 12 months (365 days) of an application. In 2007, independent 
auditors noted that NMB's Office of Mediation was not achieving its 
performance goals. In response, the Director of the Office of 
Mediation stated that NMB was no longer using those time-based goals. 
NMB officials told us that it is difficult to develop measurable 
performance goals for mediation services because there are many 
factors outside the agency's control, such as the parties' willingness 
to enter into an agreement. 

[28] Key practices have been identified in prior GAO work such as GAO, 
Executive Guide: Creating Value Through World-class Financial 
Management, GAO/AIMD-00-134 (Washington, D.C.: April 2000), or in OMB 
guidelines. 

[29] We obtained the nine most recent annual financial statement 
reports NMB could provide. In all 9 years, NMB received unqualified 
audit opinions. We did not independently assess these audits. 

[30] Auditors also report annually on NMB's compliance with laws and 
regulations over financial reporting and have found no instances of 
material or immaterial noncompliance in the last 9 years. 

[31] Under standards issued by the American Institute of Certified 
Public Accountants, control deficiencies exist when the design or 
operation of a control does not allow management or employees to 
prevent or detect misstatements on a timely basis. A significant 
deficiency is one that adversely affects an agency's ability to 
reliably initiate, authorize, record, process, or report financial 
data in accordance with generally accepted accounting principles. A 
material weakness is a significant deficiency, or combination of 
significant deficiencies, that could result in a material misstatement 
in financial statements. Because of inherent limitations in internal 
controls, misstatements, losses, or noncompliance may nevertheless 
occur and not be detected. 

[32] The auditors also identified a significant deficiency in fiscal 
year 2008 in NMB's internal controls over financial reporting related 
to a different issue--ensuring that transactions are properly 
recorded, processed, and summarized. 

[33] NMB officials told us that ADR will no longer be reviewed 
separately; it will be reviewed as part of the review of mediation 
services. 

[34] 31 U.S.C. § 3512(c), (d). 

[35] OMB Circular No. A-123, Management's Responsibility for Internal 
Control (rev. Dec. 21, 2004). 

[36] When asked, NMB officials responded that the agency did not 
submit a management response to the recommendations in this review 
because NMB did not agree with the findings. In addition, they noted 
that they were occupied with addressing the material weakness 
identified in the financial statement audit previously discussed. 

[37] During NMB's financial statement audit, auditors noted certain 
matters involving internal control and NMB's operations that warranted 
management's attention. The auditors issued a management letter to NMB 
discussing all nonreportable conditions involving NMB's operations. 
NMB officials told us that they were not able to submit management 
responses, given other year-end tasks. 

[38] We have reported that agency management should be responsive to 
the findings and recommendations of audits and other reviews aimed at 
strengthening internal control. See GAO, Internal Control Management 
and Evaluation Tool, GAO-01-1008G (Washington, D.C.: August 2001). OMB 
has also issued guidance to agencies in its Circular A-50 specifying 
the role of the designated audit follow-up officials and emphasizing 
the importance of monitoring the implementation of resolved audit 
recommendations in order to assure promised corrective action is 
actually taken. 

[39] NMB officials said there are some cases when the agency has asked 
auditors for interim guidance on processes or operations. Although 
this is outside the auditors' contractual duties, NMB officials have 
met with the independent auditors before the implementation of 
initiatives to ensure the initiatives would address audit 
recommendations. 

[40] In their 2008-2009 report on NMB internal controls over personnel 
and payroll, auditors found NMB had not yet developed and implemented 
policies and procedures to address the accuracy and timely submission 
of personnel/payroll data provided by General Services Administration 
staff. The report noted that this was a repeat finding. 

[41] NMB was unable to provide a copy of the fiscal year 2009 
management letter. 

[42] According to NMB officials, the change in financial systems 
occurred because the system would no longer be supported. 

[43] FISMA was enacted as title III, E-Government Act of 2002, Pub. L. 
No. 107-347, 116 Stat. 2899, 2946. 

[44] These practices include (1) periodic assessments of risk; (2) 
policies and procedures based on assessments of risk; (3) subordinate 
plans for providing adequate information security; (4) security 
awareness training for employees and contractors; (5) periodic testing 
and evaluation of information security policies, procedures, and 
agency practices; (6) process for planning, implementing, evaluating, 
and documenting remedial actions to address known security 
deficiencies; (7) procedures for detecting, reporting, and responding 
to security incidents; and (8) plans and procedures to ensure 
continuity of operations for information systems that support the 
operation and assets of the agency. 

[45] OMB, Implementation of Commonly Accepted Security Configurations 
for Windows Operating Systems, M-7-11 (March 22, 2007). 

[46] See 5 U.S.C. § 552a and Pub. L. No. 107-347, § 208, 116 Stat. 
2899, 2921. The terms personal information and personally identifiable 
information are used interchangeably in this report to refer to any 
information about an individual maintained by an agency, including (1) 
any information that can be used to distinguish or trace an 
individual's identity, such as name, Social Security number, date and 
place of birth, mother's maiden name, or biometric records, and (2) 
any other information that is linked or linkable to an individual, 
such as medical, educational, financial, and employment information. 

[47] Previously, NMB's mediators were working from their homes as 
directed by agency officials at NMB's headquarters in Washington, D.C. 
The rail and air joint committees were formed following the 1994 
report from the Commission on the Future of Worker-Management 
Relations. The joint committees made a number of additional 
recommendations regarding mediation. NMB also created senior mediator 
positions to supervise and help improve oversight of mediators. 
However, effective June 2013, senior mediators no longer have 
supervisory duties, and all mediators report directly to the Director 
of Mediation and ADR Services. NMB officials told us they made this 
change to facilitate more direct involvement in mediation case 
management on the part of board members and the Chief of Staff. In 
addition, officials noted that the Director of Mediation and ADR 
Services retired, effective September 2013. As a result of his 
departure, mediators will temporarily report directly to the Chief of 
Staff. 

[48] GAO/AIMD-00-21.3.1. 

[49] GAO, Human Capital: Key Principles for Effective Strategic 
Workforce Planning, GAO-04-39 (Washington, D.C.: Dec.11, 2003). 

[50] OPM noted in its 2007 evaluation that NMB did not have a formal 
approach to workforce planning. OPM found that while NMB collected 
some workforce data, it did not analyze the data in such a way as to 
identify the human capital needed to meet organizational goals, 
develop strategies to identify workforce competency gaps, or ensure 
appropriate organizational structure. OPM made three recommendations 
regarding workforce planning. According to OPM officials, its 
recommendations to agencies are suggestions to improve human capital 
management, and agencies are not required to take action. OPM 
considered its evaluation of NMB to be closed as of August 2008. 

[51] The Director of the Office of Mediation and ADR Services told us 
that about 60 percent of NMB's mediation cases are in the rail 
industry, in part because recent airline mergers and consolidations 
have reduced the number of separate airline mediation cases. 

[52] In its 2007 evaluation, OPM found NMB had not conducted a 
leadership competency gap analysis or succession planning. OPM also 
found NMB did not offer or make available leadership programs. 
Interviews OPM held with NMB staff at all levels confirmed that there 
is no formal succession plan in place for managers, supervisors, or 
staff. 

[53] A joint rail and air labor-management committee, the Dunlop II 
Committee, recommended in a December 2009 report that NMB reestablish 
the Chief of Staff position in order to improve NMB's cohesion and 
effectiveness. 

[54] Specifically, OPM noted that the training provided by NMB, which 
may be limited due to budgetary constraints, is not linked to 
succession planning. In addition, NMB did not have data to assess 
whether its training and development initiatives and strategies 
support mission-critical competencies, or whether the return on 
investments in training yields positive results toward mission 
accomplishment. OPM recommended that NMB collect and analyze such 
data. OPM also found that NMB lacked a process to evaluate the 
effectiveness and impact of training provided, and stated that NMB 
should identify and assess training needs annually and evaluate 
training to determine how well it meets short-and long-range program 
needs. 

[55] OPM, 2012 Federal Employee Viewpoint Survey: National Mediation 
Board Small Agency Management Report (Washington, D.C.). The annual 
Federal Employee Viewpoint Survey developed by OPM measures employees' 
perceptions of whether, and to what extent, conditions characterizing 
successful organizations are present in their agencies. We provided 
data from other small agencies to provide context, but it is difficult 
to compare NMB data to data from all other small agencies combined 
because of the small sample size at NMB. 

[56] GAO, Framework for Assessing the Acquisition Function at Federal 
Agencies, GAO-05-218G (Washington, D.C.: September 2005). 

[57] GAO-05-218G. 

[58] Under the federal government's 25 Point Implementation Plan to 
Reform Federal Information Technology Management and OMB Memorandum M-
11-29, agency Chief Information Officers' (CIO) roles should change to 
move away from just policymaking and infrastructure maintenance to 
encompass true portfolio management for all information technology. 
Agency CIOs must be positioned with these responsibilities and 
authorities to improve the operating efficiency of their agencies. 
CIOs must drive the investment review process for information 
technology investments and have responsibility over the agency's 
entire information technology portfolio. 

[59] Specifically, Executive Order 13589: Promoting Efficient Spending 
(November 9, 2011) states: "Each agency should take steps to limit the 
number of IT devices (e.g., mobile phones, smartphones, desktop and 
laptop computers, and tablet personal computers) issued to employees, 
consistent with the Telework Enhancement Act of 2010 (Pub. L. No. 111-
292, 124 Stat. 3165), operational requirements (including continuity 
of operations), and initiatives designed to create efficiency through 
the effective implementation of technology." In addition, NMB's Bring 
Your Own Device Policy, effective July 2013, notes the benefits of 
allowing employees to use their own information technology devices, 
including the ability to carry just one device for personal and work 
use, and potential cost savings to the agency. 

[60] As of July 2013, NMB had issued 48 of the 55 laptops and 21 of 
the 25 iPads to staff. In August 2013, officials told us that the new 
board member would receive a laptop, iPad, and smartphone. NMB 
officials also told us they purchased an additional smartphone for a 
contractor. 

[61] According to NMB's Procurement Cycle Contracting Procedures, the 
department director requesting the purchase should prepare a statement 
of work outlining the requirements, and then meet with the Director of 
the Office of Administration and the Contracting Official to discuss 
the requirements. 

[62] NMB's Procurement Cycle Contracting Procedures require the 
Director of the Office of Administration and/or the Contracting 
Official to determine the appropriate contracting vehicle. If the 
General Services Administration schedule is used, NMB's Contracting 
Official should solicit three cost proposals and review the proposals 
with a subject matter expert. If there is no vendor identified on the 
schedule, NMB will do full and open competition by placing a statement 
of work on FedBizOpps. FedBizOpps is the government website used to 
announce the government's needs and intent to enter into a contract 
for goods or services. 

[63] Federal Acquisition Regulation § 13.106-3(b)(3)(i). 

[64] GAO/AIMD-00-21.3.1. 

[65] According to 5 C.F.R. § 250.203(a)(3), agencies' annual human 
capital management reports, provided to OPM, must provide an 
evaluation of and report on the agency's existing human capital 
management policies, programs, and operations, as they relate to the 
agency's overall mission/program performance. The report must address 
the performance measures and milestones contained in the agency human 
capital plan, including compliance measures with respect to relevant 
laws, rules, and regulations. The report must also document actions 
taken to correct any violations or deficiencies that are identified. 

[66] The Inspector General Act, as amended, established Offices of 
Inspector General to serve as independent, objective offices within 
certain federal departments and entities to promote economy, 
efficiency, and effectiveness as well as prevent or detect fraud and 
abuse. Neither this law nor any other law created an IG for NMB. 

[67] There have been other efforts to provide NMB with IG services. 
NMB officials approached FLRA about sharing their IG, and a bill 
currently pending before the House of Representatives would require 
FLRA's IG to supervise, direct, and control audit and investigative 
activities (relating to such audits) pertaining to programs and 
operations within NMB. Inspector General Improvement Act of 2013, H.R. 
314, 113th Cong. § 2(e) (2013) 

[68] Congress appropriated another $500,000 in fiscal year 2000, but 
this was provided specifically to raise NMB's arbitrators' daily rate 
from $220 to $300, where it currently stands. 

[69] Data provided by the Federal Mediation & Conciliation Service 
show private arbitration costs of nearly $5,000 per case, on average, 
in fiscal year 2012, including the arbitrator's per-diem fees and 
expenses. NMB officials estimated their average cost per case at $600 
(per diem and expenses only). 

[70] Administration of Arbitration Programs, 69 Fed. Reg. 48,177 
(August 9, 2004)(to be codified at 29 C.F.R. pt. 1210). 

[71] NMB's General Counsel said representation cases involve not only 
elections but also include other representation activities such as 
referrals from NLRB, interference investigations, and others. 

[72] NMB officials said if they find a violation of election rules, 
the election of a union may still stand, but NMB may shorten the 2-
year timeframe before another election can be held. 

[73] Representation Election Procedure, 75 Fed. Reg. 26,062 (May 11, 
2010) (codified at 29 C.F.R. pts. 1202 and 1206). 

[74] NMB reported that nearly 98 percent of the comments received in 
response to the notice of proposed rulemaking were: (1) very general 
statements; (2) personal anecdotes of experience or participation in 
NMB's election procedures; or (3) identical or nearly identical ''form 
letters'' or ''postcards'' sponsored by various constituent groups. 

[75] The rulemaking occurred as Delta and Northwest airlines were in 
merger discussions, and some stakeholders viewed its timing as a 
politicized effort to ensure unions would survive the merger. 

[76] Representation Procedures and Rulemaking Authority, 77 Fed. Reg. 
75,543 (Dec. 21, 2012)(to be codified at 29 C.F.R. pt. 1206). 

[77] Pub. L. No. 112-95, 126 Stat. 11. 

[78] Id. § 1003, 126 Stat. 147. 

[79] NMB determined in the 2012 rule that the Act's 50 percent 
requirement did apply to merger-related elections. 77 Fed. Reg. 
75,543, 75,544. 

[80] Based on experience in examining a wide range of government 
programs, we have found that effective performance of specific 
management functions--strategic planning, budget formation and 
execution, organizational alignment and control, performance 
measurement, human capital strategies, financial management, 
information technology, and acquisition--are key to creating and 
sustaining high-performing organizations. See GAO, Determining 
Performance and Accountability Challenges and High Risks, GAO-01-159SP 
(Washington, D.C.: November 2000). 

[81] GAO, Agencies' Strategic Plans under GPRA: Key Questions to 
Facilitate Congressional Review. GAO/GGD-10.1.16 (Washington, D.C.: 
May 1, 1997). 

[82] GAO, Standards for Internal Control in the Federal Government, 
GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999). 

[83] For the purposes of this report, we focused mainly on GPRA and 
GPRAMA requirements related to federal agencies' strategic planning 
process, such as required timeframes, leadership roles, and 
performance planning. We assessed NMB's current strategic plan, annual 
performance plan, and annual performance report against federal 
requirements, but did not report on each of these requirements. 

[84] GAO, Internal Control Management and Evaluation Tool, GAO-01-
1008G (Washington, D.C.: August 2001); Executive Guide: Effectively 
Implementing the Government Performance and Results Act, GAO/GGD-96-
118 (Washington, D.C.: June 1996); GAO/GGD-10.1.16; The Results Act: 
An Evaluator's Guide to Assessing Agency Annual Performance Plans, 
GAO/GGD-10.1.20 (Washington, D.C.: April 1998); and Managing for 
Results: Enhancing Agency Use of Performance Information for 
Management Decision Making, GAO-05-927 (Washington, D.C.: Sept. 9, 
2005). 

[85] NMB was unable to provide a copy of the fiscal year 2009 
management letter. 

[86] OPM's Federal Employee Viewpoint Survey is a tool that measures 
employees' perceptions of whether, and to what extent, conditions 
characterizing successful organizations are present in their agencies. 
To assess the reliability of the survey data, we interviewed 
knowledgeable OPM officials and reviewed data reliability assessments 
performed in prior GAO work. 

[87] GAO, Human Capital: Key Principles for Effective Strategic 
Workforce Planning, GAO-04-39 (Washington, D.C.: Dec.11, 2003). 

[88] GAO, Framework for Assessing the Acquisition Function at Federal 
Agencies, GAO-05-218G (Washington, D.C.: Sept. 1, 2005). 

[End of section] 

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