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Report to Congressional Requesters: 

June 2004: 

HUMAN CAPITAL: 

DHS Faces Challenges In Implementing Its New Personnel System: 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-790]: 

GAO Highlights: 

Highlights of GAO-04-790, a report to congressional requesters 

Why GAO Did This Study: 

DHS was provided with significant flexibility to design a modern human 
capital management system. Its proposed system has both precedent-
setting implications for the executive branch and far-reaching 
implications on how the department is managed. GAO reported in 
September 2003 that the effort to design the system was collaborative 
and consistent with positive elements of transformation. In February, 
March, and April 2004 we provided preliminary observations on the 
proposed human capital regulations. 

Congressional requesters asked GAO to describe the infrastructure 
necessary for strategic human capital management and to assess the 
degree to which DHS has that infrastructure in place, which includes 
an analysis of the progress DHS has made in implementing the 
recommendations from our September 2003 report. 

DHS generally agreed with the findings of our report and provided more 
current information that we incorporated. However, DHS was concerned 
about our use of results from a governmentwide survey gathered prior to 
the formation of the department. We use this data because it is the 
most current information available on the perceptions of employees 
currently in DHS and helps to illustrate the challenges facing DHS.

What GAO Found: 

To date, DHS’s actions in designing its human capital management system 
and its stated plans for future work on the system are helping to 
position the department for successful implementation. Nonetheless, 
the department is in the early stages of developing the infrastructure 
needed for implementing its new human capital management system. 

* DHS has begun strategic human capital planning efforts at the 
headquarters level since the release of the department’s overall 
strategic plan and the publication of proposed regulations for its new 
human capital management system. Strategic human capital planning 
efforts can enable DHS to remain aware of and be prepared for current 
and future needs as an organization. However, this will be more 
difficult because DHS has not yet been systematic or consistent in 
gathering relevant data on the successes or shortcomings of legacy 
component human capital approaches or current and future workforce 
challenges. Efforts are now under way to collect detailed human capital 
information and design a centralized information system so that such 
data can be gathered and reported at the departmentwide level. 

* DHS and Office of Personnel Management leaders have consistently 
underscored their personal commitment to the design process. Continued 
leadership is necessary to marshal the capabilities required for the 
successful implementation of the department’s new human capital 
management system. Sustained and committed leadership is required on 
multiple levels: securing appropriate resources for the design, 
implementation, and evaluation of the human capital management system; 
communicating with employees and their representatives about the new 
system and providing opportunities for feedback; training employees on 
the details of the new system; and continuing opportunities for 
employees and their representatives to participate in the design and 
implementation of the system. 

* In its proposed regulations, DHS outlines its intention to implement 
key safeguards. For example, the DHS performance management system must 
comply with the merit system principles and avoid prohibited personnel 
practices; provide a means for employee involvement in the design and 
implementation of the system; and overall, be fair, credible, and 
transparent. The department also plans to align individual performance 
management with organizational goals and provide for reasonableness 
reviews of performance management decisions through its Performance 
Review Boards. 

www.gao.gov/cgi-bin/getrpt?GAO-04-790.

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact J. Christopher Mihm at 
(202) 512-6806 or mihmj@gao.gov.

[End of section]

Contents: 

Letter: 

Results In Brief: 

Background: 

DHS Is Beginning Strategic Human Capital Planning Efforts: 

Continued Leadership Is Necessary to Marshal the Capabilities Required 
for Successful Implementation: 

DHS Proposes Implementing Key Safeguards: 

Conclusions: 

Agency Comments and Our Evaluation: 

Appendixes: 

Appendix I: Scope and Methodology: 

Scope: 

Methodology: 

Appendix II: Criteria Used for Evaluation: 

Strategic Human Capital Planning: 

Key Capabilities for Implementing Human Capital Approaches: 

Institutionalizing Performance Management Safeguards: 

Appendix III: Comments from the Department of Homeland Security: 

Appendix IV: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Acknowledgments: 

Figure: 

Figure 1: The Development of the DHS Human Capital System: 

Letter June 18, 2004: 

The Honorable George V. Voinovich: 
Chairman, Subcommittee on Oversight of Government Management, the 
Federal Workforce, and the District of Columbia: 
Committee on Governmental Affairs: 
United States Senate: 

The Honorable Jo Ann Davis: 
Chairwoman, Subcommittee on Civil Service and Agency Organization: 
Committee on Government Reform: 
United States House of Representatives: 

The creation of the Department of Homeland Security (DHS) is an 
historic opportunity for the federal government to fundamentally 
transform how the nation will protect itself from terrorism and other 
threats. DHS is in the early stages of transforming and integrating a 
disparate group of agencies with multiple missions, values, and 
cultures into a strong and effective cabinet department. Together with 
this unique opportunity, however, comes significant risk to the nation 
if this transformation is not implemented successfully. In fact, we 
designated this implementation and transformation as high risk in 
January 2003.[Footnote 1]

On February 20, 2004, the Secretary of DHS and the Director of the 
Office of Personnel Management (OPM) released proposed regulations for 
DHS's new human capital system. Among other things, the proposal 
establishes a pay for performance system, a new adverse actions and 
appeals process, and new labor relations rules. The regulations 
provided the broad outline of the DHS proposed system. As the system 
evolves, critical issues, such as how DHS will link individual 
performance expectations to DHS's mission and goals, how it will define 
performance expectations to promote individual accountability, and how 
it will continue to incorporate adequate safeguards to ensure fairness, 
will need to be addressed. Such detailed implementation policies and 
procedures will need to be developed in a transparent and inclusive 
manner as the system evolves.

In light of the challenge to establish a modern strategic human capital 
management system in the department, you asked that we undertake a 
series of engagements to assess and assist DHS in its implementation 
efforts. As agreed with your office, this is the third of several 
studies in which we examine how DHS begins to implement its new human 
capital system. Our first report, issued in September 2003, described 
the process DHS put in place to design its human capital system and 
involve employees and analyzed the extent to which the process 
reflected what we found to be important elements of successful 
transformations.[Footnote 2] We found that, to date, the design effort 
was collaborative and facilitated participation of employees from all 
levels of the department. The effort also generally reflected what we 
have found to be important elements of effective transformations. 
Second, we provided our preliminary observations on selected major 
provisions of the proposed human capital regulations in a testimony and 
two related items of correspondence providing answers to post-hearing 
questions.[Footnote 3] We found that many of the basic principles 
underlying the proposed regulations were consistent with proven 
approaches to strategic human capital management, and identified parts 
of the system that deserved further consideration.

As agreed with your offices, this third study describes the 
infrastructure necessary for strategic human capital management and 
assesses the degree to which DHS has that infrastructure in place, 
including progress DHS has made since our September 2003 report. More 
details on our scope and methodology can be found in appendix I and 
criteria used to evaluate the department's efforts are summarized in 
appendix II. We interviewed officials from DHS headquarters who are 
involved in designing the new human capital system. Human resource 
leaders from the five largest legacy components within DHS were also 
interviewed: the Transportation Security Administration (TSA), Federal 
Emergency Management Agency (FEMA), the organizations formerly known as 
the Immigration and Naturalization Service (INS) and the U.S. Customs 
Service (Customs), and the U.S. Coast Guard. This work was conducted 
from March 2003 through March 2004 in Washington, D.C., and in 
accordance with generally accepted government auditing standards.

The analysis of DHS's effort to design a strategic human capital 
management system can be particularly instructive for future human 
capital management and integration initiatives within specific units of 
DHS. We have consistently supported the need for government 
transformation and the concept of modernizing federal human capital 
policies, as underscored in recent testimonies and our January 2003 
report that described why strategic human capital management remains a 
governmentwide high-risk area.[Footnote 4] The DHS effort can also 
prove instructive as other agencies implement changes to their human 
capital management systems.

Results In Brief: 

DHS is in the early stages of developing the infrastructure needed for 
implementing its new human capital management system. At a minimum, 
this infrastructure includes a strategic human capital planning process 
that integrates the agency's human capital approaches with program 
goals, desired outcomes, and mission; the capabilities to effectively 
develop and implement a new human capital system; and a modern, 
effective, and credible performance management system that includes a 
set of institutional safeguards, including reasonable transparency and 
appropriate accountability mechanisms to ensure the fair, effective, 
and credible implementation of the new system. DHS's infrastructure 
development efforts include the following: 

* DHS has begun strategic human capital planning efforts at the 
headquarters level since the release of the department's overall 
strategic plan and the publication of proposed regulations for its new 
human capital management system. In comparison, the five legacy 
agencies we studied each engage in strategic human capital planning 
activities, but their efforts vary in their level of detail, including 
the time frames covered by the plans and the degree to which future 
skill and competency needs are identified. DHS has not yet 
systematically gathered relevant human capital data at the headquarters 
level. However, efforts are now under way to collect detailed human 
capital information and design a centralized information system so that 
such data can be gathered and reported at the departmentwide level. 
These strategic human capital planning efforts can enable DHS to remain 
aware of and be prepared for current and future needs as an 
organization.

* DHS and OPM leaders have consistently underscored their personal 
commitment to the design process. Sustained and committed leadership is 
required on multiple levels: securing appropriate resources for the 
design, implementation, and evaluation of the human capital management 
system; communicating with employees and their representatives about 
the new system and providing opportunities for feedback; training 
employees on the details of the new system; and continuing 
opportunities for employees and their representatives to participate in 
the design and implementation of the system. In light of this 
challenge, DHS formed three teams to implement the human capital 
regulations, each of which are co-led by professional staff from DHS 
headquarters and a component agency.

* In its proposed regulations, DHS outlines its intention to implement 
key safeguards. For example, the DHS performance management system must 
comply with the merit system principles and avoid prohibited personnel 
practices; provide a means for employee involvement in the design and 
implementation of the system; and overall, be fair, credible, and 
transparent. The department also plans to align individual performance 
management with organizational goals and provide for reasonableness 
reviews of performance management decisions through its Performance 
Review Boards.

The proposed DHS human capital management system has both significant 
precedent-setting implications for the executive branch and far-
reaching implications for how the department is managed. However, how 
it is done, when it is done, and the basis on which it is done can make 
all the difference in whether such efforts are successful. To date, 
DHS's actions in designing its human capital management system and its 
stated plans for future work on the system are helping to position the 
department for successful implementation.

In commenting on a draft of this report, DHS generally agreed with its 
findings. DHS comments provided more current information on 
implementation timelines and described further research conducted by 
the design teams between April and September 2003, which we have 
incorporated. In addition, DHS raised concerns about our use of data 
from the OPM governmentwide Federal Human Capital Survey (FHCS) since 
the survey was administered before the formation of DHS. Since the 
administration of the survey, DHS notes a significant amount of change 
has been made in the department. We agree that the department is making 
progress in designing its human capital system and outline in this 
report where the department is making strides. This report notes that 
the FHCS was conducted during the same time frame that the 
administration proposed legislation to form DHS. FHCS data are the most 
current information available on the perceptions of employees currently 
employed by DHS and are valuable because of their illustration of the 
challenges the department faces. DHS provided additional technical 
comments, which were incorporated where appropriate. Comments from DHS 
are provided in full in appendix III.

Background: 

Mission and Organization of DHS: 

The DHS strategic plan, released on February 23, 2004, includes the 
following mission statement: "We will lead the unified national effort 
to secure America. We will prevent and deter terrorist attacks and 
protect against and respond to threats and hazards to the nation. We 
will ensure safe and secure borders, welcome lawful immigrants and 
visitors, and promote the free-flow of commerce." The strategic plan 
further identifies seven strategic goals: awareness, prevention, 
protection, response, recovery, service, and organizational 
excellence.

DHS is generally organized into four mission-related directorates: 
Border and Transportation Security, Emergency Preparedness and 
Response, Science and Technology, and Information Analysis and 
Infrastructure Protection. These directorates include the following 
legacy agencies: 

* The Border and Transportation Security directorate consolidates the 
major border security and transportation operations under one roof, 
including legacy Customs, parts of the legacy INS, TSA, the Federal Law 
Enforcement Training Center, the Federal Protective Service, the Office 
for Domestic Preparedness from the Department of Justice (DOJ), and 
part of the U.S. Department of Agriculture's Animal and Plant Health 
Inspection Service (APHIS). This directorate includes the newly formed 
Bureau of Immigration and Customs Enforcement (ICE) and the Bureau of 
Customs and Border Protection (CBP).

* The Emergency Preparedness and Response (EPR) directorate integrates 
domestic disaster preparedness training and government disaster 
response and includes FEMA, the Strategic National Stockpile, the 
National Disaster Medical System, the Nuclear Incident Response Team, 
the Domestic Emergency Support Teams from DOJ, and the National 
Domestic Preparedness Office from the Federal Bureau of Investigation 
(FBI).

* The Science and Technology directorate coordinates scientific and 
technological advantages for securing the homeland and includes the 
Chemical, Biological, Radiological, and Nuclear Countermeasures 
Programs, the Environmental Measurements Laboratory, the National Bio-
Weapons Defense Analysis Center, and the Plum Island Animal Disease 
Center.

* The Information Analysis and Infrastructure Protection directorate 
accesses and analyzes intelligence, law enforcement data, and other 
information involving threats to homeland security and evaluates 
vulnerabilities from state and local agencies, the private sector, and 
federal agencies such as the Central Intelligence Agency, FBI, and the 
National Security Agency. It includes the Critical Infrastructure 
Assurance Office, the Federal Computer Incident Response Center, the 
National Communications System, the National Infrastructure Protection 
Center, and the energy security and assurance program activities of the 
Department of Energy.

* In addition to the mission directorates, the Management Directorate, 
led by the Undersecretary for Management, is responsible for 
integrating the activities of the Chief Financial Officer, the Chief 
Procurement Officer, the Chief Human Capital Officer, the Chief 
Information Officer, and the Chief of Administrative Services.

In addition to the four mission-related directorates, the U.S. Secret 
Service and the U.S. Coast Guard remain intact as distinct entities in 
DHS. The Bureau of Citizenship and Immigration Services, composed of 
legacy INS adjudications and benefits programs, reports to the Deputy 
Secretary.

DHS's People: 

DHS has just under 158,000 civilian employees.[Footnote 5] Of the 
civilian employees, a vast majority transferred from seven 
organizations: TSA, INS, Customs, FEMA, the U.S. Coast Guard, the 
Secret Service, and APHIS. Of the civilian employees who transferred 
from these seven organizations, approximately 90 percent are stationed 
outside the Washington, D.C. metropolitan area. These employees hold 
positions ranging from inspectors, investigators, police and 
intelligence to attorneys and administrative services.

According to OPM, just over 49,000, or just under one-third, of DHS 
civilian employees are represented by unions. This includes 16 
different unions divided into 75 separate bargaining units. The 3 
unions representing the largest number of employees are the American 
Federation of Government Employees, the National Treasury Employees 
Union, and the National Association of Agricultural Employees.

Process Used to Design the Human Capital System: 

The design process of the DHS human capital management system included 
DHS and OPM employees and union representatives. Figure 1 describes the 
development of the DHS human capital system.

Figure 1: The Development of the DHS Human Capital System: 

[See PDF for image] 

[End of figure] 

DHS Is Beginning Strategic Human Capital Planning Efforts: 

Using the department's strategic plan as a starting point, DHS recently 
began drafting a strategic human capital plan and a more detailed 
workforce plan for the department. One of the goals of the strategic 
plan, organizational excellence, makes it a priority for the agency to 
value its people and create a culture that promotes a common identity, 
innovation, mutual respect, trust, accountability, and teamwork. To 
support the accomplishment of this goal, the department has an 
objective focused on ensuring effective recruitment, development, 
compensation, succession management, and leadership of a diverse 
workforce to provide optimal service at a responsible cost. While the 
plan broadly states a few strategies that could be used to achieve this 
objective, it does not identify the skills needed, resources required, 
or timetables associated with the strategies. Additional programmatic 
objectives within the strategic plan will require human capital 
approaches to ensure they are realized.

The Director for Human Resources Policy and the Senior Advisor for 
Human Resources Policy said that the strategic human capital plan will 
be completed later this spring and will include goals for transforming 
the human capital management of the department over the next 5 years. 
These same officials report that this will be a "living document" and 
expect that revisions will be made as they learn more about the human 
capital needs across the department.

Below the headquarters level, strategic human capital planning of 
different levels of detail is being done in the five legacy components 
we studied. These plans vary in terms of the time frame covered by the 
plan and the degree to which future skill and competency needs are 
identified.

* In July 2003, FEMA/EPR released a 5-year strategic human capital plan 
that identified the challenges it faces, improvement initiatives, and 
outcome measures for the initiatives. A timeline and the unit 
responsible for implementation are also identified. Part of FEMA's 
"Model for Success" articulates the need to identify strategic 
competencies. The plan states that FEMA intends to integrate its 
competency management system with future workforce planning efforts. 
According to agency officials, FEMA was invited to present its 
Competency Assessment System to the DHS Human Capital Management Forum 
and OPM.

* Customs/CBP workforce planning efforts are currently short-term and 
tactical in nature. The component does not have a consolidated plan 
that identifies human capital needs or strategies and the planning 
horizon is less than 1 year in duration. Instead, CBP informally sets 
annual targets for various human capital activities that are 
articulated in various agency meetings and memoranda. Progress towards 
the targets is tracked in a biweekly report that includes information 
such as changes in staffing levels, retirement eligibilities, and the 
gender breakdown of the workforce.

* INS/ICE officials reported that they used workforce plans to respond 
to Congressional mandates in managing large-scale recruiting and 
retention efforts, beginning in 1996. It released a 3-year plan in June 
1996 to manage this growth, placing a priority on deployment, 
recruiting, hiring, and training strategies. Since the original release 
of the plan, it has been updated annually through individual memoranda 
and charts reflecting current human capital data. According to an 
agency official, the component is working with a contractor to identify 
a baseline understanding of workforce demographics and skills and 
determine future workforce requirements.

* TSA hired a consultant in September 2003 to conduct a study of 
screener staffing levels at the nation's commercial airports in an 
effort to right-size and stabilize its screener workforce. Among the 
tasks the contractor is to complete are the implementation of a 
staffing analysis model to be used as a management tool to determine 
daily and weekly staffing levels and the deployment of the model to 
commercial airports nationwide.

* The Coast Guard has a 5-year strategic human capital plan covering 
the period 2001 to 2005 that integrates approaches for managing 
military, civilian, and reserve employees. Identified within the plan 
are current challenges and desired characteristics for the workforce of 
the future. Strategies are adjusted annually and the objectives and 
approaches are continuously evaluated for their impact so that 
midcourse corrections can be made if necessary, according to an agency 
official. The Coast Guard plans to do a major update of its plan once 
the department's human capital system is completed.

DHS headquarters has not yet been systematic or consistent in gathering 
relevant data on the successes or shortcomings of legacy component 
human capital approaches or current and future workforce challenges, 
despite the potential usefulness of this information to strategic human 
capital planning activities. Efforts are now under way to gather such 
data. During the design process, from April through September 2003, the 
subgroups that identified options for the human capital system gathered 
an extensive amount of research on innovative practices outside of DHS 
and basic demographic data on employees in the department. DHS also 
reported that it gathered policy documents from legacy components and 
specifically noted meeting with TSA, Coast Guard, legacy Customs, and 
FEMA to understand their policies and practices. However, at a briefing 
for DHS stakeholders in August 2003, DHS and OPM officials said that 
they did not evaluate the successes or shortcomings of legacy agency 
human capital approaches or current and future workforce challenges, 
nor had they analyzed the results from the OPM FHCS.

The department is now beginning to collect more detailed, internal 
human capital data, according to one DHS official. With the support of 
a contractor, focus groups are planned for this summer so that human 
capital challenges can be identified and validated. According to the 
same official, the Chief Human Capital Officer is holding monthly 
meetings to spotlight the successful practices of components within the 
department and disseminate best practices. Moving forward, the 
department plans to design a centralized information system so that 
human capital data can be gathered and reported at the corporate level.

With this information, the department will be better positioned to 
conduct data-driven evaluations of the successes and shortcomings of 
its new human capital management system. DHS documents indicate that 
the department is committed to an ongoing comprehensive evaluation of 
the effectiveness of the human capital system. The department described 
efforts to identify human capital metrics and an intent to use employee 
surveys to gauge employee satisfaction and needs. We testified that DHS 
should consider doing evaluations that are broadly modeled on the 
evaluation requirements of the OPM demonstration projects.[Footnote 6] 
Under the demonstration project authority, OPM requires agencies to 
evaluate and periodically report on results, implementation of the 
demonstration project, cost and benefits, impacts on veterans and other 
equal employment opportunity groups, adherence to merit system 
principles, and the extent to which the lessons from the project can be 
applied governmentwide. A set of balanced measures addressing a range 
of results and customer, employee, and external partner issues may also 
prove beneficial. An evaluation such as this would facilitate 
congressional oversight; allow for any midcourse corrections; assist 
DHS in benchmarking its progress with other efforts; and provide for 
documenting best practices and sharing lessons learned with employees; 
stakeholders; other federal agencies; and the public. We have reported 
on key principles for effective strategic human capital planning and 
the importance of data-driven human capital decision making (see app. 
II).[Footnote 7]

Continued Leadership Is Necessary to Marshal the Capabilities Required 
for Successful Implementation: 

DHS and OPM leaders have consistently underscored their personal 
commitment to the design process and speak openly in support of it. As 
we have reported, this is a very positive start. DHS will need to 
sustain this effort to overcome the views reflected in the OPM 
FHCS,[Footnote 8] administered prior to the formation of DHS, in which 
employees now in the department responded with the following 
perceptions: 

* 28 percent believe that leaders generate high levels of motivation 
and commitment in the workforce, compared to a governmentwide response 
of 36 percent;[Footnote 9]

* 35 percent hold their leaders in high regard, compared to a 
governmentwide response of 43 percent; and: 

* 43 percent believe their organization's leaders maintain high 
standards of honesty and integrity, compared to a governmentwide 
response of 47 percent.

Resources. DHS is recognizing that there are up-front costs to design 
and implementation and that its components are starting from different 
places regarding the maturity of their human capital management 
systems. Members of the Senior Review Advisory Committee agreed during 
their deliberations that creating the new human capital management 
system will require a substantial investment, and identified this as a 
core principle for the design of the system. Additionally, during the 
DHS focus groups, employees expressed an interest in increasing the 
resources available for training and professional development, and 
noted the importance of having an adequate budget for the performance 
management system in particular.[Footnote 10]

The administration recognizes the importance of funding this major 
reform effort and has requested, for fiscal year 2005, $102.5 million 
to fund training, the development of the performance management and 
compensation system, and contractor support, and over $10 million for a 
performance pay fund in the first phase of implementation (affecting 
about 8,000 employees) to recognize those who meet or exceed 
expectations.[Footnote 11] Approximately $20 million was also requested 
to fund the development of a departmental human resources information 
technology system. While the investments are important to the ultimate 
success of DHS's efforts, it is equally important to recognize that 
certain costs are one-time in nature and, therefore, should not be 
built into the base of DHS's budget for future years.

Communication. In our September 2003 report, we commended the 
structured approach the department developed to communicate with 
stakeholders on the human capital system and recommended that the 
Secretary of DHS ensure that the message communicated across the 
department was consistent. Officials we interviewed in five legacy 
components of the department agreed that communication from DHS 
headquarters on the human capital system has been consistent. In 
particular, three noted that the information contained in the weekly 
departmental newsletter is helpful. As an example of the consistency of 
the communication on the new human capital management system, between 
December 5, 2003 and February 27, 2004, employees were assured in five 
different newsletters that the new human capital system would not lead 
to a loss in pay or benefits and four different newsletters reported 
that no layoffs would result due to the implementation of the new 
system. To ensure the consistency of the message, a Communications 
Coordination Team, which includes members from across the department, 
has been established to disseminate information and promote a clear 
understanding of the new human capital system. This team meets biweekly 
or weekly and is co-chaired by the Director of Internal Communications 
and the Director of Human Resource Management.

In our September report we also recommended that the department 
maximize opportunities for two-way communication and employee 
involvement through the completion of the design process and 
implementation, and noted that special emphasis should be placed on 
seeking the feedback and buy-in of front-line employees in the field. 
Opportunities for two-way communication were limited between the 
conclusion of the town hall meetings in July 2003 and the publishing of 
the proposed regulations in February 2004. The primary means for 
employees to provide feedback was through the Human Resources Design 
Team e-mail box. Employees and the general public were also allowed to 
participate in the public comment period of the Senior Review Advisory 
Committee meetings in October 2003. While the department continued to 
consult intermittently with leaders of the three major unions during 
this period, one agency official noted that the department does not 
have a similar mechanism in place to obtain feedback from nonunionized 
employees. One action taken to overcome this challenge was the effort 
to notify employees how to comment on the proposed regulations, which 
was communicated in six different newsletters between February 13 and 
March 22, 2004. DHS received over 3,400 comments on its proposed 
regulations, in part due to its efforts to encourage employees to 
submit comments on the system.

Since the release of the proposed regulations, DHS has provided 
information to employees through a variety of formats. For example, a 
link to the proposed human capital regulations was placed in a 
prominent position on the intranet home page of the department for easy 
access. On February 13, 2004, a satellite broadcast outlined the major 
features of the human capital management system, reaching approximately 
500 DHS locations around the country. During the broadcast, employees 
submitted questions, and those unable to view the broadcast could 
access it through the DHS Internet Web site. Additionally, a senior 
leadership conference was held, in part, to brief executives on the 
proposed system. The department has developed tool kits to provide 
information to both executives and line managers about the changes and 
to provide them with talking points for discussion with their employees 
and developed a quad-fold to distribute to line employees containing 
questions and answers about the new system. Town hall meetings that 
were held around the country to mark the one-year anniversary of the 
department included discussions about the proposed human capital 
system. Finally, between February 13 and March 22, 2004, the time in 
which employees could submit comments on the proposed regulations, the 
weekly DHS newsletter included answers to commonly asked questions and 
details on what would be changed and remain the same under the 
proposal.

The success of DHS communication efforts is especially important, given 
employee responses to the OPM FHCS: 

* 40 percent report that managers promote communication among different 
work units, which is less than the governmentwide response of 51 
percent;

* 65 percent feel they have enough information to do their job well, 
which is less than the governmentwide response of 71 percent; and: 

* 37 percent are satisfied with the information they receive from 
management on what is going on in the organization, which is less than 
the governmentwide response of 45 percent.

Training. Members of the Senior Review Advisory Committee identified 
training and development as a critical component for implementing the 
human capital system. Furthermore, participants in the DHS focus groups 
expressed a need for training and professional development 
opportunities in a number of areas, including general supervisory 
capabilities, assessing employee performance, labor-management 
relations, and alternative dispute resolution. The DHS proposal 
correctly recognizes that a substantial investment in training is a key 
aspect of implementing a performance management system. The need for 
in-depth and varied training will continue as the system is 
implemented, as indicated by results from the OPM FHCS in which 53 
percent of respondents believe supervisors/team leaders in their work 
unit encourage their development at work, which is less than the 
governmentwide response of 59 percent. Furthermore, 47 percent feel 
they are given a real opportunity to improve their skills, which is 
less than the governmentwide response of 57 percent. Our recently 
released guides for agencies to help ensure investments in training and 
development are targeted strategically and could prove helpful to DHS 
as it develops its training and development programs.[Footnote 12]

Employee Participation. The Undersecretary for Management has already 
noted her commitment to move forward on implementing the human capital 
system in a collaborative way, and reiterated that support in a 
December 19, 2003 memorandum to DHS employees regarding the human 
capital system. Regardless of whether it is a part of collective 
bargaining, involving employees in such important decisions as how they 
are deployed and how work is assigned is critical to the successful 
operations of the department. This is likely to be a significant 
challenge for the department in light of employee responses to the OPM 
FHCS in which 28 percent of DHS employees indicated a feeling of 
personal empowerment, which is fewer than the governmentwide response 
of 40 percent. Additionally, 44 percent of DHS employees reported 
satisfaction with their involvement in decisions that affect their 
work, compared to 53 percent governmentwide.

Implementation Teams. DHS formed three implementation teams at the end 
of February 2004 to support the design and implementation of the human 
capital management system because of the multiple areas that require 
management attention. This includes a Training and Communications team; 
a Pay, Performance, and Classification team; and a Labor Relations, 
Adverse Actions, and Appeals team. According to agency officials, the 
teams will initially focus their efforts on data collection and project 
planning activities until the department issues interim final 
regulations for the human capital management system, at which time the 
teams will begin to draft departmental policies to support 
implementation. Agency officials reported that, as they move forward, 
they will pay particular attention to how their decisions may affect 
other human capital approaches across the department.

The mission of the Training and Communications team is to develop 
comprehensive communication and training plans, coordinate and manage 
the development of training, coordinate the delivery of training, and 
to disseminate information related to the design and implementation of 
the department's human capital system. The co-leads of the team said 
their work largely depends on the efforts of the other two 
implementation teams and acknowledged the concerns raised by employees 
on the need for training, especially for departmental managers. They 
also said they plan to rely on the training capacity already in the 
department. A second goal is for the team to ensure that communication 
with employees about the new human capital management system is 
coordinated and consistent across components and to ensure that avenues 
are available for DHS employees to communicate ideas to the 
implementation teams.

The mission of the Pay, Performance, and Classification team is to 
design departmental policies, procedures, guidance, implementation 
instructions, and evaluation criteria so that components can implement 
new systems in the areas of pay, performance management, and 
classification. The team is beginning its work by gathering information 
in these areas from departmental components and defining the system 
objectives. Officials noted this would be a significant challenge 
because of differences in the types of data collected, the varied 
manner in which the data are stored, and uneven levels of data 
reliability. As the team develops its proposals, it plans to use 
advisory groups to evaluate the efficacy of draft policies. Particular 
attention will be paid to ensuring there are adequate safeguards in the 
classification, pay, and performance management systems, according to 
officials.

The mission of the Labor Relations, Adverse Actions, and Appeals team 
is to prepare rules, regulations, policies, procedures, guidance, 
implementing instructions, and evaluation criteria for the department 
to deploy new systems in these areas. The co-leads noted that they 
intend to work collaboratively to design systems that encourage 
cooperation. These officials reported that their initial tasks are to 
explore how to staff different boards and panels identified in the 
proposed regulations and determine how to transition pending cases to 
the new system. They further plan to identify elements that require 
departmental-level guidance, identify elements where policy variation 
is appropriate among departmental components, and collect data on 
historical levels of grievances and appeals to forecast the potential 
workload once the department is transitioned to the new system.

The composition of the implementation teams sends an important signal. 
Each of the three implementation teams is co-led by professional staff 
from DHS headquarters and a component agency. As of mid-March 2004, 
officials noted the membership of the teams was still evolving, but was 
composed mainly of human capital professionals. Agency officials noted 
that decisions had not yet been made about the level of involvement of 
union officials. These same officials reported that OPM staff would 
serve as advisers when needed as opposed to participating on a full-
time basis, and noted an intention to pull together groups of employees 
to serve as "sounding boards and challenge groups" throughout the 
process. Contractors will be integrated with the teams to provide 
project management and other support.

As DHS moves forward, it may find helpful a set of key capabilities 
that our work has found to be central to the use of human capital 
authorities.[Footnote 13] These practices center on effective planning 
and targeted investments, employee training and participation, and 
accountability and cultural change (see app. II).

DHS Proposes Implementing Key Safeguards: 

In its proposed regulations, DHS outlines its intention to implement 
key safeguards that we have found essential to implementing performance 
management systems in a fair, effective, and credible manner. For 
example, the DHS performance management system must comply with the 
merit system principles and avoid prohibited personnel practices; 
provide a means for employee involvement in the design and 
implementation of the system; and overall, be fair, credible, and 
transparent. The department also plans to align individual performance 
management with organizational goals and provide for reasonableness 
reviews of performance management decisions through its Performance 
Review Boards. Moreover, employees and their union representatives 
played a role in shaping the design of the proposed systems. These 
safeguards are generally consistent with our work identifying key 
practices that leading public sector organizations here and abroad have 
used in their performance management systems to link organizational 
goals to individual performance and create a "line of sight" between an 
individual's activities and organizational results (see app. 
II).[Footnote 14]

Our February 2004 testimony identified additional steps DHS could take 
to build safeguards into its revised performance management 
system.[Footnote 15] For example, we suggested that DHS commit to 
publishing the results of the performance management process to assure 
reasonable transparency and provide appropriate accountability 
mechanisms in connection with the results of the performance management 
process. This can include publishing overall results of performance 
management and individual pay decisions while protecting individual 
confidentiality and reporting periodically on internal assessments and 
employee survey results relating to the performance management system. 
Publishing the results in a manner that protects individual 
confidentiality can provide employees with the information they need to 
better understand the performance management system.

Conclusions: 

The proposed DHS human capital management system has both significant 
precedent-setting implications for the executive branch and far-
reaching implications on how the department is managed. However, how it 
is done, when it is done, and the basis on which it is done can make 
all the difference in whether such efforts are successful. To date, 
DHS's actions in designing its human capital management system and its 
stated plans for future work on the system are positioning the 
department for successful implementation. Looking forward, DHS will 
need to make continued progress in a number of key areas including the 
following.

* Strategic workforce planning and the gathering of relevant human 
capital data --Strategic human capital planning activities can enable 
the department to capitalize on the strengths of its workforce and 
address challenges in a manner that is clearly linked to achieving 
DHS's mission and goals. The potential for human capital planning 
activities to positively impact the department, however, depends on its 
gathering of valid, reliable data on workforce demographics and the 
successes and shortcomings of new approaches at the headquarters level.

* Communication and training --As we previously noted, communicating 
with employees and their representatives about the new system and 
providing opportunities for feedback, placing a special emphasis on 
reaching out to line employees in the field, can facilitate gaining 
employee buy-in to the new human capital management system. 
Additionally, the delivery of training on the new system can enable 
employees to understand their rights and how the agency will use its 
authority.

* Safeguards --Publishing the results of the performance management 
process can provide employees with the information they need to better 
understand the performance management system and make the system more 
transparent.

Agency Comments and Our Evaluation: 

In commenting on a draft of this report, DHS generally agreed with its 
findings. DHS comments provided more current information on 
implementation timelines and described further research conducted by 
the design teams between April and September 2003, which we have 
incorporated. In addition, DHS raised concerns about our use of data 
from the OPM governmentwide FHCS since the survey was administered 
before the formation of DHS. Since the administration of the survey, 
DHS notes a significant amount of change has been made in the 
department. We agree that the department is making progress in 
designing its human capital system and outline in this report where the 
department is making strides. This report notes that the FHCS was 
conducted during the same time frame that the administration proposed 
legislation to form DHS. FHCS data are the most current information 
available on the perceptions of employees currently employed by DHS and 
are valuable because of their illustration of the challenges the 
department faces. DHS provided additional technical comments, which 
were incorporated where appropriate. Comments from DHS are provided in 
full in appendix III.

As agreed with your offices, unless you publicly release its contents 
earlier, we plan no further distribution of this report until 30 days 
from its date. At that time, we will send copies of this report to the 
Chairman and Ranking Minority Member, Senate Committee on Governmental 
Affairs; the Chairman and Ranking Minority Member, House Committee on 
Government Reform; the Chairman and Ranking Minority Member, House 
Select Committee on Homeland Security; and other interested 
congressional parties. We will also send copies to the Secretary of the 
Department of Homeland Security and the Director of the Office of 
Personnel Management. Copies will be made available at no charge on the 
GAO Web site at [Hyperlink, http://www.gao.gov].

If you have any questions about this report, please contact me on (202) 
512-6806. Key contributors to this report are listed in appendix IV.

Signed by: 

J. Christopher Mihm Managing Director, Strategic Issues: 

[End of section]

Appendixes: 

Appendix I: Scope and Methodology: 

Scope: 

This work was conducted from March 2003 through March 2004 in 
accordance with generally accepted government auditing standards. We 
performed our work in the Washington, D.C., metropolitan area in the 
headquarters offices of Department of Homeland Security (DHS) and the 
five largest legacy components that transferred to the department: The 
Transportation Security Administration (TSA), the Federal Emergency 
Management Agency (FEMA), the organizations formerly known as the 
Immigration and Naturalization Service (INS) and the U.S. Customs 
Service, and the U.S. Coast Guard.

Methodology: 

To address our objective, we examined the workforce planning efforts of 
the five largest legacy components that transferred to the department. 
Data on workforce planning and capabilities needed for successful human 
capital management were supplemented by information gathered in 
interviews with officials from DHS headquarters and the five legacy 
components. A standard set of questions was used for interviewing the 
legacy components. Interviews with the components were conducted 
between January and February 2004. Presentations made by DHS and the 
Office of Personnel Management (OPM) in August 2003 were evaluated to 
understand the level of data analysis conducted during system design. 
We were observers at the August 2003 briefing. We also examined the 
transcripts and report summarizing the proceedings of the Senior Review 
Advisory Committee meetings in October 2003 and relevant issues of the 
weekly DHS newsletter. Our findings were analyzed against criteria 
articulated in relevant GAO human capital reports.

To be responsive to your particular interest in seeking out and 
incorporating employee perspectives on the human capital system, we 
gathered information on employee perceptions from a variety of sources 
and presented these findings throughout the report. Insights into 
employee opinions were gathered from the OPM Federal Human Capital 
Survey, administered between May and August 2002, and a DHS report 
summarizing findings from the department's focus groups held during the 
summer of 2003. A description of the objective, scope, methodology, and 
limitations of these two studies was detailed in appendix I of Human 
Capital: Preliminary Observations on Proposed DHS Human Capital 
Regulations 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-479T].

In the background section of this report, we cite information from 
OPM's Central Personnel Data File (CPDF). The CPDF contains personnel 
data for most employees of the executive branch. The largest executive 
branch employee groups not included are in the intelligence agencies 
(CIA, etc.) and the Postal Service. Agencies submit data to the CPDF at 
the end of each fiscal quarter. We have found the CPDF to be 
sufficiently reliable for the purposes of this report.[Footnote 16]

[End of section]

Appendix II: Criteria Used for Evaluation: 

The success of DHS's efforts to design and implement its new human 
capital system depends, in part, on building and maintaining an 
institutional infrastructure to make effective use of its 
flexibilities. At a minimum, this infrastructure includes a strategic 
human capital planning process that integrates the agency's human 
capital approaches with program goals, desired outcomes, and mission; 
the capabilities to effectively develop and implement a new human 
capital system; and a modern, effective, and credible performance 
management system that includes a set of institutional safeguards, 
including reasonable transparency and appropriate accountability 
mechanisms to ensure the fair, effective, and credible implementation 
of the new system.

Strategic Human Capital Planning: 

Strategic workforce planning is the first essential element of the 
institutional infrastructure that an agency needs to ensure that its 
human capital program capitalizes on its workforce's strengths and 
addresses related challenges in a manner that is clearly linked to 
achieving the agency's mission and goals. Strategic workforce planning 
addresses two critical needs: (1) aligning an organization's human 
capital programs 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.[Footnote 
17]

At its core, strategic workforce planning, also called human capital 
planning, focuses on developing long-term strategies for acquiring, 
developing, and retaining an organization's total workforce (including 
full-and part-time federal staff and contractors) to meet the needs of 
the future. We recently described five principles for strategic 
workforce planning.[Footnote 18]

* Involve top management, employees, and other stakeholders in 
developing, communicating, and implementing the strategic workforce 
plan.

* Determine the critical skills and competencies that will be needed to 
achieve current and future programmatic results.

* Develop strategies that are tailored to address gaps in the number 
and deployment of employees and the alignment of human capital 
approaches for enabling and sustaining the contributions of all 
critical skills and competencies.

* Build the capability needed to address administrative, educational, 
and other requirements important to support workforce strategies.

* Monitor and evaluate the agency's progress towards its human capital 
goals and the contribution that human capital results have made toward 
achieving programmatic goals.

Consistent with these principles, we have identified that one of the 
critical success factors for strategic human capital planning is data-
driven human capital decision making.[Footnote 19] A fact-based, 
performance-oriented approach to human capital management is crucial 
for maximizing the value of human capital as well as managing risk. 
High-performing organizations use data to determine key performance 
objectives and goals that enable them to evaluate the success of their 
human capital approaches. Valid and reliable data are critical to 
assessing an agency's workforce requirements and heighten an agency's 
ability to manage risk by allowing managers to spotlight areas for 
attention before crises develop and identify opportunities for 
enhancing agency results. Reporting on the results of these evaluations 
can facilitate congressional oversight of the system, allow for 
midcourse corrections, and serve as a tool for documenting best 
practices and sharing lessons learned with employees, stakeholders, 
other federal agencies, and the public.

Key Capabilities for Implementing Human Capital Approaches: 

As DHS moves forward, it may find helpful a key set of capabilities 
that our work has found to be central to the use of human capital 
authorities.[Footnote 20] These practices center on effective planning 
and targeted investments, employee participation and training, and 
accountability and cultural change.

* Plan strategically and make targeted investments: 

* Obtain agency leadership commitment: 

* Determine agency workforce needs using fact-based analysis: 

* Develop strategies that employ appropriate flexibilities to meet 
workforce needs: 

* Make appropriate funding available: 

* Ensure stakeholder input in developing policies and procedures: 

* Engage the human capital office: 

* Engage agency managers and supervisors: 

* Involve employees and unions: 

* Use input to establish clear, documented, and transparent policies 
and procedures: 

* Educate managers and employees on the availability and use of 
flexibilities: 

* Train human capital staff: 

* Educate agency managers and supervisors on existence and use of 
flexibilities: 

* Inform employees of procedures and rights: 

* Streamline and improve administrative processes: 

* Ascertain the source of existing requirements: 

* Reevaluate administrative approval processes for greater efficiency: 

* Replicate proven successes of others: 

* Build transparency and accountability into the system: 

* Delegate authority to use flexibilities to appropriate levels within 
the agency: 

* Hold managers and supervisors directly accountable: 

* Apply policies and procedures consistently: 

* Change the organizational culture: 

* Ensure involvement of senior human capital managers in key decision-
making processes: 

* Encourage greater acceptance of prudent risk taking and 
organizational change: 

* Recognize differences in individual job performance and competencies: 

Institutionalizing Performance Management Safeguards: 

We testified last spring that Congress should consider establishing 
statutory standards that an agency must have in place before it can 
implement a more performance-based pay program and developed an initial 
list of possible safeguards to help ensure that pay for performance 
systems in the government are fair, effective, and credible.[Footnote 
21]

* Assure that the agency's performance management systems (1) link to 
the agency's strategic plan, related goals, and desired outcomes and 
(2) result in meaningful distinctions in individual employee 
performance. This should include consideration of critical competencies 
and achievement of concrete results.

* Involve employees, their representatives, and other stakeholders in 
the design of the system, including having employees directly involved 
in validating any related competencies, as appropriate.

* Assure that certain predecisional internal safeguards exist to help 
achieve the consistency, equity, nondiscrimination, and 
nonpoliticization of the performance management process (e.g., 
independent reasonableness reviews by Human Capital Offices and/or 
Offices of Opportunity and Inclusiveness or their equivalent in 
connection with the establishment and implementation of a performance 
appraisal system, as well as reviews of performance rating decisions, 
pay determinations, and promotion actions before they are finalized to 
ensure that they are merit-based; internal grievance processes to 
address employee complaints; and pay panels whose membership is 
predominately made up of career officials who would consider the 
results of the performance appraisal process and other information in 
connection with final pay decisions).

* Assure reasonable transparency and appropriate accountability 
mechanisms in connection with the results of the performance management 
process. This can include reporting periodically on internal 
assessments and employee survey results relating to the performance 
management system and publishing overall results of performance 
management and individual pay decisions while protecting individual 
confidentiality. Publishing the results in a manner that protects 
individual confidentiality can provide employees with the information 
they need to better understand the performance management system.

While incorporating these safeguards into performance management 
systems, our work indicates that there is a set of key practices for 
agencies to create a clear linkage, or "line of sight," between 
individual performance and organizational success.[Footnote 22] These 
key practices include the following.

1. Align individual performance expectations with organizational goals. 
An explicit alignment helps individuals see the connection between 
their daily activities and organizational goals.

2. Connect performance expectations to crosscutting goals. Placing an 
emphasis on collaboration, interaction, and teamwork across 
organizational boundaries helps strengthen accountability for results.

3. Provide and routinely use performance information to track 
organizational priorities. Individuals use performance information to 
manage during the year, identify performance gaps, and pinpoint 
improvement opportunities.

4. Require follow-up actions to address organizational priorities. By 
requiring and tracking follow-up actions on performance gaps, 
organizations underscore the importance of holding individuals 
accountable for making progress on their priorities.

5. Use competencies to provide a fuller assessment of performance. 
Competencies define the skills and supporting behaviors that 
individuals need to effectively contribute to organizational results.

6. Link pay to individual and organizational performance. Pay, 
incentive, and reward systems that link employee knowledge, skills, and 
contributions to organizational results are based on valid, reliable, 
and transparent performance management systems with adequate 
safeguards.

7. Make meaningful distinctions in performance. Effective performance 
management systems strive to provide candid and constructive feedback 
and the necessary objective information and documentation to reward top 
performers and deal with poor performers.

8. Involve employees and stakeholders to gain ownership of performance 
management systems. Early and direct involvement helps increase 
employees' and stakeholders' understanding and ownership of the system 
and belief in its fairness.

9. Maintain continuity during transitions. Because cultural 
transformations take time, performance management systems reinforce 
accountability for change management and other organizational goals.

[End of section]

Appendix III: Comments from the Department of Homeland Security: 

U.S. Department of Homeland Security: 
Washington, DC 20528:

June 7, 2004:

Mr. J. Christopher Mihm: 
Managing Director, Strategic Issues: 
United States Government Accounting Office:

Dear Mr, Mihm:

On behalf of Secretary Ridge, I would like to thank you for the 
opportunity to review and comment on the report entitled Human Capital: 
DHS Faces Challenges in Implementing Its New Personnel System (GAO-04-
790). Generally, we believe this report is accurate and reflective of 
our processes and current status; however we believe there is some 
information that needs to be updated or clarified, The most substantive 
comments are discussed below, and it is our understanding that the 
final report will incorporate our technical comments.

The draft report references the use of and/or the results of OPM's 
Federal Human Capital Survey (FHCS). While we support the FHCS and 
believe the results can be of tremendous value to agencies, we question 
the current usefulness to DHS. The FHCS was conducted prior to the 
establishment of DHS and the opinions expressed by the respondents to 
the survey were provided prior to the formation of DHS. Yet, this 
report appears to use the survey results from the legacy organizations 
as a baseline for DHS. We question how accurately the results portray 
the perceptions of DHS employees given the significant amount of change 
that has occurred. Thus, it is our opinion that the results of the 
FHCS, as used in the context of this report, may be misleading,

We also believe that timeframes contained in the draft report should be 
updated since we are now in a position to more accurately project major 
milestones, This includes the ability to better estimate when the 
interim final regulations might be published which has enabled us to 
set realistic internal goals for the implementation phase, As a result, 
some of the milestones outlined on page six, Figure 1, should be 
adjusted. Specifically, under the last box "Fall 2004 to January 2009," 
you may want to change the second bullet to reflect, "Implement the job 
evaluation, pay, and performance management provisions in a phased 
approach, with the first phase implemented beginning January/February 
2005 and the second phase implemented beginning fall of 2005." You 
should also revise the second full paragraph on page eight to reflect 
that the focus groups are more likely to occur during the summer than 
late spring or early summer,

Finally, we also would like to correct the information provided on page 
eight in the first full paragraph, Specifically, we request that you 
change the third sentence to reflect that during the design process 
from April through September 2003, not only did the subgroups gather 
basic demographic data, but they also gathered policy documents from 
all the legacy organizations and met with representatives of many of 
the organizations in order to conduct in-depth discussions 
regarding internal HR policies. For example, during the summer of 2003, 
the subgroups met with representatives of TSA, the Coast Guard, legacy 
Customs, and FEMA to learn more about their organizations and their 
current policies and practices,

We have enjoyed working with all the representatives of your 
organization and appreciate the insight and feedback we have received, 
both in person, and through these reports. Should you have any 
questions regarding these comments, please feel free to give me a call.

Enclosure:

Sincerely,

Signed by: 

Ronald J. James,
Chief Human Capital Officer: 

[End of section]

Appendix IV: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

J. Christopher Mihm, (202) 512-6806: 

Acknowledgments: 

In addition to the person named above, Ed Stephenson, Ellen V. Rubin, 
Tina Smith, Lou V.B. Smith, Masha Pasthhov-Pastein, Karin Fangman, and 
Ron La Due Lake made key contributions to this report.

(450258): 

FOOTNOTES

[1] U.S. General Accounting Office, Major Management Challenges and 
Program Risks: Department of Homeland Security, GAO-03-102 (Washington, 
D.C.: January 2003). 

[2] U.S. General Accounting Office, Human Capital: DHS Personnel System 
Design Effort Provides for Collaboration and Employee Participation, 
GAO-03-1099 (Washington, D.C.: Sept. 30, 2003). 

[3] U.S. General Accounting Office, Human Capital: Preliminary 
Observations on Proposed DHS Human Capital Regulations, GAO-04-479T 
(Washington, D.C.: Feb. 25, 2004); Posthearing Questions Related to 
Proposed Department of Homeland Security (DHS) Human Capital 
Regulations, GAO-04-570R (Washington, D.C.: Mar. 22, 2004); and 
Additional Posthearing Questions Related to Proposed Department of 
Homeland Security (DHS) Human Capital Regulations, GAO-04-617R 
(Washington, D.C.: Apr. 30, 2004).

[4] U.S. General Accounting Office, Human Capital: Building on DOD's 
Reform Effort to Foster Governmentwide Improvements, GAO-03-851T 
(Washington, D.C.: June 4, 2003); High-Risk Series: Strategic Human 
Capital Management, GAO-03-120 (Washington, D.C.: January 2003); and 
Managing for Results: Using Strategic Human Capital Management to Drive 
Transformational Change, GAO-02-940T (Washington, D.C.: July 15, 2002). 


[5] According to OPM's Central Personnel Data File (CPDF), as of 
December 2003. This represents the number of DHS federal employees. For 
more information on the CPDF, see appendix I.

[6] GAO-04-479T. 

[7] U.S. General Accounting Office, Human Capital: Key Principles for 
Effective Strategic Workforce Planning, GAO-04-39 (Washington, D.C.: 
Dec. 11, 2003), and A Model of Strategic Human Capital Management, GAO-
02-373SP (Washington, D.C.: Mar. 15, 2002). 

[8] The DHS responses reported by the 2002 OPM FHCS approximate the 
views of some, but not all, employees now at DHS. For example, TSA 
screeners were not hired at the time of the survey. Also, though APHIS 
employees were divided between DHS and the U.S. Department of 
Agriculture (USDA), the APHIS respondents included those remaining at 
USDA. Additionally, the survey was conducted during the same time frame 
that the administration proposed legislation to form DHS; thus, the 
opinions expressed by the respondents to the survey were before the 
formation of DHS. The objective, scope, and methodology for the 2002 
OPM FHCS is described in more detail in GAO-04-479T. 

[9] In all instances, comparing DHS's results to the OPM FHCS 
governmentwide average, DHS results are fewer by a statistically 
significant amount, according to analysis presented on OPM's Web site. 
Statistics are rounded to the nearest whole number. The governmentwide 
response includes all respondents except for those transferred to DHS.

[10] The objective, scope, and methodology for the DHS focus groups are 
described in more detail in GAO-04-479T. 

[11] According to agency officials, the training costs do not include 
the time employees are expected to spend in training or the costs 
associated with using training resources already in the department. 

[12] U.S. General Accounting Office, Human Capital: A Guide for 
Assessing Strategic Training and Development Efforts in the Federal 
Government, GAO-04-546G (Washington, D.C.: March 2004); and Human 
Capital: Selected Agencies' Experiences and Lessons Learned in 
Designing Training and Development Programs, GAO-04-291 (Washington, 
D.C.: Jan. 30, 2004). 

[13] U.S. General Accounting Office, Human Capital: Effective Use of 
Flexibilities Can Assist Agencies in Managing Their Workforces, GAO-03-
2 (Washington, D.C.: Dec. 6, 2002). 

[14] U.S. General Accounting Office, Results-Oriented Cultures: 
Creating a Clear Linkage between Individual Performance and 
Organizational Success, GAO-03-488 (Washington, D.C.: Mar. 14, 2003). 

[15] GAO-04-479T. 

[16] U. S. General Accounting Office, OPM's Central Personnel Data 
File: Data Appear Sufficiently Reliable to Meet Most Customer Needs, 
GAO/GGD-98-199 (Washington, D.C.: Sept. 30, 1998). 

[17] U.S. General Accounting Office. Human Capital: Key Principles for 
Effective Strategic Workforce Planning, GAO-04-39 (Washington, D.C.: 
Dec. 11, 2003). 

[18] GAO-04-39. 

[19] U.S. General Accounting Office, A Model of Strategic Human Capital 
Management, GAO-02-373SP (Washington, D.C.: Mar. 15, 2002).

[20] U.S. General Accounting Office, Human Capital: Effective Use of 
Flexibilities Can Assist Agencies in Managing Their Workforces, GAO-03-
2 (Washington, D.C.: Dec. 6, 2002).

[21] U.S. General Accounting Office, Defense Transformation: 
Preliminary Observations on DOD's Proposed Civilian Personnel Reforms, 
GAO-03-717T (Washington, D.C.: Apr. 29, 2003).

[22] U.S. General Accounting Office, Results-Oriented Cultures: 
Creating a Clear Linkage between Individual Performance and 
Organizational Success, GAO-03-488 (Washington, D.C.: Mar. 14, 2003).

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