<DOC> [109 Senate Hearings] [From the U.S. Government Printing Office via GPO Access] [DOCID: f:29507.wais] S. Hrg. 109-329 THE RIGHT PEOPLE? OVERSIGHT OF THE OFFICE OF PERSONNEL MANAGEMENT ======================================================================= HEARING before the OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL WORKFORCE AND THE DISTRICT OF COLUMBIA SUBCOMMITTEE of the COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS UNITED STATES SENATE ONE HUNDRED NINTH CONGRESS SECOND SESSION __________ JUNE 27, 2006 __________ Printed for the use of the Committee on Homeland Security and Governmental Affairs U.S. GOVERNMENT PRINTING OFFICE 29-507 PDF WASHINGTON : 2006 ------------------------------------------------------------------ For sale by Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC area (202) 512-1800 Fax: (202) 512-2250. Mail: Stop SSOP, Washington, DC 20402-0001 COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS SUSAN M. COLLINS, Maine, Chairman TED STEVENS, Alaska JOSEPH I. LIEBERMAN, Connecticut GEORGE V. VOINOVICH, Ohio CARL LEVIN, Michigan NORM COLEMAN, Minnesota DANIEL K. AKAKA, Hawaii TOM COBURN, Oklahoma THOMAS R. CARPER, Delaware LINCOLN D. CHAFEE, Rhode Island MARK DAYTON, Minnesota ROBERT F. BENNETT, Utah FRANK LAUTENBERG, New Jersey PETE V. DOMENICI, New Mexico MARK PRYOR, Arkansas JOHN W. WARNER, Virginia Michael D. Bopp, Staff Director and Chief Counsel Michael L. Alexander, Minority Staff Director Trina Driessnack Tyrer, Chief Clerk OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL WORKFORCE AND THE DISTRICT OF COLUMBIA SUBCOMMITTEE GEORGE V. VOINOVICH, Ohio, Chairman TED STEVENS, Alaska DANIEL K. AKAKA, Hawaii NORM COLEMAN, Minnesota CARL LEVIN, Michigan TOM COBURN, Oklahoma THOMAS R. CARPER, Delaware LINCOLN D. CHAFEE, Rhode Island MARK DAYTON, Minnesota ROBERT F. BENNETT, Utah FRANK LAUTENBERG, New Jersey PETE V. DOMENICI, New Mexico MARK PRYOR, Arkansas JOHN W. WARNER, Virginia Andrew Richardson, Staff Director Richard J. Kessler, Minority Staff Director Nanci E. Langley, Minority Deputy Staff Director Emily Marthaler, Chief Clerk C O N T E N T S ------ Opening statements: Page Senator Voinovich............................................ 1 Senator Akaka................................................ 3 WITNESSES Tuesday, June 27, 2006 Hon. Linda M. Springer, Director, Office of Personnel Management. 4 Hon. David M. Walker, Comptroller General, Government Accountability Office.......................................... 8 Alphabetical List of Witnesses Springer, Hon. Linda M.: Testimony.................................................... 4 Prepared statement with attachments.......................... 27 Walker, Hon. David M.: Testimony.................................................... 8 Prepared statement........................................... 49 APPENDIX Questions and answers submitted for the Record from: Ms. Springer................................................. 83 Mr. Walker................................................... 92 THE RIGHT PEOPLE? OVERSIGHT OF THE OFFICE OF PERSONNEL MANAGEMENT ---------- TUESDAY, JUNE 27, 2006 U.S. Senate, Oversight of Government Management, the Federal Workforce and the District of Columbia Subcommittee, of the Committee on Homeland Security and Governmental Affairs, Washington, DC. The Committee met, pursuant to notice, at 10:15 a.m., in room SD-342, Dirksen Senate Office Building, Hon. George V. Voinovich, Chairman of the Subcommittee, presiding. Present: Senators Voinovich and Akaka. OPENING STATEMENT OF CHAIRMAN VOINOVICH Chairman Voinovich. The hearing will please come to order. We are going to begin. Unfortunately, Mr. Walker is stuck in traffic and will be late, but, we are pleased that Ms. Springer is here today. This hearing is titled, ``The Right People? Oversight of the Office of Personnel Management.'' I called today's hearing to discuss GAO's management review of the Office of Personnel Management that has been underway for the past year. My colleagues, Senators Collins, Lieberman, Akaka, and I requested this review to assist the incoming Director, following the departure of Director Kay Coles James. GAO's work is important to assist Congress in evaluating the current status of OPM and find an answer to this key question: ``Is OPM positioned to be the Federal Government's agency of change for effective strategic human capital transformation?'' People often ask me why I spend my time on Federal human capital management. I have to ask, what if the intelligence community did not have enough linguists fluent in languages critical to conducting the war on terror? Or, what if the Office of Personnel Management did not have enough investigators to conduct background investigations for agencies to grant employees security clearances? Or, what if the Veterans' Administration did not have enough nurses to provide care at our veterans' hospitals? Or, what if the Social Security Administration did not have enough administrative law judges to hear disability claim cases in a timely fashion? These are not hypothetical questions. These are real areas in which the Federal Government is lacking the right people with the right skills. OPM must be able to assist agencies to build the necessary workforce to accomplish these vital missions and others. The Office of Personnel Management is no different from the rest of the Federal Government. It is facing a retirement wave, a ``tsunami,'' as Director Springer has called it. In the next 4 years, 46 percent of OPM's total workforce, and 66 percent of its Senior Executive Service, will be eligible to retire. In his written testimony, Comptroller General Walker gives the overall statistics for the Federal Government: That in the next 4 years, 33 percent of the total workforce and 68 percent of the Senior Executive Service will be eligible to retire. This could be a debilitating loss of talent and institutional knowledge. As everyone here knows, in the previous 3 years, Congress has enacted more changes in the Civil Service Code than in the previous quarter of a century. I want to acknowledge Senator Akaka's effort in that regard. In every instance, OPM has been given a critical role in guiding agencies through the implementation process, whether through issuing regulations to guide agencies on use of category rating, approving requests for direct hire authority, certifying performance management systems for the Senior Executive Service, or working with the Department of Homeland Security and the Department of Defense to develop regulations for new personnel systems. OPM has been tasked with new responsibilities. In addition, OPM has maintained all its previous functions, such as administering the Federal Employee Health Benefits Program, processing all Federal employee retirements, and conducting the background investigations needed to process a security clearance. Furthermore, we in Congress continue to discuss whether additional Federal workforce reforms are necessary in order to ensure the Federal Government is a 21st Century employer of choice. It is no secret that I believe that additional reforms are necessary. I have introduced legislation, the Federal Workforce Performance Appraisal and Management Improvement Act, to improve Federal employees' performance appraisals and more closely tie pay levels to those appraisals. In fact, this Subcommittee will have a hearing on this legislation, as well as the bill introduced by Senator Akaka, this Thursday. Under our legislation, OPM has a key role to play in reviewing performance management systems. Comptroller General Walker's testimony is going to be imperative to help us understand whether OPM is prepared to lead the way. Ms. Springer, you have been in your position for just one year, a year tomorrow to be exact. I suspect you feel like you have been in it for 5 years. Since you assumed the position, you have made significant progress in positioning the agency to lead future reform. I was very much impressed by the new OPM strategic and operational plan. In addition, OPM has earned a ``green'' on the President's Management Agenda scorecard for strategic human capital management. It is vital that OPM be a model agency in order for it to successfully lead transformation throughout the Federal Government. I was with the President several weeks ago, and we were talking about Josh Bolton moving on to be Chief of Staff and my friend Rob Portman becoming the new OMB Director. I said, ``Mr. President, did you know that they have green in one area and all the rest of them are red?'' He said, ``What?'' I said, ``Yes. OMB has three areas that are red.'' My feeling is that, just as Ms. Springer's agency should be right on top and all green, so should the Office of Management and Budget. So the President says, ``We will see about that.'' However, I think that, Ms. Springer, you know that we can always do better. I am sure that Mr. Walker will identify and make appropriate recommendations to do just that. I look forward to both of your testimonies and the honest discussion we will have here today on where OPM has been and where you would like to take it. I would now like to call on Senator Akaka for his opening statement. Senator Akaka. OPENING STATEMENT OF SENATOR AKAKA Senator Akaka. Thank you very much, Mr. Chairman. I want to thank you for this hearing and for always looking to address problems that we will be facing in the future and holding hearings so that we can address them. I also want to commend the Director for her work during the past year, to come forward with the State of the Agency Report. It is impressive and I want to commend you for that. Although we, in Congress, understand that OPM is the focal point of human capital management, it is safe to say that the average taxpayer looks toward the Federal worker to run the government, and the American people need confidence in the ability of government to provide the services on which they depend. OPM needs the right people who understand how efforts to modernize the Civil Service could adversely impact agency performance and public confidence. Our goal today is to understand what resources OPM needs to fulfill its operational and managerial responsibilities, while safeguarding the rights, benefits, and protections of employees under a merit-based personnel system. Mr. Chairman, I want you to know that, unfortunately, I must leave at 10:30 to attend a classified briefing on the North Korea missile program, which may affect the State of Hawaii. Mr. Chairman, I want to make sure that the Comptroller General and the Director of OPM have time to deliver their statements before I leave. Therefore, I ask, Mr. Chairman, that my full statement be made a part of the record. Chairman Voinovich. Without objection. Senator Akaka. Thank you. [The prepared statement of Senator Akaka follows:] PREPARED STATEMENT OF SENATOR AKAKA Thank you, Mr. Chairman. As you've noted, the oversight of the Office of Personnel Management (OPM) is the responsibility of this Subcommittee. I, too, welcome the opportunity to evaluate the ability of OPM to be the government's leader in personnel policy today and in the future with our two witnesses--OPM Director Springer and Comptroller General Walker--both of whom share our view that public service is an honorable profession. OPM has one of the most important roles in the Federal Government-- administering and enforcing Federal Civil Service laws, rules, and regulations as well as aiding the Executive Branch in managing the Federal workforce. OPM also supports agencies in recruiting, retaining, training, and motivating the best and most effective workforce possible. If agencies do not have the personnel systems in place to have the right person, with the right skills, at the right place, at the right time, they cannot meet their goals. Although we in Congress understand that OPM is the focal point of human capital management, the taxpayer looks toward the Federal worker to run the government. And the American people need confidence in their government's ability to provide the services on which they depend--from protecting their private, personal data to providing quality health care to the Nation's veterans, and to provide them in a manner free from political pressures. That is why the rights and protections of Federal workers are so important. Unfortunately new personnel reforms being touted by the Administration for Federal workers, such as those being developed at the Departments of Defense and Homeland Security, have eroded employee morale. This can impact agency performance and undermine the public's trust in government. OPM needs the right people who understand how OPM's efforts to modernize the civil service could adversely impact agency performance and public confidence. Our goal today is to understand what resources OPM needs to fulfill its operational and managerial responsibilities, while safeguarding the rights, benefits, and protections of employees under a merit-based personnel system. Although Director Springer and I do not always agree on the direction of government, she knows I am appreciative of the enthusiasm and leadership she has brought to OPM. I am especially pleased with OPM's new advertising campaign showcasing Federal employment. However, no amount of advertising will erase the perception that it takes too long to get a Federal job, which is why OPM's resources must be devoted to attracting--retaining--training--and motivating a skilled and professional workforce. It's imperative that OPM eradicates the perception among young people that it's not worth their time to pursue working for the Federal Government. Making Federal employment more attractive to the next generation is an area where Chief Human Capital Officers (CHCO) and Human Resource Directors can help. OPM must continue to exercise its leadership in guiding this endeavor. The same holds true for pushing agencies to use existing flexibilities to hire talented individuals. Communication and collaboration between OPM and other Federal agencies must be strengthened, and it is my expectation that the CHCO Council will be an important link in OPM's strategy to improve communications among agencies. In my discussion of OPM's capacity to lead, the issue of retirement comes up, especially since nearly half--46 percent--of OPM's workforce will be eligible for retirement in about 4 years. The loss of experienced personnel, both at OPM and across the Federal Government, should concern us all. I commend OPM on working to develop a strategy to convince these seasoned employees to remain on the job longer. On the other hand, pursing programs that are not in the best interest of the Federal workforce will result in workers opting to retire. Employee morale is a critical feature in figuring our retirement numbers no matter whose retirement estimates we use. OPM must also increase its capacity to ensure that supervisors receive adequate training. Since the 1990s, supervisory training has been the responsibility of individual agencies which has resulted in inconsistent training. The Federal Managers Association notes that 60 percent of its members will be retirement eligible in 5 years, and we must commit to nurturing new managers. Mandatory training programs, developed through guidance provided by OPM, will strengthen manager- employee relationships and increase communication. Mr. Chairman, we're looking for OPM to lead by example, which is why we asked GAO to identify specific management challenges that stand in the way of OPM capitalizing on its role. I want to thank you again for holding today's hearing which will serve as a roadmap for future discussions of OPM's capacity to lead. Senator Voinovich. If you will stand, I will swear you in. Do you swear that the testimony you are about to give this Subcommittee is the truth, the whole truth, and nothing but the truth, so help you, God? Ms. Springer. I do. Chairman Voinovich. We welcome you back. Usually, I would limit you to 5 minutes, but if you want to go for 7 minutes, we will let you do that. TESTIMONY OF HON. LINDA M. SPRINGER,\1\ DIRECTOR, OFFICE OF PERSONNEL MANAGEMENT Ms. Springer. Thank you, Mr. Chairman, and thank you, Senator Akaka. As you mentioned, it is one year since I took the oath of office to become the eighth Director of the Office of Personnel Management. As you mentioned also, there are times when it seems a little longer than that, but for the most part, we have gotten a lot done in that year. --------------------------------------------------------------------------- \1\ The prepared statement of Ms. Springer with attachments appears in the Appendix on page 27. --------------------------------------------------------------------------- My objective at the time of assuming this office was to raise the agency's performance level. Clearly, the agency was coming off of a period, and a survey, that indicated that there were things that needed to be adjusted and fixed. Many of the Comptroller General's comments are founded on that 2004 survey. What I can report to you today, is that we have made demonstrable progress since that time, and we are beginning to realize the two goals that I have for OPM. One, is that we would achieve operational excellence and two, strategic creativity. So, what I want to talk to you today about, primarily, are the steps that we have taken since I came on board and what that is leading to in both of those areas. Obviously, at the very beginning, you have to look to leadership. Leadership is what is reflected through an organization, and so it starts at the very top. Sitting before you today is the senior leadership team of OPM. They have all come to demonstrate the fact that we are a team. Half of them are relatively new to their positions over this past year, both internal promotions as well as people from outside. We now have a senior leadership team that has been reinvigorated and really works together in a very constructive and candid way, that they hadn't been able to do for some time. Beyond just the leadership, effective organizations ensure that the associates throughout the organization are connected to the mission. That was something that, candidly, as the 2004 survey demonstrated, was not the case for significant portions of OPM, particularly for the thousands of associates who were operating around the country. We have roughly 59 offices. One of my goals was to visit every single OPM office at least once every year. When I leave this hearing today, I am going to be visiting our offices in Dallas, Tucson, and Denver. That will be close to wrapping up all those visits. But what I learned repeatedly, was that agency visits by a Director hadn't been happening, in many cases for as many as 10 years. So, it is no surprise that the results of the survey in 2004, prior to my arrival, indicated that people felt detached from the leadership, detached from the overall goals and objectives, because even at the highest level, leadership wasn't engaged and wasn't visibly out there connecting to staff. That is changing, not only with these visits but also with the use of nation-wide Webcasts with real-time Q and A, and with other visits by members of this senior team, who are committed to being visible. All of those things, flows of ideas to and from the office here in Washington, are raising morale, raising engagement, and are allowing us to better serve the nation-wide workforce, which, as you know, is located predominately outside of Washington, DC. So, getting the right people in place and getting people engaged were the first two steps. Now we need to have a plan to really set our course. As you have acknowledged, we did come out in March with a new strategic and operational plan with new goals. Among others, we had the CHCO Council Executive Committee review those goals and review that plan before we published it. It is one of the ways that we are trying to link better with the Council and bring them more into our management for the human capital community. The new plan is distinctive. It is clear, it is candid, and it is specific. It has got about 170 to-dos. It doesn't have pictures. It doesn't have a lot of text. It is very different from most other plans. The Washington Post called it strikingly clear and simple and reflects a no-nonsense, down-to-earth style. I consider praise from the Washington Post something to be valued. We have the plan. We have the people. Now the next step is to create an accountability culture. An achieving of the goals of those plans really meant that we had to incorporate those goals into each individual person's own personal plan. OPM associates throughout the organization now have objectives that are tied to the plan. Senior executives, particularly, have 75 percent of their performance contracts tied to those plan goals. Word for word, they are exactly transferred, and there is a direct linkage now to their compensation at the senior executive level when executing and achieving those goals. That means we have greater assurances that the goals will be achieved and we have a well-harnessed team environment, where everyone is sharing in the goals and working to get those done. Those are all positioning steps, and now that they are done, we are ready to raise our operational performance. All of those things are just a prelude to actually achieving results. Progress for all of our plan goals is monitored using a chronological tracking system, and a copy of that is attached to my statement today. You also can see that on OPM's website. The link is also listed in my written statement. I will be honest with you, I don't know of any other agency that has a link on their website where you can go directly to all of their goals, specifically, and have the date that they were completed. It is something that I don't think is heard of, candidly, among agencies and even in the private sector-- complete visibility. To date, we have achieved every plan objective that has been scheduled since we introduced the plan in March. And, in some of the cases, we are ahead. We have achieved ones that aren't even due yet. So, we are achieving results. We are off to a good start there. As far as funding the effort, that is an important thing. We won't be able to realize the results of our plan without getting the 2007 budget funding that we need. Things that we are doing, important things like the guidance for the President's human capital plan for the possibility of pandemic flu wasn't due until August. OPM has already been releasing it in advance. That is part of the new customer service mindset. We are looking at the customer, saying, what does the customer need? Not just accurate, good guidance, but they need it in a timely manner. So, even though we didn't have a date until August 1, we already did the first release in June. The second release will be in early July. And then the balance will follow at the August due date. That is the mentality that we are operating under. We think that we are in a good position to ask you for full funding of our 2007 budget request. One of the things that we will fund is our retirement systems modernization. Unfortunately, the funding for that by the House was zeroed out, and that was a disappointment to us, and I think they realize that needs to be put back in. We are hoping to work with the Senate to make sure that doesn't happen and it gets resolved in conference. We now have a 1950s-vintage retirement calculation process. As you know, OPM does all the calculations of retirement benefits, not just for the Executive Branch agencies, but also for the Legislative Branch. So, all of us in this room who are either with the Legislative or the Executive Branch will have our retirement benefits calculated by OPM. We are using a paper-based 1950s system that has file drawers that end-to-end would run from this conference room to Baltimore and back again. That is how bad it is. As you mentioned, we have a retirement wave coming. This system will crash if we don't get the new automated one put in place. We need funding to do that. You have my personal assurance that this is my highest priority and I will not let this program fail, as other IT projects have across the government. Now, those are all operational things that we have done. What we are now looking to do, as well, is to look strategically and do that in new ways. In the span of just a few months, OPM has fast-forwarded beyond decades of what I would consider worn-out practices and we have initiated two of the first three steps for bringing and attracting Federal workers into the government. The first was a media campaign, the first of its kind. You can see on this chart a little preview. The tag line was, ``What did you do at your job today?'' This campaign used four Federal agency employees. OPM produced the commercials. They have been running in many media markets, right now in Cincinnati, Ohio, Mr. Chairman. One of the triggers or steps is that people who are interested will go to a special section of the USAJOBS Website. We have had over 11,000 visits since we started this campaign just a few weeks ago. So, it is working and it is attracting people to raise their awareness of a broader range of government jobs. You don't just come to Washington and sit behind a desk nine-to- five and do the same thing day after day after day. There are exciting jobs. Our job is to make sure that people know about it. So that is our media campaign, step one. In addition to that, we have gone to step two, which is to recognize that the future workforce wants a variety of working arrangements. They don't necessarily want just the traditional arrangement. That is a good one, but that is only one. There are people who want to get up at four in the morning and work from their homes at unusual hours for the U.S. Government. If they want to do that, and they are qualified, we need to reach those people. So our career patterns approach to attracting talent in the 21st Century identifies all the types of patterns that should be made available, and we have introduced this now to agencies and are requiring agencies by January 1 to go through and inventory their positions according to the different patterns. We didn't stop there. We didn't just put out a rule or put out a demand. We actually developed a tool that agencies can use to analyze which of the patterns apply, and an important part of that tool is to use all the flexibilities that you have granted and passed over the past several years to say which flexibilities line up with which pattern and we will help you to attract and retain this new 21st Century workforce. So, we are very focused on that, and we are actually doing things. The third component of our approach here will be speeding up the hiring process, because there is no point in getting people excited about coming if we can't bring them on board in a timely fashion. You have both recognized that and charged us to do that, and obviously, that is something else that is an important part of our work. I just want to wrap up by saying that we are committed to all of the things that go with our goal of making sure we have an effective civilian workforce. Clearly during my tenure, we have made many changes. Many concrete things have taken place, with many more to come. This is not the old OPM. This team sitting behind me is committed to making sure that we are able to meet the demands that you place on us and that the American citizens do, as well. I will be glad to respond to your questions. Thank you. Chairman Voinovich. Thank you, Ms. Springer. Mr. Walker, we are glad that you are now here. This storm that we had in Washington has really impacted everyone, including the Comptroller General. If you will stand, I will swear you in. Do you swear that the testimony you are about to give this Subcommittee is the truth, the whole truth, and nothing but the truth, so help you, God? Mr. Walker. I do. Chairman Voinovich. Thank you. Please proceed with your statement. TESTIMONY OF HON. DAVID M. WALKER,\1\ COMPTROLLER GENERAL, GOVERNMENT ACCOUNTABILITY OFFICE Mr. Walker. Mr. Chairman, Senator Akaka, let me just say mea culpa, mea maxima culpa. I apologize for being late. Ironically, I was at my desk this morning at 7 o'clock, but today, we have our senior executives annual meeting across the river, and when I tried to come back across the river, it was a zoo. Let me just say, I am thinking of calling Noah, and I don't mean the agency in the Federal Government, to hedge my bets in case we get any more rain here, but I do appreciate the opportunity. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Walker appears in the Appendix on page 49. --------------------------------------------------------------------------- Chairman Voinovich. We really appreciate your being here, too. I just publicly want to say that we have really benefitted from your help, cooperation, advice, and sincere interest in the Office of Personnel Management. I don't know what, frankly, we would have done without the tremendous input from you and the people that work for you. Thank you. The progress we have made would not have been possible without your help. Mr. Walker. Thank you, Mr. Chairman, and thanks to you and Senator Akaka for your leadership, because I think a lot has been accomplished in the last few years and I am confident that a lot more will be accomplished in the coming years. Chairman Voinovich. By the way, Senator Akaka is leaving to attend briefing of the Armed Services Committee on North Korea. Mr. Walker. Thank you, Mr. Chairman. I can understand why he is going. I would like to summarize my statement, if I may, Mr. Chairman, and I ask that my entire statement be included in the record. Chairman Voinovich. Yes. Mr. Walker. Thank you, Sir. As I have noted previously in our 21st Century Challenges Report, people are the most valuable asset of any knowledge-based enterprise and the Federal Government is no exception. We must modernize our human capital policies and practices if we are going to attract, retain, and motivate a top-quality workforce in the 21st Century. It is important that we recognize that we need to transform our human capital policies and practices, and in many cases, we need to transform the agencies that comprise the Federal Government. While the Federal Government needs to undergo a broad-based transformation effort, OPM is one of the agencies that has its own transformation challenges. I know from my conversations with Director Springer that she agrees that OPM does have a major transformation challenge and she has undertaken a number of efforts to try to help facilitate and expedite such an effort. In that regard, we have seen considerable progress in a short period of time under her leadership. She has taken a number of steps to try to transform the agency, not the least of which was the publication of OPM's, ``Strategic and Operational Plan for the Period 2006 to 2010.'' This plan identifies a number of activities that OPM plans to implement in order to achieve its stated objectives, including dealing with the employee satisfaction issue. As you undoubtedly know, we have a situation where OPM was ranked, I think, No. 6 in employee feedback in 2003. It went down to No. 27 in 2005. But that was based on 2004 survey data. We will have to wait and see what the results of the next survey are, and I know that Director Springer has taken a number of steps to try to help enhance communication and engage a broader cross-section of the OPM employee community. I also note, when you look at the results of the employee feedback survey and the rankings, that while government is a very hierarchical organization, in general, the results from the survey show that OPM was more hierarchical than most government organizations. I know that Director Springer is trying to take steps to deal with that. As I said, they have taken commendable steps and made meaningful progress. What I would like to do is to focus on four areas where I would recommend that Director Springer continue to take steps in order to build upon the progress that has already been made and in order to address the challenges that remain. First, leadership. There is no doubt in my mind that Director Springer is committed to doing what it takes to achieve the outlined objectives. I think, as I said before, it is pretty clear from the survey results that OPM's culture, based on the feedback results, has been more hierarchical than most. Steps that can be taken to fully engage leadership, and to expand communication efforts to try to deal with that past problem and break down the barriers, are very much needed. Second, with regard to talent and resources, OPM has made progress in assessing its current workforce needs and developing leadership succession plans. However, OPM also needs to try to take a look at what type of future skills and competencies it will need as compared with what it has, and how best to go about filling those gaps. The basic nature of OPM is likely to change dramatically in the coming years and that means that the type of skills and knowledge that it will need and capabilities and the relative quantities will likewise change. This means that, in addition to looking at the skills and knowledge, they are going to also, in my view, look at their organizational structure and possibly realign their organizational structure as well as consider alternative sourcing strategies as to how best to meet their needs of the future. To what extent should work be done by civil servants? What type of skills and knowledge, at what levels and compensation programs, would they need to have? To what extent can and should they be leveraged to technology? And, to what extent, might they be able to employ alternative sourcing strategies? With regard to customer focus, communication, and collaboration, agency views and survey results in our previous work show that OPM is taking steps to improve its customer service and communication with agencies. It is important they continue to do so. It will be critically important as we move ahead because they will become more of an enabler rather than a compliance type of organization, although they still will have certain oversight responsibilities. With regard to performance, culture, and accountability, OPM has made progress in creating a line of sight and in enhancing alignment and accountability across their organization in an effort to achieve the stated objectives that are outlined in their newest plan. Ultimately, success in achieving Director Springer's reforms objectives will rest in part not only on her committed leadership and sustained attention and her other top executives, but OPM's ability to properly align and consistently support mission accomplishment of the employees of the organization through making sure that they have modern, effective, and credible performance management systems that align institutional, unit and individual performance management objectives. Mr. Chairman, that is an overview, an executive summary of my extensive written statement, which I know has been submitted for the record. I would be more than happy to answer any questions that you may have. Chairman Voinovich. Thank you very much, Mr. Walker. Ms. Springer, could you further describe OPM's budget? First, is the budget that was approved by OMB sufficient? If we are able to maintain that number here in the Senate, would that be adequate, or are you going to be strained? Ms. Springer. We will be able to---- Chairman Voinovich. Listen, I want you to level with me. Ms. Springer. Yes. Chairman Voinovich. One of my concerns is that agencies are not forthcoming above their fiscal challenges. More and more is being asked of various departments and agencies, but they are not getting additional resources. It is attributable to the fact that we are squeezing the non-defense part of the discretionary budget. We have to face up to the fact that there are growing challenges but not increasing resources. We really need candor from people like yourself I told the same thing to OMB Director Rob Portman, who I have known a long time. I said, one of his priorities is taking care of the personnel needs of departments and agencies. So I would like you to be as candid as you can be with us. Ms. Springer. For 2007---- Chairman Voinovich. Yes. Ms. Springer. For 2007, we can get the things that are in our plan done if we get all the funding. We will be challenged to be creative in how we deploy people, and if any new demands come up during 2007, unfunded mandates, if you will, then something will have to give because that level that we have requested will just do it for us. But if new things come up, then something will have to take a back seat. So, that is how tight the 2007 budget is. The biggest concern that I have about 2007 is that we don't get the funding we need for this retirement system. You and I have had the chance to talk about this, which I appreciate. Two things were a real shocker to me when I came in a year ago. First was the state of the retirement calculation process and the second was the 2004 survey. You can imagine coming into an organization and being hit with those two things makes you wonder why you came. That is fair, but then you just do something about that. You sort of move on from that point. Regarding the 2004 survey, I can work with that with this leadership team. Regarding the retirement systems modernization. I understand the history of false starts and government-wide programs that failed because of bad leadership or whatever, but we can't afford to fail this time. We can't go further without the funding. So from a budget standpoint, that is my biggest concern for 2007. Mr. Walker. Mr. Chairman, can I touch on the retirement system real quick, if that is OK with you? Chairman Voinovich. Yes, fine. Sure. Mr. Walker. There is no question in my mind, Mr. Chairman, that they absolutely, positively need to modernize their retirement information system. I had a personal experience within the last couple of months where a friend of mine passed away who was a Federal Government employee and whose wife was waiting for weeks in order to try to be able to get her survivor benefit payments from OPM. There are real human faces on a lot of these problems. The volume involved, the fact that it is paper-intensive, the fact that we have got a huge retirement wave coming, there is absolutely no question that it has to be modernized. The one thing that I would suggest that this Subcommittee, and the Congress, may want to consider, is if there are concerns about OPM's readiness, the Congress can always consider employing an approach similar to what it has done with the IRS's modernization effort. Specifically, to give OPM the money, but possibly require GAO to take a look to make sure that things are going reasonably well. I know that Director Springer is dedicated to making sure that this does go well and she has made it one of her highest priorities, but it is a bona fide need and I do think it is something that deserves serious attention. Ms. Springer. We did have GAO visit with us periodically on our progress. Chairman Voinovich. The other thing is, how much help are you getting from the unions? They ought to be really concerned about this. Ms. Springer. Any time I speak to them about this, this is one of those areas where we have got really complete agreement. So the answer is yes---- Chairman Voinovich. I am hoping--what I would love to see is some copies of letters from major employee unions to the members of the Appropriations Committee to let them know how important this project is. This is a big deal for their membership. Have either one of you calculated a reasonable time period in which such a system can be implemented? I know that it took about 3 years in Ohio. We have a very extensive workers' comp program and everything was stovepiped. I will never forget it. It took them about 3 years to modernize a paper system. Now it is a paperless system, and everybody is so much happier with it. But, how long will it take to put this system in place? Ms. Springer. Our project plan would call for it to be done essentially in late 2009, early 2010, so it is about the same. It is about the same 3-year period. But the biggest challenge we have is, and I think you probably had in Ohio, is the conversion of the paper into the system. I mean, the software exists. Adapting the software and the functionality for the calculation, that is less time-consuming actually than the data conversion and then the change---- Chairman Voinovich. In other words, the software exists? It is not something that has to be developed for your operation? Ms. Springer. It has to be adapted for the Federal Government, but we are not starting from a clean sheet of paper, a blank sheet of paper. That was the problem that OPM had when they first started this in the 1990s, was to try and build something from scratch, which doesn't make sense for a process that every company in America has to do, which is to calculate pension benefits. Mr. Walker. Mr. Chairman, from our standpoint, there is no question it is a multi-year effort. I will be happy to talk to our IT team and provide something for the record with regard to their preliminary observations on how many years it will take. But I just want to reinforce that, in addition to the data conversion effort, it is very important before one engages in a major system modernization effort to take a hard look at current processes and controls and to make sure that they have been modernized before one seeks to automate. That is very important and I know that Director Springer understands that, given her background in financial management and controls. Chairman Voinovich. Is there any way that GAO could help them? Mr. Walker. We are happy to take a look at it and provide constructive input. I think it is in all of our interests for them to be successful. At the same point in time, I know Congress has a legitimate concern to make sure that we don't have a repeat of major system development problems that have occurred in the past. Chairman Voinovich. That is for sure--FBI. Mr. Walker. I could state a long list. Chairman Voinovich. Another example is at the Bethesda Naval Hospital. It had taken 3 years to put in a computer system out there. I don't know who was in charge, but these stories just drive me up the wall. I cannot believe it. It seems like the left hand doesn't know what the right hand is doing. Furthermore, completing the RSM project will take until at least 2009 or 2010. There will be a new administration then. How do you guarantee that this project will be completed? Ms. Springer. Probably the best guarantor of that is that you can have a strong project management system in place, a governance for the project that is driven by career people, not political. Most of the senior team behind me is career. Those are people who are going to be there when I am gone. Second, having a well-documented, well-designed plan is not a political issue. This is something that, regardless of your political philosophy, you want to have done right. So it is not something that a new administration is going to want to short- circuit. We have gotten bipartisan support for what we are doing--support on both sides of the aisle. One of the things I have learned during my time in Washington is that the real strength of an organization lies with its career team. We are just sort of the summer help that comes and goes from time to time. But the career involvement in this project is particularly important. Chairman Voinovich. Well, I don't agree with how you describe your role because there is no question that good leadership makes a big difference in a department, and I have seen that in OPM. Mr. Walker. Mr. Chairman, can I add real quickly, I agree with you on the leadership point, but I think in addition to a dedicated and capable career civil service--that is absolutely essential--I would also note that the Congress' continued attention to this effort is also an important element to make sure that you can continue to maintain momentum irrespective of what happens in the Presidential election of 2008. Chairman Voinovich. Well, God willing, I am going to be around until at least 2010. I assure you that I am going to stay on top of it with oversight. Next, you discussed a new way of attracting Federal employees. Have you teamed with Monster to develop a new Website? Ms. Springer. Yes, we work with them---- Chairman Voinovich. So, the ads you discussed are different from the work Monster does? Ms. Springer. Yes, this is entirely different. The USAJOBS is a place where you go to actually see the announcement of positions. What we are doing here, first with the media campaign, is actually running ads around the country. These aren't PSAs that run in the middle of the night. These are actual paid advertisements, media spots, in areas that have a little bit higher than average unemployment, that have a good student population, and where there is a market that is ripe for a new career. This is about job awareness, and so we will have someone from NOAA or we will have someone from Interior or some other department that will actually tell about what they are doing and how exciting it is and meaningful for public service. Chairman Voinovich. Is it working? Ms. Springer. It is working. We just started in May, so it has only been a little over a month since it has been running-- the first measure of whether it is working is the visits to the special part of the Website to find out more, and we have had 11,000 visits just as a result of the ads we have run. But then the follow-up is important, and the career patterns initiative--again, that is entirely new, hasn't been done before--is where that next step will come in. Chairman Voinovich. One of the complaints I hear is that applying for a Federal job takes so much work and then they never hear back from the agency. Ms. Springer. Yes. Chairman Voinovich. For example, the Postal Service. They are still recrutiing and administering tests, but the Postal Service is not hiring. So why are they doing this if they are not hiring? This discourages people from considering jobs with the Federal Government. Ms. Springer. Yes, and that needs to change and that is one of the things that is in our plan. The fact is that we need a shorter timeframe from when the job announcement closes to when there is a notice given back that we want to bring you on. And then from that point, it needs to go faster. So, that is the next step that we are working on. I agree with you, that is still a challenge. Can I just add one other thing? Chairman Voinovich. Yes. Ms. Springer. Mr. Chairman, part of the issue isn't so much the technology, it is what agencies do. All the steps are at the individual agency level once the applicant has gone through the technology and through that front door. There is a variety of steps, and as we work with the CHCO Council, we need to shorten some of those steps at the individual agencies in dealing with the application when it comes in. Mr. Walker. And Mr. Chairman, if I can add onto that, two notes of caution. We have to be careful to make sure that we have qualitative as well as quantitative measures. You can have a lot of people that are hitting a site or applying for a job, but if they don't have the right kind of skills and knowledge that we need, then it can be misleading. Second, a major problem is that while we can, and should, leverage technology to a greater extent than we have, nothing takes the place of the personal touch. Once somebody takes the time and effort to apply, it is really important that there be some human contact at some point in time, within a reasonable period of time, with those individuals or else they will get turned off. I mean, you can have status reports electronically that they can go to the Web and take a look at, but you have got to have some human intervention, because after all, we are a people business and you want to have a positive experience. Chairman Voinovich. Well, what I hear from my constituents, is that the Federal Government does not respond to job applicants. The more people hear that, the less they will want to consider working for the government. The other thing that I want to know is whether you have worked with agencies to identify the people that they need? There are some specific agencies that have a much greater challenge. Also, I would be interested in knowing what kind of relationship and communication there is between you and the Partnership for Public Service. The Partnership was created, as you know, by Sam Hayman to promote working for the Federal Government. Working with groups like the Partnership is important. I was at a breakfast today and heard how the government is struggling to hire engineers. Mr. Walker is working on a report to evaluate the workforce for the technical workforce in the Federal Government. OPM needs to look out across the Federal agencies to identify areas where there will be tremendous competition for needed talent with the private sector, or I think is something that is very important. Ms. Springer. You are absolutely right. We will be competing in a supply and demand environment that is going to shift dramatically over the next several years--already started--to where the demand is going way up and the supply, meaning the talent pool, is going down. There are a number of ways to deal with that. Some of them are the ones that I have shared with you. It is particularly critical in certain occupations. Engineering is one of them, and there are some others. I talk with major accounting firms, and they are having trouble finding CPAs. That is another example. It is always difficult for us to get good chief financial officers and financial staff in government agencies. There are organizations like the Partnership, and others that we do work with, and we do some joint programs with a number of them, so yes, we are engaged. What we need to do is, with the CHCO Council, to have more focused job fairs, for example, and really do focus as opposed to just doing them in areas as courtesies or other things. Go to the area where there is going to be an engineer population so that we are able to make contact, that personal touch, with the portion of the talent pool that we really need. So, yes, that is a way that we need to focus. All the CHCOs are doing succession planning right now. Under a plan, they have to get those done. When we see where those particular needs are, we will be able to coordinate our efforts. Chairman Voinovich. If I asked you today, are there on file succession plans for all of the Federal agencies that are really substantive, what would the answer be? Ms. Springer. No. Chairman Voinovich. How many agencies have them? Ms. Springer. Well, I can't answer that, but I will know pretty soon because we have got a date in our own plan. We are holding ourselves accountable for making sure that the agencies get those up to speed. I don't remember the exact date. It may be this fall. I am thinking it is maybe by the end of the fiscal year. So at that point, I will have a better read. But there is really that whole risk analysis, the risk of how many are scheduled to leave, how many will leave, what is the risk and the vulnerability to the agency, that is a process that many of the agencies are still working right now. I would be surprised if half of them are as robust as they ought to be. Chairman Voinovich. Half of them? Ms. Springer. I would be surprised. But by the end of the fiscal year, I think is the point at which we will double-check again and see exactly where they are. Chairman Voinovich. Is that taking into consideration when they are evaluating for the President's Managemen Agenda? Ms. Springer. On the scorecard? Yes. Chairman Voinovich. What is your impression of the Government Performance and Results Act (GPRA)? One of the things we found is that when the GPRA reports are filed each year, they did not include anything dealing with human capital. Is human capital being included in GPRA reports? Ms. Springer. Well, I don't know if we have given a specific directive. It should be. One of the things that we need to deal with, candidly, and I see it now as an agency head, is that there are many requirements that are put on the human resource community. What we have got to make sure is that we are not spending all our time just in a compliance mode but actually doing something that is meaningful and will lead to some sort of action. So whether it is GPRA, which is great, or a scorecard or some other things, we have to make sure that all those things bear fruit and they don't just become a compliance exercise. Chairman Voinovich. One of the things that we set up was the CHCO Council. Mr. Walker and Ms. Springer, do you think the Council has done the job that it was expected to do? My vision for the Council was that it would meet, share ideas, and build relationships to share best practices. To my knowledge, that has not happened. Is that fair? Ms. Springer. I think it is fair. I think it has had a modicum of success, but it hasn't realized its full potential. I think, correctly, the GAO report acknowledges that and points it out as an area of opportunity for us. We have done some things. We have realigned the committees. We have brought them into meetings with OPM for planning. The one place where I would say we really worked well together was on Hurricane Katrina, and getting guidance out and understanding the needs of the human capital community. We are doing it now again with developing this pandemic flu guidance, where the Emergency Preparedness Subcommittee is very engaged. So those are models that we need to build on. But it hasn't realized its full potential. We have a new executive director, as you know, and we are going to take some steps. We have created the new position of a deputy CHCO, which wasn't there originally. That is modeling after this CFO Council. That allows us to make sure we have good continuity from administration to administration and lets us dig down deeper into the organization. These CHCOs often wear several hats in management roles, and so it is helpful to have another person, and that will help them to be engaged in more ways with us. So there are a number of steps we need to take. I think we can make a lot of progress over the next year. Chairman Voinovich. I would like to identify where it hasn't reached its potential. I would like to work with you to set goals to evaluate the Council. The other thing is that when we got the legislation establishing the Council was passed, one goal was to bring a high-level commitment to the importance of human capital. Again, anecdotally, my understanding is that it really hasn't happened. I would like either one of you to comment on that situation. Ms. Springer. Could I just say one thing and then defer to my colleague? Chairman Voinovich. Yes. Ms. Springer. One of the things that I think happened with the Council, and why it wasn't as effective, candidly, and I am being honest with you here, is, I think, the meetings came to be just an opportunity largely for OPM to convey information, as opposed to a real strong interaction and engagement. I saw the same thing with the CFO Council when I first came in there, where it became an opportunity for OMB to present information. What we need to do is make sure that it is a two-way dialogue, it is not just a vehicle for making announcements by a central agency. As far as our own commitment, we had the CHCO Executive Committee review our strategic plan and give us input on it. That is about the highest level of engagement we could have, not just our own CHCO, but the CHCOs of other agencies. So, I think you are right, we need to expand that level of engagement. Mr. Walker. Mr. Chairman, I would say that I agree that it is important to have effective two-way communication through the CHCO Council. It is not just OPM disseminating information, it is information being pushed to OPM. Second, I think there are additional opportunities for the Council to employ, what I would call, a matrix approach, whereby they have responsibilities relating to their own individual department and agency and then assign selected CHCOs to be the point person on a horizontal or government-wide challenge so that they are focused not just on their own agency, but across agencies, creating taskings and partnerships to move forward. In that regard, two areas in particular where I think we need more progress would be critical skills gaps, which has been touched on already in this hearing, and performance management approaches. The performance management approaches that are taken by most Federal agencies are abysmal, and if we really want to try to transform what the government does, how the government does business, if we really want this to be a more results-oriented government, then we need to modernize our performance management systems, because people will behave based upon how they are measured. If we can end up aligning institutional, unit, and individual performance measurement reward systems, we can achieve great progress in a reasonable period of time. But in many cases, the systems just aren't anywhere close to cutting the mustard. Chairman Voinovich. Well, again, I beleive the jury is out on the pay-for-performance system for the Senior Executive Service. At some places, it has been successful. In other places, it has not been effective. OPM has to work with agencies that are facing challenges. If the systems for the SES are not successful, agencies will not be successful with strong performance management for the rest of the workforce. I have to tell you, and I don't think I have shared this with Ms. Springer, that Senator Akaka and I had a really good oversight hearing on the new National Security Personnel System. It looks like they have done a good job communicating information about NSPS for Spiral 1.1. It seems to me that one of the jobs that OPM should have is to identify successes to share through the CHCO Council. It is not effective for agencies to individually try to figure out to address problems. Mr. Walker. I think it is real important, Mr. Chairman-- there are two afflictions that are prevalent in government and we have got to figure out ways to deal with them. One is myopia, or near-sightedness, focusing on today. The second is tunnel vision, just focusing on more of a particular span of control without looking horizontally. Councils like the CHCO Council and the CFO Council and others provide an opportunity to help people not just focus on their turf, but also to look horizontally, to share best practices, and avoid common mistakes. The last thing I would say is, I understand there have been different experiences with regard to pay-for-performance, and that is a major transformational change. I would respectfully suggest that we must modernize our performance management systems. That must happen first, because unless and until we do that, you are not in the position to effectively implement a pay-for-performance system credibly, equitably, and in a sustainable manner. So it is really important that we do first things first and there needs to be much more progress in that area. Chairman Voinovich. I have introduced legislation that I think moves in that direction. I have heard that the General Services Administration, under Steve Perry, has improved its performance management program. I don't know if you have evaluated their work, but the concerpt is that each employee's performance should be tied to the organization's goals. Somebody asked me, why is this important, and I said, well, people like to know whether they are doing a good or bad job. There should be a meaningful discussion of what they do to advance the goals of the agency. I think that strong performance management is really important, and I think my legislation would help move the Federal Government in that direction. Except for DHS and DOD, the Federal Government doesn't have this mandate. One of the things that I think you should understand, Ms. Springer, is that how well you do during the next couple of years is going to have a lot to do with whether or not Congress considers additional reforms. I suspect that in the next election, Civil Service reform will be an issue. The unions are not happy with reforms underway at DHS and DOD. So the quality of what you are doing is going to have a major impact on whether these reforms continue. You must engage the unions in this work. After an NSPS oversight hearing in April, I sat down and discussed it with the union witness. He was very interested in working with Congress and the Department of Defense. In the next couple of years, you are going to have to prove to the rank and file civil servants that this is really a good thing. These changes will help foster an excited group of people, that are going to get a better chance to improve their career in the Federal Government. I think that is a real challenge, because if we don't do it right, or it looks like it is not working, then I think the reforms may end. That gets back to the issue of involvement of people. Mr. Walker, your report shows that OPM involves people at the top but is not as successful engaging the rank and file. It is not what it should be. I would like you to comment on how you think that situation could change. It gets back to Total Quality Management which is to take care of your internal customers first so that they can do a good job of taking care of your external. If you ignore the internal, then you are not going to be able to do a very good job with the external. Ms. Springer, would you tell me about what you are doing to change that? Ms. Springer. Absolutely, and you are right, it is a question of engagement. When people are ignored, when people are left out, when they don't have an opportunity to comment, when they don't know what they are doing, how what they are doing affects the overall mission, people are going to be very dissatisfied. You are going to have disengagement and you are going to have bad morale and you are going to have bad results on surveys, and that is exactly what we had at 2004. What are we doing to fix that? I will give you an example, and I am not saying this to throw stones at anyone, but if you have a senior leadership team working across the street from one of your processing offices, one of your important offices, and that team doesn't take the time to go across the street and visit with their own employees, then that sends a very strong message that you don't really care about them, and that was the kind of environment that was there. I am not saying it was intentional, but how else can you take it if you are one of those employees? We have set up a website. It is called ``My Ideas.'' I get e-mails directly from any OPM employee anywhere in the world and we get back to them. I give them a commitment of two things. I will read it and they will get an answer, and they will get an answer quickly, and that always happens. We have webcasts where we go on, with other senior managers, live on the website. Anyone can dial up from wherever they are. We have people who telework. They can get right on. And they can real-time e-mail us questions and we answer them. They are engaged. There is a new sense, and it is not just me, it is the members of this team, of people going out and we want to hear from them and we actually put their ideas into practice. When we get things done each month, the goals, the whole agency celebrates, not just one office, and there are novel ways of doing that. They don't cost much, an ice cream social, for example, where senior managers serve ice cream to people. But we have got newsletters. There are things that weren't there before, lots of engagement for the employees. The goals weren't set by an outside consultant. They were set by members of OPM. They were reviewed by a number of outsiders, but they are the employees' goals, so they have ownership. It is not just handed to them or done to them. They are their own goals, and their own performance agreements, not just SES, but every member of OPM has a goal or goals to some degree or another that they can see tied directly to that strategic plan and operational plan. Chairman Voinovich. How many people were involved in putting that plan together? You have a strategic and operational plan that I have been very impressed with, but how many of your top managers provided input and did you get any input at all from the rank and file? Ms. Springer. Yes. We had the senior team plus another 50 members of OPM, both general schedule and SES, that I met with 10 or 11 times, every week. I didn't take a step forward without that group of 50 reviewing what we did and them giving us direction. So they are their goals. That is just the starting point. Now, you have to show that you have a successful culture and you reward it and you acknowledge it. You go up to our site in Pennsylvania that has hundreds of employees and you go out and shake hands and you listen to people. I have people that literally came up to me in tears in the beginning of June because it was the first time that they really had people to come and interact and listen to them. That is what is different now. It is the whole sense that these are people. The agency is not so huge that you can't interact. That is one of the great advantages we have. And so people are engaged. They understand what they are doing. They are getting acknowledged when they succeed. Leaders make sure they have what they need to succeed, and that is what is going to turn it around. That is why I am confident when we get this 2006 survey that is going to be done in August at OPM, that you are going to see a huge change, just a huge change. Chairman Voinovich. That is terrific. I chair a Subcommittee in the EPW Committee which has oversight of the Nuclear Regulatory Commission. I am spending a lot of time working with the NRC. I am talking to them about implementing total quality management. It is involvement of people in the decisionmaking that drives continuous improvement. That is the excitement that makes an organization, I think, really outstanding. Mr. Walker, during your review, did you identify any particular area of concern or significant skill gap that OPM must address in order for it to successfully lead the Federal Government's human capital transformation? Mr. Walker. One of the areas that OPM needs to continue to make progress on is the plan that was issued in March. I believe it is excellent, it is very transparent, it has specific goals, and specific time frames. However, I think they need to continue to update their more comprehensive workforce plan and what type of skills and knowledge they are going to need to achieve their objectives in the future. Given the nature of OPM, its business is going to change in the future, their role and functions are going to change, what type of skills and knowledge they are going to need and what relative quantities, what items can be automated, what items should be core to the Civil Service, what items might we look for alternative sourcing approaches. I think that is an area where, I think, there is more time and attention that needs to be focused. It is a major undertaking, because you are really talking about OPM being fundamentally different in the future than what it was 10 years ago, in many ways. Chairman Voinovich. This is one area where I thought the CHCO Council would be effective. For example, sharing best practices to encourage telework. Which agencies really are making use of telework? Is that kind of information being shared with other agencies? I am familiar with the Defense Finance and Accounting Service. They really are utilizing the ability to telework. For example, how many agencies today have telework? Do you know? Ms. Springer. Yes, we do. We have a survey going on right now. We will have the results of that. It is small. Some are doing more than others. Patent and Trademark Office does it. In fact, we featured them at one of our press briefings to roll this out. The Council is the vehicle we should be using to amplify these best practices. Chairman Voinovich. The thing is, OPM has to look down the road and envision the Federal Government is going to compete for talent. I think that the government should be strongly advocating telework. There are a lot of fabulous people out there with great skills who, for example, are moms at home and can't come to the office every day. I have an example in my own family--my own daughter-in-law. She has four kids. She gets up at 4 o'clock in the morning and works from a secure computer at home. She also goes into the office once a week. She worked for this organization before. They love it, and she is making a contribution. The point is that there is going to be a lot more of that. Everybody is going to be looking at different flexibilities. We have got a whole different world that we are living in today. If we are going to be the employer of the 21st Century, the government ought to be looking around and seeing what other organizations are doing. Law firms are doing it. Accounting firms are doing it. That is one way we can stay up there and be competitive and not fall behind the private sector. Ms. Springer. Mr. Chairman, you have been the best advertiser for what we are doing and have just launched, which is that we need to identify all those patterns, alternate work sites, telework is one of those patterns. There are lots of them. Mobility--there are people who want to come in government and out of government. They want to come mid-career or late- career. Retirees don't want to necessarily leave altogether. They might want a reduced, limited basis work schedule. There are people who want to come for just a particular mission or particular role. They want to put in systems and do that from agency to agency, and then they are almost like an internal consultant, if you will. But there are all kinds of arrangements, and that is our initiative, a 21st Century approach to attracting talent. It is exactly what you just articulated. But it is not enough to just dump this idea out to agencies and say, here it is, have at it. You have to have a tool to help the agencies to take their positions and say, which of these patterns work? Does telework work for this kind? That is fine. Here are the flexibilities that the U.S. Congress has given you that might help attract somebody for that pattern. And even beyond all that, one of the things, and it goes with Mr. Walker saying that what we need to do in a new role is train leaders to manage in these environments, because it takes a different type of manager and our managers today aren't necessarily going to be good managers in these types of relationships. So that is one of the big things we have on our plate to do. Chairman Voinovich. Well, it gets back to something Mr. Walker said. If there is an agency successfully implementing telework, the CHCO Council is an appropriate venue to explain to other agencies the success. This could encourage other agencies to explore implementing a new program, like telework. Ms. Springer. Right. Chairman Voinovich. The Council should spread best practices. Ms. Springer. Yes. And he is here to hear you say that today. We did actually do that at our roll-out of this and it is the first of many more times that we have to do it. We had PTO, we had Interior, and we had part of OPM. The actual employee was there saying how this works. There was a mother there saying, ``Here is how I am able to telework at home and here are the tools I have to do it.'' She works for PTO. And someone from Interior and someone from OPM. So we are starting to do it. We need to do a lot more of it and the CHCO Council is the place to do it. Chairman Voinovich. OK. This gets back to one other thing, and neither one of you answered the question on this. What is your assessment of the status of the CHCOs in the departments? Mr. Walker, I don't know if you have had a chance to look some of these over. I would like your opinion about this. The goal of the CHCO Council is to elevate the role of human capital in the departments. Has it happened? Mr. Walker. That is an area I think we need to do more work on, but I will tell you this. There is absolutely no question that the human capital function needs to be elevated, it needs to be much more strategic, and it needs to employ much more forward-looking, creative, and integrated approaches. In some cases, the people who are in those jobs are well-suited to the new future. In some cases, they may not be well-suited to the new future. Merely because this function needs to be something that it hasn't been in the past doesn't mean that the existing players can achieve that objective. You have to analyze that, because you have to earn people's respect to be a strategic player, to be at the table with top management and in order to be able to add that value. I would like to reinforce something that you touched on before. In my view, with the major transformational challenges that we face, not just in the human capital area but overall, we need to do much more work in the area of benchmarking and best practices, much more work. Let me give you two examples in the human capital area to try to help bring it home. In my view, there are two key dimensions. One dimension is, what are the major challenges that we face? Examples of that would be critical skills gaps and inadequate performance management systems. Those are just two of many examples. So what are the critical challenges that we face across government? And then second, what are effective tools or strategies that can be employed in order to address the key challenges that we face across government? Those could include things like telework or student loan repayments, pay-for- performance systems or whatever. We need to create these matrices where we are saying, here are the big challenges and here are the strategies. Let us make sure that we have mechanisms that provide benchmarking information while sharing best practices. Let us tap a key player, not only just within OPM, let us tap a key player within the CHCO Council to have some responsibility for each of these so we can end up fighting the siloism, the tunnel vision, and the focus on today and start helping to create a more positive future quicker than otherwise might be the case. Chairman Voinovich. If you can do it in the Executive Branch, maybe we can do it in the Legislative Branch. Mr. Walker. Well, Mr. Chairman, I have said this before. I think the Congress is a critically important player in our constitutional form of government. There is a reason that it is Article I in the Constitution. There is a reason that it is on the Hill. At the same point in time, realistically, in major transformational efforts, you have to start with the Executive Branch because the Executive Branch at least has a CEO. Chairman Voinovich. Right. Mr. Walker. So you have got a point person who is responsible and accountable. But I do think the Congress is going to have to make some major changes, too. It is not well aligned to meet the challenges and capitalize on the opportunities of the 21st Century. Chairman Voinovich. I agree with you. I just think we are not looking at the big picture, I call it stovepipes. For example, funding MAX HR for the Department of Homeland Security. Does he ask you for help? Ms. Springer. Well, no, not on the budget. Obviously, we want them to be successful. We haven't been engaged in the budget. We have been engaged in other ways to try and steer them to achieve success. We think that in the area of their personnel reform, especially once they get a permanent new Under Secretary in for management, they need to follow the model that has been used at DOD, and DOD obviously has a long history of training and they have an infrastructure, but I think that the whole program management structure they have there is one that would serve them well. Our advice to them has been to, once they get the right people in place, visit with DOD and try to take some steps along that line. Chairman Voinovich. So they have a long way to go? Ms. Springer. I think, with all the turnover and other things, for the CHCO positions that are vacant right now, they need to get the right people in place first in those key leadership positions. Chairman Voinovich. Well, my observation is that DHS and DOD need chief management officers. They have to have somebody that is going to follow through with transformation. One of the things that I am really concerned about, again, is Congress making more organizational changes. We are going to try and redo FEMA all over again, and I just think it is crazy. I really do. I just think that the Secretary has got his hands full and now we are talking about changing again. He has got 2\1/2\ years, and what Congress ought not to be doing is spending time debating the FEMA organizational chart. It just doesn't make any sense to me. I just think that the Administration should be more aggressive in coming to Congress and saying what they need. That is one area that I am really concerned about. Mr. Walker, you talk to these people. I just think at this stage in this Administration, we ought to be just telling DHS to focus on its mission and not another reorganization. Even if it started now, it will not be done by the end of this Administration. Does anyone want to comment on that? Mr. Walker. Well, I think that we need a reasonable degree of stability in order to be able to execute on critical areas that need to be focused on. As you know, some of these organizational issues are not just internally driven. In some cases, Congress is looking into possibly restructuring. We have done work with regard to what went right, what didn't go right with regard to Hurricanes Katrina and Rita, and one of the things that we talked about is you need to have, among other things, a person responsible and accountable for a major emergency who reports directly to the President of the United States in the wake of a catastrophic event. That does not necessarily mean that FEMA has to be outside the Department of Homeland Security. There are ways to accomplish the objective without unbundling that organization, and I think Congress and the key players need to focus on the substance, rather than the form, of a lot of the challenges that we face, so we can focus more on achieving results. Chairman Voinovich. Exactly, and it gets back to a management principle. I have spent over 18 years managing in the Executive Branch. My observation is, you can have a structure that may not be perfect, but if you have the right individuals, you can be successful. You can have a perfect structure, but if you don't have the leadership, it is not going to work. I think that is where we are right now. They need consistent leadership at Homeland Security. They have the right people. Give them the job and let them go out and get it done instead of debating the organizational structure. Then what happens is officials spend time coming up here to testify when they should be out in the field emphasising getting the job done. Mr. Walker. Mr. Chairman, when I first came to GAO in November 1998, I worked together with all our top executives and got input from our employees to be able to come up with our first ever strategic plan in early 2000 and then to realign the organization to support that plan. I made those decisions early and we got it behind us. You need some stability in an organization so you can focus on achieving positive results. When people are worried about where their organization is going to be, or where they are going to be, that has an automatic undercutting of productivity. Chairman Voinovich. And it doesn't help in recruiting, either. Mr. Walker. No, and I also agree that if you don't have the right leaders, nothing else matters. Chairman Voinovich. Listen, that is a great way to end this hearing. I really appreciate the fact that the two of you have been here. I think this has been very helpful to us. We continue to look forward to working with you. Keep it up. To your team back there, we are very proud of you. You are really stirring the pot and getting things done. Thanks for following Ms. Springer in her efforts. She is only as good as you guys are. Thank you for what you are doing. This hearing is adjourned. 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