U.S. Office of Personnel Management - Ensuring the Federal Government has an effective civilian workforce

Good morning, Chairman Serrano, Ranking Member Regula, and Members of the Subcommittee.

Thank you for the opportunity to meet with you today to discuss the U.S. Office of Personnel Management (OPM) and the Federal workforce. I will use my time to share with you information about what the OPM of 2007 looks like, to summarize some of our recent accomplishments and to highlight our budgetary needs for FY 2008.

As you know, our responsibilities include every aspect of ensuring the Federal Government has an effective civilian workforce - from background investigations, recruitment, hiring, training and succession planning to personnel policy design, development and oversight, compensation, employee benefits and retirement administration.

As shown in the first attachment to my prepared statement, and in the first two charts I have brought with me this morning, OPM is involved in a broad range of Federal workforce administration activities that go hand in hand with the general responsibilities I just mentioned. First, as Director of the agency, I serve as the principal advisor to the President with respect to our 1.8 million Federal civilian workforce. And Mr. Chairman, I know you will be interested to know that this is indeed a diverse workforce, in terms of minority employment - in fact, our latest figures show an overall increase in 2006 to 32.2 percent of that 1.8 million now being represented by minorities.

OPM designs and oversees implementation of human capital strategies across the Federal Government. We set recruiting, selection, development, and compensation guidance for Federal executives and other civil service employees. We designed and oversee operation of the USAJOBS.gov website which allows individuals to search for and apply for any of the approximately 20,000 Federal positions which are now vacant and posted on that site. We certify performance appraisal systems for over 7,000 members of the Senior Executive Service. And we have worked closely with both the Departments of Defense and Homeland Security to fulfill the statutory obligation Congress gave to OPM in 2002 and 2003 on the design of more modern and flexible human resources management systems for those two departments in view of their unique national security mission requirements. I would note that OPM will complete our independent assessment of the implementation of these systems by May. Furthermore, we are helping Federal agencies strengthen their performance appraisal systems to distinguish employee performance more meaningfully and motivate their employees to achieve even more for the American people.

OPM also manages the largest single employer-sponsored health insurance plan in the world with over 8 million insured. We conduct 90 percent of all background investigative services for the Federal Government. That's 1.8 million investigations a year. For more than 40 years, we have provided critical training for the Federal workforce at our Federal Executive Institute and Management Development Centers. We provide Federal observers to monitor elections for ethnic and racial discriminatory practices, and for compliance with language minority requirements in areas designated by the Attorney General. And, we administer retirement benefits for all three branches of the Federal Government - over 2.4 million retirees.

2006 was a year of great accomplishment for OPM as you will see with the second attachment to my prepared statement (and the third chart I have here this morning). We introduced a framework for achieving our goals founded on a new five year Strategic and Operational Plan which was markedly different from previous plans. It contains goals that are straightforward and transparent to the public - goals that are tied to specific completion dates and which are also tied to our performance management system to ensure accountability. We established the highest level of visibility and accountability by posting every goal and its due date on our public website.

I am pleased to report that OPM associates met all of the 106 goals which were scheduled for completion in 2006. Included in these achievements was the launch of new dental and vision insurance programs that were chosen by over 700,000 enrollees. We issued an on-line catalog of all Federal Government professional development programs. We provided career counseling to 1,000 military and family members at the Walter Reed Army Medical Center here in Washington, D.C., and also opened a new veterans' career counseling center at the Brooke Army Medical Center in Texas. We also issued new personnel and telework guidance for agencies to use in preparing for a possible pandemic influenza outbreak. We paid $60 billion in retirement and life insurance benefits. We introduced the Career Patterns Initiative - a 21st century approach to recruiting talent. And for the first time ever, we designed, produced, and placed televised Federal job recruitment ads featuring actual Federal employees in ten media markets across the country.

We have recently released an addendum to our Plan which incorporates 96 new goals to include further improvements for the Federal Employees Health Benefits Program such as health information technology (HIT) implementation initiatives; further building and testing of our Retirement Systems Modernization program components in support of our February, 2008 "go-live" objective; expansion of our efforts in Government-wide recruitment, including additional television advertisements of Federal job opportunities; further improvement to data security, including additional data encryption efforts and privacy training; and continued work with the Chief Human Capital Officers Council, which Congress authorized in 2002, to develop and share best practices on cross-cutting human capital issues, including effective performance management for our senior executives, or greater use of workforce flexibilities such as telework, and critical direct-hire authorities agencies may need to utilize as they react to different mission requirements. I am confident that I will be able to report to you next year that we were successful in meeting these new goals as well.

With respect to the President's Fiscal Year 2008 budget request for OPM, I am confident we have been operating in a manner that warrants continued investment of taxpayer dollars for the purposes outlined in this year's budget submission. As you will see in the third attachment to my statement (and the fourth chart I have here this morning), our total budget request for FY 2008 is $43 billion. 99.5 percent of our request is for mandatory funding of our insurance and retirement programs. Our discretionary request is for $232 million.

As I mentioned before, we have several key priorities that are supported by our 2008 budget request, as you will see in the last attachment to my statement and this final chart here this morning. One of my highest priorities has been, and continues to be, to modernize the way that we calculate and process Federal retirement payments. This is a critical effort which recognizes the changing demographics of the Federal workforce, with roughly 60 percent of the Federal workforce expected to be eligible for retirement over the next 10 years. Our current antiquated system - which is a paper-based system that includes nearly 150,000 file drawers - is currently being transformed into an electronic system which will enable us to provide timely and accurate payments to individuals retiring from Federal service. We are very appreciative that the Congress provided us with $13 million in the recent joint funding resolution for Fiscal Year 2007 that enables us to keep the project moving forward. I ask that you continue your support for this important project in Fiscal Year 2008 and beyond.

I would also like to mention additional initiatives that we are working on this year. We plan to submit a number of legislative proposals to improve certain features of our benefits programs and to enhance Federal agencies' ability to recruit and retain a highly skilled workforce. For example, we will soon propose some changes that will provide more choices, increase equity in benefits, and reduce costs for Federal Employees Health Benefits Program enrollees. We are also working to develop a proposal, as a means of combating the forthcoming retirement wave I referenced, that would allow Federal agencies to rehire recently-retired Federal employees who can assist with short-term projects, fill critical skill gaps and train the next generation of Federal employees without having a reduction in the annuity payments they have already earned. In sum, we are committed to exploring various ways to maintain our competitive position as we seek candidates for Federal service in an increasingly competitive market for talent.

Mr. Chairman, I have highlighted only a small portion of the important work that is being done at OPM. I am very appreciative of the support of this subcommittee and look forward to working with you as we continue to strengthen the Federal workforce. I am certain that, together, we can do what is necessary to provide the resources and guidance that will enable every Federal agency to have the workforce it needs to accomplish its mission.

Attachment [89 KB]