United States General Accounting Office GAO Performance and Accountability and High-Risk Series February 1999 Major Management Challenges and Risks An Executive Summary GAO/OCG-99-ES GAO United States General Accounting Office Washington, D.C. 20548 Comptroller General of the United States February 1999 Members of the 106th Congress This report outlines actions needed to improve the performance and accountability of, and manage the risks relating to, our national government. It summarizes the findings of a new set of reports, entitled Performance and Accountability Series: Major Management Challenges and Program Risks, we issued last month. This document also incorporates a summary of our latest High-Risk Series update that was also issued last month. This latter series includes government operations that GAO has designated “high risk” because of their greater vulnerabilities to waste, fraud, abuse, and mismanagement. GAO has been working with the Congress and the executive branch to promote effective implementation of much needed governmentwide management reforms. They include strengthening financial management, improving information technology practices, and producing a more results-oriented government. Important activities have begun but more effort is needed to produce tangible, lasting improvements and instill a sharper focus on performance and accountability. Greater attention also is needed on human capital strategies to support meaningful and sustainable management reforms across government. GAO is committed to helping the Congress and federal agencies better serve the American people and prepare for the demands of the 21st century. Two of my primary goals for GAO are to help continuously improve the efficiency and effectiveness of and accountability over federal operations and to help enhance the public’s respect for and confidence in their government. In addition to our ongoing support to the Congress through reports, testimonies, and consultations, we plan to update the issues addressed in these two series at the beginning of each new Congress. This will be an important way to gauge progress. Special recognition is due to the Members of Congress who requested the initial Performance and Accountibility Series. These include the Majority Leader of the House of Representatives, Dick Armey; the Chairman of the House Government Reform Committee, Dan Burton; the Chairman of the House Budget Committee, John Kasich; the Chairman of the Senate Committee on Governmental Affairs, Fred Thompson; the Chairman of the Senate Budget Committee, Pete Domenici; and Senator Larry Craig. The series was subsequently cosponsored by the Ranking Minority Member of the House Government Reform Committee, Henry A. Waxman; the Ranking Minority Member, Subcommittee on Government Management, Information and Technology, House Government Reform Committee, Dennis Kucinich; Senator Joseph I. Lieberman; and Senator Carl Levin. Special recognition is also due to the Senate Governmental Affairs and the House Government Reform Committees for their long-standing commitment to and support of our High-Risk Series. We remain committed to identifying and reporting on high-risk areas to facilitate oversight by the Congress and to encourage needed actions by applicable executive branch agencies. The GAO officials listed at the end of this report can provide additional information. This report is being sent to each Member of Congress and heads of major departments and agencies. David M. Walker Comptroller General of the United States Page 2 GAO/OCG-99-ES An Executive Summary Page 3 GAO/OCG-99-ES An Executive Summary Contents Introduction 6 Adopting an 9 Effective Results Orientation Improving the 16 Use of Information Technology to Achieve Results Strengthening 21 Financial Management for Decision-Making and Accountability Building, 26 Maintaining, and Marshaling the Human Capital Needed to Achieve Results 1999 High-Risk 29 List Key GAO Officials 30 Page 4 GAO/OCG-99-ES An Executive Summary Page 5 GAO/OCG-99-ES An Executive Summary Introduction As we approach the 21st century, American citizens are increasingly demanding improved government services and better stewardship of public resources. Responding effectively to these demands will require innovative management approaches and the use of new types of information to guide decisions. The federal government is adopting the principles of performance-based management in an effort to address these demands. Performance-based management seeks to • shift the focus of government performance and accountability away from a preoccupation with activities--such as grants or inspections. • focus on the results or outcomes of those activities-- such as real gains in safety, health, and living standards. • systematically integrate thinking about the results the government intends to achieve, giving consideration to • organizational structures, • program and service delivery strategies, • the use of technology, and • human capital strategies and practices. The Congress has constructed a legislative foundation Performance- to create more focus on performance-based Based Statutory management and decision-making. Under this Framework framework, new information will be generated to provide deeper understanding of federal performance and management challenges and to help target program areas needing attention. Page 6 GAO/OCG-99-ES An Executive Summary Introduction Figure 1: Performance-Based Framework Area Statute New information Results • Government Performance and • Agencies' missions and orientation Results Act of 1993 strategic priorities (Results Act) • Results-oriented goals • Performance data Financial • Chief Financial Officers Act • Audited annual financial management of 1990 statements • Timely and reliable • Government Management information on Reform Act of 1994 results of operations • Costs of achieving results • Federal Financial Management Improvement Act of 1996 Information • Paperwork Reduction Act • Relationship of investments technology of 1995 to the achievement of performance • Clinger-Cohen Act of 1996 Page 7 GAO/OCG-99-ES An Executive Summary Introduction The government faces a number of major challenges Improving to improving performance and strengthening Performance and accountability. Accountability Across Government The Major Challenges • Adopting an effective results orientation • Improving the use of information technology to achieve results • Strengthening financial management to better support decision-making and accountability • Building, maintaining, and marshaling the human capital needed to achieve results (GAO/OCG-99-1) Part of this challenge is giving adequate attention to resolving high-risk problems. Since 1990, we have identified government operations that are “high risk” because of their greater vulnerabilities to waste, fraud, abuse, and mismanagement. This effort brought a much needed focus on problems that are costing the government billions of dollars. To help, we have made hundreds of recommendations to improve these high-risk operations (GAO/HR-99-1). Overall, agencies are making progress in trying to correct these problems and the Congress has acted through hearings and legislation. Sustained attention is needed to make further headway. High-risk problems are highlighted throughout this report and listed on page 29. Page 8 GAO/OCG-99-ES An Executive Summary Adopting an Effective Results Orientation The cornerstone of efforts to implement performance-based management is the adoption of a results orientation. Many agencies continue to struggle to implement basic tenets of performance-based management. The uneven pace of progress across government is not surprising; agencies are in the early years of undertaking the changes that performance-based management entails. Too often, the government has failed to manage on Defining Goals the basis of a clear understanding of the results and Measures expected to be achieved and how performance will be gauged. These understandings are vital because programs are designed and implemented in dynamic environments; competing program priorities and stakeholders’ needs must continuously be balanced and new needs addressed. Page 9 GAO/OCG-99-ES An Executive Summary Adopting an Effective Results Orientation The Social Security Administration (SSA) • SSA has emphasized improving processes for quickly determining applicants' eligibility for the Supplemental Security Income (SSI) program and moving the eligible claimants onto the disability rolls. However, SSA has not put emphasis on the equally important result of helping individuals return to work and move off the disability rolls. Also, long-standing problems such as increasing overpayments and the inability to recover outstanding debt, contribute to SSI's status as a high-risk area. During fiscal year 1998, for example, current and former recipients owed SSA more than $3.3 billion, including $1.2 billion in newly detected overpayments for the year. SSA plans to improve SSI's overall payment accuracy. (GAO/OCG-99-20) The Internal Revenue Service (IRS) • IRS' traditional performance goals and measures, such as amounts collected from taxpayers, had created incentives to maximize enforcement results, but provided insufficient incentives to ensure that taxpayers received fair treatment. IRS plans to emphasize identifying, as promptly as possible, taxpayers who may have compliance problems and then addressing the particular problems of those taxpayers. This customer-oriented approach is intended to help taxpayers and IRS by minimizing the need for subsequent enforcement actions. (GAO/OCG-99-14) Page 10 GAO/OCG-99-ES An Executive Summary Adopting an Effective Results Orientation Ineffective and outmoded organizational and program Aligning structures frequently have undermined agencies’ Activities to Meet effectiveness. Challenges agencies confront range Demands from the need for clearer lines of accountability to streamlining organizations in response to changing circumstances. All federal agencies share the ongoing need to ensure that their organizational structures and program approaches efficiently support the accomplishment of mission-related goals. The Department of Energy (DOE) • DOE's organizational structure has neither clear lines of authority nor clear definitions of roles and responsibilities. Contractors receive policy guidance from program offices, but are managed by field offices that are not accountable to the program offices. While DOE had nearly $16.2 billion in obligations to contracts in fiscal year 1997, its contract management practices--including noncompetitive awards and lax oversight of costs and activities--continue to be high risk. DOE has a framework in place for contract reform but implementation problems remain. (GAO/OCG-99-6) The Department of Defense (DOD) • The end of the cold war provided DOD with the opportunity to reduce the size and cost of its infrastructure and thereby make resources available for other priorities, such as force modernization and military readiness. We have identified areas in which DOD's infrastructure can be eliminated, streamlined, or reengineered. Improved infrastructure planning could help DOD components and programs to develop results-oriented goals and performance measures that link to and support DOD-wide goals. DOD is seeking ways to address mission support inefficiencies such as through consolidations and public-private partnerships. (GAO/OCG-99-4) Virtually all of the results that the government strives Rationalizing to achieve require the concerted and coordinated Crosscutting efforts of two or more agencies. However, mission Efforts fragmentation and program overlap are widespread and programs are not always well-coordinated. This wastes scarce funds, frustrates taxpayers, and limits Page 11 GAO/OCG-99-ES An Executive Summary Adopting an Effective Results Orientation overall program effectiveness. Table 1 illustrates this problem, found in over 30 programs across government and covering nearly a dozen federal missions. Table 1: Areas of Fragmentation and Overlap Mission areas Programs Agriculture • Food safety Commerce and housing credit • Financial institution regulation Community and regional • Community development development • Economic development • Emergency preparedness • Housing • Rural development Education, training, • Early childhood programs employment and social • Employment training services • Student aid General science, space, and • High performance computing technology • National laboratories • Research and development facilities • Small business innovation research General government • Federal statistical agencies Health • Long-term care • Substance abuse • Nuclear health and safety • Telemedicine Income security • Child care • Welfare and related programs • Youth programs International affairs • Educational programs • Policy formulation and implementation (continued) Page 12 GAO/OCG-99-ES An Executive Summary Adopting an Effective Results Orientation Mission areas Programs Law enforcement • Border inspections • Drug control • Investigative authority • Drug trafficking • Combating terrorism Natural resources and • Federal land management environment • International environmental programs • Hazardous waste cleanup • Water quality Improving Food Safety and Quality • The fragmented federal approach to ensure the safety and quality of the nation's food--at a cost of over $1 billion a year--is inefficient and hinders the government's efforts to effectively protect consumers. Estimates of foodborne illness range widely, from 6.5 million to 81 million cases annually, and it is estimated that these illnesses cause between 500 and 9,100 related deaths each year. The current system to ensure food safety suffers from inconsistent oversight, poor coordination, and inefficient allocation of resources. As many as 12 different federal agencies administer over 35 different laws overseeing food safety. (GAO/OCG-99-2) Combating Terrorism • Better coordination is needed to improve the effectiveness of efforts to safeguard the nation from terrorist attacks. Over 40 agencies, bureaus, and offices--at a cost of nearly $7 billion for unclassified programs during fiscal year 1997--implement numerous programs designed to prevent and deter terrorism, respond to terrorist threats and incidents, and manage the consequences of terrorist acts. Coordinating these programs will entail a substantial effort. (GAO/OCG-99-1) Page 13 GAO/OCG-99-ES An Executive Summary Adopting an Effective Results Orientation Federal agencies are working with their state partners Creating to instill performance-based approaches to managing Performance intergovernmental programs. Partnership agreements Partnerships centered on results-oriented goals and measures can be an effective vehicle for achieving results while providing states with needed flexibility. However, in some cases the government could do a better job. The Health Care Financing Administration (HCFA) • HCFA, as required by statute, has delegated to states the responsibility to inspect nursing homes and certify that they meet federal standards. We have identified problems in the enforcement of these standards. In analyzing recent inspection and complaint information in California, we found that nearly one in three nursing homes was cited by state inspectors for providing care that created serious or potentially life-threatening problems. Although state inspectors identified serious deficiencies, HCFA's policies did not ensure that these deficiencies were corrected. HCFA is developing plans to improve state inspection practices, revise oversight of state inspections, and strengthen actions against poorly performing homes. (GAO/OCG-99-7) Page 14 GAO/OCG-99-ES An Executive Summary Adopting an Effective Results Orientation An environment that focuses on results needs Developing and different information from that traditionally collected. Using Obtaining more credible results-oriented performance Performance information is essential for (1) accurately assessing agencies’ progress in achieving goals and (2) in cases Information where sufficient progress is not being made, for identifying opportunities for improvement. The Environmental Protection Agency (EPA) • EPA has found that the wealth of environmental data EPA and states collect are often difficult to compile in a meaningful way. For example, inconsistencies in water quality assessments, due to states using methodologies that differ, make it difficult for EPA to aggregate the data. Using information from these various sources presents a challenge when attempting to conclusively determine whether the quality of rivers, lakes, and streams is getting better or worse over time. Absent this information, it has been difficult for EPA to set priorities, evaluate the success of its programs and activities, and report on its accomplishments in a credible and informed way. (GAO/OCG-99-17) The Health Care Financing Administration • HCFA had not developed its own process for estimating the national error rate for its over $181 billion Medicare fee-for-service payment program. For fiscal year 1997, the Department of Health and Human Service's Inspector General, in its CFO financial audit, estimated that about 11 percent of all such payments for claims, about $20 billion, did not comply with Medicare laws and regulations. HCFA has now adopted the reduction of the error rate as a performance goal under the Results Act. (GAO/OCG-99-7) Page 15 GAO/OCG-99-ES An Executive Summary Improving the Use of Information Technology to Achieve Results The government is heavily dependent on computer systems and networks to implement vital public services supporting national defense, revenue collection, and social benefits. However, billions of dollars have been wasted for computer systems that failed to deliver expected results. To the extent that billions in planned annual obligations for information technology can be spent more wisely, federal programs will operate more efficiently with less cost. To accomplish this, the government faces a number of critical challenges. Resolving the Year 2000 computing problem is the Addressing the most pervasive, time-critical risk facing government Urgent Year 2000 today. Unless adequate actions are taken, key federal Computing operations—national defense, benefit payments, air traffic management, and more—could be seriously Challenge disrupted. Over the past 2 years, preparedness has improved markedly, but significant challenges remain and time is running out. Page 16 GAO/OCG-99-ES An Executive Summary Improving the Use of Information Technology to Achieve Results Figure 2: Year 2000 Progress Tier 1: Agencies Demonstrating Insufficient Evidence of Progress • Defense • HHS • Transportation • Energy • State • AID Tier 2: Agencies Showing Evidence of Progress But About Which OMB Had Concerns • Agriculture • Education • Labor • OPM • Commerce • Justice • Treasury Tier 3: Agencies Making Satisfactory Progress • HUD • EPA • NASA • SBA • Interior • FEMA • NSF • SSA • VA • GSA • NRC Source: November 1998 OMB report. To help agencies mitigate Year 2000 risks, we produced guides on enterprise readiness, business continuity and contingency planning, and testing. We also issued over 70 reports and made over 100 recommendations to improve the readiness of the government as a whole and of a wide range of individual agencies. The scope of this problem extends beyond federal operations—it spans all spectrums of our national economy as well as globally. Accordingly, we recommended that the President’s Council on Year 2000 Conversion develop a comprehensive picture of the nation’s readiness by Page 17 GAO/OCG-99-ES An Executive Summary Improving the Use of Information Technology to Achieve Results key economic sector—including risks posed by international links. The Council has adopted a sector-based focus to increase awareness and has begun developing a national assessment. Continuing computer security weaknesses put critical Resolving Serious federal operations and assets at great risk. Such Information problems make it easier for individuals and groups to Security obtain sensitive information, commit fraud, or disrupt operations. In today’s environment, these threats Weaknesses include a range of military enemies, criminals, and terrorists who have the capability to severely disrupt or damage the systems and infrastructures upon which our nation depends. Much more needs to be done to ensure that systems and data supporting essential federal operations are adequately protected. First, individual agencies need to proactively manage risk and strengthen computer security programs by adopting best practices, such as those we described in a May 1998 executive guide entitled Information Security Management: Learning From Leading Organizations (GAO/AIMD-98-68). Second, stronger governmentwide leadership is essential. A May 1998 presidential directive established entities within the National Security Council and the FBI to address critical infrastructure issues. Consistent with our recommendations, OMB and the National Security Council are working collaboratively to increase governmentwide focus on this issue, but these efforts are only in their early stages. Agencies are making some strides in improving Ensuring That information technology investment strategies, but Investments current practices fall short of statutory expectations. Improve Services Page 18 GAO/OCG-99-ES An Executive Summary Improving the Use of Information Technology to Achieve Results Figure 3: Key Information Technology Challenges Information Technology Challenges • Better justify how costly investments will improve performance. • Design architectures before proceeding with massive system modernization efforts. • Fix inadequate software development and acquisition practices. • Build effective chief information officer leadership and organizations. The following four troubled multibillion dollar modernizations, which we have designated high risk, illustrate the vital importance of meeting these challenges. Their ultimate success is key to the government’s future ability to deliver critical services—safe and efficient air travel, modern tax processing and customer service operations, and improved weather forecasting—as well as improving systems that support national defense operations. Page 19 GAO/OCG-99-ES An Executive Summary Improving the Use of Information Technology to Achieve Results Air Traffic Control Modernization • FAA's $42 billion air traffic control modernization program has experienced cost overruns, schedule delays, and performance shortfalls. In response to our recommendations, FAA has initiated efforts to improve software acquisition practices, complete an architecture, and place a Chief Information Officer with sufficient authority. However, FAA's reforms are not yet complete and several major projects continue to face challenges and risks. (GAO/OCG-99-13) Tax Systems Modernization • The IRS has spent over $3 billion attempting to modernize its outdated, paper- intensive approach to tax return processing. We identified serious weaknesses, including the need for IRS to institute better practices for making investment decisions and using sound system development methods. IRS is working to implement our recommendations to build the necessary capability before it begins modernizing tax processing systems. (GAO/OCG-99-14) National Weather Service (NWS) Modernization • To improve forecasts and provide better prediction of severe weather and flooding, NWS has been working on an over $4 billion program to upgrade weather observing systems. It is nearing completion, but we are concerned about NWS' ability to deliver on the final and most critical modernization piece, which has been delayed and become more expensive due to design and management problems such as the lack of a complete architecture. (GAO/OCG-99-3) Department of Defense Systems Modernization Efforts • DOD has an $18 billion investment to replace almost 2,000 inefficient, duplicative systems with more cost-effective systems. This effort--while necessary--is plagued with poor management controls and too little assurance that investments will achieve the department's technology objectives. (GAO/OCG-99-4) Page 20 GAO/OCG-99-ES An Executive Summary Strengthening Financial Management for Decision-Making and Accountability Reliable and timely information is essential to ensure adequate accountability, manage for results, and make timely and well-informed judgments. However, such information historically has not been routinely available across government. The combination of reforms ushered in by the Results Act and the Chief Financial Officers (CFO) Act will, if successfully implemented, generate the necessary foundation to effectively run performance-based organizations. The CFO Act requires agencies to routinely produce sound cost and performance information. Toward that end, the 24 largest departments and agencies have been required to prepare annual audited financial statements beginning with fiscal year 1996. Eleven of these agencies received unqualified audit opinions for fiscal year 1997—up from 6 for fiscal year 1996. Page 21 GAO/OCG-99-ES An Executive Summary Strengthening Financial Management for Decision-Making and Accountability Figure 4: FY 1997 Financial Statement Audit Opinions Unqualified audit opinions were received by: • Education • Labor • GSA • SBA • Energy • State • NASA • SSA • Interior • EPA • NRC Qualified audit opinions were received by: • HHS • HUD • VA • NSF Disclaimers of audit opinion were received by: • Agriculture • Defense • Transportation • Commerce • Justice • AID Other CFO agencies: • Treasury received an unqualified opinion on its administrative financial statements and a qualified opinion on its custodial schedules. • FEMA received an unqualified opinion on a financial statement for a part of the agency. Financial statements were not prepared for the whole agency. • OPM's Retirement Fund and Life Insurance Fund received unqualified opinions; revolving funds, health benefits, and salaries and expenses received disclaimers. Page 22 GAO/OCG-99-ES An Executive Summary Strengthening Financial Management for Decision-Making and Accountability The most serious difficulties in implementing the CFO Act’s goals are framed by the results of our first-ever audit of the government’s consolidated financial statements for fiscal year 1997. Widespread financial system weaknesses, problems with fundamental recordkeeping, incomplete documentation, and weak internal controls—including computer controls—prevented the government from accurately reporting a large portion of its assets, liabilities, and costs. These deficiencies undermine agencies’ ability to accurately measure costs and effectively safeguard federal assets and manage operations. The President reacted strongly, requiring agency heads to submit plans to OMB to correct deficiencies. Financial management reform was designated a top management priority. The House passed a resolution urging quick resolution of these problems. The requirements of the CFO Act are prompting steady improvements in financial accountability, but major difficulties must be overcome, as depicted below. Page 23 GAO/OCG-99-ES An Executive Summary Strengthening Financial Management for Decision-Making and Accountability The Department of Defense • DOD, with an annual budget exceeding $250 billion and hundreds of billions of dollars in equipment and inventory, represents a large percentage of the government's assets, liabilities, and net costs. Yet, none of the military services or the department as a whole has yet been able to produce auditable financial statements. Billions of dollars in property, equipment, and disbursements have not been properly accounted for and liabilities have not been adequately estimated for activities such as environmental cleanup and disposal of weapon systems. Serious problems remain, although we have noticed increased attention to rectify this situation. (GAO/OCG-99-4) The Forest Service • Audits of the Forest Service have found serious weaknesses, including pervasive errors in data supporting land, buildings, and equipment. While the Forest Service has progressed in addressing these deficiencies, much work remains. (GAO/OCG-99-2) The Federal Aviation Administration • Since 1994, the Department of Transportation Inspector General has been unable to determine whether FAA's financial statements are reliable. For example, in fiscal year 1997, the IG could not verify property, plant, and equipment reported at about $12 billion. FAA has improvements planned and underway but not yet completed. (GAO/OCG-99-13) The Internal Revenue Service • IRS, which collects most of the government's revenue (over $1.7 trillion in 1998), for the first time obtained an unqualified opinion on its financial statements for fiscal year 1997--after five previous attempts did not yield auditable statements. This outcome was achieved, however, through material audit adjustments, and serious internal control weaknesses over refunds, receipts, and unpaid tax assessments remain. (GAO/OCG-99-14) Page 24 GAO/OCG-99-ES An Executive Summary Strengthening Financial Management for Decision-Making and Accountability Audited financial statements are essential to providing an annual public scorecard on accountability. However, an unqualified audit opinion, while certainly important, is not an end in itself. For some agencies, the preparation of financial statements requires considerable reliance on ad hoc programming and analysis of data produced by inadequate systems that are not integrated or reconciled, and often require significant audit adjustments. Efforts to obtain reliable year-end data that are not backed up by fundamental improvements in underlying financial management systems and operations to support ongoing program management and accountability will not achieve the intended results of the CFO Act over the long term. Providing cost information also remains a key challenge. New standards require agencies to develop measures of the full costs of carrying out a mission, producing products, or delivering services to promote comparison of the costs of various programs and results. Developing the necessary information will be a substantial undertaking; and while there is a broad recognition of the importance of doing so, for the most part, agencies have just begun this effort. Page 25 GAO/OCG-99-ES An Executive Summary Building, Maintaining, and Marshaling the Human Capital Needed to Achieve Results Leading organizations understand that effectively managing employees—or human capital—is essential to achieving results. Only when the right employees are on board and provided the training, tools, structure, incentives, and accountability to work effectively is organizational success possible. Human capital planning must be an integral part of an Adopting a organization’s strategic and program planning; human Strategic capital itself should be thought of not as a cost to be Approach minimized but as an asset to be enhanced. The challenge—and opportunity—confronting federal agencies as they seek to become more performance-based is to align their human capital policies and practices with their program goals and strategies. The Department of Housing and Urban Development (HUD) • HUD's continuing difficulties in planning for and effectively using its human capital are among the most pressing challenges the agency faces. These weaknesses are particularly troubling because, in the past, not having enough staff with the necessary skills has limited HUD's ability to perform essential functions, such as monitoring multibillion dollar federal programs. In 1994, we designated HUD's programs as high risk because an insufficient mix of staff with the proper skills was one of the four serious, long-standing deficiencies that placed HUD's programs at risk. Although HUD continues to make credible progress in overhauling its operations to correct its management deficiencies, we continue to believe that these deficiencies, taken together, place the integrity and accountability of HUD's programs at high risk. (GAO/OCG-99-8) Page 26 GAO/OCG-99-ES An Executive Summary Building, Maintaining, and Marshaling the Human Capital Needed to Achieve Results The rapid pace of social and technological change and Developing Staff shifts in agency strategies to achieve their missions to Meet Critical pose continuing challenges to attract and develop Needs skilled staff. Skills gaps in critical areas undermine agencies’ effectiveness and efforts to address high-risk areas. The Department of Energy • The lack of staff with the requisite technical skills has limited the effectiveness of DOE's self-regulation and contributed to the environmental problems at many of DOE's facilities. The Defense Nuclear Facilities Safety Board has repeatedly stated in its annual reports to the Congress that the lack of appropriate technical expertise in DOE is a significant problem. (GAO/OCG-99-6) The Department of Defense • DOD is another department that has experienced difficulties in finding and retaining staff with technical training. To achieve the wide-ranging reforms necessary to address its serious, long-standing financial management deficiencies, DOD must upgrade the skills of its financial personnel. (GAO/OCG-99-4) Moving successfully to a more performance-based Creating a approach requires that organizations better align their Performance- human capital policies and practices with their Oriented Culture missions and goals. New ways of thinking must be adopted about the goals to be achieved; the organizational arrangements, program strategies, and partnerships needed to achieve those goals; and how progress will be measured. Likewise, employee incentive and accountability mechanisms need to be aligned with the goals of the organization. The failure to constructively involve staff in an organization’s efforts to become more performance-based means Page 27 GAO/OCG-99-ES An Executive Summary Building, Maintaining, and Marshaling the Human Capital Needed to Achieve Results running the risk that the changes will be more difficult and protracted than necessary. The Nuclear Regulatory Commission (NRC) • In 1997, the NRC's Office of Inspector General (IG) surveyed NRC staff to obtain their views on the agency's safety culture. In its June 1998 report, the IG noted that the staff had a strong commitment to protecting public health and safety but expressed high levels of uncertainty and confusion about the new directions in regulatory practices and challenges facing the agency. Employees who are confused about the direction their agency is taking will not be able to effectively focus on results or make as full a contribution as they might otherwise. As the IG concluded, improved management leadership and communication are needed to effectively involve employees in achieving results. (GAO/OCG-99-19) In summary, human capital must become a more prominent issue for the government as agencies become more performance-based. Financial management, information technology management, and results-oriented goalsetting and measurement have all been the subject of major reform legislation this decade. As a next step, human capital reforms will be necessary to fully realize the benefits which can be gained through a well-defined performance-based management and accountability framework. Page 28 GAO/OCG-99-ES An Executive Summary 1999 High-Risk List 1999 High-Risk Areas and The Year They Were Designated High Risk Addressing Urgent Year 2000 Computing Challenge 1997 Resolving Serious Information Security Weaknesses 1997 Ensuring Major Technology Investments Improve Services Air Traffic Control Modernization 1995 Tax Systems Modernization 1995 National Weather Service Modernization 1995 DOD Systems Development and Modernization Efforts 1995 Providing Basic Financial Accountability DOD Financial Management 1995 Forest Service Financial Management 1999 FAA Financial Management 1999 IRS Financial Management 1995 IRS Receivables 1990 Reducing Inordinate Program Management Risks Medicare 1990 Supplemental Security Income 1997 IRS Tax Filing Fraud 1995 DOD Infrastructure Management 1997 HUD Programs 1994 Student Financial Aid Programs 1990 Farm Loan Programs 1990 Asset Forfeiture Programs 1990 The 2000 Census 1997 Managing Large Procurement Operations More Efficiently DOD Inventory Management 1990 DOD Weapon Systems Acquisition 1990 DOD Contract Management 1992 Department of Energy Contract Management 1990 Superfund Contract Management 1990 NASA Contract Management 1990 Page 29 GAO/OCG-99-ES An Executive Summary Key GAO Officials Gene L. Dodaro • An Executive Summary (GAO/OCG-99-ES) Assistant Comptroller General • A Governmentwide Perspective (GAO/OCG-99-1) Accounting and Information • High-Risk Series: An Update (GAO/HR-99-1) Management Division (202) 512-2600 firstname.lastname@example.org Keith O. Fultz • Department of Agriculture (GAO/OCG-99-2) Assistant Comptroller General • Department of Energy (GAO/OCG-99-6) Resources, Community and • Department of Housing and Urban Development Economic Development Division (GAO/OCG-99-8) (202) 512-3200 • Department of the Interior (GAO/OCG-99-9) email@example.com • Department of Transportation (GAO/OCG-99-13) • Environmental Protection Agency (GAO/OCG-99-17) • Nuclear Regulatory Commission (GAO/OCG-99-19) Richard L. Hembra • Department of Education (GAO/OCG-99-5) Assistant Comptroller General • Department of Health and Human Services Health, Education and Human (GAO/OCG-99-7) Services Division • Department of Labor (GAO/OCG-99-11) (202) 512-6806 • Department of Veterans Affairs (GAO/OCG-99-15) firstname.lastname@example.org • Social Security Administration (GAO/OCG-99-20) Henry L. Hinton, Jr. • Department of Defense (GAO/OCG-99-4) Assistant Comptroller General • Department of State (GAO/OCG-99-12) National Security and • Agency for International Development International Affairs Division (GAO/OCG-99-16) (202) 512-4300 • National Aeronautics and Space Administration email@example.com (GAO/OCG-99-18) Nancy R. Kingsbury • An Executive Summary (GAO/OCG-99-ES) Acting Assistant Comptroller • A Governmentwide Perspective (GAO/OCG-99-1) General • Department of Commerce (GAO/OCG-99-3) General Government Division • Department of Justice (GAO/OCG-99-10) (202) 512-2700 • Department of the Treasury (GAO/OCG-99-14) firstname.lastname@example.org • U.S. Postal Service (GAO/OCG-99-21) Page 30 GAO/OCG-99-ES An Executive Summary Ordering Information The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. Orders by mail: U.S. General Accounting Office P.O. Box 37050 Washington, DC 20013 or visit: Room 1100 700 4th St. NW (corner of 4th & G Sts. 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Major Management Challenges and Risks: An Executive Summary
Published by the Government Accountability Office on 1999-02-01.
Below is a raw (and likely hideous) rendition of the original report. (PDF)