[Material Transmitted]{.underline}

Instruction 273-1, Human Resources Assessment Program

[Material Superseded]{.underline}

Instruction 273-1, Transmittal 90.11 (Delete in its entirety, including
all exhibits.)

[Background]{.underline}

This Instruction has been completely revised, to be consistent with the
recommendations of the National Performance Review (NPR), both as to
program design and length.

The NPR recommended that human resources overnight shift in emphasis
from compliance audits, performed by external staff organizations, to
on-going reviews and monitoring performed by line management. Overnight
activities should be integral to management\'s overall control system.
Staff overnight should be minimized, though sufficient to ensure that
line managers perform their control functions (i. e., by reviewing their
control and improvement systems).

In 1995, the Office of Management and Budget (OMB) issued a revised
Circular A-123, Management Accountability and Control. The revision
greatly \"decentralizes\" what was commonly referred to as the internal
control program and provides agencies far more flexibility. HHS internal
implementing instructions pass this flexibility on to the OPDIVs.

The 1990 version of Instruction 273-1 had already integrated to some
extent the internal control program with the human resources assessment
program. The human resources assessment program in this new Instruction
273-1 is modeled on the program structure outlined by Circular A-123, as
adapted for the human resources function. We expect that

OPDIV human resources assessment programs will be designed and operated
in close coordination with OPDIV management control programs.

The 1990 version of Instruction 273-1 also expanded coverage to include
the assessment of equal employment opportunity programs as well as
personnel programs. The new version continues that approach, which is
particularly appropriate in view of last year\'s major delegations to
OPDIVs for EEO complaint processing. We envision that successful OPDIV
human resources assessment program design will reflect increased
coordination between EEO and personnel functions, as well as with OPDIV
management control programs.

Many of the exhibits with the 1990 version are still useful
self-assessment tools. We intend to update these and make them available
outside the personnel manual system; accordingly, you may wish to retain
the current exhibits until they are replaced. We have also recently
issued and distributed similar assessment guides for areas not
previously covered (e.g.,executive resources and EEO complaints
processing).

[Filing Instructions]{.underline}

Remove superseded materials and replace them with new materials. Change
Table of Contents (Instruction 002-1) for the Personnel Manual to
reflect changes. Post receipt of this transmittal to the HHS check list
of Transmittals and file this transmittal in sequential order after the
check list.

> John J. Callahan
>
> Assistant Secretary for
>
> Management and Budget

INSTRUCTION 273-1

Distribution: MS ( PERS ): HRFC-001

Subject: Human Resources Assessment Program

273-1-00 Purpose

10 References

20 Definitions

30 Program Requirements

[273-1-00 PURPOSE]{.underline}

This Instruction states the policies and requirements for improving the
accountability and effectiveness of human resources programs and
operations through systematic assessment.

In this Instruction, human resources includes equal employment
opportunity, affirmative employment, special emphasis and personnel
programs.

[273-1-10 REFERENCES]{.underline}

> 5 U.S. C. 305 (systematic review of operations)
>
> 5 U.S. C. 306 (strategic plans)
>
> 5 U.S. C. Chapter 23 (merit system principles)
>
> 29 U.S. C. 206(d) (equal pay)
>
> 29 U.S. C. 621 et seq. (age discrimination)
>
> 29 U.S. C. 791 et seq. (reasonable accommodation)
>
> 31 U.S. C. 3512 (management controls)
>
> 29 CFR Parts 1601, 1604, 1605, 1606, 1607, 1608, and 1614 (federal
> sector equal employment opportunity)
>
> OMB Circular A-123 (Revised 6/21/95) (management accountability and
> control)

[273-1-20 DEFINITIONS]{.underline}

A.  **[Management accountability]{.underline}** is the inherent
    responsibility for assuring the quality and timeliness of program
    performance, for increasing production and controlling costs, and
    for carrying out program activities with integrity and in compliance
    with applicable law. Management accountability for human resources
    encompasses (1) individual managers with authority for making human
    resource decisions and (2) personnel and EEO officials who
    administer human resource programs and advise managers and
    employees.

B.  **[Management controls]{.underline}** are the organization,
    policies, and procedures adopted by management to ensure that
    programs achieve intended results within applicable laws and
    regulations. Management controls also protect programs and resources
    from fraud, waste, and abuse.

C.  **[Human resources assessment program]{.underline}**: the policies,
    procedures, and management controls by which an OPDIV evaluates, by
    various methods, the management and administration of its EEO and
    personnel programs. The principal objective of the human resources
    assessment program is to ensure that HR programs are effectively
    supporting mission accomplishment. It may be a part of, or
    integrated with, the OPDIV\'s overall program under OMB Circular
    A-123.

273-1-30 PROGRAM REQUIREMENTS

Each OPDIV must establish a human resources assessment program that, as
a minimum, provides for the following elements:

A.  **[Develop and Implement Management Controls\
    \
    ]{.underline}**These controls must have, as a primary focus, the
    human resources function support of mission accomplishment. In other
    to do this, they will need to go beyond traditional compliance
    audits and encompass organizational health and customer
    satisfaction**. (See the general management control standards** in
    OMB Circular A-123.) They will cover all human resources programs
    and activities (i. e., the actions taken by managers as well as
    personnel/EEO office operations).\
    \
    The Federal merit system principles (5 U.S. C. Chapter 23)
    constitute the definitive framework for human resources management.
    Consequently, they should strongly influence the development of
    management controls. Additionally, human resources managers need to
    ensure managers' familiarity with merit principles and prohibited
    personnel practices.

B.  **[Systematically Assess Adequacy of Controls\
    \
    ]{.underline}**The assessment program should provide for
    continuously monitoring human resources management controls. The
    program design should provide for complete functional/activity
    coverage over a specified period (e.g., five yearn). Sources of
    information for assessing controls include:

-   management knowledge gained by daily operations

-   management reviews and program evaluations

-   IG, GAO, and OPM reports

-   surveys of organizational health and customer satisfaction

-   reports from the personnel/payroll system designed to reflect
    anomalies and/or trends

-   review of complaint/grievance issues and outcomes

-   information from employee representatives and partnership councils

-   workforce demographics

A.  **[Identify Deficiencies and Take Corrective Action\
    \
    ]{.underline}**The human resources assessment program should include
    a priority-based, systematic process for reporting deficiencies and
    assigning accountability for taking corrective action.

B.  **[Report Annually on the Operation of the Assessment Program\
    \
    ]{.underline}**Each OPDIV must submit to the Assistant Secretary for
    Management and Budget an annual report on its human resources
    assessment program. The report is due by November 15 for the
    preceding fiscal year.\
    \
    The report must include the following:

-   A description of the human resources assessment program

-   A summary of the year\'s assessment activities, significant findings
    and, as necessary, the corrective actions taken.

-   A description of any barries impeding assessment program
    effectiveness and plans for program changes