GAO-02-1050R Human Capital Flexibilities

United States General Accounting Office

Washington, DC 20548

Comptroller General

of the United States

August 9, 2002

The Honorable Fred Thompson

Ranking Minority Member

Committee on Governmental Affairs

United States Senate

Dear Senator Thompson:

I am pleased to respond to your request for information about GAO’s use of our

special human capital flexibilities. These flexibilities relate to the specific authorities

granted to GAO through legislation enacted in 1980 and 2000.

1980 PERSONNEL ACT:

As a result of the GAO Personnel Act of 1980, we implemented a broad banded payfor-performance system for GAO analysts and specialists and certain special

Comptroller General appointment authorities that were granted to us by the

Congress. A primary goal of our broad banded pay for performance system is to

reward staff on the basis of knowledge, skills, and performance as opposed to the

passage of time. It also provides managers with additional flexibility to assign and

use staff in a manner that is more suitable to multi-tasking and the full utilization of

available staff. Our current broad banded system for analysts and specialists places

staff in three bands rather than in Grades 7 through 15. The pay ranges for each band

closely approximate the GS-equivalents. For example, Band II ranges from about GS13, step 1 to GS-14, step 10. Importantly, careful design and effective implementation

is crucial to obtaining the benefits of broad-banding in an equitable and cost effective

manner.

As a result of the 1980 Act, the Comptroller General has authority to direct hire up to

15 experts and consultants, on a non-competitive basis, at any level including the

SES, with renewable terms up to 3 years each. GAO has used this authority in

selected cases and found it to be very valuable in filling critical time-sensitive

positions within the agency.

2000 PERSONNEL FLEXIBILITIES ACT:

Our October 2000 legislation gave us additional tools to realign our workforce in light

of mission needs and overall budgetary constraints; correct skills imbalances; and
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reduce high-grade, managerial, or supervisory positions without reducing the overall

number of GAO employees. This legislation allowed us to (1) make targeted

voluntary early retirement and/or buyout offers to certain employee groups, (2)

create senior level positions at compensation levels and benefits consistent with

Senior Executive Service (SES) positions to address our ongoing need for scientific,

technical, and professional career expertise, and (3) give much greater consideration

to employee performance, skills and knowledge in any reduction-in-force actions.

The development of the agency’s regulations involved collaboration with our

Employee Advisory Council and consideration of employee comments. Since the

legislation was enacted, we have

∙ established agency regulations and conducted our first voluntary early

retirement offer. Once employees registered their interest in

participating in the program, we considered a number of factors

including employee knowledge, skills, performance, and competencies;

the organizational unit or subunit in which an employee worked; an

employee’s occupational series, grade, or band level, as appropriate;

and the geographic location of the employee. As authorized by the 2000

legislation, employee performance was just one of many factors we

considered when deciding which employees would be granted early

retirement. However, let me assure you, we did not use performance as

a basis to target certain individuals. Eighty-one employees submitted

applications, 57 of these applicants were approved, 6 were disapproved,

and 18 employees withdrew their applications. Most employees left

GAO between October 1, 2001 and January 3, 2002. The remaining

employees will leave GAO no later than the end of fiscal year 2002. The

positions and resources freed up from this effort are reallocated to

address more critical needs of the Congress and the agency;

∙ not begun drafting regulations to authorize voluntary buy-outs since,

due to the high cost of retirement fund contributions, we do not have

any current plans to use this authority;

∙ developed agency regulations and established nine senior level

positions, of which 7 have been filled; and

∙ begun drafting our reduction-in-force regulations, which will be

published for comments shortly.

We believe the above tools have provided GAO with much needed flexibility to

deliver on our mission in an efficient, effective and economical manner while

incorporating adequate safeguards to prevent abuse of employees. For example, our

use of voluntary early retirement authority helped us realign versus downsize GAO

and to strengthen our efforts to have the right staff with the right skills in the right

locations to better meet the needs of the Congress and the agency. These authorities

benefit our employees, the Congress, and ultimately the American people by helping

us improve our performance and ensure our accountability.

In addition to the above special legislative authorities, we, have implemented a

number of other actions to modernize our human capital policies, procedures, and

practices. While authority to take these actions is generally available to many federal

agencies, they are rarely used to any significant extent. For example, we use
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recruiting, retention and other incentives to attract and retain talented employees.

We have streamlined our hiring process and used our internship program to offer

permanent employment to those interns who complete 10 weeks of highly successful

work experience. We also have implemented a number of innovative employee

empowerment and benefit programs (e.g., Employee Advisory Council, employee

surveys, transportation subsidies, child care facilities and student loan repayment).

Importantly, we have also recently redesigned our performance appraisal system to

better link it to our strategic plan, core values and desired outcomes. This new

system will be linked to a revised pay, promotion and rewards system that is “stateof-the art” for a professional services organization.

As we engage in these important changes, we know that GAO is not perfect and we

never will be. Our transformation effort is a work-in-progress for us as it is for

others. Our approaches are not the only way for agencies to proceed, but they can

help others identify ways to address their individual human capital challenges. In this

regard, we have shared our lessons and experiences with others, and are happy to do

so. We have also provided a range of tools and methodologies to “help others help

themselves” in this critically important area.1

We are striving to be in the vanguard of the federal government’s efforts to modernize

human capital strategies. At GAO, our people are our most valuable asset and it is

only through their combined efforts that we can effectively serve the Congress and

our country. In this regard, our human capital flexibilities and our commitment to

“lead by example” in transforming the way that government does business are clearly

paying large dividends to the Congress and the American people as evidenced in our

recent Annual Performance and Accountability Report.

I look forward to continuing to work with you, the Congress, the Office of Personnel

Management, the Office of Management and Budget, agencies, and other interested

parties as we jointly seek to ensure that the federal government modernizes its

human capital strategies in order to maximize performance, assure accountability,

transform itself, and prepare for the future.

Sincerely yours,

David M. Walker

Comptroller General

of the United States

 1

 For examples of the tools provided to agencies, see Human Capital: A Self-Assessment Checklist for

Agency Leaders, GAO/OGC-00-14G, September 2000 and A Model of Strategic Human Capital

Management, GAO-02-373SP, March 15, 2002.