GAO

United States General Accounting Office

A

Testimony

Before the Committee on Government Reform,

House of Representatives

For Release on Delivery 

Expected at 10 a.m. EST

Thursday,

April 3, 2003

EXECUTIVE 

REORGANIZATION 

AUTHORITY 

Balancing Executive and 

Congressional Roles in 

Shaping the Federal 

Government’s Structure 

Statement of David M. Walker

Comptroller General of the United States

GAO-03-624T
In view of the overarching trends and the growing fiscal challenges facing 

our nation, there is a need to consider the proper role of the federal 

government, how the government should do business in the future, and in 

some instances, who should do the government’s business in the 21st 

century. 

The fundamental issue raised by the proposal to grant reorganization 

authority to the President is not whether the government’s organization can 

and should be restructured, but rather, whether and how the Congress 

wishes to change the nature of its normal deliberative process when 

addressing proposals to restructure the federal government. This testimony 

makes the following key points: 

• Given current trends and increasing fiscal challenges, a comprehensive 

review, reassessment, and reprioritization of what the government does 

and how it does it is clearly warranted. This is especially vital in view of 

changing priorities and the compelling need to examine the base of 

government programs, policies, and operations since, given GAO’s longterm budget simulations, the status quo is unsustainable over time. 

• While the intent of such a review is desirable and some expedited 

congressional consideration may well be appropriate for specific issues, 

the Congress also has an important role to play in government reform 

initiatives, especially from an authorization and oversight perspective. 

In contrast to the past “one-size-fits-all” approaches in developing new 

executive reorganization authority, the Congress may want to consider 

different tracks for proposals that propose significant policy changes 

versus those that focus more narrowly on government operations. 

Further, Congress may want to consider establishing appropriate 

processes to ensure the involvement of key players, particularly in the 

legislative and executive branches, to help facilitate reaching consensus 

on specific restructuring proposals that would be submitted for 

consideration, should the Congress enact a new executive reorganization 

authority. 

• Modern management practices can provide a framework for developing 

successful restructuring proposals. Such practices include: establishing 

clear goals, following an integrated approach, developing an effective 

human capital strategy, considering alternative program delivery 

mechanisms, and planning for both initial and long-term implementation 

issues to achieve a successful transformation. Furthermore, successful 

implementation will depend in part on continuing congressional 

oversight. The Congress could significantly enhance its efficiency and 

effectiveness by adapting its own organization to mirror changes in the 

executive branch. 

GAO has sought to assist the 

Congress and the executive branch 

in considering the actions needed 

to support the transition to a more 

high performing, results-oriented, 

and accountable federal 

government. At the Committee’s 

request, GAO provided perspective 

on the proposal to reinstate the 

authority for the President to 

submit government restructuring 

plans to the Congress for expedited 

review. 

The President and the Congress 

may wish to consider alternative 

provisions geared toward whether 

policy or operational issues are 

being considered. Further, they 

may wish to consider establishing 

processes (e.g., a commission) that 

provide for the involvement of key 

players and a means to help reach 

consensus on any specific 

restructuring proposals that would 

be submitted for consideration by 

the Congress. 

www.gao.gov/cgi-bin/getrpt?GAO-03-624T.

To view the full report, including the scope 

and methodology, click on the link above. 

For more information, contact Patricia A. 

Dalton at (202) 512-6806 or 

daltonp@gao.gov. 

Highlights of GAO-03-624T, testimony 

before the Committee on Government 

Reform, House of Representatives 

April 3, 2003

EXECUTIVE REORGANIZATION 

AUTHORITY 

Balancing Executive and Congressional 

Roles in Shaping the Federal 

Government's Structure 
Page 1 GAO-03-624T 

Mr. Chairman and Members of the Committee:

Good morning. I appreciate the opportunity to discuss the proposal to 

reinstate the authority for the President to submit government 

restructuring plans to the Congress and obtain expedited review. Both the 

Congress and the administration are to be complimented for stating their 

intent to increase the focus on how to improve the efficiency and 

effectiveness of the federal government as we begin the 21st century. This 

hearing is evidence of such increased commitment.

GAO has sought to assist the Congress and the executive branch in 

considering the actions needed to support the transition to a more high 

performing, results-oriented, and accountable federal government. We 

believe that it is crucial for both the Congress and the executive branch to 

work together in a constructive manner on “good government” issues that 

are designed to improve the economy, efficiency and effectiveness of 

government on a continual basis. At the same time, the Congress has 

important constitutional authorization, appropriation, and oversight roles 

that must be considered.

The fundamental issue raised by the proposal to grant executive 

reorganization authority to the President is not whether the government’s 

organization can and should be restructured, but rather how best to deal 

with this issue. In this regard, the recent Volcker Commission1

 and GAO 

have noted the need to review and revise the current federal government 

structure. Given that historically executive reorganization authority has 

included certain “fast track” provisions for congressional review, the 

question at hand is whether and how the Congress wishes to change the 

nature of its normal deliberative process when addressing proposals to 

restructure the federal government.

My statement today will focus on several key issues:

1. Given current trends and increasing fiscal challenges, a comprehensive 

review, reassessment, and reprioritization of what the government does 

and how it does it is clearly warranted. This is especially vital in view of 

changing priorities and the compelling need to examine the base of 

1

National Commission on the Public Service, Urgent Business for America: Revitalizing 

the Federal Government for the 21st Century (Washington, D.C.: January 2003).
Page 2 GAO-03-624T 

government programs, policies and operations since, given GAO’s long 

range budget simulations, the status quo is unsustainable over time.

2. While the intent of such a review is desirable and some expedited 

congressional consideration may well be appropriate for specific 

issues, the Congress has an important role to play in management 

reform initiatives, especially from an authorization and oversight 

perspective. In the past, the Congress has adopted “fast track” 

approaches for specific areas. However, depending on the nature of 

future legislative proposals that will be submitted, they could have 

profound implications for the relative role the Congress plays in 

developing legislation and conducting oversight to enhance the 

performance and ensure the accountability of the executive branch. In 

contrast to the past “one-size-fits-all” approaches, in developing new 

executive reorganization authority, the Congress may want to consider 

different tracks for proposals that propose significant policy changes 

versus those that focus more narrowly on operations. Further, 

Congress may want to consider establishing appropriate processes 

(e.g., a commission) to ensure the involvement of key players to help 

reach consensus on any specific reorganization proposals that would 

be submitted for consideration by the Congress, should the Congress 

enact new executive reorganization authority. 

3. Modern management practices can provide a framework for developing 

successful restructuring proposals. Such practices include: 

establishing clear goals, following an integrated approach, developing 

an effective human capital strategy, considering alternative program 

delivery mechanisms, and planning for both initial as well as long-term 

implementation issues. Furthermore, successful implementation will 

depend in part on continuing congressional oversight. The Congress 

could significantly enhance its efficiency and effectiveness by adapting 

its own organization to mirror changes in the executive branch.

Presumably, the Congress will want to obtain the input of GAO and other 

parties before enacting any substantive proposals. As a result, any 

timeframes for expedited consideration should allow for a reasonable 

period for this to occur.

This testimony draws upon our wide-ranging ongoing and completed work 

on government transformation, organization, and management issues. We 

also reviewed the history of major reorganization efforts as well as the 

legislative history of executive reorganization authority. We conducted our 
Page 3 GAO-03-624T 

work in accordance with generally accepted government auditing 

standards.

Need to Reexamine 

Government Structures 

to Meet 21st Century 

Challenges

The federal government is in a period of profound transition and faces an 

array of challenges and opportunities to enhance performance, ensure 

accountability, and position the nation for the future. As you know, our 

country’s transition into the 21st century is characterized by a number of 

key trends including:

• the national and global response to terrorism and other threats to 

personal and national security;

• the increasing interdependence of enterprises, economies, civil society, 

and national governments, referred to as globalization;

• the shift to market-oriented, knowledge-based economies;

• an aging and more diverse U.S. population;

• advances in science and technology and the opportunities and 

challenges created by these changes;

• challenges and opportunities to maintain and improve the quality of life 

for the nation, communities, families, and individuals; and

• the changing and increasingly diverse nature of governance structures 

and tools.2

As the nation and government policymakers grapple with the challenges 

presented by these evolving trends, they do so in the context of an 

overwhelming fact: The fiscal pressures created by the retirement of the 

baby boom generation and rising health care costs threaten to overwhelm 

the nation’s fiscal future. Our latest long-term budget simulations reinforce 

the need for change in the major cost drivers—Social Security and health 

care programs. By midcentury, absent reform of these entitlement 

programs and/or other major tax or spending policy changes, projected 

federal revenues may be adequate to pay little beyond interest on the debt 

2

U.S. General Accounting Office, Strategic Plan 2002-2007 (Washington, D.C.: June 2002).
Page 4 GAO-03-624T 

and Social Security benefits. Further, our recent shift from surpluses to 

deficits means that the nation is moving into the future in a weaker fiscal 

position.

In response to the emerging trends and long-term fiscal challenges the 

government faces in the coming years, we have an opportunity to create 

highly effective, performance-based organizations that can strengthen the 

nation’s ability to meet the challenges of the 21st century and reach beyond 

our current level of achievement. The federal government cannot accept 

the status quo as a “given”—we need to reexamine the base of government 

programs, policies, and operations. We must strive to maintain a 

government that is effective and relevant to a changing society—a 

government that is as free as possible of outmoded commitments and 

operations that can inappropriately encumber the future, reduce our fiscal 

flexibility, and prevent future generations from being able to make choices 

regarding what roles they think government should play.

Many departments and agencies were created in a different time and in 

response to problems and priorities very different from today’s challenges. 

Some have achieved their one-time missions and yet they are still in 

business. Many have accumulated responsibilities beyond their original 

purposes. Others have not been able to demonstrate how they are making a 

difference in real and concrete terms. Still others have overlapping or 

conflicting roles and responsibilities. Redundant, unfocused, and 

uncoordinated programs waste scarce funds, confuse and frustrate 

program customers, and limit overall program effectiveness.3

 

3

U.S. General Accounting Office, Managing in the New Millennium: Shaping a More 

Efficient and Effective Government for the 21st Century, GAO/T-OGC-00-9 (Washington, 

D.C.: Mar. 29, 2000). 
Page 5 GAO-03-624T 

Our work has documented the widespread existence of fragmentation and 

overlap from both the broad perspective of federal missions and from the 

more specific viewpoint of individual federal programs. As new needs are 

identified, the common response has been a proliferation of 

responsibilities and roles to federal departments and agencies, perhaps 

targeted on a newly identified clientele, or involving a new program 

delivery approach, or, in the worse case scenario, merely layered onto 

existing systems in response to programs that have failed or performed 

poorly. Though our work also suggests that some issues may warrant 

involvement of multiple agencies or more than one approach, 

fragmentation and overlap adversely impacts the economy, efficiency and 

effectiveness and of the federal government.4

 

It is obviously important to periodically reexamine whether current 

programs and activities remain relevant, appropriate, and effective in 

delivering the government that Americans want, need, and can afford. This 

includes assessing the sustainability of the programs, as well as the 

effectiveness of the tools—such as direct spending, loan guarantees, tax 

incentives, regulation, and enforcement—that these programs embody. 

Many federal programs—their goals, organizations, processes, and 

infrastructures—were designed years ago to meet the needs and demands 

as determined at that time and within the technological capabilities of that 

earlier era. The recent report of the Volcker Commission similarly 

observed that “[f]ifty years have passed since the last comprehensive 

reorganization of the government” and that “[t]he relationship of the 

federal government to the citizens it services became vastly broader and 

deeper with each passing decade.”5

 The commission recommended that a 

fundamental reorganization of the federal government into a limited 

number of mission-related executive departments was needed to improve 

its capacity to design and implement public policy.

We now have both an opportunity and an obligation to take a 

comprehensive look at what the government should be doing and how it 

should go about doing its work. Based on GAO’s own recent experiences 

with restructuring, such a fundamental reexamination of government 

4

U.S. General Accounting Office, Managing for Results: Using the Results Act to Address 

Mission Fragmentation and Program Overlap, GAO/AIMD-97-146 (Washington, D.C.: 

Aug. 29, 1997).

5

National Commission on the Public Service, Urgent Business for America: Revitalizing 

the Federal Government for the 21st Century (Washington, D.C.: January 2003).
Page 6 GAO-03-624T 

missions, functions, and activities could improve government effectiveness 

and efficiency and enhance accountability by reducing the number of 

entities managed, thereby broadening spans of control, increasing 

flexibility, and fully integrating rather than merely coordinating related 

government activities.

Balancing the Roles of 

the Congress and the 

Executive Branch in 

Developing 

Restructuring 

Proposals

Given the obvious case for reexamining the government’s structure, the 

major issue for debate today is the question of whether and how to change 

the Congress’ normal deliberative process for reviewing and shaping 

executive branch restructuring proposals. Such authority can serve to 

better enable presidential leadership to propose government designs that 

would be more efficient and effective in meeting existing and emerging 

challenges. 

Presidential leadership is critical to set goals and propose the means—the 

organizational design and policy tools—needed to achieve the goals. 

However, it is important to ensure a consensus on identified problems and 

needs, and to be sure that the solutions our government legislates and 

implements can effectively remedy the problems we face in a timely 

manner. Fixing the wrong problems, or even worse, fixing the right 

problems poorly, could cause more harm than good. 

Congressional deliberative processes serve the vital function of both 

gaining input from a variety of clientele and stakeholders affected by any 

changes and providing an important constitutional check and 

counterbalance to the executive branch. The statutory framework for 

management reform enacted during the 1990s demonstrates the Congress’ 

capacity to deal with governmentwide management reform needs. The 

Congress sought to improve the fiscal, program, and management 

performance of federal agencies, programs, and activities. For example, the 

Government Performance and Results Act (GPRA) is a central component 

of the existing statutory management framework, which includes other 

major elements, such as the Chief Financial Officers (CFO) Act, and 

information resource management improvements, such as the ClingerCohen Act. These laws provide information that is pertinent to a broad 

range of management-related decisions to help promote a more resultsoriented management and decision-making process, regardless of what 

organizational approach is employed.

The normal legislative process, which by design takes time to encourage 

thorough debate, does help to ensure that any related actions are carefully 
Page 7 GAO-03-624T 

considered and have broad support. The Congress has played a central 

role in management improvement efforts throughout the executive branch 

and has acted to address several high-risk areas through both legislative 

and oversight activities. Traditionally, congressional and executive branch 

considerations of policy trade-offs are needed to reach a reasonable degree 

of consensus on the appropriate federal response to any substantive 

national need. 

It is imperative that the Congress and the administration form an effective 

working relationship on restructuring initiatives. Any systemic changes to 

federal structures and functions must be approved by the Congress and 

implemented by the executive branch, so each has a stake in the outcome. 

Even more importantly, all segments of the public that must regularly deal 

with their government—individuals, private sector organizations, states, 

and local governments—must be confident that the changes that are put in 

place have been thoroughly considered and that the decisions made today 

will make sense tomorrow.

Only the Congress can decide whether it wishes to limit its powers and role 

in government reorganizations. As part of the legislative branch, we at 

GAO obviously have some concerns regarding any serious diminution of 

congressional authority. In certain circumstances, the Congress may deem 

limitations appropriate; however, care should be taken regarding the 

nature, timing, and scope of any related changes. Lessons can be learned 

from prior approaches to granting reorganization authority to the 

President. Prior successful reorganization initiatives reinforce the 

importance of maintaining a balance between executive and legislative 

roles in undertaking significant organizational changes. Safeguards are 

needed to ensure congressional input and concurrence on the goals as well 

as overall restructuring proposals. In the final analysis, the Congress must 

agree with any restructuring proposals submitted for consideration by the 

President in order for them to become a reality. 
Page 8 GAO-03-624T 

Prior Executive 

Reorganization Authority 

Reflected Changing Balance 

between Legislative and 

Executive Roles

Periodically, between 1932 and 1984, the Congress provided the President 

one form or another of expedited reorganization authority. 6

 Most of the 

authority granted during this period shared three characteristics. 

• First, most previous authorities established rules that allowed the 

President’s plan to go into effect unless either house acted by passing a 

motion of disapproval within a fixed period. However, in accordance 

with the 1983 Chadha decision,7

 which held the one-house legislative 

veto unconstitutional, the most recent expedited reorganization 

authority, granted to President Reagan in 1984, required passage of a 

joint affirmative resolution by both houses and signed by the President 

to approve any presidential reorganization plan. Hence, the need for 

both houses to positively approve a president’s plan for it to take effect 

set a higher bar for success and in essence gave the Congress a stronger 

role than in the past. 

• Second, between 1949 and 1984, the Congress increasingly limited the 

scope of what the President could propose in a reorganization plan, 

which also had the effect of enhancing congressional control. For 

example, whereas in 1949, there were few restrictions on what the 

President could propose, the Reorganization Act of 1977 prohibited 

plans that, among other things, established, abolished, transferred, or 

consolidated departments or independent regulatory agencies. 

• Third, expedited reorganization authority during this period limited the 

period of time during which a President could propose any 

reorganization plans. Clearly, the extent to which the Congress was 

willing to cede its authority to oversee the President’s reorganization 

plans has been an important variable in designing such provisions.

6

Ronald C. Moe, Congressional Research Service, The President’s Reorganization 

Authority: Review and Analysis (Washington, D.C.: Mar. 8, 2001). 

7

Immigration and Naturalization Service v. Chadha, 462 U.S. 919 (1983).
Page 9 GAO-03-624T 

Successful Government 

Restructurings Balanced 

Executive and Legislative 

Roles

Throughout the 20th century, efforts to structure the federal government to 

address the economic and political concerns of the time met with varying 

degrees of success. The first Hoover Commission,8

 which lasted from 1947 

to 1949, is considered by many to have been the most successful of 

government restructuring efforts. The membership was bipartisan, 

including members of the administration and both houses of the Congress. 

Half its members were from outside government. The commission had a 

clear vision, making reorganization proposals that promoted what they 

referred to as “greater rationality” in the organization and operation of 

government agencies and enhanced the president's role as the manager of 

the government—principles that were understood and accepted by both 

the White House and the Congress.9

 Former President Hoover himself 

guided the creation of a citizens' committee to build public support for the 

commission's work. More than 70 percent of the first Hoover Commission's 

recommendations were implemented, including 26 out of 35 reorganization 

plans. According to the Congressional Research Service, “the ease with 

which most of the reorganization plans became effective reflected two 

factors: the existence of a consensus that the President ought to be given 

deference and assistance by Congress in meeting his managerial 

responsibilities and the fact that most of the reorganization plans were 

pretty straightforward proposals of an organizational character.”10

8

The commission's formal name was the Commission on Organization of the Executive 

Branch. Its membership: Former President Herbert Hoover, Dean Acheson, Sen. George 

Aiken, Rep. Clarence Brown, Arthur Flemming, James A. Forrestal, Joseph P. Kennedy, Rep. 

Carter Manasco, Sen. John L. McClellan, George Mead, James K. Pollock, and James Rowe.

9

Ronald C. Moe, The Hoover Commissions Revisited (Boulder, Colorado: Westview Press, 

1982), 2.

10Ronald C. Moe, Congressional Research Service, The President’s Reorganization 

Authority: Review and Analysis (Washington, D.C.: Mar. 8, 2001). 
Page 10 GAO-03-624T 

By contrast, the second Hoover Commission, which lasted from 1953 to 

1954, had a makeup very similar to that of the first, but it did not have the 

advance backing of the President and the Congress. Hoover II, as it was 

called, got into policy areas with the goal of cutting government programs. 

But it lacked the support of the President, who preferred to use his own 

advisory group11 in managing the government. It also lacked the support of 

the Congress and the public, neither of which cared to cut the government 

at a time when federally run programs were generally held in high esteem 

and considered efficient and beneficial.12 More than 60 percent of Hoover 

II's recommendations were implemented, but these were mostly drawn 

from the commission's technical recommendations rather than from its 

major ones (such as changing the government's policies on lending, 

subsidies, and water resources) that would have substantively cut federal 

programs.13

The lesson of the two Hoover Commissions is clear: If plans to reorganize 

government are to move from recommendation to reality, creating a 

consensus for them is essential to the task. In this regard, both the process 

employed and the players involved in making any specific reorganization 

proposals are of critical importance. The success of the first Hoover 

Commission can be tied to the involvement and commitment of both the 

Congress and the President. Both the legislative branch and executive 

branches agreed to the goals. With this agreement, a process was 

established that provided for wide spread involvement, including citizens, 

and transparency so that meaningful results could be achieved. 

That lesson shows up again in the experience of the Ash Council, which 

convened in 1969-70. Like the first Hoover Commission, the Ash Council 

aimed its recommendations at structural changes to enhance the 

effectiveness of the President as manager of the government. In addition to 

11Called PACGO (the President's Advisory Council on Government Organization), it was 

chaired by Nelson Rockefeller from 1953-1958. PACGO drafted 14 reorganization plans that 

were presented to the President and accepted by the Congress. Ronald C. Moe, 

Reorganizinq the Executive Branch in the Twentieth Century: Landmark 

Commissions,(Washington, D.C.: Congressional Research Service, Mar. 19, 1992), 34.

12Moe, 105.

13Summary of the Objectives, Operations, and Results of the Commissions on 

Organization of the Executive Branch of the Government (First and Second Hoover 

Commissions), House Committee on Government Operations, (Washington,D.C.: May 

1963), 31-33.
Page 11 GAO-03-624T 

renaming the Bureau of the Budget the Office of Management and Budget, 

the Ash Council proposed organizing government around broad national 

purposes by integrating similar functions under major departments. It 

proposed that four super departments be created—economic affairs, 

community development, natural resources, and human services—with 

State, Defense, Treasury, and Justice remaining in place. But the Ash 

Council could not gain the support of the Congress. Its recommendations 

would have drastically altered jurisdictions within the Congress and the 

relationships between committees and the agencies for which they had 

oversight responsibilities. The Congress was not thoroughly clear on the 

implications of the four super departments, was not readily willing to 

change its own structure to parallel the structure proposed by the council, 

and was not eager to substantially strengthen the authority of the 

presidency.

Once again, the lesson for today is that reorganizing government is an 

immensely complex and politically charged activity. Those who would 

reorganize government must make their rationale clear and must build a 

consensus for change before specific proposed reorganizations are 

submitted to Congress if they are to see their efforts bear fruit. It is 

important that all players, particularly the Congress and the President, 

reach agreement on restructuring goals and establish a process to achieve 

their objectives that provides needed transparency if anything substantive 

is to be achieved. The process may vary depending on the significance of 

the changes sought. However, the risk of failure is high without having the 

involvement of key players and a process to help reach consensus on 

specific reorganization proposals that are submitted to the Congress for its 

consideration.

A final important lesson from these prior experiences is that a balance 

must be struck between the need for due deliberation and the need for 

action. A distinction also needs to be made between policy choices and 

operational choices. Relatively straightforward reorganization proposals 

that focus on operational issues appear to have met with greater success 

than those that addressed more complex policy issues. For example, 

proposals to eliminate programs, functions, or activities typically involve 

policy choices. On the other hand, a proposal to consolidate those same 

activities within a single organization is more focused on management 

effectiveness and efficiency, than on policy changes. Therefore, in 

contrast to the past “one-size-fits-all” approaches, in again granting 

expedited reorganization authority to the President, the Congress may wish 

to consider different tracks that allow for a longer period for review and 
Page 12 GAO-03-624T 

debate of proposals that include significant policy elements as opposed to 

operational elements.

Modern Management 

Practices Provide a 

Framework for 

Restructuring 

Proposals

Three years ago, I testified that the challenge for the federal government at 

the start of the 21st century is to continue to improve and to translate the 

management reforms enacted by the Congress in the 1990s into a day-today management reality across government.14 Restructuring can be an 

important tool in this effort. Restructuring efforts must, however, be 

focused on clear goals. Further, irrespective of the number and nature of 

federal entities, creating high-performing organizations will require a 

cultural transformation in government agencies. Hierarchical management 

approaches will need to yield to partnerial approaches. Process-oriented 

ways of doing business will need to yield to results-oriented ones. Siloed 

organizations—burdened with overlapping functions, inefficiencies and 

turf battles—will need to become more horizontal and integrated 

organizations if they expect to make the most of the knowledge, skills, and 

abilities of their people. Internally focused agencies will need to focus 

externally in order to meet the needs and expectations of their ultimate 

clients—the American people. In the coming month, I plan to convene a 

forum to discuss steps federal agencies can take to become highperforming organizations.

GAO is leading by example. To create a world-class professional services 

organization, we have undertaken a comprehensive transformation effort 

over the past few years. Our strategic plan, which is developed in 

consultation with the Congress, is forward looking and built on several key 

themes that relate to the United States and our position in the world 

community. We restructured our organization in calendar year 2000 to 

align with our goals, resulting in significant consolidation—going from 35 

to 13 teams, eliminating an extra organizational layer, and reducing the 

number of field offices from 16 to 11. We have become more strategic, 

results-oriented, partnerial, integrated, and externally focused. Our scope 

of activities includes a range of oversight-, insight-, and foresight-related 

engagements. We have expanded and revised our products to better meet 

client needs. In addition, we have re-defined success in results-oriented 

terms and linked our institutional and individual performance measures. 

14U.S. General Accounting Office, Managing In The New Millennium : Shaping a More 

Efficient and Effective Government for the 21st Century, GAO/T-OCG-00-9 (Washington, 

D.C.: Mar. 29, 2000).
Page 13 GAO-03-624T 

We have strengthened our client relations and employed a “constructive 

engagement approach” to those we review. The impact on our results has 

been dramatic. Several of our key performance measures have almost 

doubled and our client feedback reports satisfaction has also improved. 

There are six important elements to consider for a successful 

reorganization—establishing clear goals, taking an integrated approach, 

developing a comprehensive human capital strategy, selecting appropriate 

service delivery mechanisms, managing the implementation, and providing 

effective oversight.

Clear goals. The key to any reorganization plan is the creation of specific, 

identifiable goals. The process to define goals will force decision makers 

to reach a shared understanding of what really needs to be fixed in 

government, what the federal role really ought to be, how to balance 

differing objectives, and what steps need to be taken to create not just 

short-term advantages but long-term gains. The mission and strategic goals 

of an organization must become the focus of the transformation, define the 

culture, and serve as a vehicle to build employee and organizational 

identity and support. Mission clarity and a clear articulation of priorities 

are critical, and strategic goals must align with and support the mission and 

serve as continuing guideposts for decision making. New organizations 

must have a clear set of principles and priorities that serve as a framework 

for the organization, create a common culture, and establish organizational 

and individual expectations.

The most recent restructuring, the formation of the Department of 

Homeland Security (DHS), illuminates this point. There was clear national 

consensus that a new national goal and priority was homeland security. 

With agreement on the mission and goals of this new department, the 

various activities and functions scattered throughout the government could 

be identified and moved into the new department. Building a framework of 

clearly articulated goals facilitates any restructuring effort. This is true for 

both the initial design and the implementation.

The government today is faced with many challenges. In considering 

restructuring, it is important to focus on not just the present but the future 

trends and challenges. Identification of goals to address these trends and 

challenges provides a framework for achieving consensus and 

organizational design. In fact, the effects of any reorganization are felt 

more in the future than they are today. The world is not static. Therefore, 

it is vital to take the long view, positioning the government to meet the 
Page 14 GAO-03-624T 

challenges of the 21st century. Regardless of the immediate objectives, any 

reorganization should have in mind certain overarching goals: a 

government that serves the public efficiently and economically, that is run 

in a sound, businesslike fashion with full accountability, and that is flexible 

enough to respond to change.

Integrated approach. The importance of seeing the overall picture cannot 

be overestimated. Reorganization demands a coordinated approach, 

within and across agency lines, supported by solid consensus for change. 

One cannot underestimate the interconnectedness of government structure 

and activities. Make changes here, and you will certainly affect something 

over there. Our work has certainly illuminated the interconnectedness of 

federal programs, functions, and activities.

DHS again provides lessons. Though many homeland security 

responsibilities, functions, and activities have been brought under the 

umbrella of DHS, many remain outside. DHS will have to form effective 

partnerships throughout the federal government—on intelligence 

functions, health issues, science activities. In addition, partnerships will 

be required outside the federal government—state and local governments, 

private sector organizations, and the international community, if DHS is to 

successfully accomplish its mission.

We have previously reported that the Government Performance and 

Results Act (Results Act) could provide a tool to reexamine roles and 

structure at the governmentwide level. The Results Act requires the 

President to include in his annual budget submission a federal government 

performance plan. The Congress intended that this plan provide a “single 

cohesive picture of the annual performance goals for the fiscal year.” The 

governmentwide performance plan could be a unique tool to help the 

Congress and the executive branch address critical federal performance 

and management issues. It also could provide a framework for any 

restructuring efforts. Unfortunately, this provision has not been fully 

implemented. 

Beyond an annual performance plan, a strategic plan for the federal 

government might be an even more useful tool to provide broad goals and 

facilitate integration of programs, functions, and activities, by providing a 

longer planning horizon. In the strategic planning process, it is critical to 

achieve mission clarity in the context of the environment in which we 

operate. With the profound changes in the world, a re-examination of the 

roles and missions of the federal government is certainly needed. From a 
Page 15 GAO-03-624T 

clearly defined mission, goals can be defined and organizations aligned to 

carrying out the mission and goals. Integration and synergy can be 

achieved between components of the government and with external 

partners to provide more focused efforts on goal achievement. 

If fully developed, a governmentwide strategic plan can potentially provide 

a cohesive perspective on the long-term goals for a wide array of federal 

activities. Successful strategic planning requires the involvement of key 

stakeholders. Thus, it could serve as a mechanism for building consensus. 

The process of developing the plan could prompt a more integrated and 

focused discussion between the Congress and the administration about 

long-term priorities and how agencies interact in implementing those 

priorities. Further, it could provide a vehicle for the President to articulate 

long-term goals and a road map for achieving them. In the process, key 

national performance indicators associated with the long-term goals could 

be identified and measured. 

In addition, a strategic plan can provide a much needed framework for 

considering any organizational changes and making resource allocation 

decisions. Essentially, organizations and resources (e.g., human, financial, 

and technological) are the ways and means of achieving the goals 

articulated by the strategic plan. Organizations should be aligned to be 

consistent with the goals and objectives of the strategic plan. Clear 

linkages should exist between the missions and functions of an 

organization and the goals and objectives it is trying to achieve. In making 

the trade-offs in resource decisions, a strategic plan identifies clear 

priorities and forms a basis for allocating limited resources for maximum 

effect. 

The process of developing a strategic plan that is comprehensive, 

integrated, and reflects the challenges of our changing world will not be 

easy. However, the end result could be a government that serves the public 

efficiently and economically, that is run more efficiently and effectively 

with full accountability, and that is flexible enough to respond to our 

rapidly changing world.

Human capital strategy. People are an organization’s most important asset, 

and strategic human capital management should be the centerpiece of any 

transformation or organizational change initiative. An organization’s 

people define its character, affect its capacity to perform, and represent the 

knowledge base of the organization. 
Page 16 GAO-03-624T 

Since 2001, we have designated human capital management as a 

governmentwide high risk. The Congress and the executive branch have 

taken a number of steps to address the federal government’s human capital 

shortfalls. However, serious human capital challenges continue to erode 

the ability of many agencies, and threaten the ability of others, to 

economically, efficiently, and effectively perform their missions. A 

consistent, strategic approach to maximize government performance and 

ensure its accountability is vital to the success of any reorganization efforts 

as well as to existing organizations. 

A high-performance organization focuses on human capital. Human capital 

approaches are aligned with mission and goal accomplishment. Strategies 

are designed, implemented, and assessed based on their ability to achieve 

results and contribute to the organization’s mission. Leaders and managers 

stay alert to emerging mission demands and human capital challenges. 

They reevaluate their human capital approaches through the use of valid, 

reliable, and current data, including an inventory of employee skills and 

competencies. Recruiting, hiring, professional development, and retention 

strategies are focused on having the needed talent to meet organizational 

goals. Individual performance is clearly linked with organizational 

performance. Effective performance management systems provide a “line 

of sight” showing how unit, team, and individual performance can 

contribute to overall organizational goals. 

Human capital strategies need to be built into any restructuring efforts. 

The Congress has recognized the importance of human capital in recent 

restructuring efforts. For example, in the creation of DHS and the 

Transportation Security Agency (TSA), human capital issues were 

addressed directly with the granting of flexibilities to improve the 

effectiveness of their workforces. Thus, human capital issues need to be 

addressed in both the design and implementation of any organization.

Service delivery mechanisms. Once goals are defined, attention must be 

paid not only to how the government organizes itself but also to the tools it 

uses to achieve national goals. The tools for implementing federal 

programs include, for example, direct spending, loans and loan guarantees, 

tax expenditures, and regulations. A hallmark of a responsive and effective 

government is the ability to mix public/private structures and tools in ways 

that are consistent with overriding goals and principles while providing the 

best match with the nature of the program or service. The choice of tools 

will affect the results the government can achieve. Therefore, 
Page 17 GAO-03-624T 

organizations must be designed to effectively use the tools they will 

employ. 

In most federal mission areas—from low-income housing to food safety to 

higher education assistance—national goals are achieved through the use 

of a variety of tools and, increasingly, through the participation of many 

organizations that are beyond the direct control of the federal government. 

This environment provides unprecedented opportunities to change the way 

federal agencies are structured to do business internally and across 

boundaries with state and local governments, nongovernmental 

organizations, private businesses, and individual citizens.

Implementation. No matter what plans are made to reorganize the 

government, fulfilling the promise of these plans will depend on their 

effective implementation. The creation of a new organization may vary in 

terms of size and complexity. However, building an effective organization 

requires consistent and sustained leadership from top management to 

ensure the needed transformation of disparate agencies, programs, 

functions, and activities into an integrated organization. To achieve 

success, the end result should not simply be a collection of component 

units, but the transformation to an integrated, high-performance 

organization. The implementation of a new organization is an extremely 

complex task that can take years to accomplish. It is instructive to note 

that the 1947 legislation creating the Department of Defense was further 

changed four times by the Congress in order to improve the effectiveness 

of the department. Despite these changes, DOD continues to face a range 

of major management challenges, with six agency-specific challenges on 

our 2003 list and three governmentwide challenges. Start-up problems 

under any reorganization are inevitable but can be mitigated by 

comprehensive planning and strong leadership.

An implementation plan anchored by an organization’s mission, goals and 

core values is critical to success.15 An implementation plan should address 

the complete transition period, not just the first day or the first year. It 

must go beyond simply the timetable for the organization’s creation, 

consolidation, or elimination. Effective implementation planning requires 

identification of key activities and milestones to transform the organization 

15U.S. General Accounting Office, Mergers and Transformation: Lessons Learned for a 

Department of Homeland Security and Other Federal Agencies, GAO-03-293SP

(Washington, D.C.: Nov. 14, 2002).
Page 18 GAO-03-624T 

into a fully integrated, high-performance organization and establish 

accountability for results. Careful planning and attention to management 

practices and key success factors, such as strategic planning, information 

technology, risk management, and human capital management, are 

important to overall results. A human capital strategic plan must be 

developed. It is vital to have key positions filled with people who possess 

the critical competencies needed by the organization. Further, systems and 

processes need to be tailored to and integrated within the organization. 

The experiences of TSA highlight the need for long-term planning. A year 

after being set up, although great progress has been made, TSA still faces 

numerous challenges—ensuring adequate funding; establishing adequate 

cost controls; forming effective partnerships to coordinate activities; 

ensuring adequate workforce competence and staffing levels; ensuring 

information systems security; and implementing national security 

standards.

Top leadership must set priorities and focus on the most critical issues. 

While top leadership is essential and indispensable, it will be important to 

have a broad range of agency leaders and managers dedicated to the 

transformation process to ensure that changes are thoroughly implemented 

and sustained over time. Dedicated management leadership can free the 

head of the organization from day-to-day operational and administrative 

issues, allowing time to focus on mission priorities.

One approach to providing the sustained management attention essential 

for addressing key infrastructure and stewardship issues while helping 

facilitate the transition and transformation process is the creation of a chief 

operating officer (COO) position within selected federal agencies. To be 

successful, a COO must have a proven track record in a related position 

and high profile—reporting directly to the agency head, and be vested with 

sufficient authority to achieve results. Since successful restructurings 

often take a considerable amount of time, 5 to 7 years being common, a 

term appointment of up to 7 years might be warranted. To further clarify 

accountability, the COO should be subject to a clearly defined, resultsoriented performance contract with appropriate incentives, rewards, and 

accountability mechanisms.16

16U.S. General Accounting Office, Highlights of a GAO Roundtable: The Chief Operating 

Officer Concept: A Potential Strategy to Address Federal Governance Challenges, 

GAO-03-192SP (Washington, D.C.: Oct. 4, 2002).
Page 19 GAO-03-624T 

Oversight. Congressional involvement is needed not just in the initial 

design of the organization, but in what can turn out to be a lengthy period 

of implementation. The Congress has an important role to play—both in its 

legislative and oversight capacities—in establishing, monitoring, and 

maintaining progress to attain the goals envisioned by government 

transformation and reorganization efforts. 

Sustained oversight by the Congress is needed to ensure effective 

implementation. The understanding by the Congress of the various 

agencies will provide a measure of whether the reorganization is 

accomplishing its goals and whether it needs further refinement. Assessing 

progress is important to ensuring implementation is moving in the right 

direction.

To ensure effective implementation, along with efficient and effective 

oversight, the Congress will also need to consider realigning its own 

structure. With changes in the executive branch, the Congress should 

adapt its own organization in order to improve its efficiency and 

effectiveness. Most recently, the Congress has undertaken a 

reexamination of its committee structure, with the implementation of DHS. 

In fact, the DHS legislation instructed both houses of Congress to review 

their committee structures in light of the reorganization of homeland 

security responsibilities within the executive branch. 

In summary, the key issue at hand is how to make changes and reforms and 

what the respective roles of the Congress and the executive branch should 

be in the process. Only the Congress can decide whether it wishes to limit 

its powers and role in government reorganizations. As part of the 

legislative branch, I obviously have some concerns about any serious 

diminution of your authority. In certain circumstances, the Congress may 

deem it appropriate. A distinction needs to be made between policy 

choices and operational choices, and a balance must be struck between the 

need for due deliberation and the need for action in these different cases. 

The Congress may wish to consider a longer period for review and debate 

of proposals that include significant policy elements versus operational 

elements. Further, the President and the Congress may wish to consider 

establishing a process (e.g., a commission), that provides for the 

involvement of the key players and a means to help reach consensus on any 

specific restructuring proposals that would be submitted for consideration 

by the Congress.
Page 20 GAO-03-624T 

In view of the overarching trends and the long-term fiscal challenges facing 

our nation, there is a need to consider the proper role of the federal 

government, how the government should do business in the future, and in 

some instances, who should do the government’s business in the 21st 

century. Evaluating the role of government and the programs it delivers 

within the context of the major trends facing our nation and our increasing 

fiscal challenges it faces is key in determining how best to address the 

country's most pressing priorities. It is increasingly important that federal 

programs use tools to manage effectively across boundaries and work in 

conjunction with the priorities and needs of American citizens; 

international, federal, state, and local governments; and the private and 

nonprofit sectors. This is an opportune time for the Congress to carefully 

consider how to make needed changes in the short term to help agencies 

effectively manage their resources and link resource decisions to results as 

well as to work toward a comprehensive and fundamental reassessment of 

what the government does, how it does it, and who should do the 

government’s business.

Mr. Chairman, this concludes my prepared statement. We at GAO look 

forward to continuing to “lead by example” in connection with government 

transformation efforts and to assisting the Congress with related matters. I 

would be pleased to respond to any questions that you or other Members of 

the Committee may have.

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