GAO-04-897R Implementation of CHCO Act 

United States General Accounting Office

Washington, DC 20548 

June 18, 2004 

The Honorable Jo Ann Davis 

Chairwoman 

Subcommittee on Civil Service and Agency 

 Organization 

Committee on Government Reform 

House of Representatives 

Subject: Posthearing Questions Related to Agencies’ Implementation of the 

Chief Human Capital Officers (CHCO) Act 

Dear Madam Chairwoman: 

On May 18, 2004, I testified before your Subcommittee at a hearing entitled “First 

Year on the Job: Chief Human Capital Officers.”1 This letter responds to your request 

that I provide answers to follow-up questions from the hearing. Your questions, along 

with my responses, follow. 

1. You indicated the importance of a strategic plan to provide a sense of 

direction for the Council and that a draft plan has been prepared. Do you 

anticipate a timely completion of the plan? 

We have not identified any barriers or obstacles that would prevent the Council from 

completing its strategic plan, which is in draft, in a timely manner, although the 

Council has not established a target date for completion. The strategic plan is an 

organization’s starting point and foundation for defining what the organization seeks 

to accomplish, identifying the strategies it will use to achieve desired results, and 

then determining how well it succeeds in reaching results-oriented goals and 

achieving objectives. Developing a strategic plan can help the Council clarify 

organizational priorities and unify the Council’s members in the pursuit of shared 

goals. 

2. Aside from winning the war on talent as alluded to in your testimony, 

what, in your view, are other pressing human capital issues facing the federal 

government today and how should the CHCO Council address those issues? 

The nation’s large and growing long-term fiscal imbalance and a range of other 21st

century challenges are driving a fundamental transformation of the federal 

 

1

 U.S. General Accounting Office, Human Capital: Observations on Agencies’ Implementation of the 

Chief Human Capital Officers Act, GAO-04-800T (Washington, D.C.: May 18, 2004). 
Page 2 GAO-04-897R Implementation of CHCO Act 

government. This transformation requires a comprehensive reexamination of what 

the government does, how it does business, and in some cases, who does its business. 

Ultimately, to successfully transform, the federal government must change its culture 

to become more results-oriented, customer-focused, and collaborative. Specifically, 

agencies continue to face pervasive human capital challenges in four key areas: 

• Leadership: Top leadership in agencies must provide the committed and 

inspired attention needed to address human capital and related organization 

transformation issues.

• Strategic human capital planning: Agencies’ human capital planning 

efforts need to be more fully and demonstrably integrated with mission and 

critical program goals.

• Acquiring, developing, and retaining talent: Additional efforts are needed 

to improve recruiting, hiring, professional development, and retention 

strategies to ensure that agencies have the needed talent.

• Results-oriented organizational cultures: Agencies continue to lack 

organizational cultures that promote high performance and accountability and 

empower and include employees in setting and accomplishing programmatic 

goals.

The Council can play an important leadership role in developing policies that are 

sensitive to implementation concerns and gain consensus and consistent followthrough within the executive branch. In addition to working to streamline hiring and 

recruitment, we believe that the Council has the opportunity to address several 

immediate and significant needs of the government’s human capital community. 

These needs include the following: 

• Modernizing agency performance management systems and creating a clear 

linkage between individual performance and organizational success. 

 

• Developing the capabilities required for successful implementation of human 

capital reform. 

• Implementing strategic human capital planning to ensure that an agency’s 

human capital program optimizes its workforce’s strengths. 

• Transforming the human capital office and its processes to more fully 

contribute to key agency decisions. 

3. Where do you think the CHCO Council should most focus their oversight 

attention? 

The Council can play a key role in helping agencies implement human capital policies 

and facilitating the oversight responsibilities of OPM. For example, we recently 

testified that agencies appear to be making limited use of new hiring flexibilities.2

 

According to OPM, the agencies have not as fully embraced the new tools and 

 

2

 U.S. General Accounting Office, Human Capital: Status of Efforts to Improve Hiring, GAO-04-796T 

(Chicago, Ill.: June 7, 2004). 
Page 3 GAO-04-897R Implementation of CHCO Act 

flexibilities as OPM had hoped.3 In our prior work, we recommended that OPM work 

with and through the CHCO Council to more thoroughly research, compile, and 

analyze information on the effective and innovative use of human capital flexibilities. 

We noted that sharing information about when, where, and how the broad range of 

personnel flexibilities is being used, and should be used, could help agencies meet 

their human capital management challenges. OPM and agencies need to continue to 

work together to improve the hiring process, and the CHCO Council should be a key 

vehicle for this needed collaboration. To accomplish this effort, agencies need to 

provide OPM with timely and comprehensive information about their experiences in 

using various approaches and flexibilities to improve their hiring processes. OPM—

working through the CHCO Council—can, in turn, help by serving as a facilitator in 

the collection and exchange of information about agencies’ effective practices and 

successful approaches to improved hiring. Such additional collaboration between 

OPM and the agencies could go a long way in helping the government as a whole and 

individual agencies to improve the processes for quickly hiring highly qualified 

candidates to fill important federal jobs. 

4. In your research, are CHCOs becoming integrated into the leadership 

teams of the agencies in which they now exist? If not, is this the direction in 

which they are moving? 

The successful integration of CHCOs into the leadership teams of the agencies is best 

evidenced and evaluated by how well they help the agency achieve strategic results 

and pursue its mission. Because the CHCOs have only been in place a little over a 

year, it is too early to assess results. However, agency CHCOs told us that the CHCO 

Act has lent support to their efforts by establishing a single point within the agencies 

with the perspective, responsibility, and authority to ensure the successful 

implementation of strategic human capital initiatives. They indicated that their 

designation as Chief Human Capital Officer has strengthened agencies’ human capital 

direction by providing strategic human capital management attention at the highest 

level of the agencies and the opportunity to advance issues directly to the head of the 

agency. 

In addition, the CHCOs identified different strategies the agencies employed to 

integrate the CHCO position into their leadership teams, underscoring that there is no 

single best model for all agencies and all circumstances. The significant differences 

included: 

• Significant additional management responsibilities or focused scope of 

responsibility for human capital: As we testified, half of the CHCOs have 

major responsibilities in addition to human capital management. These 

responsibilities include financial management, information management, 

administrative services, facilities management, and procurement. According 

to CHCOs who occupy positions that oversee significant management 

functions in addition to human capital, they already have a “seat at the table,” 

and have a voice in the strategic activities of their agency. However, a number 

of CHCOs who are responsible only for human capital matters also reported 

 

3

 U.S. Office of Personnel Management, Statement of the Honorable Dan G. Blair, Deputy Director, 

Office of Personnel Management (Chicago, Ill.: June 7, 2004). 
Page 4 GAO-04-897R Implementation of CHCO Act 

that they fully participate in the strategic decision making of their agency. 

While the CHCO Act provides for agencies integrating the position into the 

leadership team as best fits their needs, we have previously reported that 

agency leaders are including human capital leaders in key agency strategic 

planning and decision making and, as a result, the agencies are engaging the 

human capital organization as a strategic partner in achieving desired 

outcomes relating to the agency’s mission.4

• Reporting directly to the agency head or reporting to another senior 

leadership position: Underscoring the CHCOs statements that they are 

functioning as an integral part of the agency’s senior leadership team, more 

than half (15 of 24) of the CHCOs report directly to the agency head. OPM’s 

guidance to agencies urged agency leaders to ensure that if the CHCO did not 

report directly to the agency head, the CHCO should serve as an integral part 

of the agencies’ leadership team, participating fully in its deliberations and 

decisions and sharing accountability with the other members of that team for 

the agency’s bottom line performance and mission results. Such a role clearly 

provides the opportunity to integrate the human capital initiatives with the 

other key processes and decisionmaking in the agency. 

• Career executive or political appointee: The CHCOs were evenly split 

between career executives and political appointees. Since the inaugural 

CHCO appointments, two agencies have changed their CHCO designation from 

the incumbent career executive to a higher-level political appointee, although 

this is not sufficient to draw conclusions as to the general direction of 

appointments. 

Although the so-called “seat-at-the-table” is significant, CHCOs are ultimately valued 

not by place, but by the value they add to the agencies’ strategic human capital 

approaches in attaining organizational goals. We have found that CHCOs are 

positioned in roles where they have the opportunity to more directly affect agency 

decisions and achievement of goals. 

 

5. As you stated in your report, many CHCOs are currently holding multiple 

positions, in addition to their CHCO title. Is this a good thing for the future 

of the position and the agencies? 

We believe as time passes and agency CHCOs become more established in their roles 

and responsibilities, it will become exceedingly difficult for CHCOs to devote the 

necessary time and attention to the CHCO role if CHCOs are “dual-headed” with other 

key functions. As we testified, half of the CHCOs have significant management 

responsibilities in multiple areas. A number of these CHCOs told us that they believe 

such multiple responsibilities work well for them in their agency. For example, some 

CHCOs with key responsibilities in multiple areas told us they believe this enables 

them to achieve quicker decisionmaking on strategic human capital issues. On the 

other hand, other CHCOs said they prefer devoting all their attention to human 

capital issues. 

 

4

 U.S. General Accounting Office, Human Capital: Selected Agency Actions to Integrate Human 

Capital Approaches to Attain Mission Results, GAO-03-446 (Washington, D.C.: Apr. 11, 2003). 
Page 5 GAO-04-897R Implementation of CHCO Act 

6. To follow up on the last question, what other positions are compatible 

with the CHCO such that one could hold that title along with another 

position? 

Early in the federal experience of establishing the CFO and CIO positions, we 

testified that the challenges facing most agencies in financial and information 

management required full-time leadership by separate individuals with appropriate 

talent, skills, and experience in these two areas. For smaller agencies, an executive 

wearing several management hats may be appropriate. There is not necessarily any 

one model that is either the most appropriate for or that will guarantee success at 

every federal department and agency. The mission, size, and culture unique to each 

federal agency make it unwise to prescribe any single approach. This concern will be 

best considered in light of the progress CHCOs demonstrate in moving forward on 

their human capital strategies and plans. 

More generally, we have suggested that Congress consider establishing Chief 

Operating Officer (COO) or equivalent positions in selected agencies as one element 

of an overall strategy to address certain systemic federal governance and 

management challenges. These COOs would be part of a broader effort to elevate 

attention to management and transformation issues, integrate various key 

management and transformation efforts, and institutionalize accountability for 

addressing management issues leading a transformation.5

 By their very nature, the 

problems and challenges facing agencies are crosscutting and thus require 

coordinated and integrated solutions. However, the risk is that management 

responsibilities (including, but not limited to information technology, financial 

management, and human capital) will be “stovepiped” and thus will not be 

implemented in a comprehensive, ongoing, and integrated manner. While officials 

with management responsibilities often have successfully worked together, there 

needs to be a single point within agencies with the perspective and responsibilities—

as well as the authority—to ensure successful implementation of functional 

management initiatives and, if appropriate, transformation efforts. 

7. Do you anticipate the CHCO Council playing a key role in making 

government-wide recommendations for improving personnel policy? 

We anticipate the CHCO Council will play a key role in leading the federal 

government’s human capital reform efforts. Our experience with the CFO Act shows 

the importance of having a central advisory group to help promote the 

implementation of financial management reform. The CFO has played a lead role in 

creating goals for improving federal financial management practices, providing sound 

advice to OMB on revisions to executive branch guidance and policy, and building a 

professional community of governmentwide financial management expertise. The 

CHCO Council can play a similarly useful role. 

 

5

For additional information on the COO concept and how it might apply to federal agencies, see U.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.: 

October 2002). 
Page 6 GAO-04-897R Implementation of CHCO Act 

Our past work has found that approaches to interagency collaboration, such as the 

CHCO council, have emerged as an important central leadership strategy in both 

developing policies that are sensitive to implementation concerns and gaining 

consensus and consistent follow through within the executive branch. In effect, 

agency collaboration can serve to institutionalize many management policies initiated 

by either Congress or OMB. We believe it is reasonable that the success that OMB 

has achieved with other interagency councils in fostering communication across the 

executive branch, building commitment to reform efforts, tapping the talents that 

exist within agencies, keeping management issues in the forefront, and initiating 

improvement projects can be expected of the CHCO Council under the leadership of 

OPM. 

8. Are there any notable successes or glaring weaknesses that the CHCO 

Council should address as it enters into its second year of activity? 

As we testified, the Council has successfully set an agenda by creating five 

subcommittees to address and recommend change for five key areas identified by the 

Council’s leadership as critical to the success of the strategic management of the 

human capital initiative outlined in the President’s Management Agenda. Several of 

the issues coincide with the four key areas: leadership; strategic human capital 

planning; acquiring, developing, and retaining talent; and results-oriented 

organizational cultures, which we identified in our high-risk series on strategic 

human capital management.6

Identifying priority human capital issues, organizing the leadership and talent to 

analyze them, proposing actions to be taken, and frequently meeting to share 

information and perspectives are good first steps. We understand that the full 

Council will meet over the coming months to consider the recommendations of the 

subcommittees and advance an agenda of needed improvements to better address the 

issues. 

The urgency of addressing the key human capital challenges the government faces 

will require the CHCO Council to become very active in providing input to OPM on 

the results of its activities and OPM to effectively use the Council to enhance the 

ability of agencies to strategically manage their human capital to accomplish 

transformational change. 

_ _ _ _ _ _ 

 

6

 U.S. General Accounting Office, High-Risk Series: Strategic Human Capital Management, GAO-03-

120 (Washington, D.C.: January 2003). 
Page 7 GAO-04-897R Implementation of CHCO Act 

For additional information on our work on governmentwide human capital issues, 

please contact me on 512-6806 or at mihmj@gao.gov. 

Sincerely yours, 

J. Christopher Mihm 

Managing Director, Strategic Issues 

(450195) 
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