NATIONAL 

MEDIATION BOARD

Strengthening 

Planning and Controls 

Could Better 

Facilitate Rail and Air 

Labor Relations

Report to Congressional Committees

December 2013

GAO-14-5

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-5, a report to 

congressional committees

December 2013

NATIONAL MEDIATION BOARD

Strengthening Planning and Controls Could Better

Facilitate Rail and Air Labor Relations

Why GAO Did This Study

A small federal agency, NMB facilitates 

labor relations in two key transportation 

sectors—railroads and airlines—

through mediation and arbitration of 

labor disputes and overseeing union 

elections. Established under the 

Railway Labor Act, NMB’s primary 

responsibility is to prevent work 

stoppages in these critical industries. 

The FAA Modernization and Reform 

Act of 2012 required GAO to evaluate 

NMB programs and activities. GAO 

examined NMB’s (1) strategic planning 

and performance measurement

practices; (2) controls for key 

management areas; and (3) 

challenges, if any, in overseeing 

elections. GAO assessed NMB’s 

management practices using internal 

control standards and other GAO 

criteria; interviewed NMB officials, 

current and former board members, 

and key stakeholders from rail and air 

labor and management groups; and 

reviewed relevant federal laws,

regulations, and NMB policies.

What GAO Recommends

Congress should consider authorizing 

an appropriate federal agency’s IG to 

provide oversight of NMB. NMB should 

implement a formal strategic planning 

process and develop performance 

goals and measures to meet federal 

requirements, develop a process to 

address audit findings, implement key 

components of an information security 

and privacy program, and engage in 

strategic workforce planning. NMB 

should also collect and analyze data 

on the types of rail grievances filed to 

help improve efficiency in its arbitration 

process. In commenting on a draft of 

this report, NMB said it would address 

our recommendations and described 

actions it plans to take.

What GAO Found

The National Mediation Board (NMB) recently updated its strategic plan but is not 

meeting some federal strategic planning and performance measurement

requirements. NMB missed deadlines for updating its strategic plan and lacks 

performance measures to assess its progress in meeting its goals, even though 

an agency’s strategic plan should form the basis for everything an agency does.

NMB also lacks some controls in key management areas that could risk its 

resources and its success:

Financial accountability: NMB contracts for annual financial statement audits

and internal control reviews. However, it lacks a formal process for addressing

identified deficiencies, a key internal control.

Information technology: NMB recently transitioned to new information 

technology systems but is missing key management and security controls, 

including an information security program that fully implements federal 

requirements.

Human capital: NMB has taken steps to improve its human capital program but 

improvements are still needed. Although all NMB senior managers are eligible for 

retirement, NMB has not engaged in formal workforce planning to identify gaps in 

staff skills, and strategies, such as training, to address them.

Procurement: NMB has established some key procurement policies and 

controls but weaknesses remain. For example, in a recent purchase of tablet

computers for some staff, NMB did not follow its own procedures to assess the 

need for the devices or solicit competition. 

Other management issues: NMB does not have an Inspector General (IG), and 

oversight by other federal agencies is limited. NMB also has a significant number 

of pending rail arbitration cases, and it lacks complete data on the types of cases

filed to help it address the backlog and the costs. 

Management and Program Areas Key to Achieving NMB’s Mission

NMB has adapted to challenges presented by large union elections resulting 

from airline mergers and has implemented improvements such as online voting.

In 2010, NMB changed its rules for determining a majority in union elections. 

While this process caused disagreement among some stakeholders, NMB data 

suggest that the percentage of elections in which a union was certified has, thus 

far, remained relatively constant in the years before and after the rule change.

View GAO-14-5. For more information, contact 

Revae Moran at (202) 512-7215, or 

moranr@gao.gov.
Page i GAO-14-5 National Mediation Board

Letter 1

Background 4

NMB Is Missing Key Elements of Successful Performance Planning 

and Reporting 13

NMB Lacks Some Key Management Controls 19

NMB Has Responded to Industry Changes and Stakeholder 

Disagreements in Conducting Elections 43

Conclusions 47

Matter for Congressional Consideration 48

Recommendations for Executive Action 49

Agency Comments and Our Evaluation 50

Appendix I Scope and Methodology 54

Appendix II Comments from the National Mediation Board 60

Appendix III GAO Contact and Staff Acknowledgments 65

Tables

Table 1: Comparison of NMB to Other Federal Labor Relations 

Agencies 11

Table 2: Extent to Which NMB Is Following Key Practices for 

Financial Accountability and Control 19

Table 3: Extent to Which NMB Is Following Key Practices for 

Information Security and Privacy 25

Table 4: Extent to Which NMB Is Following Key Practices for 

Effective Workforce Planning 29

Table 5: Extent to Which NMB Is Following Key Practices for 

Procurement 34

Figures

Figure 1: NMB Organization and Key Responsibilities 5

Figure 2: The Process for Resolving “Major Disputes” under the 

RLA 9

Contents
Page ii GAO-14-5 National Mediation Board

Figure 3: Example of NMB Performance Goals, for Mediation and 

ADR, Fiscal Year 2014 Budget Submission 17

Figure 4: NMB Issued Information Technology Devices with 

Similar Functions to Almost Half Its Workforce, as of July 

2013 37

Abbreviations

ADR Alternative dispute resolution

CIO Chief Information Officer 

FedRAMP Federal Risk and Authorization Management Program

FISMA Federal Information Security Management Act of 2002 

FMCS Federal Mediation & Conciliation Service

FLRA Federal Labor Relations Authority

GPRA Government Performance and Results Act of 1993

GPRAMA GPRA Modernization Act of 2010

IG Inspector General

NLRB National Labor Relations Board

NMB National Mediation Board

OMB Office of Management and Budget

OPM Office of Personnel Management

RLA Railway Labor Act

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Page 1 GAO-14-5 National Mediation Board

441 G St. N.W.

Washington, DC 20548

December 3, 2013

The Honorable John D. Rockefeller, IV 

Chair

The Honorable John Thune 

Ranking Member 

Committee on Commerce, Science, and Transportation 

United States Senate 

The Honorable Tom Harkin

Chair 

The Honorable Lamar Alexander 

Ranking Member 

Committee on Health, Education, Labor, and Pensions 

United States Senate 

The Honorable Bill Shuster 

Chair

The Honorable Nick J. Rahall, II

Ranking Member

Committee on Transportation and Infrastructure 

House of Representatives 

Railroads and airlines are two key transportation sectors, and disruptions 

to these industries can be costly for passengers, workers, consumers, 

and businesses. For example, as a result of an 89-day pilot strike in 

spring 2001 at Comair, a regional carrier for Delta Air Lines, the carrier 

did not operate its 815 daily flights for an estimated 25,000 passengers. 

The airline’s 1,350 striking pilots lost an estimated $14 million in salaries, 

and the airline reported laying off an additional 1,600 nonstriking workers. 

Recognizing the significant consequences of work stoppages as a result 

of disputes between labor and management, in 1926, Congress enacted 

the Railway Labor Act (RLA) to provide a framework for ensuring 

harmonious labor relations in the railroad industry. A 1934 amendment to 

the RLA created the National Mediation Board (NMB), an independent 

federal agency that provides mediation and other services to help resolve 

labor disputes over issues such as working conditions and rates of pay. In 

addition, NMB is responsible for resolving disputes over union 

representation and the interpretation of collective bargaining agreements. 

A 1936 amendment to the RLA expanded coverage to the airline industry. 

The FAA Modernization and Reform Act of 2012 further amended the 
Page 2 GAO-14-5 National Mediation Board

RLA and mandated GAO to evaluate NMB’s programs and management 

practices.1 Specifically, this report examines:

1. the extent to which the National Mediation Board follows federal 

strategic planning requirements and leading practices,

2. the extent to which the National Mediation Board has key 

management controls in place—for financial management; information 

management, security, and privacy; human capital and workforce 

development; and procurement—to fulfill its mission, and

3. how the National Mediation Board addresses challenges, if any, in its 

process for overseeing employee representation elections.

To address these objectives, we reviewed relevant federal laws and 

regulations and interviewed NMB officials, current board members, and 

all board members who served from 2000 through 2012. We also 

interviewed key stakeholders, including representatives from rail and air 

labor and management groups. We reviewed key NMB documents, 

including its most recent 5-year strategic plan, its annual Performance 

and Accountability Report, and congressional budget justification 

documents, and compared NMB’s performance planning and reporting 

practices with requirements in the Government Performance and Results 

Act of 1993 (GPRA) as updated by the GPRA Modernization Act of 2010 

(GPRAMA) and related leading practices identified in our previous work. 

We also reviewed NMB’s financial statement audits for fiscal years 2004 

through 2012 and the most recent cycle of internal control reviews of 

program and management areas, and interviewed NMB’s independent 

auditors about identified internal control weaknesses. We did not 

independently assess the findings in these financial audits and program 

reviews. We also reviewed NMB policies and procedures for 

representation, mediation, and arbitration, including the NMB 

Representation Manual, board member briefing book, sample ballots, and 

rulemaking procedures.

 1

Pub. L. No. 112-95, § 1004, 126 Stat. 11,147. FAA stands for the Federal Aviation 

Administration. The Act also required GAO to review the processes applied by NMB to 

certify and decertify representation of employees by labor organizations and the extent to 

which those processes are consistent with the processes of other agencies with 

jurisdiction over labor relations. See GAO, National Mediation Board Mandates in the FAA 

Modernization and Reform Act of 2012, GAO-12-835R (Washington, D.C.: June 27, 

2012).
Page 3 GAO-14-5 National Mediation Board

In addition, we assessed NMB’s plans, policies, and practices in financial 

management; information management, security, and privacy; human 

capital; and procurement using GAO’s Standards for Internal Control in 

the Federal Government,2 the Federal Information Security Management 

Act of 2002, Privacy Act of 1974, E-Government Act of 2002, guidelines 

developed by the Office of Management and Budget (OMB) and the 

National Institute of Standards and Technology, and criteria developed by 

GAO in prior work.3 We identified key practices from these criteria and 

assessed whether NMB is following these practices (NMB is taking 

appropriate actions and has a formal plan, policy, or other document), 

partially following (NMB is taking some actions but does not have a formal 

plan or policy and/or some additional steps are needed to consider this 

practice implemented), or minimally following (NMB is taking little or no 

action to address this practice). We also tested the security settings on 

NMB information technology devices, such as laptops, smartphones, and 

tablets.

We interviewed officials at OMB and the Office of Personnel Management 

(OPM) to determine how these agencies provide oversight and guidance 

to NMB. We assessed the reliability of data from OPM’s annual human 

capital survey of NMB staff, and data provided by NMB on representation 

election outcomes, and determined that these data were sufficiently 

reliable for our purposes. See appendix I for a detailed description of our 

scope and methodology.

We conducted this performance audit from September 2012 through 

December 2013 in accordance with generally accepted government 

auditing standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a reasonable 

basis for our findings and conclusions based on our audit objectives. We 

believe that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives.

 2

GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999).

3

Specifically, we used GAO’s prior work on strategic workforce planning to assess NMB’s 

human capital practices. GAO, Human Capital: Key Principles for Effective Strategic 

Workforce Planning, GAO-04-39 (Washington, D.C.: Dec. 11, 2003). To assess NMB’s 

procurement function, we used GAO, Framework for Assessing the Acquisition Function 

at Federal Agencies, GAO-05-218G (Washington, D.C.: September 2005). 
Page 4 GAO-14-5 National Mediation Board

The RLA was passed in 1926, in part to establish a legal framework for 

avoiding disruptions in rail service and interstate commerce. The RLA 

was later amended to extend its provisions to the airline industry, and 

also to establish NMB as a federal agency to administer the law. 

According to NMB, the original bill was drafted jointly by rail management 

and labor representatives and was enacted by Congress without 

amendment. The RLA establishes several key principles. For example:

• It requires parties (rail and air carriers and their employees’ 

representatives) to “exert every reasonable effort” to settle disputes to 

avoid interruption to commerce or to the operation of any railroad or 

airline.4

• It gives participants the right to designate their representatives under 

the Act without interference from the other party and assures 

employees the right to determine a collective bargaining 

representative without interference from their employers.5

• It establishes procedures for resolving disputes over pay, rules, or 

working conditions during collective bargaining, as well as disputes 

resulting from the interpretation or application of existing collective 

bargaining agreements.6

NMB is headed by a three-member board, with each member appointed 

by the President and confirmed by the Senate for a term of 3 years. No 

more than two members of the board can be from the same political 

party.7 In August 2013, a third board member was confirmed by the 

Senate, filling a board position that had been vacant since June 2012. 

The board members typically designate a chairman annually. The board 

members provide overall leadership and strategic direction for NMB, and 

retain responsibility for key functions such as releasing the parties from 

the mediation of major disputes if no agreement can be reached. The 

board has delegated day-to-day administration and oversight to NMB’s 

Chief of Staff and General Counsel (see fig. 1). As of August 2013, NMB 

had 49 employees, including the 3 board members. NMB also contracts 

 4

45 U.S.C. § 152, First.

5

45 U.S.C. § 152, Third.

6

45 U.S.C. §§ 152, Sixth, 153 and 155. 

7

45 U.S.C. §154, First. 

Background

NMB’s Organization and 

Resources
Page 5 GAO-14-5 National Mediation Board

with approximately 430 arbitrators. In fiscal year 2013, NMB had an 

operating budget of $12.7 million.

Figure 1: NMB Organization and Key Responsibilities
Page 6 GAO-14-5 National Mediation Board

NMB has sole jurisdiction to certify employee unions in the rail and air 

industries. Under the RLA, employees have a right to select a union free 

from influence, interference, or coercion from their employer.8 Eligible 

employees in a craft or class at a given carrier—those who perform the 

same duties and functions, such as locomotive engineers or pilots—

select a union representative on a systemwide basis. For example, the 

pilots at an airline must be represented by the same union regardless of 

where they are located geographically. Unions are selected through 

secret-ballot elections conducted by NMB.

If there is a question concerning representation of a craft or class, NMB is 

charged with resolving the representation dispute through its Office of 

Legal Affairs. For an election to occur, at least 50 percent of the eligible 

employees in the craft or class must submit signed authorization cards 

indicating their interest in being represented by a union.9 An NMB 

investigator compares signatures on those cards to signature samples for 

all eligible voters in the craft or class provided by the carrier to assess 

their authenticity and determine if there is a sufficient percentage to hold 

an election. The investigator also addresses any challenges to the 

eligibility of individual voters. Votes are cast by phone or via the Internet, 

in an election overseen by NMB. If a union receives a majority of the 

votes, NMB certifies the union as the employee representative. 

Additionally, NMB protects against “interference, influence, or coercion by 

either party” during this process, and it can order a new election or 

shorten the time before another union may apply to represent the 

employees if it determines any of these have occurred.

In 2010, NMB changed its rules for certifying a union.10 Previously, a 

union had to receive votes from a majority of all employees in a craft or 

class who were eligible to vote in order to be certified, or approved, as the 

 8

45 U.S.C. § 152, Fourth. We use the terms “carrier” and “employer” synonymously in this 

report.

9

45 U.S.C. § 152, Ninth. NMB has stated that the RLA does not preclude an employer 

from voluntarily recognizing a union as the employee representative. See, e.g., Galveston 

Wharves, 4 NMB 200, 203 (1962). If employees do not have representation and only one 

union is under consideration, NMB can certify the union if the parties agree in writing and 

upon presentation by the union of authorization cards signed by a majority of the 

represented employees.

10Representation Election Procedure, 75 Fed. Reg. 26,062 (May 11, 2010)(codified at 29 

C.F.R. pts. 1202 and 1206). 

Union Representation 

Elections
Page 7 GAO-14-5 National Mediation Board

employee representative. This meant that employees who did not vote 

were, in effect, counted as voting against union representation. Under the 

rule change, an employee who chooses not to vote is no longer counted 

because union representation is now determined by a majority of votes 

cast. Numerous stakeholders, including union and carrier groups and 

members of Congress, submitted comments for and against the change.11

In addition, one NMB board member at the time wrote a dissenting 

opinion in the proposed and final rules published in the Federal Register.

Once a union has been certified to represent a group of employees, the 

carrier is required to negotiate with—and only with—that union in a 

process known as collective bargaining. When the parties cannot reach 

agreement on the terms of a new or revised collective bargaining 

agreement—such as working conditions or rates of pay—it is classified as 

a “major dispute.”

12 Either party can apply for NMB’s mediation services 

to resolve their differences or NMB may impose mediation if it finds that 

resolving the dispute is in the public’s interest. In general, mediation is a 

process through which disputing parties, with assistance from a neutral 

third party (known as a mediator), seek ways to settle their dispute. In 

fiscal year 2012, NMB provided mediation services in 144 cases, 46 of 

which were closed and 98 of which were pending at the end of that year. 

Mediation continues until the parties reach agreement or NMB determines 

that further mediation will not be effective and offers the parties the option 

of interest arbitration, in which case a neutral arbitrator would determine 

what provisions to include in the new or modified collective bargaining 

agreement. Either party may, however, refuse arbitration. If either party 

 11One stakeholder group sued NMB to stop implementation of the rule. On December 16, 

2011, the U.S. Court of Appeals for the District of Columbia affirmed a District Court 

decision which held that NMB had the authority to make the rule change and that it was 

consistent with the RLA. Air Transport Association of America, Inc. v. National Mediation 

Board, 663 F.3d 476 (2011).

12The terms “major dispute” and “minor dispute” are not found in the RLA. Rather, NMB 

and federal courts have, over the years, used these terms, common in the history of 

railway labor issues, to differentiate types of disputes. As the Supreme Court defined 

these terms in 1945, major disputes “[relate] to disputes over the formation of collective 

agreements or efforts to secure them. They arise where there is no such agreement or 

where it is sought to change the terms of one.... They look to the acquisition of rights for 

the future, not to assertion of rights claimed to have vested in the past.” Elgin, Joliet &

Eastern Railway Co. v. Burley, 325 U.S. 711, 723 (1945). Minor disputes, on the other 

hand, “[relate] either to the meaning or proper application of a particular provision with 

reference to a specific situation...” Id.

Resolution of “Major 

Disputes” in Collective 

Bargaining
Page 8 GAO-14-5 National Mediation Board

refuses, a 30-day cooling off period is triggered before the parties can 

exercise what is known as self help. Self help includes actions such as 

the union going on strike or the carrier denying employment or refusing to 

admit union employees onto the property in a lockout. To prevent this 

work stoppage, the President may create a Presidential Emergency 

Board to help settle the dispute.13 In fiscal year 2012, there was one 

Presidential Emergency Board created in a dispute involving the five 

largest U.S. railroads and numerous short-line and regional railroads. 

(See fig. 2 for a description of the process for resolving major disputes 

under the RLA.)

 13Under the RLA, if a dispute between a carrier and its employees, in the judgment of 

NMB, threatens “substantially to interrupt interstate commerce to a degree such as to 

deprive any section of the country of essential transportation service,” NMB shall notify the 

President, who may, in his discretion, create a board to investigate and report on the 

dispute. 45 U.S.C. § 160. Creation of an emergency board delays a strike, lockout, or 

other form of self help, generally for 60 days. The emergency board has 30 days to issue 

a report with recommendations for settling the dispute. The parties to the dispute have 

another 30-day period to consider the recommendations and reach an agreement. There 

are different Presidential Emergency Board provisions for publicly funded commuter 

railroads.
Page 9 GAO-14-5 National Mediation Board

Figure 2: The Process for Resolving “Major Disputes” under the RLA

In addition to mediation and arbitration, NMB provides voluntary 

alternative dispute resolution (ADR) services, such as facilitation and 

training, to help unions and carriers learn to resolve disputes using less 

confrontational methods.

The RLA also offers another type of arbitration—grievance arbitration—to 

help resolve “minor disputes.”

14 As opposed to major disputes, which 

involve the establishment or modification of a collective bargaining 

agreement, minor disputes are disagreements over how to interpret and 

apply existing agreements. For example, an employee may file a 

 14Unless it is otherwise clear from context, in this report, when we refer to arbitration, we 

are generally referring to grievance arbitration to resolve minor disputes, rather than 

interest arbitration, which can be used to resolve major disputes.

Resolution of “Minor 

Disputes” under Collective 

Bargaining Agreements
Page 10 GAO-14-5 National Mediation Board

grievance if he or she believes they were wrongfully fired or disciplined. If 

the carrier and employee cannot resolve their dispute, the RLA permits a 

party to refer the dispute to arbitration before an adjustment board 

created by the rail or air industry.15 The adjustment board consists of a 

carrier representative, a union representative, and a neutral arbitrator. In 

most instances, the neutral is selected by the two representatives. If they 

are unable to agree on an individual, they may request that NMB appoint 

a neutral. Grievances that the parties have been unable to resolve 

themselves are submitted to this board for resolution. In this capacity, the 

neutral is called upon to break a tie. Unlike major disputes, minor disputes 

cannot trigger self-help actions such as strikes or lockouts.

NMB does not directly provide arbitration services through its own staff, 

but rather maintains a list of registered arbitrators from which the parties 

can select someone to review and decide their case. In the airline 

industry, the parties pay the costs of arbitration. In the railroad industry, 

however, consistent with the requirements of the RLA, NMB pays the fee

(currently $300 per day) and travel expenses of the arbitrator. In fiscal 

year 2012, NMB’s arbitrators closed 3,869 rail grievance arbitration cases 

and 2,084 were pending at year’s end. In that year, NMB’s arbitration 

budget was $2 million, not including NMB staff salaries.

NMB differs in several key ways from the other three labor relations 

agencies in the United States: the National Labor Relations Board 

(NLRB), Federal Mediation & Conciliation Service (FMCS), and Federal 

Labor Relations Authority (FLRA) (see table 1).

 1545 U.S.C. § 153, First (i). The arbitration of unresolved minor disputes in the rail industry 

takes place before either the National Railroad Adjustment Board or adjustment boards 

established by the parties (rail carriers and unions), known as Public Law Boards or 

Special Boards of Adjustment. 45 U.S.C. § 153, First (i) and Second; 29 C.F.R. § 1207.1. 

These adjustment boards generally are made up of an equal number of carrier and union 

representatives. The RLA gave NMB the power to create a National Air Transport 

Adjustment Board (45 U.S.C. § 185), but it has not done so. Instead, in the airline industry, 

parties jointly create their own temporary special boards of adjustment, called System 

Boards, through collective bargaining agreements.

Other Federal Labor 

Relations Agencies
Page 11 GAO-14-5 National Mediation Board

Table 1: Comparison of NMB to Other Federal Labor Relations Agencies

Agency

National Mediation Board National Labor 

Relations Board

Federal Mediation & 

Conciliation Service

Federal Labor 

Relations Authority

Authorizing statute Railway Labor Act National Labor 

Relations Act

Labor-Management 

Relations Act of 1947 

(Taft-Hartley Act)

Federal Service 

Labor-Management 

Relations Statute

Target populations Railroad and airline carriers and 

workers

Private sector 

employers and 

workers, with some 

exclusions such as 

certain agricultural, 

gaming and religious 

entities. U.S. Postal 

Service employees 

are also covered.

Private, public, and 

federal sector 

employers and workers

Most federal 

employers and 

workers

Union certification • Voluntary recognition by carrier 

and workers

• Secret ballot election

• Voluntary 

recognition by 

employer and 

workers

• Secret ballot 

election

• NLRB-mandated 

recognition

n/a – FMCS does not 

oversee union 

certification

a

• Secret ballot 

election

Union 

decertification

No formal decertification process Formal decertification 

process and voluntary 

disclaimer of interest

n/a

b

Formal decertification 

process

Dispute resolution • Mediation and arbitration

• Mediation is mandatory before 

the parties can exercise self help 

(e.g., strike)

• NMB pays for railroad 

arbitration; the parties pay for 

airline arbitration 

n/a • Mediation and 

arbitration

• Mediation is 

voluntary (except 

in the health care 

industry)

• Parties pay for 

arbitration. (FMCS 

only provides lists 

of potential 

arbitrators.) 

Arbitration is 

based on a private 

agreement 

between an 

employer and a 

union.

• Impasse 

procedures for 

bargaining 

disputesc

• Parties pay for 

arbitration

and 

arbitration

Source: GAO analysis of applicable federal statutes and agency documents, and interviews with agency officials.

a

NLRB also may require an employer to recognize and bargain with a union if a majority of employees 

signed authorization cards and the employer engaged in unfair labor practices that make a fair 

election unlikely.
Page 12 GAO-14-5 National Mediation Board

b

A union may submit a Disclaimer of Interest, stating that it waives and disclaims any right to 

represent a group of employees.

c

The Federal Service Impasses Panel is an entity within FLRA that provides additional assistance in 

resolving disputes if FMCS services cannot resolve the dispute or if the parties request the Panel’s 

services.

OMB and OPM have key oversight responsibilities for all federal 

agencies, including NMB. Among other things, OMB is responsible for 

providing oversight of agencies’ management, including information 

technology and procurement. OMB is also responsible for preparing and 

implementing the President’s annual budget and for providing guidance to 

agencies on how to comply with the GPRA Modernization Act of 2010

(GPRAMA).16 OPM is the central personnel management agency of the 

federal government charged with administering and enforcing federal civil 

service laws, regulations, and rules. OPM also maintains a personnel 

management oversight program to ensure that agencies comply with 

merit system principles and standards set by the office.17 As part of this 

program, OPM conducts audits of agencies’ human capital programs.18 In 

addition, OPM administers a survey of federal employees to measure 

employees’ perceptions of whether, and to what extent, conditions 

characterizing successful organizations are present in their agencies.

In 1993, Congress passed GPRA, which established strategic planning, 

performance planning, and performance reporting as a framework for 

agencies to communicate progress in achieving their missions. GPRAMA, 

enacted in 2011, established some important changes to existing 

requirements by placing a heightened emphasis on priority-setting, crossorganizational collaboration to achieve shared goals, and the use and 

analysis of goals and measurements to improve outcomes. GPRAMA 

enhanced agency-level planning and reporting requirements and requires 

agencies to have additional leadership involvement and accountability.

 16GPRA stands for the Government Performance and Results Act. Pub. L. No. 111-352, 

124 Stat. 3866 (2011).

175 U.S.C. § 1104(b)(2). 

18These reviews are conducted to determine how well an agency’s human resources 

programs, operations, and use of personnel authorities contribute to accomplishment of 

the agency’s mission and whether the actions taken comply with merit systems principles, 

laws, and regulations. Merit systems principles constitute the framework for federal human 

resources management. See, 5 U.S.C. § 2301. 

Executive Branch 

Oversight Responsibilities

Federal Performance 

Planning and Reporting 

Requirements under GPRA 

and GPRAMA
Page 13 GAO-14-5 National Mediation Board

NMB lacks a robust strategic planning process, with formal mechanisms 

for gathering congressional and stakeholder input, and as a result, the 

agency has not met some federal requirements for performance planning. 

For example, NMB updated its previous strategic plan, which covered 

fiscal years 2005 to 2010, in November 2012, 7 years after it was 

issued.19 NMB also missed a February 2012 deadline set by GPRAMA for 

agencies to update their existing strategic plans to be consistent with new 

requirements. NMB officials said they engage in strategic planning but 

have not made the development of a strategic planning document a high 

priority.20 The agency had delayed the start of the strategic planning 

process until the completion of changes in the agency’s information 

technology systems. The sequencing of NMB’s strategic plan 

development—after the roll-out of other initiatives—runs counter to our 

previous findings on leading results-oriented organizations. Strategic 

planning should provide the basis for everything an organization does. 

For example, all decisions, including those involving resources such as 

information technology systems and human capital investments, should 

flow from an agency’s strategic plan. Developing a strategic plan can help 

 19GPRA required strategic plans to be updated at least every 3 years.

20Since 1993, GPRA has required executive agencies to complete strategic plans in which 

they define their missions, establish results-oriented goals, and identify the strategies that 

will be needed to achieve those goals. The accompanying committee report noted that a 

multi-year strategic plan articulates the fundamental mission (or missions) of an 

organization, and lays out its long-term general goals for implementing that mission, 

including the resources needed to reach these goals. The clearer and more precise these 

goals are, the better able the organization will be to maintain a consistent sense of 

direction, regardless of leadership changes at the top. S. Rep. No. 103-58, at 15 (1993).

NMB Is Missing Key 

Elements of 

Successful 

Performance Planning 

and Reporting

NMB Lacks a Robust 

Strategic Planning Process 

for Meeting Federal 

Requirements
Page 14 GAO-14-5 National Mediation Board

clarify organizational priorities and unify an agency’s staff in the pursuit of 

shared goals.21

Agencies are also required to issue a new strategic plan in February 

2014, and every 4 years thereafter, concurrent with the President’s 

budget (issued no later than the first Monday in February). (See sidebar 

for key strategic planning requirements.) In August 2013, NMB officials 

said they intend to complete a new strategic plan by December 2013, 

before the February 2014 deadline.

NMB lacks a systematic way of involving congressional and other 

stakeholders in its strategic planning process. As noted earlier, agencies 

should consult with Congress and other stakeholders for input when 

developing and adjusting their strategic plans. NMB officials told us they 

do not have a routine process for gathering input from congressional 

stakeholders during the strategic planning process, a key focus of 

GPRAMA. Consultations with Congress are intended, in part, to ensure 

that agency performance information is useful for congressional oversight 

and decision making. As we have previously reported, having pertinent 

and reliable performance information available is necessary for Congress 

to adequately assess agencies’ progress in making performance and 

management improvements and ensure accountability for results.22

In addition, many stakeholders in the rail and air industries, both in labor 

and management, told us NMB does not seek out and incorporate 

stakeholder input in its strategic planning efforts, and NMB officials 

confirmed that they do not have a formal mechanism for involving 

stakeholders in this process. NMB officials told us that the agency instead 

receives input from stakeholders in informal ways, such as getting 

 21GAO, Agencies’ Strategic Plans Under GPRA: Key Questions to Facilitate Congressional 

Review, GAO/GGD-10.1.16 (Washington, D.C.: May 1997); and Executive Guide: 

Effectively Implementing the Government Performance and Results Act, 

GAO/GGD-96-118 (Washington, D.C.: June 1996).

22At the request of Congress, we developed a guide in June 2012 to assist members of 

Congress and their staffs in ensuring that the consultations required by GPRAMA are 

useful for assessing agency performance. See GAO, Managing for Results: A Guide for 

Using the GPRA Modernization Act to Help Inform Congressional Decision Making, 

GAO-12-621SP (Washington, D.C.: June 15, 2012). See also, GAO, Financial and 

Performance Management: More Reliable and Complete Information Needed to Address 

Federal Management and Fiscal Challenges, GAO-13-752T (Washington, D.C.: July 10, 

2013). 

Key Requirements for Agencies’ Strategic 

Planning Process (GPRAMA)

• Cover at least a 4-year period

• Issued approximately 1 year after a 

Presidential term begins

• Involve stakeholder input when developing 

or adjusting the plan

• Consult with appropriations, authorizing, 

and oversight congressional committees, 

both majority and minority, at least every 2 

years

• Made available online and notify the 

President and Congress

Source: GAO analysis of GPRAMA.
Page 15 GAO-14-5 National Mediation Board

feedback from parties during the course of mediation, or from members of 

two joint labor-management groups: the Dunlop II Committee, which has 

reviewed NMB’s mediation function, and the Section 3 Subcommittee, 

which has reviewed NMB’s rail arbitration function. However, when we 

interviewed officials from both groups, they reported that NMB hasn’t 

always involved them in planning. Stakeholder involvement is important to 

help agencies ensure their efforts and resources are being targeted to the 

highest priorities.23

Without a robust strategic planning process as a guide, NMB is also not 

meeting federal requirements for annual performance planning and 

reporting. Federal agencies are required to develop annual performance 

plans. These plans use performance measurement to reinforce the 

connection between the long-term strategic goals outlined in an agency’s 

strategic plan and the day-to-day activities of its managers and staff. 

Annual performance plans are to include performance goals which cover 

each agency’s program activities as listed in the budget, a description of 

the necessary resources and strategies to achieve these goals, a 

balanced set of performance measures for each goal, and a discussion of 

how the measures will be verified. (See sidebar for key performance 

planning requirements.)

An agency’s performance goals establish desired performance levels, 

and performance measures are used to assess progress toward 

achieving those goals. Yet the goals and sub-goals listed in NMB’s fiscal 

year 2014 budget submission do not consistently meet the basic 

GPRAMA requirements of being objective, measurable, and 

quantifiable.24 For example, NMB states that it has a goal to “better track 

 23GAO/GGD-96-118.

24OMB defines a performance goal as a statement of the level of performance to be 

accomplished within a timeframe, expressed as a tangible, measurable objective or as a 

quantitative standard, value, or rate. For the purposes of this guidance and 

implementation of GPRAMA, a performance goal includes a performance indicator, a 

target, and a time period. GPRAMA requires performance goals to be expressed in an 

objective, quantifiable, and measurable form unless agencies, in consultation with OMB, 

determine that it is not feasible. In such cases an “alternative form” performance goal may 

be used. See OMB, Preparation and Submission of Strategic Plans, Annual Performance 

Plans, and Annual Program Performance Reports, OMB Circular No. A-11, Part 6 (August 

2012).

NMB’s Performance Plan 

Lacks Objective and 

Quantifiable Goals and 

Measures for Reporting on 

Results
Page 16 GAO-14-5 National Mediation Board

the history of cases” within its mediation and ADR programs. However, 

this goal does not contain a target number of mediation cases to be 

tracked (quantifiable), what would be considered “better” (objective), a 

performance indicator to gauge progress (measurable), or a time period 

in which to accomplish this goal (see fig. 3). Without measurable targets 

or timeframes, these goals do not establish intended performance or 

allow NMB and the public to assess progress.

Key Requirements for Agencies’ 

Performance Plans (GPRAMA)

• Cover 2 fiscal years—the current and

upcoming timeframes are concurrent with 

the President’s budget (issued no later 

than the first Monday in February of each 

year); made available online and notify 

the President and Congress

• Must contain: (1) objective, quantifiable, 

measureable performance goals for all

program activities, (2) a description of 

how performance goals contribute to 

agency strategic plan goals and 

objectives and federal government 

performance goals, (3) goal leaders, (4) 

contributing programs and activities, (5) 

strategies and resources needed, (6) 

milestones, (7) a balanced set of 

performance measures/indicators, (8) the 

basis for comparing actual results with 

performance goals, (9) the means to be 

used to verify/validate data (description of 

how the agency will ensure data accuracy 

and reliability), (10) a description of how 

the agency is working with other agencies 

to achieve its performance goals and 

relevant federal government performance 

goals, and (11) major management 

challenges 

Source: GAO analysis of GPRAMA.
Page 17 GAO-14-5 National Mediation Board

Figure 3: Example of NMB Performance Goals, for Mediation and ADR, Fiscal Year 2014 Budget Submission

Since NMB has not developed objective, measurable, or quantifiable 

goals, it is not well positioned to develop performance measures to use in 

reporting progress or results in any program area. NMB’s fiscal year 

2011-2016 strategic plan stated that the agency plans to formulate 

performance measures for its strategic goals and each of the related 
Page 18 GAO-14-5 National Mediation Board

performance goals in its annual budget submission.25 However, the 

performance goals in NMB’s fiscal year 2014 budget submission did not 

contain indicators or measures that could be used to gauge agency 

performance. NMB officials said they are currently working to develop 

more quantifiable, time-based performance measures for NMB program 

areas in its next strategic plan. Our previous work on results-oriented 

organizations shows that many agencies need years to develop a sound 

set of performance measures.26 NMB officials told us they internally track 

measurable targets, such as the number of days NMB mediators meet 

with parties before reaching resolution on a specific collective bargaining 

agreement, but the agency does not report these metrics publicly.27

Without objective, measurable, and quantifiable performance goals made 

available to the public, Congress and stakeholders lack information on the 

extent to which NMB is making annual progress toward its strategic goals 

and how NMB is planning to use its resources.

 25Prior to July 2013, NMB had not made current and past congressional budget 

submission documents, which contain detailed performance and budget information, 

available on the agency’s website. Since fiscal year 2008, OMB has required agencies to 

make their budget justification materials, including performance plans, available to the 

public by posting materials on the Internet within 2 weeks after they are transmitted to 

Congress. In July 2013, during the course of our review, NMB posted these materials on 

the agency’s website for the first time. 

26GAO/GGD-96-118.

27In the past, NMB included time-based targets in its performance reporting. For example, 

NMB’s fiscal year 2005 Performance and Accountability Report contained the following 

performance goals for mediation: (1) mediation applications will be responded to within 3 

business days; (2) a mediator will be assigned within 10 calendar days following docketing 

of all mediation cases; and (3) the mediator and board will endeavor to assist the parties 

in reaching an agreement within 12 months (365 days) of an application. In 2007, 

independent auditors noted that NMB’s Office of Mediation was not achieving its 

performance goals. In response, the Director of the Office of Mediation stated that NMB 

was no longer using those time-based goals. NMB officials told us that it is difficult to 

develop measurable performance goals for mediation services because there are many 

factors outside the agency’s control, such as the parties’ willingness to enter into an 

agreement.
Page 19 GAO-14-5 National Mediation Board

NMB is following most key practices for financial accountability and 

control, an integral part of an organization’s management that should 

reach throughout all departments and programs as well as financial 

management and reporting functions. There are two key practices, 

however, that NMB is following only partially or minimally (see table 2).28

Table 2: Extent to Which NMB Is Following Key Practices for Financial Accountability and Control

Practice

Extent NMB is 

following Example 

Prepare annual, comprehensive, agencywide financial 

statements

Following NMB prepares annual, comprehensive, 

agencywide financial statements.

Have an independent audit performed of the most recent 

fiscal year financial statements

Following NMB contracts for an independent audit of 

its most recent fiscal year financial 

statements.

Receive an unqualified (clean) audit opinion on the most 

recent fiscal year’s financial statements

Following NMB reports it has received 15 years of 

unqualified financial audit opinions.

Annually obtain an auditor’s opinion or report on internal 

controls over financial reporting

Following NMB contracts for a report on internal 

controls over financial reporting. 

Annually receive an auditor’s opinion or report on internal 

controls over financial reporting that contains no material 

internal control weaknesses

Partially following NMB’s fiscal year 2010 and 2011 reports on 

internal controls over financial reporting each 

contained a material weakness.

Conduct an annual assessment of internal control for 

compliance with standards for internal control and OMB 

requirements

Following NMB contracts for an assessment of internal 

controls over one key program or 

management area annually. 

Monitor corrective actions to ensure systemic weaknesses 

and identified deficiencies are resolved

Minimally following NMB does not have a formal mechanism for 

tracking resolution of findings and 

recommendations.

Obtain an annual auditor’s report on compliance with laws 

and regulations

Following NMB contracts for an annual auditor’s report 

on compliance with laws and regulations.

 28Key practices have been identified in prior GAO work such as GAO, Executive Guide: 

Creating Value Through World-class Financial Management, GAO/AIMD-00-134

(Washington, D.C.: April 2000), or in OMB guidelines.

NMB Lacks Some Key 

Management Controls

NMB Has Most Key 

Controls for Financial 

Accountability but Lacks a 

Formal Mechanism to 

Address Deficiencies
Page 20 GAO-14-5 National Mediation Board

Practice

Extent NMB is 

following Example 

Annually receive an auditor’s report on compliance with laws 

and regulations that contains no reported noncompliance

Following NMB’s reports on compliance with laws and 

regulations for fiscal years 2004 through 

2012 contained no reported noncompliance.

Source: GAO analysis of NMB documents and interviews with NMB officials and independent auditors.

Note: In this and other management areas, we assessed whether NMB is following key practices 

(NMB is taking appropriate actions and has a formal plan, policy, or other document), partially 

following (is taking some actions but does not have a formal plan or policy and/or some additional 

steps must be taken to consider this practice implemented), or minimally following (NMB is taking little 

or no action to address this particular practice).

NMB routinely prepares comprehensive, agencywide financial statements 

and contracts for independent audits of those financial statements. The 

agency has reported that it received 15 years of unqualified financial audit 

opinions.29 As part of these audits, the auditors also provide NMB with a 

report on internal controls over financial reporting.30 In those reports, the 

auditors identified a material weakness in two of the years audited (2010 

and 2011).31 The material weakness in both years was related to the 

untimely recording of obligations related to NMB’s arbitration services. 

This issue was downgraded to a significant deficiency in fiscal year 2012 

after NMB took steps to address the issue.32 According to a senior NMB 

official, the agency expects to address all recommendations related to the 

2012 significant deficiency with full implementation of its Arbitrator 

Workspace, a web-based information system that replaces multiple 

 29We obtained the nine most recent annual financial statement reports NMB could 

provide. In all 9 years, NMB received unqualified audit opinions. We did not independently 

assess these audits. 

30Auditors also report annually on NMB’s compliance with laws and regulations over 

financial reporting and have found no instances of material or immaterial noncompliance 

in the last 9 years.

31Under standards issued by the American Institute of Certified Public Accountants, 

control deficiencies exist when the design or operation of a control does not allow 

management or employees to prevent or detect misstatements on a timely basis. A 

significant deficiency is one that adversely affects an agency’s ability to reliably initiate, 

authorize, record, process, or report financial data in accordance with generally accepted 

accounting principles. A material weakness is a significant deficiency, or combination of 

significant deficiencies, that could result in a material misstatement in financial statements. 

Because of inherent limitations in internal controls, misstatements, losses, or 

noncompliance may nevertheless occur and not be detected.

32The auditors also identified a significant deficiency in fiscal year 2008 in NMB’s internal 

controls over financial reporting related to a different issue—ensuring that transactions are 

properly recorded, processed, and summarized.
Page 21 GAO-14-5 National Mediation Board

electronic forms used by NMB to track arbitrator activity and financial 

obligations to contracted arbitrators.

In addition to annual financial statement audits, NMB contracts with the 

same independent auditors to review its internal controls over one key 

program area (mediation, arbitration, representation, and ADR) or 

management area (procurement and personnel/payroll) annually.33 The 

law commonly known as the Federal Managers’ Financial Integrity Act of 

198234 and its implementing guidance from OMB35 require federal 

agencies to develop and implement appropriate and cost-effective 

internal controls for results-oriented management, assess the adequacy 

of those internal controls, identify needed areas of improvement, take 

corresponding corrective action, and provide an annual statement of 

assurance regarding internal controls and financial systems.

However, NMB does not have a mechanism for ensuring prompt 

resolution of findings, a key internal control. When asked how the agency 

monitors the status of recommendations or findings in its internal control 

reviews, NMB officials said it is assumed, based on management’s 

written response in the reports, that any weaknesses will be addressed 

and resolved by the date of the next review of that topic. However, that 

review may not occur for as many as 8 years. For example, the 

representation function was last reviewed in fiscal year 2005, and 

auditors began their next review of that topic in June 2013. In addition, 

NMB has not consistently provided management responses, which are 

written descriptions of the actions the agency plans to take to address 

deficiencies. For example, in the 2009-2010 report on internal controls 

over arbitration, NMB did not submit a management response to the five 

findings and recommendations in the report.36 In addition, NMB did not 

submit responses to findings and recommendations in the auditors’ 

 33NMB officials told us that ADR will no longer be reviewed separately; it will be reviewed 

as part of the review of mediation services. 

3431 U.S.C. § 3512(c), (d).

35OMB Circular No. A-123, Management’s Responsibility for Internal Control (rev. Dec. 

21, 2004).

36When asked, NMB officials responded that the agency did not submit a management 

response to the recommendations in this review because NMB did not agree with the 

findings. In addition, they noted that they were occupied with addressing the material 

weakness identified in the financial statement audit previously discussed.
Page 22 GAO-14-5 National Mediation Board

management letters that accompanied NMB’s financial statement reports 

in fiscal years 2011 and 2012.37

It is also not clear that top NMB management officials are monitoring the 

resolution of findings and recommendations made by independent 

auditors.38 Within NMB, department heads are responsible for 

implementing the auditors’ recommendations. The Chief of Staff and the 

board do not assume operational responsibility for addressing the findings 

of independent auditors. In addition, it is not clear that NMB’s board 

members are given routine, formal reports on the status of findings or 

how they are resolved. While some NMB officials told us board members 

are briefed or given reports on the status of resolving findings, officials 

could not provide documentation, such as minutes of meetings in which 

audit findings or internal control reviews and their resolution were 

discussed. Officials told us that it is the agency’s policy not to keep 

minutes of board meetings. Furthermore, NMB’s auditors do not follow up 

on the status of recommendations in the internal control reviews until the 

date of the next review unless the recommendation is related to NMB’s 

annual financial statement audit.39 As a result, some recommendations 

made by auditors to improve internal controls or NMB operations may not 

be addressed. In the 2008-2009 report on NMB’s personnel and payroll, 

auditors found the same deficiency they identified in their fiscal year 2003 

 37During NMB’s financial statement audit, auditors noted certain matters involving internal 

control and NMB’s operations that warranted management’s attention. The auditors 

issued a management letter to NMB discussing all nonreportable conditions involving 

NMB’s operations. NMB officials told us that they were not able to submit management 

responses, given other year-end tasks.

38We have reported that agency management should be responsive to the findings and 

recommendations of audits and other reviews aimed at strengthening internal control. See 

GAO, Internal Control Management and Evaluation Tool, GAO-01-1008G (Washington, 

D.C.: August 2001). OMB has also issued guidance to agencies in its Circular A-50 

specifying the role of the designated audit follow-up officials and emphasizing the 

importance of monitoring the implementation of resolved audit recommendations in order 

to assure promised corrective action is actually taken. 

39NMB officials said there are some cases when the agency has asked auditors for interim 

guidance on processes or operations. Although this is outside the auditors’ contractual 

duties, NMB officials have met with the independent auditors before the implementation of 

initiatives to ensure the initiatives would address audit recommendations.
Page 23 GAO-14-5 National Mediation Board

review on the same topic.40 In addition, auditors made the same 

recommendation to NMB in their management letters for fiscal years 

2008, 2010, 2011, and 2012.41

NMB relies on information technology to carry out its mission. The agency 

uses computer systems and networks to host applications, files, email 

services, and web access, and to manage its records and financial 

information. During fiscal year 2013, NMB switched its network 

infrastructure, including its email, files, web access, and other 

applications, to a commercial vendor. Further, in May 2013, it switched its 

financial management system to the Bureau of the Public Debt’s 

Administrative Resource Center. 42 NMB also plans to bring its records 

management system into its cloud computing environment in fiscal year 

2014.

Federal laws and policies require federal agencies to implement key 

practices to effectively manage and secure their information systems and 

information, and protect the privacy of personal information they collect 

and use. For example, the Federal Information Security Management Act 

of 2002 (FISMA)43 requires federal agencies to develop, document, and 

implement an agencywide information security program to provide 

security for the information and information systems that support the 

operations and assets of the agency, including those operated on behalf 

of the agency by a contractor or another agency. Such a program 

 40In their 2008-2009 report on NMB internal controls over personnel and payroll, auditors 

found NMB had not yet developed and implemented policies and procedures to address 

the accuracy and timely submission of personnel/payroll data provided by General 

Services Administration staff. The report noted that this was a repeat finding.

41NMB was unable to provide a copy of the fiscal year 2009 management letter.

42According to NMB officials, the change in financial systems occurred because the 

system would no longer be supported.

43FISMA was enacted as title III, E-Government Act of 2002, Pub. L. No. 107-347, 116 

Stat. 2899, 2946.

NMB Has Not Fully 

Implemented Key 

Information Security and 

Privacy Controls
Page 24 GAO-14-5 National Mediation Board

includes eight key practices.44 To improve information security and reduce 

overall information technology operating costs for agencies, OMB also 

issued a memorandum45 instructing the heads of departments and 

agencies to implement common security settings for computers running 

Windows operating systems. In addition, the Privacy Act of 1974 and EGovernment Act of 2002 describe, among other things, agency 

responsibilities with regard to protecting personally identifiable 

information.46

NMB has not fully implemented key information security and privacy

practices (see table 3).

 44These practices include (1) periodic assessments of risk; (2) policies and procedures 

based on assessments of risk; (3) subordinate plans for providing adequate information 

security; (4) security awareness training for employees and contractors; (5) periodic 

testing and evaluation of information security policies, procedures, and agency practices; 

(6) process for planning, implementing, evaluating, and documenting remedial actions to 

address known security deficiencies; (7) procedures for detecting, reporting, and 

responding to security incidents; and (8) plans and procedures to ensure continuity of 

operations for information systems that support the operation and assets of the agency.

45OMB, Implementation of Commonly Accepted Security Configurations for Windows 

Operating Systems, M-7-11 (March 22, 2007).

46See 5 U.S.C. § 552a and Pub. L. No. 107-347, § 208, 116 Stat. 2899, 2921. The terms 

personal information and personally identifiable information are used interchangeably in 

this report to refer to any information about an individual maintained by an agency, 

including (1) any information that can be used to distinguish or trace an individual’s 

identity, such as name, Social Security number, date and place of birth, mother’s maiden 

name, or biometric records, and (2) any other information that is linked or linkable to an 

individual, such as medical, educational, financial, and employment information.
Page 25 GAO-14-5 National Mediation Board

Table 3: Extent to Which NMB Is Following Key Practices for Information Security and Privacy

Practice

Extent NMB is 

following Example 

Information Security Practices

Conduct periodic risk assessments that 

consider cyber threats and vulnerabilities

Partially following NMB conducted a risk assessment in 2011 for its network, 

records management, and financial systems. However, NMB has 

not documented a risk assessment for its new network 

environment and financial management systems.

Develop and implement risk-based policies 

and procedures to ensure compliance with 

applicable standards and guidance including 

system configuration requirements

Partially following NMB has developed draft policies and procedures for managing 

agency documents, information, records, and its new network 

environment. However, it did not fully adopt 26 of 63 required 

security settings on its Windows laptop computers that we 

reviewed.

Develop system security plans that cover 

networks, facilities, and systems or groups 

of systems, as appropriate

Partially following A system security plan had been developed for NMB’s network, 

records management, and financial systems. NMB has a draft 

security plan for its new network. However, NMB has not 

developed a security plan for its new financial management 

system. 

Provide security awareness training for 

agency employees and contractors

Partially following NMB employees have taken the required annual security 

awareness training. However, NMB did not provide sufficient 

evidence to support that its contractors have received the required

training. 

Conduct periodic management testing and 

evaluation that includes testing of all major 

systems at least annually 

Partially following NMB last tested and evaluated its Enterprise Network, records 

management, and financial systems in 2011. 

Establish a remedial action process to 

address identified information security 

control weaknesses

Partially following NMB has developed a preliminary plan of actions; however, it 

does not include milestones. In addition, NMB has not established 

and documented a remedial action process for its information 

security control weaknesses. 

Establish security-incident procedures for 

detecting, reporting, and responding to 

incidents 

Minimally following NMB has not developed procedures for detecting, reporting, and 

responding to security incidents.

Establish and maintain up-to-date continuity 

of operations plans and procedures for 

information systems

Partially following NMB’s disaster recovery plan has not been updated since May 

2006. Its continuity of operations plan has not been updated since 

June 2011 and does not reflect the current information technology 

environment. 

Privacy Practices

Assign agency official for privacy Following NMB has designated its Chief Information Officer as its senior 

agency official for privacy. 

Establish policies and procedures for privacy 

protections

Minimally following NMB did not provide evidence to support it has established 

policies and procedures governing privacy protections.

Conduct privacy impact assessmentsa for Minimally following

systems containing personally identifiable 

information

NMB did not provide a privacy impact assessment for its 

Enterprise Network, records management, and financial 

management systems. In addition, NMB did not provide evidence 

to support that a privacy impact assessment will not be required 

for its new computing environments.
Page 26 GAO-14-5 National Mediation Board

Practice

Extent NMB is 

following Example 

Issue systems of records notice Minimally following b NMB did not issue systems of records notice for its Enterprise 

Network, records management, and financial systems. In addition, 

NMB did not provide evidence to support that systems of records 

notice would not be required for its Enterprise Network and 

financial management systems.

Source: GAO analysis of NMB documents and interviews with agency officials.

a

A privacy impact assessment is an analysis of how personal information is collected, stored, shared, 

and managed in a federal system.

b

A system of records is a collection of information about individuals under control of an agency from 

which information is retrieved by the name of an individual or other identifier. System of records 

notices are posted to agency websites to identify, among other things, the purpose of and individuals 

covered by information in a system of records, the category of records that are maintained about the 

individuals, and how the information is shared and routinely used by the agency.

According to agency officials, key practices were not followed because 

NMB has been in the process of transitioning its information technology 

network and systems. NMB plans to update and finalize all of its 

information security policies and procedures to reflect its new information 

technology environment. It also plans to conduct a test and evaluation of 

its information security controls to ensure that they are appropriately 

designed and operating effectively. However, the agency has not 

established timeframes or milestones for completing these actions. Until 

NMB fully develops, documents, and implements an agencywide 

information security program, increased risk exists that the confidentiality, 

integrity, and availability of its information will be compromised.

Finally, although NMB officials stated that the agency has taken steps to 

provide privacy protections for personal information accessed or held by 

NMB, they did not provide supporting documents to demonstrate how the 

agency plans to ensure the privacy of personal information that may be 

contained in its new computer environments. Until it establishes privacy 

policies, NMB will have limited assurance that the personal information it 

collects and uses is adequately protected.
Page 27 GAO-14-5 National Mediation Board

NMB has taken steps to improve its human capital program, such as 

increasing oversight of mediators and providing additional training 

opportunities to its staff. For example, in 1997, in response to 

recommendations made by the rail and air labor-management 

committees, NMB relocated all its mediators from the field to its 

headquarters in Washington, D.C.47 In 2000, NMB established individual 

development plans to improve staff training, and, in 2010, began 

providing free or low cost training to its staff through partnerships with two 

universities and other efforts. More specifically, NMB officials teach 

classes at those universities, or the agency provides office space for the 

universities to hold training sessions for labor relations practitioners in 

exchange for several NMB staff attending the training sessions at no 

charge.

Despite these improvements, NMB’s actions are not guided by a strategic 

workforce plan, which is essential for every federal agency in that it

addresses two critical needs: (1) aligning an organization’s human capital 

program with its current and emerging mission and programmatic goals; 

and (2) developing long-term strategies for acquiring, developing, and 

retaining staff to achieve programmatic goals. Workforce planning is a 

key internal control, as agency management should ensure that skill 

needs are continually assessed and that the organization is able to obtain 

and maintain a workforce with the skills necessary to achieve 

organizational goals.48 Although agencies may take a variety of 

approaches to workforce planning, GAO has identified some principles 

 47Previously, NMB’s mediators were working from their homes as directed by agency 

officials at NMB’s headquarters in Washington, D.C. The rail and air joint committees were 

formed following the 1994 report from the Commission on the Future of WorkerManagement Relations. The joint committees made a number of additional 

recommendations regarding mediation. NMB also created senior mediator positions to 

supervise and help improve oversight of mediators. However, effective June 2013, senior 

mediators no longer have supervisory duties, and all mediators report directly to the 

Director of Mediation and ADR Services. NMB officials told us they made this change to 

facilitate more direct involvement in mediation case management on the part of board 

members and the Chief of Staff. In addition, officials noted that the Director of Mediation 

and ADR Services retired, effective September 2013. As a result of his departure, 

mediators will temporarily report directly to the Chief of Staff.

48GAO/AIMD-00-21.3.1.

NMB Has Taken Steps to 

Improve Its Human Capital 

Program but Does Not 

Follow Key Planning 

Practices
Page 28 GAO-14-5 National Mediation Board

that agencies should follow, including determining critical skills and 

competencies, and developing strategies for closing any gaps.49

NMB has not developed a strategic workforce plan that incorporates 

these key practices (see table 4). Although the agency indicated in 2009 

that it would develop one as part of its last human capital plan, it has yet 

to do so. NMB’s lack of strategic workforce planning was also identified 

by OPM in its last evaluation of the agency’s human capital program in 

2007.50

 49GAO, Human Capital: Key Principles for Effective Strategic Workforce Planning, 

GAO-04-39 (Washington, D.C.: Dec.11, 2003). 

50OPM noted in its 2007 evaluation that NMB did not have a formal approach to workforce 

planning. OPM found that while NMB collected some workforce data, it did not analyze the 

data in such a way as to identify the human capital needed to meet organizational goals, 

develop strategies to identify workforce competency gaps, or ensure appropriate 

organizational structure. OPM made three recommendations regarding workforce 

planning. According to OPM officials, its recommendations to agencies are suggestions to 

improve human capital management, and agencies are not required to take action. OPM 

considered its evaluation of NMB to be closed as of August 2008.
Page 29 GAO-14-5 National Mediation Board

Table 4: Extent to Which NMB Is Following Key Practices for Effective Workforce Planning 

Practice

Extent NMB is 

following Example

Involve top management, employees, and other 

stakeholders in developing, communicating, and 

implementing the strategic workforce plan 

Minimally following NMB does not have a strategic workforce plan, 

although it indicated it would develop one in its last 

human capital plan in 2009.

Any human capital plans to date were developed by 

the Director of the Office of Administration without 

substantive input from other senior managers, 

employees, or stakeholders. 

Determine the critical skills and competencies that 

will be needed to achieve current and future 

programmatic results 

Minimally following NMB has not determined the critical skills and 

competencies needed to achieve current and future 

program results, although it indicated it would do so 

in its last human capital plan in 2009. Instead, NMB 

identifies needed competencies and skills on a caseby-case basis when it hires to fill a vacancy.

Develop strategies tailored to address gaps in 

number, deployment, and alignment of human capital 

approaches for enabling and sustaining the 

contributions of all critical skills and competencies

Minimally following NMB does not have an up-to-date succession plan 

or other strategies to address gaps in competencies 

or skills. 

Build the capability needed to address administrative, 

educational, and other requirements important to 

support workforce planning strategies

Minimally following NMB uses human capital flexibilities, such as 

recruitment and retention incentives and a telework 

program, but the use of these flexibilities is not tied 

to a strategic workforce planning effort.

Monitor and evaluate agency’s progress toward its 

human capital goals and the contribution human 

capital results have made toward achieving 

programmatic results

Minimally following NMB does not have measurable goals and 

objectives related to strategic workforce planning.

NMB has goals and objectives in its 2009 human 

capital plan, but it does not have a process for 

evaluating its plan and ensuring that it takes the 

included steps. As a result, NMB reported not 

completing many of the actions laid out in the plan.

Source: GAO analysis of NMB documents and interviews with NMB officials.

NMB has not determined the skills and competencies it needs to achieve 

current and future program results, nor has it systematically identified 

gaps or strategies to fill them. Instead, senior NMB officials said they 

identify needed skills and competencies on a case-by-case basis, such as 

when hiring to fill a specific vacancy. Officials added that NMB does not 

have difficulty hiring staff. However, some stakeholders identified, and 

NMB officials acknowledged, possible gaps in skills and competencies 

among NMB mediators, an occupation NMB has identified as critical to its 

mission. For example, several NMB officials and most of the labor and 

management stakeholders we interviewed said NMB staff, particularly 
Page 30 GAO-14-5 National Mediation Board

mediators, lack rail industry experience. NMB officials confirmed that 10 

of its 13 mediators come from the airline industry, 2 come from the 

railroad industry, and 1 does not have a background in either industry.51

NMB officials said it is difficult to recruit mediators from the rail industry 

because there are few rail employees willing to leave their railroad jobs, 

particularly because industry salaries and benefits are greater than what 

NMB can offer. NMB officials described a few strategies they have used 

to recruit more staff with rail experience through networking at industry 

conferences, but they do not have a formal recruiting strategy. In addition, 

NMB officials said they cross-train staff in both the rail and air industries 

and, in 2013, took mediators on a tour of a rail property to learn more 

about the rail industry. Similarly, an NMB official and some carrier officials 

we interviewed said most NMB mediators come from labor union, rather 

than management, backgrounds. NMB officials confirmed that 8 of its 13 

mediators formerly held union labor relations positions while 4 held labor 

relations positions with carriers. (One mediator did not have a labor 

relations background with either a union or carrier.) NMB officials told us 

the agency values professional experience in rail or air labor relations 

over mediation experience because they have found that mediators need 

to understand the industries in order to be effective. However, two airline 

management officials said that having more mediators with union 

backgrounds than with management backgrounds could create the 

perception that the agency is not completely neutral in collective 

bargaining.

Further, NMB has not employed strategies, such as succession planning 

or leadership development, to help close gaps in critical skills and 

competencies. Succession planning and leadership development were 

also identified as problems by OPM in its 2007 evaluation of NMB.52 NMB 

officials identified succession planning as the agency’s greatest human 

capital challenge: All senior managers are eligible to retire and all of the 

mediators are in their second careers and eligible to retire. However, 

NMB has not revised its succession plan since it was first drafted in 2006, 

 51The Director of the Office of Mediation and ADR Services told us that about 60 percent 

of NMB’s mediation cases are in the rail industry, in part because recent airline mergers 

and consolidations have reduced the number of separate airline mediation cases. 

52In its 2007 evaluation, OPM found NMB had not conducted a leadership competency 

gap analysis or succession planning. OPM also found NMB did not offer or make available 

leadership programs. Interviews OPM held with NMB staff at all levels confirmed that 

there is no formal succession plan in place for managers, supervisors, or staff.
Page 31 GAO-14-5 National Mediation Board

even though it has since made organizational changes, such as 

reinstituting the Chief of Staff position in 2010.53 The Director of the Office 

of Administration said NMB’s small size and limited budget make it 

difficult to hire additional staff to succeed retirement-eligible senior staff. 

The director also told us the agency is taking some steps, such as 

establishing agreements with other agencies to provide administrative 

services and free up NMB staff time for developmental opportunities. 

Training also can be an important strategy to address gaps in skills or 

competencies, and NMB has taken steps to improve its training program. 

In July 2013, NMB revised its training policy, which establishes a process 

through which the agency identifies training priorities and needs. 

Specifically, the policy states that training for new staff or to correct 

performance deficiencies takes priority over training to improve 

satisfactory performance or to prepare employees for career 

advancement. Each department prepares an annual training plan that 

identifies training needs, in line with agency training priorities. Then each 

employee and his or her supervisor develop an individual development 

plan that identifies specific training opportunities to meet that employee’s 

needs. These individual development plans are approved by the 

department director. Employees are required to fill out evaluations after 

completing courses. Officials said training opportunities usually consist of 

industry conferences, on-the-job training, or training developed through 

partnerships with individual carriers, unions, or universities. However, 

NMB has not established minimum training requirements for all staff 

beyond training required of all government employees, such as 

information security training, or training required to maintain professional 

certifications, such as continuing legal education courses. OPM made 

several recommendations to NMB regarding training in its 2007 

evaluation.54 According to OPM’s fiscal year 2012 Federal Employee 

 53A joint rail and air labor-management committee, the Dunlop II Committee, 

recommended in a December 2009 report that NMB reestablish the Chief of Staff position 

in order to improve NMB’s cohesion and effectiveness. 

54Specifically, OPM noted that the training provided by NMB, which may be limited due to 

budgetary constraints, is not linked to succession planning. In addition, NMB did not have 

data to assess whether its training and development initiatives and strategies support 

mission-critical competencies, or whether the return on investments in training yields 

positive results toward mission accomplishment. OPM recommended that NMB collect 

and analyze such data. OPM also found that NMB lacked a process to evaluate the 

effectiveness and impact of training provided, and stated that NMB should identify and 

assess training needs annually and evaluate training to determine how well it meets shortand long-range program needs.
Page 32 GAO-14-5 National Mediation Board

Viewpoint Survey, 85 percent of NMB staff said the agency’s workforce 

has the job-relevant knowledge and skills necessary to accomplish 

organizational goals, but only 50 percent were satisfied with the training 

they received for their present job. Thirty-six percent of NMB employees 

were unsatisfied, compared with 24 percent at all small agencies 

combined.55

Although NMB officials said that mediators arrive at the agency with 

significant industry experience, stakeholders identified a need for 

improved training. Most of the stakeholders we interviewed said that the 

quality of NMB mediators varies. Most said mediators need to continually 

update their training to stay abreast of industry trends and effective 

mediation techniques. Similarly, the April 2010 report by a joint rail and air 

labor-management committee, the Dunlop II Committee, found that the 

level of initial and continuing training for mediators was inadequate, and 

that mediators would benefit from more standardized, comprehensive, 

and regular training, particularly in mediation skills. The committee noted 

that most mediators were formerly advocates, not neutral parties, and 

needed training in mediation skills. NMB has taken some steps to 

address concerns about mediator training. For example, two stakeholders 

we interviewed said mediators could use training to interpret and evaluate 

cost estimates provided by the parties as part of collective bargaining, 

and in July 2013, NMB officials told us that they brought in two experts to 

provide training on evaluating cost estimates. In addition, NMB officials 

said that the agency is developing a core curriculum for new mediators 

consisting of two courses on mediation and negotiation skills. The first 5-

day course, on mediation, is now available, and officials said the 

negotiation skills course will be available starting in spring 2014.

Finally, because NMB has not established a strategic workforce plan, the 

agency has not monitored and evaluated the results of its workforce 

planning efforts, including whether they contribute to accomplishing the 

agency’s strategic goals. While NMB set human capital goals and 

objectives in its 2009 human capital plan, it has not tracked or evaluated 

 55OPM, 2012 Federal Employee Viewpoint Survey: National Mediation Board Small 

Agency Management Report (Washington, D.C.). The annual Federal Employee 

Viewpoint Survey developed by OPM measures employees’ perceptions of whether, and 

to what extent, conditions characterizing successful organizations are present in their 

agencies. We provided data from other small agencies to provide context, but it is difficult 

to compare NMB data to data from all other small agencies combined because of the 

small sample size at NMB. 
Page 33 GAO-14-5 National Mediation Board

its progress in meeting them and has not taken many of the actions 

detailed in the plan. For example, under a goal to “guide human capital 

decisions by using a data-driven, results-oriented planning and 

accountability system,” NMB had a strategic objective to “develop an 

NMB accountability program based on OPM’s accountability system.”

However, as of April 2013—4 years later—a senior official reported that 

NMB has not developed such an accountability system, citing other 

pressing priorities. In its 2007 evaluation, OPM also noted that NMB did 

not have an accountability system that met OPM requirements.

NMB is partially following key practices we have identified as critical for 

agencies to manage their procurement functions, but we found some 

shortcomings (see table 5).56 NMB is following a key practice of 

appropriately placing the procurement function within the organization: 

The procurement function is at an equal organizational level as other key

mission offices, such as the Offices of Arbitration and Mediation, the 

primary internal customers for whom goods and services are acquired. 

Further, as Director of the Office of Administration, the senior 

procurement official also oversees the financial and information 

technology functions, thereby providing direct insight into other key 

internal functions involved in the procurement process. The placement of 

the office facilitates proper management support and visibility within the 

organization to help the agency meet its overall mission and needs—key 

principles that we previously identified.57 In addition, NMB involves its 

internal stakeholders in the procurement process. For example, NMB’s 

procurement procedures call for a multidisciplinary approach in that 

relevant NMB departments and subject matter experts are to be involved 

in making purchase requests, identifying requirements, and reviewing 

vendors’ proposals.

 56GAO, Framework for Assessing the Acquisition Function at Federal Agencies, 

GAO-05-218G (Washington, D.C.: September 2005).

57GAO-05-218G. 

NMB Follows Some Key 

Procurement Practices but 

Weaknesses Remain
Page 34 GAO-14-5 National Mediation Board

Table 5: Extent to Which NMB Is Following Key Practices for Procurement

Practice

Extent NMB is 

following Example 

Align acquisition with agency mission 

and needs

Following NMB has a designated procurement official to manage the 

procurement function who is appropriately positioned to 

coordinate NMB’s procurement activities and enforce 

procurement policies. 

Establish policies and processes to 

govern the procurement function

Partially following Procurement policies and processes have been established and 

some are shared in NMB’s employee handbook.

NMB’s independent auditors found that NMB generally 

established adequate controls over the procurement process, but 

some weaknesses exist in following procedures and maintaining 

appropriate documentation.

NMB lacks goals or measures for procurement in NMB’s 

agencywide strategic plan.

Establish knowledge and information 

tools to help make well-informed 

acquisition decisions 

In progressa NMB transitioned to a new system in May 2013 intended to 

integrate its financial management and procurement systems 

and facilitate accurate and timely spend analyses and reporting.

Source: GAO analysis of NMB documents and interviews with NMB officials, compared to practices in GAO’s Framework for Assessing 

the Acquisition Function at Federal Agencies. The framework includes a fourth area, human capital, which is discussed more broadly 

earlier in the report.

a

While NMB has established policies and procedures to oversee the 

procurement process, we and others have identified some weaknesses in 

following procedures and maintaining appropriate documentation. NMB’s 

independent auditors reviewed the internal controls over NMB’s 

procurement activities in fiscal year 2011 and identified some 

weaknesses. For example, auditors recommended that NMB improve its 

process for organizing and maintaining records because it found that 

NMB was unable to provide certain documents for about 25 percent of its 

purchases under $3,000. NMB officials said they have made changes to 

the agency’s processes to maintain greater control over documents that 

support its procurement decisions.

We did not score NMB on this procurement area because, during the course of our review, the 

agency was in the process of transitioning to new financial management and procurement systems 

and had not fully implemented the related information tools.

We found that NMB did not follow its own policies and procedures in 

purchasing laptops and iPads. NMB spent about $110,000 to purchase 

55 laptop computers for its staff in September 2012. Before making the 

purchase, NMB solicited quotations from three vendors and received 

quotations from two of the vendors for the laptops. However, NMB chose 

a quotation representing different technical specifications than the 

specifications originally provided to vendors. When we asked for the 

business case for purchasing these laptops, an NMB official drafted a 
Page 35 GAO-14-5 National Mediation Board

memo, dated March 2013, stating that the agency chose the more 

expensive laptops because of features such as durability, touch-screen 

capability, and a design that switches easily between laptop and tablet. 

This official further stated that the laptops NMB did not select were largely 

viewed as inferior to the laptops NMB selected. However, when 

requesting quotations, NMB did not include these criteria—touch-screen 

capability and a convertible laptop and tablet design—in its technical 

specifications. Rather, the specifications it provided to vendors were that 

of a more traditional laptop. The vendor whose quotation NMB selected 

submitted two quotations at NMB’s request—one meeting NMB’s original 

specifications and one for the convertible laptop and tablet NMB 

ultimately selected. There was no documentation that NMB notified the 

other vendors of its revised specifications and provided these vendors 

with an opportunity to submit additional quotations.

NMB also purchased iPads in October 2012 for half its staff over the 

written objection of the individual who serves as Chief Financial Officer, 

senior procurement official, and Chief Information Officer. However, 

according to federal information technology management policy and 

internal NMB documents, the Chief Information Officer should have direct 

authority over developing and implementing information technology 

policy, including information technology investments.58 In a memo, this 

official said the purchase of the iPads, in addition to new laptops that also 

function as tablet computers, and new smartphones, was not in keeping 

with a November 2011 Executive Order to limit the number of devices 

 58Under the federal government’s 25 Point Implementation Plan to Reform Federal 

Information Technology Management and OMB Memorandum M-11-29, agency Chief 

Information Officers’ (CIO) roles should change to move away from just policymaking and 

infrastructure maintenance to encompass true portfolio management for all information 

technology. Agency CIOs must be positioned with these responsibilities and authorities to 

improve the operating efficiency of their agencies. CIOs must drive the investment review 

process for information technology investments and have responsibility over the agency’s 

entire information technology portfolio.
Page 36 GAO-14-5 National Mediation Board

provided to employees.59 Instead of NMB purchasing the iPads, this 

official recommended that employees make use of NMB’s policy allowing 

employees to use their own information technology devices. In total, NMB 

spent more than $130,000 to purchase 25 iPads and 55 laptops, and to 

upgrade 22 smartphones for agency staff.60 The devices have many 

common features, calling into question the necessity for having all three 

(see fig. 4). We calculated that, as of July 2013, NMB had issued all three 

devices to 19 staff members, including the 2 board members—about 40 

percent of NMB’s workforce.

 59Specifically, Executive Order 13589: Promoting Efficient Spending (November 9, 2011) 

states: “Each agency should take steps to limit the number of IT devices (e.g., mobile 

phones, smartphones, desktop and laptop computers, and tablet personal computers) 

issued to employees, consistent with the Telework Enhancement Act of 2010 (Pub. L. No. 

111-292, 124 Stat. 3165), operational requirements (including continuity of operations), 

and initiatives designed to create efficiency through the effective implementation of 

technology.” In addition, NMB’s Bring Your Own Device Policy, effective July 2013, notes 

the benefits of allowing employees to use their own information technology devices, 

including the ability to carry just one device for personal and work use, and potential cost 

savings to the agency.

60As of July 2013, NMB had issued 48 of the 55 laptops and 21 of the 25 iPads to staff. In 

August 2013, officials told us that the new board member would receive a laptop, iPad, 

and smartphone. NMB officials also told us they purchased an additional smartphone for a 

contractor.
Page 37 GAO-14-5 National Mediation Board

Figure 4: NMB Issued Information Technology Devices with Similar Functions to 

Almost Half Its Workforce, as of July 2013

a

The laptop has videoconferencing capabilities.

NMB also did not follow its own procurement procedures in purchasing 

the iPads. Based on the documents NMB provided us, the agency did not 

follow procedures to identify the requirements before purchasing the 

iPads, as required.61 There was no statement of requirements prepared, 

in accordance with NMB procedures, and a senior NMB official told us the 

purchase was made without outlining specific requirements or assessing 

whether the iPad, or a tablet device by another manufacturer, would meet 

those requirements. After we requested documentation of the agency’s 

business case, the Chief of Staff, who approved the purchase request for 

 61According to NMB’s Procurement Cycle Contracting Procedures, the department 

director requesting the purchase should prepare a statement of work outlining the 

requirements, and then meet with the Director of the Office of Administration and the 

Contracting Official to discuss the requirements. 
Page 38 GAO-14-5 National Mediation Board

the iPads submitted by a board member in September 2012, drafted a 

memo dated March 2013 stating that the agency’s move to a cloud 

computing environment and the functionality of the iPads, in addition to 

their light weight and relatively low cost, makes them ideal for use at the 

bargaining table and in training. The memo also stated that, prior to the 

purchase, many mediators were using their own iPads.

In addition, NMB did not seek competition in making the iPad purchase. 

NMB’s procurement procedures call for full and open competition if the 

agency does not use the General Services Administration Federal Supply 

Schedules to select vendors in making purchases.62 However, NMB did 

not take steps to consult the General Services Administration schedule or 

use full and open competition. NMB officials explained that they initially 

wanted to use the government’s primary telecommunications provider to 

obtain these devices but they learned that they could not purchase the 

devices without also purchasing the data plan offered by that provider. 

Officials then contacted the iPad’s manufacturer, who referred them to a 

federal reseller but did not provide a list of additional resellers. NMB also 

did not maintain documentation for this purchase that explained the 

absence of competition, as called for in the Federal Acquisition 

Regulation for procurements under $150,000.63

At the time NMB purchased the laptops, iPads, and smartphones, it 

lacked a mechanism for ensuring that its procurement procedures were 

consistently adhered to, such as a checklist for taking required steps in 

the procurement process or maintaining proper documentation. Internal 

control standards specify that agencies should implement mechanisms 

that enforce management’s directives. This would include, for example, 

the process of adhering to procedures and requirements for procuring 

goods and services.64 Such actions are integral to ensuring effective 

 62NMB’s Procurement Cycle Contracting Procedures require the Director of the Office of 

Administration and/or the Contracting Official to determine the appropriate contracting 

vehicle. If the General Services Administration schedule is used, NMB’s Contracting 

Official should solicit three cost proposals and review the proposals with a subject matter 

expert. If there is no vendor identified on the schedule, NMB will do full and open 

competition by placing a statement of work on FedBizOpps. FedBizOpps is the 

government website used to announce the government’s needs and intent to enter into a 

contract for goods or services.

63Federal Acquisition Regulation § 13.106-3(b)(3)(i).

64GAO/AIMD-00-21.3.1. 
Page 39 GAO-14-5 National Mediation Board

stewardship of government resources and obtaining the best possible 

value for the government. In July 2013, NMB officials told us they had 

recently created such a checklist, as part of its transition to a new 

procurement system. This checklist includes required steps, such as 

conducting market research and checking the General Services

Administration schedule for available equipment and vendors, and 

requires staff to include documentation of such steps in the contract file. 

The checklist also requires staff to list three vendors and, if the vendor 

with the lowest bid is not selected, provide a rationale and additional 

documentation on the decisions made.

Although our review focused on internal controls in specific management 

areas at NMB, we identified several broader management issues as well.

OMB and OPM provide limited budgetary and human capital oversight of 

NMB. OMB reviews NMB’s budget request and strategic plans, among 

other documents, but it has not focused on NMB management issues. 

According to OMB officials, OMB does not provide the same level of 

oversight for organizations with small budgets and staff as it does for 

larger organizations. The same is true for OPM. Until 2012, OPM annually 

reviewed and provided feedback on NMB’s human capital management 

report.65 However, beginning in 2013, OPM officials told us that OPM no 

longer requires small agencies to submit their human capital 

management reports for review. OPM last audited NMB’s human capital 

program in 2007. OPM followed up with NMB and, as of 2008, considered 

that evaluation closed. It has no plans for future evaluations. However, 

OPM surveys NMB’s employees as part of its Federal Employee 

Viewpoint Survey of federal agencies, which captures NMB employees’

views of the agency’s strengths and challenges.

Although NMB contracts for annual financial statement audits and rotating 

internal control reviews of program and management areas, the agency 

 65According to 5 C.F.R. § 250.203(a)(3), agencies’ annual human capital management 

reports, provided to OPM, must provide an evaluation of and report on the agency’s 

existing human capital management policies, programs, and operations, as they relate to 

the agency’s overall mission/program performance. The report must address the 

performance measures and milestones contained in the agency human capital plan, 

including compliance measures with respect to relevant laws, rules, and regulations. The 

report must also document actions taken to correct any violations or deficiencies that are 

identified.

NMB Faces Additional 

Management Issues

Lack of Federal Oversight
Page 40 GAO-14-5 National Mediation Board

does not have continual, internal mechanisms in place to monitor and 

review its operations and programs, such as an audit committee or 

internal audit function as recommended by internal control standards. In 

addition, top NMB management officials do not take operational 

responsibility for addressing the findings of the independent auditors. As 

a result, problems identified in those auditors’ reviews of program and 

management areas may not be revisited for 5 or more years, when that 

topic again comes up for review.

NMB does not have a statutory Inspector General (IG) to fill this oversight 

role.66 In comparison, two other federal agencies with similar missions, 

the National Labor Relations Board (NLRB) and the Federal Labor 

Relations Authority (FLRA), have statutory IGs. NMB’s independent 

auditors said they can only perform the reviews NMB hires them to do. In 

contrast, an IG can target any area of an agency’s operations for an audit, 

inspection, or investigation. The House version of the FAA Modernization 

and Reform Act of 2012, H.R. 658, contained a provision that would have 

authorized the IG of the Department of Transportation to review NMB 

operations, issue findings and recommendations to address any identified 

problems, and keep the chairman of the NMB Board and Congress 

informed on agency efforts to address them. The bill also would have 

authorized $125,000 in Department of Transportation appropriations for 

each of fiscal years 2011 through 2014 to cover these services. However, 

these provisions were removed from the bill during conference and 

therefore were not enacted.67

NMB has long struggled with a large volume of railroad grievance 

arbitration cases related to minor disputes. At the beginning of fiscal year 

2000, there were 11,237 pending arbitration cases. More recently, NMB 

has taken steps to reduce the number of pending cases. For example, it 

now performs annual checks to identify cases the parties no longer want 

 66The Inspector General Act, as amended, established Offices of Inspector General to 

serve as independent, objective offices within certain federal departments and entities to 

promote economy, efficiency, and effectiveness as well as prevent or detect fraud and 

abuse. Neither this law nor any other law created an IG for NMB.

67There have been other efforts to provide NMB with IG services. NMB officials 

approached FLRA about sharing their IG, and a bill currently pending before the House of 

Representatives would require FLRA’s IG to supervise, direct, and control audit and 

investigative activities (relating to such audits) pertaining to programs and operations 

within NMB. Inspector General Improvement Act of 2013, H.R. 314, 113th Cong. § 2(e) 

(2013)

Lack of Data on Rail 

Arbitration Cases
Page 41 GAO-14-5 National Mediation Board

heard and remove them from the list of pending work. In addition, NMB 

has been exploring using alternatives to arbitration to resolve minor 

disputes, such as grievance mediation. In fiscal years 2008, 2009, and 

2010, Congress provided NMB with supplemental appropriations 

($657,000, $560,000, and $29,000, respectively) to reduce the arbitration 

backlog.68 By the beginning of fiscal year 2013, NMB had reduced the 

number of pending cases to 2,084. However, rail carriers and unions filed 

more than 3,500 new cases in fiscal year 2012.

While stakeholders told us NMB has done a good job reducing the 

number of these pending rail cases, several also said they are unable to 

get an arbitrator assigned in a timely manner. Grievance arbitration cases 

in the rail industry can involve a wide range of grievances, such as 

wrongful dismissals, unfair labor practices, and rights to additional pay. 

For example, we reviewed several arbitration decisions issued in 2012, 

including a “time claim” case that involved a group of employees 

requesting a day’s pay because their employer had violated a term of 

their collective bargaining agreement. Another case involved an 

employee who believed she was wrongfully suspended because of an 

alleged violation of the employer’s code of conduct policy. Although NMB 

has some information from the parties on the types of claims filed, 

officials said they do not track or analyze these data, nor prioritize cases 

by type of case or level of urgency. NMB assigns arbitrators to cases in 

the order the requests are received. Since NMB apportions its annual 

funding for arbitrators into 12 monthly allocations, once NMB officials 

have obligated all funds for a month, they will not fulfill requests to assign 

arbitrators to additional cases. As a result, according to rail union and 

carrier officials we interviewed, some disputes are not heard in a timely 

manner. For example, they said cases involving a dispute over whether a

rail employee was improperly fired are sometimes delayed because an 

arbitrator is not assigned immediately.

Several former board members and a senior NMB official told us that the 

large number of rail grievance arbitration cases submitted to NMB occurs 

because the parties do not bear any of these costs and so lack a financial 

incentive to only file claims with merit. Unique among labor relations 

agencies in the federal government, NMB uses federal funding to pay the 

 68Congress appropriated another $500,000 in fiscal year 2000, but this was provided 

specifically to raise NMB’s arbitrators’ daily rate from $220 to $300, where it currently 

stands.
Page 42 GAO-14-5 National Mediation Board

fees and travel expenses for an arbitrator to resolve minor disputes 

between a specific employer and a union, in accordance with the 

requirements of the RLA. In the airline industry, as with all other private 

sector industries and the federal government, the parties pay for the 

arbitrator and all other arbitration expenses.69

In 2004, to encourage more efficient use of its resources and citing its 

authority under the RLA, NMB issued a notice of proposed rulemaking to, 

among other things, establish application fees for certain grievance 

arbitration services, including, for example, a $50 fee for certification of an 

arbitrator to a board.70 The preamble to the proposed rule noted that 

these fees, which represented only a small portion of the actual costs of 

providing the respective services, would help reduce the large numbers of 

pending cases by encouraging parties to only file and proceed with those 

with merit and to consolidate as many grievances as possible. However, 

NMB did not cite any data on the numbers and types of rail arbitration 

cases that compose the backlog as justification for its proposal. In 

January 2005, at an NMB hearing on the proposed rule, an organization 

representing rail carriers expressed support for fees, stating that the 

current system imposes few restraints on the pursuit of any grievance, 

regardless of its merit. The organization said that requiring parties in the 

rail industry, like those in all other industries, to internalize the costs of 

arbitration would result in a more effective and efficient system. However, 

numerous union stakeholders voiced opposition to fees, asserting that 

NMB is required by the RLA to cover these costs and NMB does not have 

authority under the Act to charge fees. Union representatives also said 

that when the parties jointly crafted the RLA, the unions gave up their 

right to strike over minor grievances in exchange for government-financed 

arbitration. Among other concerns, opponents said fees would discourage 

unions and individual employees from pursuing valid arbitration of minor 

disputes because costs are more difficult for them to bear than they are 

for carriers. In addition, more than 125 members of Congress signed a 

letter urging NMB to reconsider the proposed rule. NMB did not issue a 

final rule regarding fees.

 69Data provided by the Federal Mediation & Conciliation Service show private arbitration 

costs of nearly $5,000 per case, on average, in fiscal year 2012, including the arbitrator’s 

per-diem fees and expenses. NMB officials estimated their average cost per case at $600 

(per diem and expenses only).

70Administration of Arbitration Programs, 69 Fed. Reg. 48,177 (August 9, 2004)(to be 

codified at 29 C.F.R. pt. 1210).
Page 43 GAO-14-5 National Mediation Board

Although NMB did not finalize its proposed rule to establish fees, the 

agency has taken other actions to manage its grievance arbitration 

workload. In a memo issued June 10, 2013, during the course of our 

review, NMB’s Chief of Staff discussed month-to-month delays for rail 

arbitration cases and said cases that are not assigned an arbitrator in a 

given month for lack of funds no longer have to be re-filed the following 

month. Instead, those cases will now go to the top of a wait list for the 

next month. The memorandum stated that this change, assuming the 

parties do not flood the system with requests, should mean that no case 

will go more than 2 months without being assigned to an arbitrator.

Both NMB officials and stakeholders said the agency has addressed 

challenges presented by railroad and airline industry changes, such as 

mergers, in conducting its representation work. Because union 

representation of rail and air employees is based on their inclusion in a 

craft or class systemwide and not by worksite, some recent elections 

overseen by NMB have involved tens of thousands of employees in 

multiple locations. For example, a 2010 merger of United and Continental 

airlines prompted an election in 2011 involving 24,000 eligible flight 

attendants. In comparison, elections at NLRB typically involve a single 

worksite and substantially smaller numbers of voters. In fiscal year 2012, 

more than 88,000 rail and air employees were involved in NMB 

representation elections. NMB officials said mergers and bankruptcies in 

recent years, primarily in the airline industry, have taxed agency 

resources. While NMB can set longer timeframes for large elections, 

officials said they must meet those deadlines with the same number of 

NMB staff. Senior officials in NMB’s Office of Legal Affairs said they 

borrow other NMB employees, such as mediators, to assist with large 

elections. At least one union official expressed concern that when 

mediators are drafted to assist with representation, their work in 

mediating collective bargaining agreements can be delayed. While the 

size of elections may have increased, the number of representation cases 

NMB Has Responded 

to Industry Changes 

and Stakeholder 

Disagreements in 

Conducting Elections

NMB Has Addressed 

Challenges in Conducting 

Representation Elections
Page 44 GAO-14-5 National Mediation Board

handled annually by NMB’s Office of Legal Affairs has remained constant 

at about 45 cases for each of the last 10 years.71

NMB has also made changes in its representation work as a result of 

evolving technology, but some key steps remain labor intensive. Moving 

to online voting in 2007 was a challenge to implement, NMB officials said, 

but stakeholders were supportive. NMB instituted online voting after 

several years of planning. NMB also implemented e-filing for election 

applications and other required documents in September 2009. However, 

authorization cards submitted by unions to demonstrate sufficient interest 

to hold an election are still authenticated by NMB staff by hand. They 

must compare the signature on the authorization card to a signature 

sample provided by the carrier. One NMB attorney told us she has had 

instances when she checked more than 4,000 cards, and NMB officials 

said all NMB staff check cards when necessary.

NMB has also faced challenges in its investigations of alleged 

interference, influence, or coercion as communications about elections 

increasingly occur via the Internet. The use of social media, hyperlinks to 

online voting websites, and other evolving communication tools have 

expanded the agency’s investigative responsibilities. An NMB attorney 

said one investigation occurred after airline employees posted photos of 

themselves holding confidential voting materials on Facebook. Another 

case required an investigation of potential coercion when employees 

hosted voting parties that were shared on YouTube. Sharing voting 

materials and voting in groups violates federal law, NMB officials said. In 

February 2008, NMB issued a policy prohibiting hyperlinks to an online 

voting site from any website other than its own. For example, in 2011, 

while investigating an allegation of interference after an airline merger 

election, NMB found that posting a hyperlink on a union website to the 

voting website might constitute interference because, while it did not 

compromise the voting process, it had the potential to reveal a voter’s 

identity through his or her Internet identification. As a result, the union’s 

 71NMB’s General Counsel said representation cases involve not only elections but also 

include other representation activities such as referrals from NLRB, interference 

investigations, and others.
Page 45 GAO-14-5 National Mediation Board

win in the election stood but NMB shortened the timeframe for holding 

another election from 2 years to 18 months.72

NMB in 2010 changed its rules for certifying a union in an election,73 and 

several stakeholders told us and a former NMB board member wrote at 

the time that this process harmed the perception of NMB as a nonpartisan 

arbiter and caused disagreement. Prior to the change, which was 

effective July 1, 2010, employees who did not vote in an election were 

counted as having cast a vote against certifying the union under NMB 

regulations. After the change, only votes cast are counted in determining 

whether a union has achieved the majority needed to be certified as the 

employee representative.

Several stakeholders said NMB was hasty and lacked input in making a 

change that overturned 75 years of precedent. NMB received almost 

25,000 comments in response to its notice of proposed rulemaking.

74

NMB held a public hearing on December 7, 2009, on the proposed rule. 

While a union official said that NMB used a deliberative process for 

making the rule change, one management stakeholder said NMB should 

have alerted them that such a change was being considered far in 

advance of a hearing. In addition, an airline carrier official said that 

because the change was suggested in a letter to NMB from one large 

union, and this union’s involvement was not initially disclosed by NMB 

officials, some stakeholders were suspicious about NMB’s motives for 

changing the rule. In the past, according to another official from a regional 

air carrier, NMB involved stakeholders before making significant changes. 

For example, the official said NMB consulted with stakeholders over 

several years before moving to online voting. A railroad official said the 

 72NMB officials said if they find a violation of election rules, the election of a union may still 

stand, but NMB may shorten the 2-year timeframe before another election can be held. 

73Representation Election Procedure, 75 Fed. Reg. 26,062 (May 11, 2010) (codified at 29 

C.F.R. pts. 1202 and 1206).

74NMB reported that nearly 98 percent of the comments received in response to the notice

of proposed rulemaking were: (1) very general statements; (2) personal anecdotes of 

experience or participation in NMB’s election procedures; or (3) identical or nearly 

identical ‘‘form letters’’ or ‘‘postcards’’ sponsored by various constituent groups.

Disagreement during Past 

Rulemaking on Union 

Elections Created 

Challenges
Page 46 GAO-14-5 National Mediation Board

process was very damaging to NMB’s reputation for neutrality. However, 

another railroad official said trust in NMB remains intact.75

Despite concerns, NMB officials reported that the percentage of elections 

resulting in certification of a union has remained relatively constant in the 

years before and after NMB’s 2010 rulemaking. NMB data for the 11 

fiscal years (2000 to 2010) before the rule change show that, on average, 

about 61 percent of all elections resulted in certification of a union. NMB 

data for the 3 fiscal years after the change (2011 to 2013) show that, on 

average, about 62 percent of all elections resulted in certification of a 

union. At the time of our report, figures for fiscal year 2013 were 

incomplete. In addition, these percentages are not weighted to account 

for the size of the elections, nor controlled for other factors that can affect 

the outcome of an election, for example, job market conditions.

Some stakeholders also wanted NMB, as part of the 2010 rulemaking, to 

clarify the process for decertifying, or removing, a union representative. 

The RLA does not specify a decertification process, and NMB offers 

minimal guidance on its website on steps to remove an employee 

representative. In its preamble to the 2010 rule, NMB noted that, while not 

as direct as some commenters might like, the existing election 

procedures allow employees to “rid themselves of a representative,” and 

that the 2010 change further gives these employees the opportunity to 

affirmatively cast a ballot for no representation. However, an airline carrier 

official and a former board member said the process in place remains 

ineffective and highly confusing. For example, a ballot currently may 

contain two options that are each a vote for no representation: “no 

representative,” and an applicant who is on the ballot as a “straw man”

who intends, if elected, to step down so as to remove representation for 

the craft or class. This applicant seeking removal of representation has to 

collect sufficient authorization cards to prompt an election in order for the 

craft or class to make this change. A former NMB board member said 

there is the potential for votes opposed to union representation to be split 

by votes for “no representative” and for a straw man. The result is that 

these vote counts will not be consolidated in favor of decertification, which 

can then happen only if either the “no representative” or straw man 

receives a majority of the votes cast. When asked whether NMB has 

 75The rulemaking occurred as Delta and Northwest airlines were in merger discussions, 

and some stakeholders viewed its timing as a politicized effort to ensure unions would 

survive the merger. 
Page 47 GAO-14-5 National Mediation Board

developed written guidance to walk parties through the process should 

they wish to drop union representation, attorneys in the Office of Legal 

Affairs said adequate guidance is available on NMB’s website and in the 

NMB Representation Manual.

According to stakeholders we interviewed, NMB improved its outreach 

when issuing a more recent rule in 2012.

76 The final rule, published in 

December 2012, made some changes to NMB’s representation process 

to conform with requirements in the FAA Modernization and Reform Act 

of 2012.77 For example, the Act amended the RLA to require that an 

application as part of a merger and requesting an organization or 

individual be certified for representation must be supported by not less 

than 50 percent of the employees in a the craft or class.78 Previously, the 

NMB Representation Manual required a 35-percent showing when a 

group of employees not already represented by a union wished to have 

an election. In its notice of proposed rulemaking, NMB explicitly sought 

comments on whether the 50-percent requirement applied to mergers.79

One stakeholder we interviewed said NMB did a better job of reaching out 

to stakeholders in the most recent rulemaking, and an airline carrier 

official characterized this as a positive “returning to form” for NMB.

The National Mediation Board is a small agency with a vital role in 

facilitating labor relations and helping avoid work stoppages in two key 

transportation sectors: the railroads and airlines. To better fulfill this role, 

NMB has in recent years instituted organizational changes, technology 

upgrades, and several new management practices. However, its 

initiatives are not guided by a robust strategic planning process, which—if 

done well—provides the basis for everything an organization does. 

Without such a process that includes mechanisms for obtaining 

stakeholder and congressional input, NMB lacks assurance that its limited 

resources are effectively targeted toward the highest priorities. Further, 

 76Representation Procedures and Rulemaking Authority, 77 Fed. Reg. 75,543 (Dec. 21, 

2012)(to be codified at 29 C.F.R. pt. 1206).

77Pub. L. No. 112-95, 126 Stat. 11.

78Id. § 1003, 126 Stat. 147. 

79NMB determined in the 2012 rule that the Act’s 50 percent requirement did apply to 

merger-related elections. 77 Fed. Reg. 75,543, 75,544.

Conclusions
Page 48 GAO-14-5 National Mediation Board

without performance goals needed to gauge agency progress, NMB, 

Congress, and stakeholders lack the information needed to improve 

management practices and better link resources to results at the agency.

Implementing cost-effective and appropriate internal controls can help an 

agency achieve results and minimize operational problems. While NMB 

has controls in key management areas, such as financial management, 

there are challenges. For example, without a formal mechanism to track 

and promptly resolve deficiencies identified in reviews of its program and 

management areas, NMB misses opportunities to improve performance 

and mitigate risks. NMB’s failure to follow federal requirements for recent 

upgrades of its information technology systems and equipment means 

NMB cannot ensure the best use of its limited resources or the protection 

of sensitive information. A lack of strategic workforce planning means 

NMB does not have assurance that its staff will continue to possess the 

skills necessary to the agency’s mission and receive the training they 

require, particularly to meet challenges presented by the impending 

retirements of senior staff.

NMB faces additional management issues. There is minimal internal 

programmatic oversight of its activities, for example, by an Inspector 

General, to identify management challenges and to hold it accountable to 

Congress and the public. NMB also struggles to efficiently manage 

grievance cases in the rail industry, partly because the parties do not pay 

for the arbitrator and thus lack an incentive to only file and progress cases 

with merit. NMB has considered ways to increase efficiency, such as 

charging application fees for its arbitration services, and has undertaken 

other efforts, such as conducting reviews of pending cases. However, it 

lacks data on the types of grievances that are filed to inform its 

deliberations on how to more efficiently manage the process. If NMB does 

not address this demand on its limited resources, it may again face a 

growing and unmanageable backlog of arbitration cases.

To provide for independent audit and investigative oversight of NMB, 

Congress should consider authorizing an appropriate federal agency’s 

Office of Inspector General to provide such oversight.

Matter for 

Congressional 

Consideration
Page 49 GAO-14-5 National Mediation Board

In order to improve NMB’s planning and make the most effective use of 

its limited resources, we recommend that the Chairman of the National 

Mediation Board take the following seven actions:

1. Develop a formal strategic planning process to fully implement key 

required elements of strategic planning, including a formal process to 

obtain congressional and stakeholder input.

2. Develop, and include in its performance plan, performance goals and 

measures that contain required elements to demonstrate results.

3. Develop and implement a formal mechanism to ensure the prompt 

resolution of findings and recommendations by independent auditors, 

including clearly assigning responsibility for this follow-up to agency 

management.

4. Develop and fully implement key components of an information security 

program in accordance with FISMA.

5. Establish a privacy program that includes conducting privacy impact 

assessments and issuing system of record notices for systems that 

contain personally identifiable information.

6. Develop a strategic workforce plan that (1) involves input from top 

management, employees, and other stakeholders; (2) identifies critical 

skills and competencies needed by NMB; (3) identifies strategies, such as 

training, to address any gaps; and (4) provides for cost-effective 

evaluations of these strategic workforce planning efforts. This plan should 

also address succession for the significant proportion of NMB staff and 

senior managers who are eligible to retire in the next few years.

7. In order to better inform its decisions about managing the rail grievance 

arbitration process, including addressing the backlog of cases, NMB 

should collect and analyze data on the types of grievances filed, and their 

disposition. NMB should use these data to improve the efficiency of the 

arbitration process and consider, as part of this effort, whether to 

establish fees for arbitration services. If NMB determines that the 

establishment of fees would improve the efficiency of the arbitration 

process, it should impose such fees or seek legislative authority to do so, 

as necessary.

Recommendations for 

Executive Action
Page 50 GAO-14-5 National Mediation Board

We provided a draft of this product to the National Mediation Board 

(NMB) for comment. We also shared a draft with the Office of 

Management and Budget (OMB) and Office of Personnel Management 

(OPM). OMB and OPM had no comments. In its written comments, 

reproduced in appendix II, NMB noted that it will review and address all of 

the recommendations and discussed ways that the agency plans to 

address them. NMB also provided technical comments that were 

incorporated, as appropriate.

Although our matter for congressional consideration was not directed to 

NMB, the agency suggested that having another federal agency’s Office 

of Inspector General provide oversight of NMB would be redundant with 

GAO’s biennial audits and evaluations, which were mandated by the FAA 

Modernization and Reform Act of 2012. As we have previously reported, 

GAO and agency Inspectors General (IGs) have complementary, rather 

than duplicative, roles. The IGs have been on the front line of combating 

fraud, waste, and abuse within their respective agencies, and their work 

has generally concentrated on audits and investigations of specific 

program-related issues of immediate concern. We continue to believe 

that, in addition to the periodic oversight provided by GAO and the annual 

audits of NMB’s financial statements by independent public accountants, 

an IG office assigned with the responsibility of providing ongoing audits 

and investigations of NMB and its operations would result in more 

effective oversight. 

Regarding our first recommendation to establish a formal strategic 

planning process, including a formal process to obtain congressional and 

stakeholder input, NMB noted that it would replace its current strategic 

plan by February 2014 using guidelines we outlined in this report. These 

guidelines include soliciting comments on a draft strategic plan from 

Congress and stakeholders. In its comments, NMB asserted it currently 

has formal avenues to obtain stakeholder input and listed several 

stakeholder groups and industry conferences. While we acknowledge in 

our report that NMB consults with such groups, representatives of key

groups told us they are not currently involved in NMB’s strategic planning 

process. Formally involving stakeholders and Congress in the strategic 

planning process is critical for ensuring that NMB’s efforts and resources 

are targeted to the highest priorities. Moreover, such consultations should 

occur during the development of a strategic plan, not after it is developed. 

We have long noted the importance of the executive branch considering 

Congress a partner in shaping goals at the outset. If an agency waits to 

consult with relevant congressional stakeholders until a strategic plan has 

been substantially drafted and fully vetted, it foregoes important 

Agency Comments 

and Our Evaluation
Page 51 GAO-14-5 National Mediation Board

opportunities to learn about and address early on specific concerns that 

could be critical to successful implementation of the plan. 

NMB noted, with respect to our second recommendation to develop

performance goals and measures, that it will include such goals and 

measures in its new February 2014 strategic plan. It is also important for 

NMB to include these goals and measures in its annual performance 

plans, as required by law, which can be consolidated with the agency’s 

congressional budget submissions or annual performance reports, per 

OMB guidance. These documents are updated on an annual basis—while 

strategic plans are updated every 4 years—and allow for greater 

transparency in reporting NMB’s progress toward meeting its goals. NMB 

also indicated it will soon develop and publish a plan to address our third 

recommendation to establish a mechanism to ensure prompt resolution of 

findings and recommendations by independent auditors and clearly 

assign responsibility for follow-up to agency management.

Regarding recommendation four to develop and fully implement 

components of an information security program, NMB stated that it was 

meeting its information security requirements through the Federal Risk 

and Authorization Management Program (FedRAMP) and that the 

program is compliant with the Federal Information Security Management 

Act of 2002 and based on National Institute of Standards and Technology 

guidelines. NMB further discussed its plans to create standards for 

security and that they plan to be fully FedRAMP compliant by June 2014. 

We acknowledge in our report some of the actions NMB has taken to 

comply with federal information security program requirements but also 

noted weaknesses with the implementation of these requirements. While 

the FedRAMP assessment process is compliant with federal information 

security program requirements, for those FedRAMP services NMB is 

using, that does not diminish NMB’s responsibility with regard to the 

development and implementation of its information security program, 

including the development of its own requirements. For example, NMB 

should ensure that it completes its draft policies and procedures, provides

information security training to its users and contractors, and updates its 

disaster recovery and continuity of operations plans and procedures. We 

continue to believe that our recommendation to develop and fully 

implement components of an information security program is still valid.

In response to recommendation five regarding the establishment of a 

privacy program, NMB stated that it holds very little personally identifiable 

information and that it has or is in the process of contracting with other 

agencies to ensure that they handle virtually all of NMB’s personally 
Page 52 GAO-14-5 National Mediation Board

identifiable information. However, as we noted in our report, NMB has not 

developed policies or procedures that discuss privacy protections for the 

personally identifiable information it currently holds, and does not comply 

with federal requirements to conduct privacy impact assessments and 

issue system of records notices if deemed necessary. Thus we believe 

our recommendation is still valid.

In commenting, NMB did not identify any specific actions it plans to take 

to address our sixth recommendation to develop a strategic workforce 

plan. NMB stated that the board and Chief of Staff regularly review 

staffing and personnel issues and plan for succession, but the agency’s 

relatively small workforce means NMB is less able to use workforce 

planning. NMB also discussed its training process, which we describe in 

detail in the report, and said no request for training has been refused in 

the past 3 fiscal years. We continue to believe a strategic workforce plan 

is essential for every federal agency, regardless of its size. Such a plan 

helps ensure an organization’s human capital program is aligned with its 

mission and programmatic goals, and that it has long-term strategies for 

acquiring, developing, and retaining staff to achieve those goals. 

Finally, in commenting on recommendation seven to analyze data on the 

types and disposition of rail grievance arbitration cases to better inform its 

management of those processes, NMB officials stated that they plan to 

collect additional data on the types of cases they receive from all 

arbitration boards and make the information available on the agency’s 

website. We reiterate the importance of analyzing this information in order 

to better manage this process. NMB also cited its efforts to reduce the 

backlog, noting that the number of arbitration cases pending at the end of 

fiscal year 2012 was the lowest in 5 years. However, as we note in the 

report, there were 2,084 claims pending at the beginning of fiscal year 

2013, which is still significant, and more than 3,500 new claims were filed 

in fiscal year 2012. We encourage NMB to maintain its focus on 

managing the arbitration process and continue to consider options, such 

as a fee structure, for achieving a more efficient use of resources.

We are sending copies of this report to the Chairman of NMB and 

appropriate congressional committees. In addition, the report is available 

at no charge on the GAO website at http://www.gao.gov.
Page 53 GAO-14-5 National Mediation Board

If you or your staff have any questions about this report, please contact 

me at (202) 512-7215 or moranr@gao.gov. Contact points for our Offices 

of Congressional Relations and Public Affairs may be found on the last 

page of this report. GAO staff who made key contributions to this report 

are listed in appendix III.

Revae Moran,

Director, Education, Workforce, and Income Security Issues
Appendix I: Scope and Methodology

Page 54 GAO-14-5 National Mediation Board

To conduct our work, we assessed how the National Mediation Board 

(NMB) carried out selected key management functions—strategic 

planning and performance measurement, financial management, 

information technology, human capital, and procurement—we have found 

are critical to creating and sustaining high-performing organizations.1 We 

also assessed how NMB is addressing challenges in one of its three 

program areas—oversight of union representation elections. Most of 

these areas were specifically identified in the FAA Modernization and 

Reform Act of 2012 as required subjects of our review. We also selected 

strategic planning and performance measurement for our review because 

we have found that an agency’s strategic planning effort is the most 

important element in results-oriented management.2

To perform our work, we reviewed relevant federal laws and regulations 

and key NMB documents, such as the agency’s most recent strategic 

plan and annual report, policies and procedures for NMB’s three program 

areas (mediation, arbitration, and representation), board member briefing 

book, and delegation orders for duties of board and staff for fiscal years 

1990 through 2013. We also assessed NMB’s management plans, 

policies, and practices in financial management, information management 

and security, human capital, and procurement using GAO’s Standards for 

Internal Control in the Federal Government3 and other criteria developed 

by GAO in prior work for these management areas, as described later in 

this appendix. We identified key practices from these criteria and 

assessed whether NMB is following these practices (NMB is taking 

appropriate actions and has a formal plan, policy, or other document), 

partially following (is taking some actions but does not have a formal plan 

or policy and/or some additional steps must be taken to consider this 

 1

Based on experience in examining a wide range of government programs, we have found 

that effective performance of specific management functions—strategic planning, budget 

formation and execution, organizational alignment and control, performance 

measurement, human capital strategies, financial management, information technology, 

and acquisition—are key to creating and sustaining high-performing organizations. See 

GAO, Determining Performance and Accountability Challenges and High Risks, 

GAO-01-159SP (Washington, D.C.: November 2000).

2

GAO, Agencies’ Strategic Plans under GPRA: Key Questions to Facilitate Congressional 

Review. GAO/GGD-10.1.16 (Washington, D.C.: May 1, 1997).

3

GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999).

Appendix I: Scope and Methodology

Overall Approach
Appendix I: Scope and Methodology

Page 55 GAO-14-5 National Mediation Board

practice implemented), or minimally following (NMB is taking little or no 

action to address this particular practice).

We also interviewed officials at the Office of Management and Budget 

(OMB) and the Office of Personnel Management (OPM) to determine how 

these agencies provide oversight and guidance to NMB, as well as to 

obtain officials’ perspectives on NMB’s management strengths and 

challenges. In cases where other entities had conducted recent work in 

any of the management functions we reviewed—such as financial 

management—we did not duplicate that work. For example, we obtained 

the most recent nine financial statement reports NMB provided to us, but 

we did not independently assess the findings in the audits. In addition, we 

reviewed but did not duplicate the work performed by NMB’s independent 

auditors in the six most recently issued internal control reviews of NMB 

program areas:

• Report on Review of Internal Controls Over Representation Functions 

(fiscal year 2005)

• Report on Review of Internal Controls Over Alternative Dispute 

Resolution (ADR) Services (fiscal year 2006)

• Report on Review of Internal Controls Over Mediation Services 

(October 2006-September 2007)

• Report on Review of Internal Controls Over Personnel/Payroll (April 

2008-March 2009)

• Report on Review of Internal Controls Over Arbitration Services 

Functions (April 2009-March 2010)

• Report on Review of Internal Controls Over Procurement (October 

2010-September 2011)

To gain additional perspectives on NMB’s program and management 

functions, we interviewed officials at the two primary federal labor 

relations agencies that cover labor relations in the private sector. We 

interviewed senior officials from the Federal Mediation & Conciliation 

Service to obtain information on its strategic planning and performance 

measurement efforts, human capital and training practices, and its role in 

mediation and arbitration. We also interviewed senior officials from the 

National Labor Relations Board to obtain information on strategic 

planning and performance measurement, human capital practices, and its 

role in overseeing union representation elections. We interviewed the 

chairman of a third labor relations agency—the Federal Labor Relations 

Authority, which covers labor relations in the federal government—but the 

primary purpose of the interview was to obtain this individual’s 

perspective as a former NMB board member.
Appendix I: Scope and Methodology

Page 56 GAO-14-5 National Mediation Board

In addition, we conducted in-depth interviews with current and former 

NMB officials, including all senior managers (Chief of Staff, General 

Counsel, and the directors of the Office of Administration, Arbitration 

Services, and Mediation and ADR Services); current board members; and 

all former board members who served from 2000 to 2012. We interviewed 

several rail and air industry experts, identified by issue area experts within 

GAO and from our literature review. We also interviewed representatives 

from key rail and air labor and management groups, including Airlines for 

America, Regional Airline Association, National Railway Labor 

Conference, AFL-CIO Transportation Trades Department and affiliated 

rail and air unions, and the International Brotherhood of Teamsters. In 

addition, we interviewed representatives from the National Association of 

Railroad Referees, an association representing railroad arbitrators. We 

also interviewed members of NMB informal advisory groups, including the 

Dunlop II Committee and Section 3 Subcommittee, which made 

recommendations to NMB on mediation and arbitration issues, 

respectively. Finally, to gain a better understanding of the types of rail 

grievance arbitration cases that NMB funds, we reviewed a judgmental 

sample of several arbitration cases available on NMB’s website that were 

decided by arbitration boards in calendar year 2012.

We conducted this performance audit from September 2012 through 

December 2013 in accordance with generally accepted government 

auditing standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a reasonable 

basis for our findings and conclusions based on our audit objectives. We 

believe that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives.

We reviewed NMB’s most recent 5-year strategic plan (fiscal years 2011-

2016), its most recent annual Performance and Accountability Report 

(fiscal year 2012), and fiscal year 2014 congressional budget justification 

documents. We also compared NMB’s strategic planning and 

performance planning and reporting practices with key requirements in 

the Government Performance and Results Act of 1993 (GPRA), the 

GPRA Modernization Act of 2010 (GPRAMA), and OMB performance 

Strategic Planning 

and Performance 

Reporting
Appendix I: Scope and Methodology

Page 57 GAO-14-5 National Mediation Board

guidance for federal agencies.4 In addition to these federal requirements, 

we assessed NMB’s plans and practices against leading practices 

identified in prior GAO work.5

We also obtained NMB’s financial statement audits for fiscal years 2004 

to 2012, auditors’ management letters to NMB for fiscal years 2008, 2010, 

2011, and 2012,6 and the six most recently issued internal control reviews 

of NMB program and management areas, as discussed earlier. We also 

interviewed NMB’s independent auditors about their processes, findings, 

and recommendations for NMB. We did not independently assess the 

findings in these financial statement audits and internal control reviews.

We interviewed NMB officials responsible for the overall planning and 

management of NMB’s information management, security, and privacy. 

We collected and assessed information on NMB’s information systems, 

including its plans, policies, and practices using the Federal Information 

Security Management Act, guidelines developed by OMB, guidelines 

developed by the National Institute of Standards and Technology, the 

Privacy Act and the E-Government Act. We also randomly selected and 

tested NMB user workstations for compliance with U.S. Government 

Configuration Baseline settings, randomly selected and reviewed NMBissued smartphones and tablets for mobile device security settings, and 

reviewed NMB cloud computing security settings within its new cloud 

environment.

 4

For the purposes of this report, we focused mainly on GPRA and GPRAMA requirements 

related to federal agencies’ strategic planning process, such as required timeframes, 

leadership roles, and performance planning. We assessed NMB’s current strategic plan, 

annual performance plan, and annual performance report against federal requirements, 

but did not report on each of these requirements.

5

GAO, Internal Control Management and Evaluation Tool, GAO-01-1008G (Washington, 

D.C.: August 2001); Executive Guide: Effectively Implementing the Government 

Performance and Results Act, GAO/GGD-96-118 (Washington, D.C.: June 1996); 

GAO/GGD-10.1.16; The Results Act: An Evaluator’s Guide to Assessing Agency Annual 

Performance Plans, GAO/GGD-10.1.20 (Washington, D.C.: April 1998); and Managing for 

Results: Enhancing Agency Use of Performance Information for Management Decision 

Making, GAO-05-927 (Washington, D.C.: Sept. 9, 2005).

6

NMB was unable to provide a copy of the fiscal year 2009 management letter.

Financial 

Management

Information 

Technology
Appendix I: Scope and Methodology

Page 58 GAO-14-5 National Mediation Board

We reviewed NMB’s most recent human capital plans, policies, and key 

documents, including NMB’s 2011 human capital management report to 

OPM, its 2009 human capital plan, and its 2006 succession plan. We also 

obtained information on the training NMB staff received in fiscal years 

2011 and 2012. We reviewed OPM’s fiscal year 2007 audit of NMB’s 

human capital program, its most recent assessment (2011) of NMB’s 

human capital management report, and the results of its 2012 Federal 

Employee Viewpoint Survey of NMB employees.7 We also reviewed data 

regarding NMB’s human capital strengths (defined by OPM as the 10 

survey items with the highest percent of positive responses) and 

challenges (the 10 survey items with the highest percent of negative 

responses). On the basis of our interview with knowledgeable OPM 

officials and review of prior GAO work concerning survey design, 

administration, and processing, we determined that the data were 

sufficiently reliable for the purpose of our review.

We assessed NMB’s strategic workforce planning efforts against 

government internal control standards and key practices identified in prior 

GAO work.8 We focused on workforce planning in this review because it 

is a critical, foundational element of an agency’s human capital program 

in that it helps ensure that agencies are making sound investments in the 

human capital issues that most affect their ability to achieve mission 

results.

We reviewed NMB’s procurement contracting cycle procedures as of 

March 2012 and NMB’s independent auditors’ most recent report on 

internal controls over the procurement function. We reviewed key 

documents, such as purchase requests and purchase orders, for the 

agency’s recent acquisition of information technology equipment, 

including tablet computers, laptops, and smartphones. We assessed 

NMB’s policies and practices against federal internal control standards 

 7

OPM’s Federal Employee Viewpoint Survey is a tool that measures employees’

perceptions of whether, and to what extent, conditions characterizing successful 

organizations are present in their agencies. To assess the reliability of the survey data, we 

interviewed knowledgeable OPM officials and reviewed data reliability assessments 

performed in prior GAO work.

8

GAO, Human Capital: Key Principles for Effective Strategic Workforce Planning, 

GAO-04-39 (Washington, D.C.: Dec.11, 2003).

Human Capital

Procurement
Appendix I: Scope and Methodology

Page 59 GAO-14-5 National Mediation Board

and standards outlined in the Federal Acquisition Regulation and GAO’s 

Framework for Assessing the Acquisition Function at Federal Agencies.9

To describe NMB’s process for overseeing employee representation 

elections and any challenges related to this process, we reviewed 

relevant federal laws and regulations and records related to NMB 

rulemakings on this subject, including proposed and final rules issued in 

2010 and 2012. We also reviewed key documents, such as the National 

Mediation Board Representation Manual (effective March 25, 2013), 

notices and memorandums on revisions to phone and Internet voting 

instructions, electronic filing procedures for elections and challenges, 

frequently asked questions (revised 2013), and sample ballots. We 

obtained NMB officials’ and stakeholders’ perspectives on the challenges 

the agency faces in this process, as well as steps it has taken to address 

any challenges. For example, we reviewed select opinions issued by 

attorneys in the Office of Legal Affairs in fiscal years 2000 to 2013 to 

resolve challenges to voter eligibility and to allegations of election 

interference, influence, and coercion. We also reviewed and assessed the 

reliability of NMB data on the number and outcomes of union 

representation elections by fiscal year before and after implementation of 

the 2010 rule change. We compared NMB’s figures to our own 

calculations of the annual number of and outcomes for representation 

elections for fiscal years 2000 to 2013 (before and after the 2010 rule 

change), and the percentages of total elections that resulted in 

certification of a union representative, using data for each fiscal year 

posted on NMB’s website. In addition, we interviewed knowledgeable 

NMB officials responsible for compiling and reviewing these data. We 

determined the data were sufficiently reliable for the purpose of our 

review.

 9

GAO, Framework for Assessing the Acquisition Function at Federal Agencies, 

GAO-05-218G (Washington, D.C.: Sept. 1, 2005). 

Union Representation 

Elections
Appendix II: Comments from the National 

Mediation Board

Page 60 GAO-14-5 National Mediation Board

Appendix II: Comments from the National 

Mediation Board
Appendix II: Comments from the National 

Mediation Board

Page 61 GAO-14-5 National Mediation Board
Appendix II: Comments from the National 

Mediation Board

Page 62 GAO-14-5 National Mediation Board
Appendix II: Comments from the National 

Mediation Board

Page 63 GAO-14-5 National Mediation Board
Appendix II: Comments from the National 

Mediation Board

Page 64 GAO-14-5 National Mediation Board
Appendix III: GAO Contact and Staff 

Acknowledgments

Page 65 GAO-14-5 National Mediation Board

Revae Moran, (202) 512-7215, moranr@gao.gov

In addition to the contact named above, Gretta Goodwin (Assistant 

Director), Rachael Chamberlin, Susan Aschoff, Alison Grantham, Shirley 

Abel, Alexander Galuten, Anjalique Lawrence, James Rebbe, Shaunyce 

Wallace, and Candice Wright made significant contributions to this report. 

In addition, key support was provided by Edward Alexander, Jr.; Elizabeth 

Curda; Benjamin Licht; Steven Lozano; and Walter Vance.

Appendix III: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(131202)
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