9/11 Commission Report: Reorganization, Transformation, and Information Sharing
Published: 2004-08-03T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The sorrow, loss, anger, and resolve so evident immediately following the September 11, 2001, attacks have been combined in an effort to help assure that our country will never again be caught unprepared. As the 9/11 Commission notes, we are safer today but we are not safe, and much work remains. Although in today's world we can never be 100 percent secure, and we can never do everything everywhere, we concur with the Commission's conclusion that the American people should expect their government to do its very best. GAO's mission is to help the Congress improve the performance and ensure the accountability of the federal government for the benefit of the American people. GAO has been actively involved in improving government's performance in the critically important homeland security area both before and after the September 11 attacks. In its request, the House Committee on Government Reform have asked GAO to address two issues: the lack of effective information sharing and analysis and the need for executive branch reorganization in response to the 9/11 Commission recommendations. Further, the Committee has asked GAO to address how to remedy problems in information sharing and analysis by transforming the intelligence community from a system of "need to know" to one of a "need to share."
section_title: What GAO Found
paragraphs: The 9/11 Commission has recommended several transformational changes, such as the establishment of a National Counterterrorism Center (NCTC) for joint operational planning and joint intelligence and replacing the current Director of Central Intelligence with a National Intelligence Director (NID) to oversee national intelligence centers across the federal government. The NID would manage the national intelligence program and oversee agencies that contribute to it. On August 2, 2004, the President asked Congress to create a NID position to be the principal intelligence advisor, appointed by the President, with the advice and consent of the Senate and serving at the pleasure of the President. Unlike the 9/11 Commission, the President did not propose that the NID be within the Executive Office of the President. He also announced that he will establish a NCTC whose Director would report to the NID, and that this center would build upon the analytic work of the existing Terrorist Threat Integration Center. He suggested that a separate center may be necessary for issues of weapons of mass destruction. Finally, he endorsed the 9/11 Commission's call for reorganization of the Congressional oversight structure. There are, however, several substantive differences between the President's proposal and the Commission's recommendations. While praising the work of the 9/11 Commission, and endorsing several of its major recommendations in concept, the President differed with the Commission on certain issues. These differences reflect that reasoned and reasonable individuals may differ, and that several methods may exist to effectuate the transformational changes recommended. However, certain common principles and factors outlined in this statement today should help guide the debate ahead. Although the creation of a NID and a NCTC would be major changes for the intelligence community, other structural and management changes have occurred and are continuing to occur in government that provide lessons for the intelligence community transformation. While the intelligence community has historically been addressed separately from the remainder of the federal government, and while it undoubtedly performs some unique missions that present unique issues, its major transformational challenges in large measure are the same as those that face most government agencies. As a result, GAO's findings, recommendations, and experience in reshaping the federal government to meet Twenty-First Century challenges will be directly relevant to the intelligence community and the recommendations proposed by the 9/11 Commission. The goal of improving information sharing and analysis with a focus upon the needs of the consumers of such improved information for specific types of threats can provide one of the powerful guiding principles necessary for successful transformation. This testimony covers four major points. First, it describes the rationale for improving effective information sharing and analysis, and suggest some ways to achieve positive results. Second, it provides some overview perspectives on reorganizational approaches to improve performance and note necessary cautions. Third, it illustrates that strategic human capital management must be the centerpiece of any serious change management initiative or any effort to transform the cultures of government agencies, including that of the intelligence community. Finally, it emphasizes the importance of results-oriented strategic planning and implementation for the intelligence arena, focusing management attention on outcomes, not outputs, and the need for effective accountability and oversight to maintain focus upon improving performance. It concludes by applying these concepts and principles to the challenges of reform in the intelligence community.

section_title: Letter
paragraphs: We at GAO applaud the efforts of the 9/11 Commission and the dedicated  family members of the victims of that tragic day whose combined efforts  have resulted in a definitive account of the past events, and a number of  constructive recommendations for the future. The sorrow, loss, anger, and  resolve so evident immediately following the September 11, 2001, attacks  have been combined in an effort to help assure that our country will never  again be caught unprepared. As the Commission notes, we are safer today  but we are not safe, and much work remains. Although in today’s world we  can never be 100 percent secure, and we can never do everything  everywhere, we concur with the Commission’s conclusion that the  American people should expect their government to do its very best.
GAO’s mission is to help the Congress improve the performance and  ensure the accountability of the federal government for the benefit of the  American people. GAO has been actively involved in improving  government’s performance in the critically important homeland security  area both before and after the September 11 attacks. For example, GAO  issued over 100 reports on homeland security-related issues and  recommended the creation of a national focal point for homeland security  before the attacks. We have also been privileged to actively support this  Congress and the 9/11 Commission through details of key personnel,  testimony before the Congress and the Commission, and sharing our  research, products, and experiences.
Just a few days after the tragic events of September 11, I testified about  various challenges and strategies to address both our short- and long-term  homeland security needs and outlined a framework for addressing our  nation’s efforts. I emphasized that we as a nation must find the best ways  to sustain our efforts over a significant time period, and leverage our finite  human, financial, and technological resources in ways that would have the  greatest impact. At that time, I identified several key questions that our  government needed to address in order to improve the security of the  homeland:  1.  What are our vision and national objectives to make our homeland  more secure?  2.  What essential elements should constitute the government’s strategy  for securing the homeland?  3.  How should the executive branch and the Congress be organized to  address these issues?  4.  How should we assess the effectiveness of any homeland security  strategy implementation to address the spectrum of threats?
During the past few years, we have seen major efforts to address these  questions, such as the formation of the Department of Homeland Security  (DHS) and major initiatives such as strengthened passenger and baggage  screening, increased border patrols, reform of the Federal Bureau of  Investigation (FBI), and the creation of the Northern Command. However,  as the 9/11 Commission and our own work indicates, these questions are  yet to be fully addressed.
GAO has continued to explore these topics on behalf of this Committee  and the Congress, issuing over 200 homeland security related products  since the September 11 attacks, developing over 500 recommendations for  action, testifying on over 90 occasions before the Congress, and working  closely with the Congress and federal agencies, including the FBI, the  Department of Defense (DOD), and DHS, to implement key  recommendations to improve homeland security mission performance,  improve government efficiency, and promote enhanced accountability and  oversight to assure the American people that the federal government is  doing all that can reasonably be expected.
In your request, you have asked me to address two issues: the lack of  effective information sharing and analysis and the need for executive  branch reorganization in response to the 9/11 Commission  recommendations. Further, you have asked me to address how to remedy  problems in information sharing and analysis by transforming the  intelligence community from a system of “need to know” to one of a “need  to share.” The 9/11 Commission has recommended several  transformational changes, such as the establishment of a National  Counterterrorism Center (NCTC) for joint operational planning and joint  intelligence and replacing the current Director of Central Intelligence with  a National Intelligence Director (NID) to oversee national intelligence  centers across the federal government. The NID would manage the  national intelligence program and oversee agencies that contribute to it.
Yesterday, on August 2, 2004, the President asked Congress to create a  NID position to be the principal intelligence advisor, appointed by the  President, with the advice and consent of the Senate and serving at the  pleasure of the President. Unlike the 9/11 Commission, the President did  not propose that the NID be within the Executive Office of the President.  He also announced that he will establish a NCTC whose Director would  report to the NID, and that this center would build upon the analytic work  of the existing Terrorist Threat Integration Center. He suggested that a  separate center may be necessary for issues of weapons of mass  destruction. Finally, he endorsed the 9/11 Commission’s call for  reorganization of the Congressional oversight structure. There are,  however, several substantive differences between the President’s proposal  and the Commission’s recommendations.
While praising the work of the 9/11 Commission, and endorsing several of  its major recommendations in concept, the President differed with the  Commission on certain issues. These differences reflect that reasoned and  reasonable individuals may differ, and that several methods may exist to  effectuate the transformational changes recommended. However, certain  common principles and factors outlined in my statement today should  help guide the debate ahead.
Although the creation of a NID and a NCTC would be major changes for  the intelligence community, other structural and management changes  have occurred and are continuing to occur in government that provide  lessons for the intelligence community transformation. While the  intelligence community has historically been addressed separately from  the remainder of the federal government, and while it undoubtedly  performs some unique missions that present unique issues (e.g., the  protection of sources and methods) its major transformational challenges  in large measure are the same as those that face most government  agencies.
As a result, GAO’s findings, recommendations, and experience in  reshaping the federal government to meet Twenty-First Century challenges  will be directly relevant to the intelligence community and the  recommendations proposed by the 9/11 Commission. Reorganizing  government can be an immensely complex activity with both opportunities  and risks. As a result, those who propose to reorganize government must  make their rationale clear and build a consensus for change if proposed  reorganizations are to succeed and be sustained. All key players must be  involved in the process.
The goal of improving information sharing and analysis with a focus upon  the needs of the consumers of such improved information for specific  types of threats can provide one of the powerful guiding principles  necessary for successful transformation. The elevated threat advisory  (orange alert) issued this past weekend for certain financial institutions in  particular regions dramatically illustrates the value of improved analysis  and sharing of information specific enough to guide effective and efficient  preparedness actions by those most at risk. Earlier threat advisories  issued by DHS were criticized for lack of specificity, “one size fits all”  applicability, and lack of “actionable” information.
In my testimony today, I will cover four major points. First, I describe the  rationale for improving effective information sharing and analysis, and  suggest some ways to achieve positive results. Improvements would  include, for example, developing a comprehensive and coordinated  national plan to facilitate information sharing and relationships. Second, I  provide some overview perspectives on reorganizational approaches to  improve performance and note necessary cautions. For example, the  Congress has an important role to play in the design and implementation  of a new structure, and oversight will be key to success. Third, I illustrate  that strategic human capital management must be the centerpiece of any  serious change management initiative or any effort to transform the  cultures of government agencies, including that of the intelligence  community. Strategic management includes, for example, consideration of  human capital flexibilities. Finally, I emphasize the importance of results- oriented strategic planning and implementation for the intelligence arena,  focusing management attention on outcomes, not outputs, and the need  for effective accountability and oversight to maintain focus upon  improving performance. For example, much more attention needs to be  paid to defining goals and measures, and providing for increased oversight  of the performance of the intelligence community. I conclude by applying  these concepts and principles to the challenges of reform in the  intelligence community.
This testimony draws upon our wide-ranging, completed, and ongoing  work, and our institutional knowledge on homeland security, combating  terrorism, and various government organizational and management issues.  We conducted our work in accordance with generally accepted  government auditing standards.
subsections: section_title: Stronger Intelligence Sharing Is Needed
paragraphs: Mr. Chairman, there is a continuing and heightened need for better and  more effective and comprehensive information sharing. We agree the  intelligence community needs to move from a culture of “need to know” to  “need to share.” The 9/11 Commission has made observations regarding  information sharing, and recommended procedures to provide incentives  for sharing and creating a “trusted information network.” Many  Commission recommendations address the need to improve information  and intelligence collection, sharing, and analysis within the intelligence  community itself. In addition, we must not lose sight of the fact that the  purpose of improving information analysis and sharing is to provide better  information throughout the federal government, and ultimately also to  state and local governments, the private sector, and our citizens, so that  collectively we are all better prepared. I want to make it clear that such  information sharing must protect confidential sources and methods, and  we do not propose any changes that would infringe upon those  protections.
In addition, as the Congress considers the Commission’s  recommendations, I would also recommend that it consider the role that  state and local agencies and the private sector should play as informed  partners in homeland security. The Commission’s work, as is the case with  our own observations, notes the changing perspective of “federal” versus  “other entities’” roles in homeland security and homeland defense. In  performing its constitutional role of providing for the common defense, we  have observed that the federal government must prevent and deter  terrorist attacks on our homeland as well as detect impending danger  before attacks occurs. Although it may be impossible to detect, prevent, or  deter every attack, steps can and must be taken to reduce the risk posed  by the threats to homeland security. Furthermore, in order to be  successful in this area, the federal government must partner with a variety  of organizations, both domestic and international.
Traditionally, protecting the homeland against threats was generally  considered a federal responsibility. To meet this responsibility, the federal  government (within and across federal agencies) gathers intelligence,  which is often classified as national security information. This information  is protected and safeguarded to prevent unauthorized access by requiring  appropriate security clearances and a “need to know.” Normally, the  federal government did not share national-level intelligence with states  and cities, since they were not viewed as having a significant role in  preventing terrorism. Therefore, the federal government did not generally  grant state and city officials access to classified information. After the  September 11 attacks, however, the view that states and cities do not have  a significant role in homeland security changed, and the “need to share”  intelligence information became clear.
However, reconciling the need to share with actually sharing has been at  the heart of the 9/11 Commission’s recommendations and our own  findings and observations on practices to improve information sharing. In  work begun before the September 11 attacks, we reported on information- sharing practices of organizations that successfully share sensitive or time- critical information. We found that these practices include:    establishing trust relationships with a wide variety of federal and  nonfederal entities that may be in a position to provide potentially  useful information and advice on vulnerabilities and incidents,    developing standards and agreements on how shared information will  be used and protected,    establishing effective and appropriately secure communications  taking steps to ensure that sensitive information is not inappropriately  disseminated.
As you might recall, we also testified before this committee last year on  information sharing. GAO has made numerous recommendations related  to sharing, particularly as they relate to fulfilling DHS’s critical  infrastructure protection responsibilities. The Homeland Security  Information Sharing Act, included in the Homeland Security Act of 2002  (P.L. 107-296), requires the President to prescribe and implement  procedures for facilitating homeland security information sharing and  establishes authorities to share different types of information, such as  grand jury information; electronic, wire, and oral interception information;  and foreign intelligence information. In July 2003, the President assigned  these functions to the Secretary of Homeland Security, but no deadline  was established for developing such information sharing procedures..
To accomplish its missions, DHS must gain access to, receive, and analyze  law enforcement information, intelligence information, and other threat,  incident, and vulnerability information from federal and nonfederal  sources, and it must analyze such information to identify and assess the  nature and scope of terrorist threats. DHS must also share information  both internally and externally with agencies and law enforcement on such  things as goods and passengers inbound to the United States and  individuals who are known or suspected terrorists and criminals (e.g.,  watch lists).
As we reported in June 2002, the federal government had made progress  in developing a framework to support a more unified effort to secure the  homeland, including information sharing. However, this work found  additional needs and opportunities to enhance the effectiveness of  information sharing among federal agencies with homeland security or  homeland defense responsibilities, and with various state and city law  enforcement agencies that have a key role in homeland security, as well as  with the private sector.
As we reported in August 2003, efforts to improve intelligence and  information sharing still needed to be strengthened. Intelligence- and  information- sharing initiatives implemented by states and cities were not  effectively coordinated with those of federal agencies, nor were they  coordinated within and between federal entities. Furthermore, neither  federal, state, nor city governments considered the information-sharing  process to be effective. For example, information on threats, methods, and  techniques of terrorists was not routinely shared; information that was  shared was not perceived as timely, accurate, or relevant; and federal  officials have not established comprehensive processes or procedures to  promote effective information sharing. At that time, we recommended that  the Secretary of Homeland Security work with the heads of other federal  agencies and state and local authorities to:  incorporate the existing information-sharing guidance that is contained  in the various national strategies and information-sharing procedures  required by the Homeland Security Act,    establish a clearinghouse to coordinate the various information-sharing  initiatives to eliminate possible confusion and duplication of effort,  fully integrate states and cities into the national policy-making process  for information sharing and take steps to provide greater assurance  that actions at all levels of government are mutually reinforcing,  identify and address the perceived barriers to federal information  sharing, and    use a survey method or a related data collection approach to  determine, over time, the needs of private and public organizations for  information related to homeland security and to measure progress in  improving information sharing at all levels of government.
DHS concurred with the above recommendations.
DHS and other federal agencies have instituted major counterterrorism  efforts involving information and intelligence sharing over the past 2 years.  For example, the Terrorist Threat Integration Center (T-TIC) was designed  to improve the collection, analysis, and sharing of all counterterrorism  intelligence gathered in the United States and overseas. The DHS  Information Analysis and Infrastructure Protection (IAIP) Directorate is  intended to receive intelligence from a variety of federal sources and act  as a central fusion point for all intelligence relevant to homeland security  and related critical infrastructure protection. Furthermore, the FBI has  created a new Office of Intelligence, established a National Joint  Terrorism Taskforce, expanded its Joint Terrorist Task Forces (JTTFs),  and recently made operational an interagency joint Terrorist Screening  Center.
Although improvements had been made, we continue to identify needs,  such as developing a comprehensive and coordinated national plan to  facilitate information-sharing on critical infrastructure protection (CIP);  developing productive information sharing relationships among the federal  government and state and local governments and the private sector; and  providing appropriate incentives for nonfederal entities to increase  information sharing with the federal government and enhance other  critical infrastructure protection efforts. As we recently reported,  information sharing and analysis centers (ISACs) have identified a number  of challenges to effective CIP information sharing between the federal  government and state and local governments and the private sector,  including sharing information on physical and cyber threats,  vulnerabilities, incidents, potential protective measures, and best  practices. Such challenges include building trusted relationships;  developing processes to facilitate information sharing; overcoming  barriers to information sharing; clarifying the roles and responsibilities of  the various government and private sector entities that are involved in  protecting critical infrastructure; and funding ISAC operations and  activities.
Although DHS has taken a number of actions to implement the  public/private partnership called for by federal CIP policy, it has not yet  developed a plan that describes how it will carry out its information- sharing responsibilities and relationships, including consideration of  appropriate incentives for nonfederal entities to increase information  sharing with the federal government, increase sector participation, and  perform other specific tasks to protect the critical infrastructure. Such a  plan could encourage improved information sharing among the ISACs,  other CIP entities, and the department by clarifying the roles and  responsibilities of all the entities involved and clearly articulating actions  to address the challenges that remain.
The department also lacks policies and procedures to ensure effective  coordination and sharing of ISAC-provided information among the  appropriate components within the department. Developing such policies  and procedures would help ensure that information is appropriately  shared among its components and with other government and private  sector CIP entities. GAO recommended that the Secretary of Homeland  Security direct officials within DHS to (1) proceed with the development  of an information-sharing plan that describes the roles and responsibilities  of DHS, the ISACs, and other entities and (2) establish appropriate  department policies and procedures for interactions with other CIP  entities and for coordination and information sharing among DHS  components. DHS has generally agreed with our findings and  recommendations.
DHS has also implemented the Homeland Security Advisory System.  Utilizing five color-coded threat levels, the system was established in  March 2002 to disseminate information regarding the risk of terrorist acts  to federal agencies, states and localities, and the public. Our recent work  indicates that DHS has not yet officially documented communication  protocols for providing threat information and guidance to federal  agencies and states, with the result that some federal agencies and states  may first learn about changes in the national threat level from media  sources. Moreover, federal agencies and states responding to our inquiries  indicated that they generally did not receive specific threat information  and guidance, and they believed this shortcoming hindered their ability to  determine whether they were at risk as well as their ability to determine  and implement appropriate protective measures.
In addition, there is a need for an improved security clearance process so  that state, local, and private sector officials have the access to information  they need, but with appropriate security safeguards in place, while efforts  to improve information sharing continue. In a recent report, we described  the FBI’s process for granting access to classified information for state  and local law enforcement officials. The FBI’s goal is to complete the  processing for secret security clearances within 45 to 60 days and top  secret security clearances within 6 to 9 months. While the FBI’s processing  of top secret security clearances has been generally timely, that was not  the case for secret clearances. However, the FBI made substantial  improvements in 2003 to the timeliness of processing secret clearances.
We also have conducted a body of work that has found that long-standing  security clearance backlogs and delays in determining clearance eligibility  affect industry personnel, military members, and federal employees. For  example, as we reported in May of this year, more than 187,000  reinvestigations, new investigations, or clearance adjudications were not  completed for industry personnel alone within established time frames.
Delays in conducting investigations and determining clearance eligibility  can increase national security risks, prevent industry personnel from  beginning or continuing work on classified programs and activities, or  otherwise hinder the sharing of classified threat information with officials  having homeland security or homeland defense responsibilities.
The FBI has also taken a number of steps to enhance its information  sharing with state and local law enforcement officials, such as providing  guidance and additional staffing. The FBI has further increased the  number of its JTTFs, increasing them from 35 prior to the September 11  attacks to 84 as of July 2004 and state and local law enforcement officials’  participation on these task forces has been increased. The FBI has at least  one JTTF in each of its 56 field locations and plans to expand to 100. The  FBI also circulates declassified intelligence through a weekly bulletin and  provides threat information to state and local law enforcement officials via  various database networks. “There is a fascination in Washington with bureaucratic solutions—rearranging the wiring  diagrams, creating new organizations. We do recommend some important institutional  changes. We will articulate and defend those proposals. But we believe reorganizing  governmental institutions is only a part of the agenda before us. Some of the saddest  aspects of the 9/11 story are the outstanding efforts of so many individual officials  straining, often without success, against the boundaries of the possible. Good people can  overcome bad structures. They should not have to. We have the resources and the people.
We need to combine them more effectively, to achieve unity of effort.”
GAO agrees with this comment, and we have noted several related  suggestions below.
section_title: While Changes May be Needed, Caution and Care Must be Taken
paragraphs: As the committee is aware, GAO has done extensive work on federal  organizational structure and how reorganization can improve  performance. The 9/11 Commission has recommended major changes to  unify strategic intelligence and operational planning with a National  Counterterrorism Center and provide the intelligence community with a  new National Intelligence Director. As the Congress and the  administration consider the 9/11 Commission’s recommendations, they  should consider how best to address organizational changes, roles and  responsibilities, and functions for intelligence-sharing effectiveness.
In response to the emerging trends and long-term fiscal challenges the  government faces in the coming years, we have an opportunity to create  highly effective, performance-based organizations that can strengthen the  nation’s ability to meet the challenges of the twenty first century and reach  beyond our current level of achievement. The federal government cannot  accept the status quo as a given—we need to reexamine the base of  government policies, programs, structures, and operations. We need to  minimize the number of layers and silos in government, emphasize  horizontal versus vertical actions, while moving our policy focus to  coordination and integration. The result, we believe, will be a government  that is effective and relevant to a changing society—a government that is  as free as possible of outmoded commitments and operations that can  inappropriately encumber the future, reduce our fiscal flexibility, and  prevent future generations from being able to make choices regarding  what roles they think government should play.
Many departments and agencies, including those of the intelligence  community, were created in a different time and in response to challenges,  threats, and priorities very different from today’s world. Some have  achieved their one time missions and yet they are still in business. Many  have accumulated responsibilities beyond their original purposes. Many  are still focused on their original mission that may not be relevant or as  high a priority in today’s world. Others have not been able to demonstrate  how they are making a difference in real and concrete terms. Still others  have overlapping or conflicting roles and responsibilities. Redundant,  unfocused, uncoordinated, outdated, misaligned, and nonintegrated  programs and activities waste scarce funds, confuse and frustrate program  customers, and limit overall efficiency and effectiveness. These are the  charges highlighted by the 9/11 Commission’s findings and  recommendations.
The problems the 9/11 Commission has described with our intelligence  activities indicate a strong need for reexamining the organization and  execution of those activities. However, any restructuring proposal requires  careful consideration. Fixing the wrong problems or even worse, fixing the  right problems poorly, could cause more harm than good.
Past executive reorganization authority has served as an effective tool for  achieving fundamental reorganization of federal operations. As I have  testified before this committee, the granting of executive reorganization  authority to the President can serve to better enable the President to  propose government designs that would be more efficient and effective in  meeting existing and emerging challenges involving the intelligence  community and information sharing with other entities. However, lessons  learned from prior federal reorganization efforts suggest that reorganizing  government can be an immensely complex activity that requires consensus  on both the goals to be achieved and the process for achieving them. Prior  reorganization authority has reflected a changing balance between  legislative and executive roles. Periodically, between 1932 and 1984, the  Congress passed legislation providing the President one form or another  of expedited reorganization authority.
Congressional involvement is needed not just in the initial design of the  reorganization, but in what can turn out to be a lengthy period of  implementation. The Congress has an important role to play—in both its  legislative and oversight capacities—in establishing, monitoring, and  maintaining progress to attain the goals envisioned by government  transformation and reorganization efforts. However, as the 9/11  Commission has noted, past oversight efforts in the intelligence area have  been wholly inadequate.
To ensure efficient and effective implementation and oversight, the  Congress will also need to consider realigning its own structure. With  changes in the executive branch, the Congress should adapt its own  organization. For example, the Congress has undertaken a reexamination  of its committee structure, with the implementation of DHS. The DHS  legislation instructed both houses of Congress to review their committee  structures in light of the reorganization of homeland security  responsibilities within the executive branch. Similarly, the 9/11  Commission recommends realigning congressional oversight to support its  proposals to reorganize intelligence programs.
section_title: Addressing Intelligence Human Capital Needs Requires Strategic Management
paragraphs: The 9/11 Commission stresses the need for stronger capabilities and  expertise in intelligence and national security to support homeland  security. For example, the Commission recommends rebuilding the  Central Intelligence Agency’s analytical capabilities, enhancing the  agency’s human intelligence capabilities, and developing a stronger  language program.
We believe, Mr. Chairman, that at the center of any serious change  management initiative are the people involved—people define the  organization’s culture, drive its performance, and embody its knowledge  base. They are the source of all knowledge, process improvement, and  technological enhancement efforts. As such, strategic human capital (or  people) strategy is the critical element to maximizing government’s  performance and ensuring accountability of our intelligence community  and homeland security efforts.
Experience shows that failure to adequately address—and often even  consider—a wide variety of people and cultural issues is at the heart of  unsuccessful organizational transformations. Recognizing the “people”  element in these initiatives and implementing strategies to help individuals  maximize their full potential in the new environment is the key to a  successful transformation of the intelligence community and related  homeland security organizations. Thus, organizational transformations  that incorporate strategic human capital management approaches will  help to sustain agency efforts and improve the efficiency, effectiveness,  and accountability of the federal government. To help, we have identified a  set of practices that have been found to be central to any successful  transformation effort.
Committed, sustained, highly qualified, and inspired leadership, and  persistent attention by all key parties in the successful implementation of  organizational transformations, will be essential, if lasting changes are to  be made and the challenges we are discussing today are to be effectively  addressed. It is clear that in a knowledge-based federal government,  including the intelligence community, people—human capital—are the  most valuable asset. How these people are organized, incented, enabled,  empowered, and managed is key to the reform of the intelligence  community and other organizations involved with homeland security.
We have testified that federal human capital strategies are not yet  appropriately constituted to meet current and emerging challenges or to  drive the needed transformation across the federal government. The basic  problem has been the long-standing lack of a consistent approach to  marshaling, managing, and maintaining the human capital needed to  maximize government performance and ensure its accountability to the  people. Thus, federal agencies involved with the intelligence community  and other homeland security organizations will need the most effective  human capital systems to address these challenges and succeed in their  transformation efforts during a period of sustained budget constraints.  This includes aligning their strategic planning and key institutional  performance with unit and individual performance management and  reward systems.
Fortunately, the Congress has passed legislation providing many of the  authorities and tools agencies need. In fact, more progress in addressing  human capital challenges was made in the last 3 years than in the last 20,  and significant changes in how the federal workforce is managed are  under way. For example, the Congress passed legislation providing  governmentwide human capital flexibilities, such as direct hire authority,  the ability to use category rating in the hiring of applicants instead of the  “rule of three,” and the creation of chief human capital officer (CHCO)  positions and the CHCO Council. In addition, individual agencies—such as  the National Aeronautical and Space Administration (NASA), DoD, and  DHS—received flexibilities intended to help them manage their human  capital strategically to achieve results.
While many agencies have received additional human capital flexibilities,  additional ones may be both needed and appropriate for the intelligence,  homeland security, national defense, and selected other agencies. While  the above authorities are helpful, in order to enable agencies to rapidly  meet their critical human capital needs, the Congress should consider  legislation granting selected agency heads the authority to hire a limited  number of positions for a stated period of time (e.g., up to 3 years) on a  noncompetitive basis. The Congress has passed legislation granting this  authority to the Comptroller General of the United States and it has helped  GAO to address a range of critical needs in a timely, effective, and prudent  manner over many years.
Recent human capital actions have significant precedent-setting  implications for the rest of government. They represent progress and  opportunities, but also present legitimate concerns. We are fast  approaching the point where “standard governmentwide” human capital  policies and processes are neither standard nor governmentwide. As the  Congress considers the need for additional human capital authorities for  the intelligence community, it should keep in mind that human capital  reform should avoid further fragmentation within the civil service, ensure  reasonable consistency within the overall civilian workforce, and help  maintain a reasonably level playing field among federal agencies in  competing for talent. Importantly, this is not to delay needed reforms for  any agency, but to accelerate reform across the federal government and  incorporate appropriate principles and safeguards.
As the Congress considers reforms to the intelligence communities’ human  capital policies and practices, it should require that agencies have in place  the institutional infrastructure needed to make effective use of any new  tools and authorities. At a minimum, this institutional infrastructure  includes a human capital planning process that integrates the agency’s  human capital policies, strategies, and programs with its program goals  and mission and desired outcomes; the capabilities to effectively develop  and implement a new human capital system; and, importantly, a set of  appropriate principles and safeguards, including reasonable transparency  and appropriate accountability mechanisms, to ensure the fair, effective,  credible, nondiscriminatory implementation and application of a new  system.
section_title: Managing for Results
paragraphs: As Chairman Kean and Vice-Chairman Hamilton caution, organizational  changes are just a part of the reforms needed. The Commission rightly  says that effective public policies need concrete objectives, agencies need  to be able to measure success, and the American people are entitled to see  some standards for performance so they can judge, with the help of their  elected representatives, whether the objectives are being met. To  comprehensively transform government to improve intelligence and  homeland security efforts, we must also carefully assess and define  mission needs, current capabilities, resource practicalities, and priorities.  And we must implement our plans to achieve those mission needs.
The federal government is well short of where it needs to be in setting  national homeland security goals, including those for intelligence and  other mission areas, to focus on results—outcomes—not inputs and  outputs which were so long a feature of much of the federal government’s  strategic planning. We are concerned that the tenets of results  management—shifting management attention from inputs, processes, and  outputs to what is accomplished with them (outcomes or results)—still  are elusive in homeland security goal setting and operational planning. We  advocate a clear and comprehensive focus on homeland security results  management, including the mission of intelligence and information  sharing. Results management should have the elements to determine (1) if  homeland security results are being achieved within planned timeframes,  (2) if investments and resources are being managed properly, (3) if results  are being integrated into ongoing decision making and priority setting, and  (4) what action is needed to guide future investment policies and influence  behavior to achieve results. These actions go far beyond a limited focus on  organizational structure.
As the Gilmore Commission stated, a continuing problem for homeland  security has been the lack of clear strategic guidance from the federal level  about the definition and objectives of preparedness and how states and  localities will be evaluated in meeting those objectives. The 9/11  Commission’s broad recommendations, if adopted, will require a  thoughtful, detailed, results-oriented management approach in defining  specific goals, activities, and resource requirements.
The track record for homeland security results management to date is  spotty. The National Strategy for Homeland Security, issued by the  administration in July 2002, was intended to mobilize and organize the  nation to secure the homeland from terrorist attacks. Intelligence and  warning was one of its critical mission areas. Despite the changes over the  past two years, the National Strategy has not been updated. In general,  initiatives identified in the strategy do not provide a baseline set of  performance goals and measures upon which to assess and improve  preparedness, stressing activities rather than results. For example, for  intelligence and warning, the National Strategy identified major initiatives  that are activities, such as implementing the Homeland Security Advisory  System, utilizing dual-use analysis to prevent attacks; and employing “red  team” techniques.
Establishing clear goals and performance measures is critical to ensuring  both a successful and a fiscally responsible and sustainable preparedness  effort. We are currently doing work on the extent to which the National  Strategy’s goals are being implemented by federal agencies. Senator  Lieberman has recently introduced legislation requiring executive branch  efforts to produce a national homeland security strategy. We support the  concept of a legislatively required strategy that can be sustained across  administrations and provides a framework for congressional oversight.  Before the administration’s National Strategy for Homeland Security was  issued, we had stated that the strategy should include steps designed to (a)  reduce our vulnerability to threats; (b) use intelligence assets and other  broad-based information sources to identify threats and share information  as appropriate; (c) stop incidents before they occur; (d) manage the  consequences of an incident; and (e) in the case of terrorist attacks,  respond by all means available, including economic, diplomatic, and  military actions that, when appropriate, are coordinated with other  nations. Earlier this year we provided a set of desirable characteristics  for any effective national strategy that could better focus national  homeland security decision making and increase the emphasis on  outcomes.
Strategic planning is critical to provide mission clarity, establish long-term  performance strategies and goals, direct resource decisions, and guide  transformation efforts. In this context, we are reviewing the DHS strategic  planning efforts. Our work includes a review of the manner by which the  Department’s planning efforts support the National Strategy for Homeland  Security and the extent to which its strategic plan reflects the  requirements of the Government Performance and Results Act of 1993.
DHS’s planning efforts are evolving. The current published DHS strategic  plan contains vague strategic goals and objectives for all its mission areas,  including intelligence, and little specific information to guide  congressional decision making. For example, the strategic plan includes  an overall goal to identify and understand threats, assess vulnerabilities,  determine potential impacts, and disseminate timely information to DHS’s  homeland security partners and the American public. That goal has very  general objectives, such as gathering and fusing all terrorism-related  intelligence and analyzing and coordinating access to information related  to potential terrorist or other threats. Discussion of annual goals are  missing, and supporting descriptions of means and strategies are vague,  making it difficult to determine if they are sufficient to achieve the  objectives and overall goals. These and related issues will need to be  addressed as the DHS planning effort moves forward.
In another effort to set expectations, the President, through Homeland  Security Presidential Directive 8, has tasked the Department of Homeland  Security with establishing measurable readiness priorities and targets  appropriately balancing the potential threat and magnitude of terrorist  attacks, major disasters, and other emergencies with resources required to  prevent, respond to, and recover from them. The task also is to include  readiness metrics and elements supporting the national preparedness goal,  including standards for preparedness assessments and strategies, and a  system for assessing the nation’s overall preparedness to respond to major  events, especially involving acts of terrorism. However, those taskings  have yet to be completed, but they will have to address the following  questions:    What are the appropriate national preparedness goals and measures?
What are appropriate subgoals for specific areas such as critical  infrastructure sectors?
Do these goals and subgoals take into account other national goals  such as economic security or the priority objectives of the private  sector or other levels of government?
Who should be accountable for achieving the national goals and  subgoals?
How would a national results management and measurement system  be crafted, implemented, and sustained for the national preparedness  goals?
How would such a system affect needs assessment and be integrated  with funding and budgeting processes across the many organizations  involved in homeland security?
However, even if we have a robust and viable national strategy for  homeland security, DHS strategic plan, and national preparedness goals,  the issue of implementation remains. Implementation cannot be assured,  or corrective action taken, if we are not getting the results we want,  without effective accountability and oversight. The focus for homeland  security must be on constantly staying ready and prepared for unknown  threats and paying attention to improving performance. In addition to  continuing our ongoing work in major homeland security mission areas  such as border and transportation security and emergency preparedness,  GAO can help the Congress more effectively oversee the intelligence  community, and any changes should consider, in our view, an appropriate  role for the GAO.
With some exceptions, GAO has broad-based authority to conduct reviews  relating to various intelligence agencies. However, because of historical  resistance from the intelligence agencies and the general lack of support  from the intelligence committees in the Congress, GAO has done limited  work in this community over the past 25 years. For example, within the  past 2 years, we have done a considerable amount of work in connection  with the FBI and its related transformational efforts. In addition, GAO has  recently had some interaction with the Defense Intelligence Agency in  connection with its transformation efforts. Furthermore, GAO has  conducted extensive work on a wide range of government  transformational and homeland security issues over the past several years.  As always, we stand ready to offer GAO’s assistance in support of any of  the Congress’ oversight needs.
section_title: The Challenges Faced in Intelligence Reform
paragraphs: In conclusion, on the basis of GAO’s work in both the public and the  private sector over many years, and my own change management  experience, it is clear to me that many of the challenges that the  intelligence community faces are similar or identical to the transformation  challenges applicable to many other federal agencies, including GAO.  Specifically, while the intelligence agencies are in a different line of  business than other federal agencies, they face the same challenges when  it comes to strategic planning and budgeting, organizational alignment,  human capital strategy, and the management of information technology,  finances, knowledge, and change.
For the intelligence community, effectively addressing these basic  business transformation challenges will require action relating to five key  dimensions, namely, structure, people, process, technology, and  partnerships. It will also require a rethinking and cultural transformation  in connection with intelligence activities both in the executive branch and  in the Congress.
With regard to the structure dimension, there are many organizational  units within the executive branch and in the Congress with responsibilities  in the intelligence and homeland security areas. Basic organizational and  management principles dictate that, absent a clear and compelling need  for competition or checks and balances, there is a need to minimize the  number of entities and levels in key decision making, oversight, and other  related activities. In addition, irrespective of how many units and levels  are involved, someone has to be in charge of all key planning, budgeting,  and operational activities. One person should be responsible and  accountable for all key intelligence activities within the executive branch,  and that person should report directly to the President. This position must  also have substantive strategic planning, budget, operational integration,  and accountability responsibilities and opportunities for the intelligence  community in order to be effective. In addition, this person should be  appointed by the President and confirmed by the Senate in order to help  facilitate success and ensure effective oversight.
With regard to the oversight structure of the Congress, the 9/11  Commission noted that there are numerous players involved in  intelligence activities and yet not enough effective oversight is being done.  As a result, a restructuring of intelligence and homeland security related  activities in the Congress is also needed. In this regard, it may make sense  to separate responsibility for intelligence activities from personal privacy  and individual liberty issues in order to ensure that needed attention is  given to both while providing for a check and balance between these  competing interests.
With regard to the people dimension, any entity is only as good as its  people, and as I stated earlier, the intelligence community is no exception.  In fact, since the intelligence community is in the knowledge business,  people are of vital importance. The people challenge starts at the top, and  key leaders must be both effective and respected. In addition, they need to  stay in their positions long enough to make a real and lasting difference. In  this regard, while the FBI director has a 10-year term appointment, most  agency heads serve at the pleasure of their appointing official and may  serve a few years in their respective positions. This is a problem when the  agency is in the need of a cultural transformation, such as that required in  the intelligence community, which typically takes at least 5 to 7 years to  effectuate.
In addition to having the right people and the right “tone at the top,”  agencies need to develop and execute workforce strategies and plans  helping to ensure that they have the right people with the right skills in the  required numbers to accomplish their missions. Many of these missions  have changed in the post-Cold War and post September 11 world. This is  especially critical in connection with certain skills that are in short supply,  such as information technology and certain languages, such as Arabic. In  addition, as the 9/11 Commission and others have noted, it is clear that  additional steps are necessary to strengthen our human intelligence  capabilities.
With regard to the process and technology dimensions, steps need to be  taken to streamline and expedite the processes used to analyze and  disseminate the tremendous amount of intelligence and other information  available to the intelligence community. This will require extensive use of  technology to sort and distribute information both within agencies and  between agencies and other key players in various sectors both  domestically and internationally, as appropriate. The 9/11 Commission and  others have noted various deficiencies in this area, such as the FBI’s  information technology development and implementation challenges. At  the same time, some successes have occurred during the past 2 years that  address process and technology concerns. For example, the Terrorist  Screening Center, created under Homeland Security Presidential Directive  6 is intended to help in the consolidation of the federal government’s  approach to terrorism screening. This center has taken a number of steps  to address various organizational, technological, integration, and other  challenges, and it may serve as a model for other needed intra- and  interorganizational efforts.
With regard to partnerships, it has always been difficult to create an  environment of shared responsibility, shared resources, and shared  accountability for achieving difficult missions. Effective partnerships  require a shared vision, shared goals, and shared trust in meeting agreed- upon responsibilities. Partnerships also mean that power is shared. Too  often we have seen both public and private sector organizations where the  term “partnership” is often voiced, but the reality is more a jockeying for  dominance or control over the “partner.” The end result is that resources  are not shared, the shared mission is never complete or adequate, and  opportunities for true strategic alliance are squandered. In the intelligence  arena, we know the potential end result is failure for the nation.
With regard to the cultural dimension, this is both the softest and the  hardest to deal with. By the softest, I mean it involves the attitudes and  actions of people and entities. By the hardest, I mean that changing long- standing cultures can be a huge challenge, especially if the efforts involve  organizational changes in order to streamline, integrate, and improve  related capabilities and abilities. This includes both execution and  oversight-related activities. As the 9/11 Commission and others have  noted, such a restructuring is needed in both the executive branch and the  Congress. This will involve taking on the vested interests of many  powerful players, and as a result, it will not be easy, but it may be  essential, especially if we expect to go from a “need to know” to a “need to  share’ approach. As I have often said, addressing such issues takes  patience, persistence, perspective, and pain before you prevail. Such is the  case with many agency transformational efforts, including those within  our own GAO. However, given the challenges and dangers that we face in  the post 9/11 world, we cannot afford to wait much longer. The time for  action is now.
section_title: Conclusion
paragraphs: “There will never be an end point in America’s readiness. Enemies will change tactics,  citizens’ attitudes about what adjustments in their lives they will be willing to accept will  evolve and leaders will be confronted with legitimate competing priorities that will demand  attention….In the end, America’s response to the threat of terrorism will be measured by  how we manage risk. There will never be a 100% guarantee of security for our people, the  economy, and our society. We must resist the urge to seek total security—it is not  achievable and drains our attention from those things that can be accomplished.”
Managing risk is not simply about putting new organizations in place. It  requires us to think about what must be protected, define an acceptable  level of risk, and target limited resources while keeping in mind that the  related costs must be affordable and sustainable. Perhaps more important,  managing risk requires us to constantly operate under conditions of  uncertainty, where foresight, anticipation, responsiveness, and radical  adaptation are vital capabilities.
We can and we must enhance and integrate our intelligence efforts as  suggested by the 9/11 Commission to significantly improve information  sharing and analysis. Several models to achieve this result exist, and  despite the unique missions of the intelligence community can readily be  adapted to guide this transformation.
We at the GAO stand ready to constructively engage with the intelligence  community to share our significant government transformation and  management knowledge and experience in order to help members of the  community help themselves engage in the needed transformation efforts.  We also stand ready to help the Congress enhance its oversight activities  over the intelligence community, which, in our view, are an essential  element of an effective transformation approach. In this regard, we have  the people with the skills, experience, knowledge, and clearances to make  a big difference for Congress and the country.
Mr. Chairman, this concludes my statement. I would be happy to answer  any questions that you or members of your committee may have at this  time.
section_title: Contacts
paragraphs: For information on this testimony, please contact Randall Yim at (202)  512-6787 or yimr@gao.gov.
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