Table 1 describes the activities that USDA’s mission areas and major staff offices perform as part of five types of administrative services that USDA business centers are to provide under the Secretary of Agriculture’s November 2017 memorandum. At USDA, eight mission areas and three of the 13 major department-level staff offices, including five sub-offices, are responsible for delivering or overseeing these five types of administrative services (see fig. 1). USDA’s eight mission areas carry out the department’s program responsibilities through 18 agencies. Five mission areas consist of multiple agencies, while three consist of a single agency, as shown below. In general, USDA’s eight mission areas deliver the administrative services, and the staff offices develop regulations, guidance, and policies describing how mission areas should deliver those services and oversee the mission areas’ performance. In addition, the staff offices deliver some administrative services on a department-wide or shared-services basis. According to USDA officials, the mission areas are to follow the regulations, guidance, and policies developed by the staff offices but are allowed considerable discretion in how they deliver administrative services based on their missions and program needs. According to USDA officials and documentation, service delivery is typically handled by a mission area’s field offices at the regional, state, or local level; however, with the establishment of the business centers, more service is being delivered at the mission area’s headquarters level. USDA has consolidated administrative services and established business centers in all of its eight mission areas in accordance with the Secretary’s November 2017 memorandum. The eight existing business centers vary in when they were established. As shown in figure 2, three mission areas had business centers before the Secretary’s memorandum. However, even the mission areas that had business centers before the Secretary’s November 2017 memorandum subsequently changed the way they provide administrative services, specifically with regard to information technology services. Two mission areas—Marketing and Regulatory Programs and Research, Education, and Economics—added information technology to their business centers during fiscal year 2019. In 2019, the Natural Resources and Environment mission area, which already included information technology in its business center, changed the position descriptions of certain employees to more accurately reflect that their major duties are considered to be information technology work. Of the five new business centers established since the Secretary’s memorandum, establishment of the FPAC Business Center entailed the most significant transformation. Typically, each business center is located within one of the mission area’s component agencies and the center’s leader reports directly to that agency’s leadership (see table 2). The FPAC Business Center is the only business center established as a separate agency within a mission area. Changes that occurred at other mission areas in transitioning to new business centers included modifying reporting structures for services that had already been consolidated. For example, according to Rural Development officials, the mission area had a business services entity prior to the Secretary’s memorandum. To establish a business center as envisioned by the Secretary’s memorandum, the mission area changed the reporting structure for administrative operations in the field. Previously, field employees associated with an administrative service reported directly to leadership in Rural Development’s state offices. These employees now report directly to headquarters leadership specific to their administrative service. However, according to Rural Development officials, no employees were physically moved. As of November 2019, most of the business centers were providing all five of the main administrative services that the Secretary’s November 2017 memorandum envisioned—specifically, financial management, human resources, information technology, procurement, and property management. Two business centers have chosen to provide financial management services differently from the other administrative services. Specifically: Food Safety. According to officials in the Food Safety mission area, as part of its reorganization, that mission area grouped all of the administrative services except financial management under the Chief Operating Officer. However, it grouped the budget office, which performs financial management services, under the agency’s Chief Financial Officer because it preferred to keep this office with mission- related program offices, which report directly to the Deputy Administrator. Natural Resources and Environment. Officials in the Natural Resources and Environment mission area said that unlike other administrative services, which are grouped under the business center, financial management responsibilities are divided between the business center’s Office of Strategic Planning, Budget, and Accountability and the Forest Service’s Office of the Chief Financial Officer. According to these officials, this arrangement strengthens internal controls by separating responsibility for allocating and spending financial resources from responsibility for accounting for how the resources are spent. One business center—in the Trade and Foreign Agricultural Affairs mission area—provides information technology and financial management services for Foreign Agricultural Service employees and has agreements in place with other USDA components to provide human resources, procurement, and property management services for the mission area. According to the Deputy Assistant Secretary for Administration, USDA accepted these mission areas’ decisions about financial management because they ensured accountability of field-level staff to the administrative service’s headquarters leadership. According to USDA’s Deputy Assistant Secretary for Administration, the department regularly reviews data on administrative services, including services provided by the business centers. However, the department does not use these or other data to assess the effectiveness and impact of its business centers and as of November 2019 did not plan to do so. Beginning in 2018, USDA created an online monitoring system to compile data from mission areas on the status of their administrative services. The system has “dashboards” displaying data specific to financial management, human resources, information technology, procurement, and property management, among other things. Each of the dashboards presents metrics gathered from various databases across mission areas. For example, the dashboards for human resources include the number of employees by organization, along with their geographic location, retirement eligibility, occupation, and any skills gaps. According to USDA officials, the dashboards allow department-level review of a large number of metrics on a range of administrative activities performed by the business centers—data that previously were available only to each mission area. USDA’s Deputy Secretary discusses performance on various dashboards with mission area and staff office leadership at quarterly review meetings. However, the department has not used dashboards or associated metrics to assess the effectiveness and impact of the business centers. Specifically, the department has not assessed the impact that the business centers have had on USDA’s customer service; human resources, including hiring; and overall functionality. According to the Deputy Assistant Secretary for Administration, creating new business centers and changing existing ones has contributed to positive results, such as savings from reducing the size of USDA’s vehicle fleet, but USDA’s Departmental Administration has not systematically compared USDA’s ability to deliver its administrative services before and after these reforms. For example, the department has not examined whether the reforms have enabled mission areas to reduce costs, reduce processing times, or identify previously unknown issues that need to be addressed. According to USDA officials, these business center reforms broadly addressed the first policy goal in USDA’s May 2018 strategic plan for fiscal years 2018 through 2022—namely that USDA programs be delivered efficiently, effectively, and with integrity and a focus on customer service. However, USDA officials told us that they have not yet attempted to measure how the business center reforms have met the three overarching policy goals identified in the Secretary of Agriculture’s November 2017 memorandum, which called for the business center reforms to (1) improve customer engagement, (2) maximize efficiency, and (3) improve agency collaboration. In addition, some stakeholders we interviewed expressed concern about progress toward these goals as USDA works to implement the business center reforms. For example: Staffing vacancies. Some stakeholders raised concerns about the impact of vacancy rates at business centers on customer engagement. The two largest business centers created since November 2017—in FPAC and Rural Development—had position vacancy rates above 27 percent as of September 30, 2019. Officials with one group representing farmers who are customers of the FPAC and Rural Development mission areas told us they were concerned that (1) vacancies in the business center may be leading to vacancies among program staff in the field, (2) complaints related to staffing have increased over the past few years, and (3) staffing vacancies in the field are negatively affecting customer service. An official from another group representing farmers told us that the group is hearing from its members that there have been a lot of changes within USDA lately and field offices seem to be understaffed and overwhelmed even after the creation of the business centers, which could be negatively affecting the quality of customer service. Vacancies at the FPAC and Rural Development business centers, particularly among staff responsible for hiring USDA program staff in the field, could therefore affect both access to and the quality of technical assistance. Employee concerns. In the FPAC Business Center, officials from one union representing employees told us that confusion among employees about their roles and responsibilities could affect both internal employee satisfaction and the overall ability of the business center to serve the FPAC mission and its customers. Specifically, these union officials noted employees’ confusion about how to reconcile differences among the work procedures that each of the three FPAC agencies used before the reorganization. Officials from this and one other union also stated that employees have reported that business center leadership has not taken action to address such employee concerns. As a result, according to officials from both unions, FPAC business center employees are experiencing low morale, confusion, frustration, and anxiety about the changes, affecting their ability to deliver services. In response, FPAC officials told us in November 2019 that the FPAC Business Center is working on empowering employees, hiring, establishing a culture of accountability, building trust and engagement, and addressing other issues that have arisen in the business center’s first year of operation. For example, these officials said they were reviewing the business center’s organizational structure to determine whether there is a need for adjustments to further streamline operations and improve service. USDA officials cited several reasons the department has not assessed the effect of the business center reform effort undertaken in response to the Secretary’s November 2017 memorandum. According to the Deputy Assistant Secretary for Administration, the absence of evaluation is partly attributable to the department’s strategy of delegating responsibility to the mission areas to implement business centers; this strategy aims to give the mission area leadership ownership of the reform effort and help ensure their buy-in. The Deputy Assistant Secretary for Administration also said that the department has focused on implementing the reforms called for in the memorandum rather than on evaluating the results. USDA officials also pointed out that the reform effort is relatively recent, with five of the business centers having been created since June 2018. However, the Deputy Assistant Secretary for Administration acknowledged the importance of evaluating and communicating any benefits derived from the business center reform effort as it moves forward. Our prior work has shown that a key practice to consider during agency reform efforts is the establishment of clear outcome-oriented goals and performance measures to assess the reform’s effectiveness and impact. As we have previously reported, a performance goal is a target level of performance expressed as a measurable objective; a performance measure includes an assessment of results compared with intended purpose that can be expressed quantitatively or in another way that indicates a level or degree of performance. Monitoring performance against goals allows agencies to assess progress and address problems as necessary. While USDA has not developed goals and measures to assess the effectiveness and impact of the business center reforms, the department has set goals for a limited number of administrative services, including hiring, the number of fleet vehicles, and travel and conference spending. In addition, parts of the department have developed goals and measures for the administrative services their business centers provide. For example, officials in the Research, Education, and Economics mission area reported nine key performance indicators for their administrative services, such as specific goals and measures for the timeliness of posting job opportunity announcements. Developing appropriate performance goals and measures and systematically assessing the effectiveness and impact of the business center reforms could help the department determine whether the reforms are meeting the Secretary’s overarching policy goals and improving the delivery of administrative services to support the department’s mission and program goals. USDA has established business centers in all of its eight mission areas, and, according to USDA’s Deputy Assistant Secretary for Administration, the department regularly reviews data on administrative services, including services provided by the business centers. However, the department has not systematically assessed whether USDA’s ability to deliver its administrative services has improved since the establishment of its business center reforms or whether the reforms are meeting the policy goals that the Secretary intended them to achieve. Importantly, the department has not assessed the impact that the business centers have had on USDA’s customer service; human resources, including hiring; and overall functionality. Our prior work has shown that a key practice to consider during agency reform efforts is the establishment of clear outcome-oriented goals and performance measures to assess the reform’s effectiveness and impact. The department has set goals for a limited number of administrative services, including hiring, the number of fleet vehicles, and travel and conference spending, but it has not developed goals and measures to more broadly assess the effectiveness and impact of the business center reforms. Developing such goals and measures and using them to assess the effectiveness and impact of the business center reforms could help the department (1) determine whether the reforms are meeting the Secretary’s overarching policy goals and (2) identify whether the reforms have enabled mission areas to improve the delivery of their administrative services by, for example, reducing costs, reducing processing times, or identifying previously unknown issues that need to be addressed. The Secretary of Agriculture should direct Departmental Administration to work with the mission areas to develop department-level outcome- oriented performance goals and related measures for the business centers, and use them to assess the effectiveness and impact of the business center reforms. (Recommendation 1) We provided a draft of this report to USDA for comment. In an email, a Senior Advisor in USDA’s Office of Operations stated that USDA agreed with our recommendation about assessing the effectiveness and impact of the business centers. In addition, in comments, reproduced in appendix II, USDA generally agreed with the findings in our draft report. USDA stated that to address our recommendation, the department is evaluating options for the development of performance metrics and inclusion of these metrics and related information as part of the regular and recurring reviews by the department’s Deputy Secretary who is identified as the Chief Operating Officer. We are sending copies of this report to the appropriate congressional committees, the Secretary of Agriculture, and other interested parties. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or your staff members have any questions regarding this report, please contact me at (202) 512-3841 or morriss@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. Since the U.S. Department of Agriculture (USDA) established the Farm Production and Conservation (FPAC) Business Center in October 2018, Congress has appropriated a total of about $294 million to USDA for necessary expenses of the FPAC Business Center. USDA has also approved $1.1 million for efforts to modernize information technology at the center through fiscal year 2020. USDA has supported the FPAC Business Center with discretionary and mandatory appropriations. USDA budget documents and congressional report language indicate that these appropriations have been accompanied by corresponding reductions in funding to the other three agencies within the FPAC mission area—the Farm Services Agency (FSA), Natural Resources Conservation Service (NRCS), and Risk Management Agency (RMA). For fiscal year 2018, the Consolidated Appropriations Act, 2018, provided discretionary appropriations of about $1.0 million to the FPAC Business Center and further provided for the transfer into the FPAC Business Center account of another $145,000 in mandatory appropriations. Subsequent USDA budget justification documents state that the $145,000 included funds directed towards three NRCS programs—the Environmental Quality Incentives Program (EQIP), Conservation Stewardship Program (CSP), and Agricultural Conservation Easement Program (ACEP). As shown in table 3, for fiscal year 2019, the Consolidated Appropriations Act, 2019, provided for the FPAC Business Center to receive discretionary appropriations of about $216.4 million, an amount that an accompanying conference report states was offset by reductions to the appropriations for administrative functions in FSA, NRCS, and RMA; a transfer of about $16.1 million in discretionary appropriations from FSA’s Agricultural Credit Insurance Fund Program Account; and a transfer of about $60.2 million in mandatory appropriations that, according to USDA officials, came from the same three NRCS programs as in 2018 (EQIP, CSP, and ACEP). According to USDA officials, prior to the establishment of the FPAC Business Center, these funds were used to support the salaries of FSA, NRCS, and RMA personnel performing functions and tasks similar to those provided by the business center and for general operating costs such as rents, information technology, travel, and training expenses. The FPAC Business Center plans its spending and tracks its obligations using standard categories, including personnel compensation, benefits, travel, transportation, postage, contracts, supplies, and equipment. As shown in table 4, the FPAC Business Center planned to spend funds only for personnel compensation and benefits in fiscal year 2018. According to data provided by USDA, the business center obligated about $995,000 of the nearly $1.2 million in available funds, and those obligations were entirely for personnel compensation and benefits. In fiscal year 2019, the business center planned to obligate nearly 74 percent of the $292.7 million in available funds on personnel compensation and benefits, about 18 percent on contracts, about 8 percent on travel, and the rest on other activities. According to USDA officials, through the end of the fiscal year, the business center had obligated approximately $272 million, or about 93 percent, of its available funds. For fiscal years 2018 through 2020, USDA approved an investment of $10 million for information technology modernization across all FPAC agencies, including the following two efforts to modernize information technology in the FPAC Business Center at an estimated cost of $1.1 million: The Modernized Directives System, approved at a cost of $600,000. According to USDA officials, the FPAC Business Center is funding this project from its salaries and expenses budget. According to USDA documents, the business center’s Management Services Division wants to provide all FPAC employees an online tool to create, authorize, disseminate, and manage all of the agency’s policy directives in an FPAC Consolidated Directives Repository while minimizing the costs of operations. According to the agency, the tool would streamline the tasks performed by the division’s administrative staff. FPAC plans to gauge the success of the effort by measuring adoption of the new tool by employees, stakeholders, and the public. The National Office Information System, approved at a cost of $500,000. According to USDA officials, $41,000 of that amount is from the FPAC Business Center’s budget for salaries and expenses, while the remaining $459,000 is funded by the other three FPAC agencies. According to USDA documents, this operations support system would improve the agency’s ability to respond in a timely manner to congressional and departmental inquiries and meet reporting requirements from the Office of Management and Budget and other oversight organizations. According to FPAC Business Center officials, the business center obligated $600,000 and $41,000, respectively, toward these two projects in fiscal year 2019. In addition to the contact named above, Nico Sloss (Assistant Director), Stephen Cleary (Analyst in Charge), Ross Campbell, Caitlin Dardenne, Juan Garay, Scott Heacock, Serena Lo, Cynthia Norris, Lauren Ostrander, and Sara Sullivan made key contributions to this report.

Summary: With budget authority of $146 billion in fiscal year 2018, USDA employs nearly 100,000 people organized into 13 major staff offices and eight mission areas comprising 18 agencies. In a November 2017 memorandum, the Secretary of Agriculture called for establishment of a business center in each mission area to provide consolidated administrative services. The memorandum identified three policy goals for these reforms: (1) improve customer engagement, (2) maximize efficiency, and (3) improve agency collaboration. The Agriculture Improvement Act of 2018 includes a provision for GAO to report on USDA's business centers. Among other things, this report examines the extent to which USDA has (1) established business centers and (2) assessed the effectiveness and impact of these business centers. GAO reviewed USDA documents and interviewed officials from USDA's Office of the Assistant Secretary for Administration, Office of Budget and Program Analysis, and eight mission areas about their efforts. GAO also interviewed representatives of USDA employee unions and USDA's external customers, such as farmers, for their perspectives on the establishment of the business centers. The U.S. Department of Agriculture (USDA) has established business centers to provide consolidated administrative services such as human resources and information technology in each of its eight mission areas, in keeping with reforms called for in a November 2017 memorandum from the Secretary of Agriculture. The business centers vary in when they were established; three preceded the Secretary's memorandum (see figure). Typically, each business center is located within one of the mission area's component agencies, and the center's leader reports directly to agency leadership. According to a USDA official, the department regularly reviews data on administrative services, including services provided by the business centers. However, the department has not assessed the effectiveness and impact of its business centers and as of November 2019, did not plan to do so. Beginning in 2018, USDA created an online monitoring system to compile data on the status of administrative services, with “dashboards” displaying data specific to different administrative services, among other things. However, the department has not used dashboards or associated metrics to assess the effectiveness and impact of the business centers, including their impact on USDA's customer service; human resources, including hiring; and overall functionality. GAO's prior work has shown that a key practice to consider during an agency's reform efforts is establishing clear outcome-oriented goals and performance measures to assess the reform's effectiveness and impact. Developing appropriate performance goals and systematically assessing the effectiveness and impact of the business center reforms could help the department determine whether the reforms are meeting the Secretary's overarching policy goals and improving the delivery of administrative services to support the department's mission and program goals. GAO recommends that USDA establish department-level outcome-oriented performance goals and related measures for the business centers, and use them to assess the effectiveness and impact of the business center reforms. USDA agreed with the recommendation.