In our June 2003 testimony on the FBI’s reorganization before the House Appropriations Subcommittee on Commerce, Justice, State, the Judiciary and Related Agencies, we reported that the FBI had made progress in its efforts to transform the agency, but that some major challenges continued. We also noted that any changes in the FBI must be part of, and consistent with, broader, government-wide transformation efforts that are taking place, especially those resulting from the establishment of the Department of Homeland Security and in connection with the intelligence community. We also noted that to effectively meet the challenges of the post- September 11, environment, the FBI needed to consider employing key practices that have consistently been found at the center of successful transformation efforts. These key practices are to ensure that top leadership drives the transformation, establish a coherent mission and integrated strategic goals to guide the transformation, focus on a key set of principles and priorities at the outset of the transformation, set implementation goals and a time line to build momentum and show progress from day one, dedicate an implementation team to manage the transformation use the performance management system to define responsibility and ensure accountability for change, establish a communication strategy to create shared expectations and report related progress, involve employees to obtain their ideas and gain their ownership for the transformation, and build a world-class organization that continuously seeks to implement best practices in processes and systems in areas such as information technology, financial management, acquisition management, and human capital. Today, we continue to be encouraged by the progress that the FBI has made in some areas as it continues its transformation efforts. Specifically worthy of recognition are the commitment of Director Mueller and senior- level leadership to the FBI’s reorganization; the FBI’s communication of priorities; the implementation of core reengineering processes to improve business practices and assist in the bureau’s transformation efforts; the dedication of an implementation team to manage the reengineering efforts; the development of a strategic plan and a human capital plan; the efforts to involve employees in the strategic planning and reengineering processes; and the FBI’s efforts to realign its activities, processes, and resources to focus on a key set of principles and priorities. While the FBI has embedded crosswalks and timelines in their various transformation plans that relate one plan to another, we still encourage the development of an overall transformation plan that will pull all of the pieces together in one document. This document can be both a management tool to guide all of the efforts, as well as a communication vehicle for staff to see and understand the goals of the FBI. It is important to establish and track intermediate and long-term transformation goals and establish a timeline to pinpoint performance shortfalls and gaps and suggest midcourse corrections. By demonstrating progress towards these goals, the organization builds momentum and demonstrates that real progress is being made. We will continue to review this issue. When we last testified in June 2003, the FBI was in the process of compiling the building blocks of a strategic plan. At that time it was anticipated that the plan would be completed by the start of fiscal year 2004. Although delayed by about 5 months, the FBI has since completed its strategic plan. FBI officials indicated that the implementation of two staff reprogrammings and delays in the appropriation of its fiscal year 2003 and fiscal year 2004 budget, as well as initiatives undertaken to protect the homeland during the war in Iraq, delayed the completion of the strategic plan. Overall we found the plan has some important strengths as well as some areas in which improvements could be made. The strategic plan includes key elements of successful strategic plans, including a comprehensive mission statement; results-oriented, long-term goals and objectives; and approaches to achieve the goals and objectives. The FBI plan presents 10 strategic goals that appear to cover the FBI’s major functions and operations, are related to the mission, and generally articulate the results in terms of outcomes the FBI seeks to achieve. For example, one of the plan’s strategic goals is “protect the United States from terrorist attack;” another goal is “reduce the level of significant violent crime.” The plan also lists strategic objectives and performance goals for each long-term strategic goal. However, the performance goals do not appear to be outcomes against which the FBI will measure progress; rather they appear to describe approaches or be key efforts that FBI will undertake to achieve its long-term strategic goals and objectives. Importantly, the plan acknowledges that the FBI faces competing priorities and clearly articulates its top 10 priorities, in order of priority. The strategic plan also frequently discusses the role partnerships with other law enforcement, intelligence, and homeland security agencies will play in achieving the plan’s goals. The plan discusses the FBI’s approach to building on its internal capacity to accomplish its mission-critical goals by improving management of human capital, information technology, and other investigative tools. The plan also discusses the external factors, such as global and domestic demographic changes and the communications revolution, which have driven the development of its strategic goals. Although the FBI has addressed several key elements in its strategic plan, the plan needs more information on other elements of strategic planning that we have identified as significant to successful achievement of an organization’s mission and goals. FBI officials indicated that some of these elements are available in other documents and were not included in the plan for specific reasons. As the FBI moves forward with its new strategic planning and execution process, it should consider addressing in its strategic plan the following key elements: Involving Key Stakeholders: As we have previously testified, any changes at the FBI must be part of, and consistent with, broader governmentwide transformation efforts that are taking place, especially those resulting from the establishment of the Department of Homeland Security and in connection with changes in the intelligence community. Successful organizations we studied based their strategic planning, to a large extent, on the interests and expectations of their stakeholders. Federal agency stakeholders include Congress and the administration, other federal agencies, state and local governments, third-party service providers, interest groups, agency employees, and, of course, the American public. Involving customers served by the organization—such as the users of the FBI’s intelligence—is important as well. The FBI strategic plan does not describe which stakeholders or customers, were involved or consulted during the plan’s development or the nature of their involvement. Such information would be useful to understanding the quality of the planning process FBI has undertaken and the extent to which it reflect the views of key stakeholders and customers. Consultation provides an important check for an organization that they are working toward the right goals and using reasonable approaches to achieve them. Relationship between Strategic and Annual Goals: Under GPRA, agencies’ long-term strategic goals are to be linked to their annual performance plans and the day-to-day activities of their managers and staff. OMB guidance states that a strategic plan should briefly outline (1) the type, nature, and scope of the performance goals being included in annual performance plans and (2) how these annual performance goals relate to the long-term, general goals and their use in helping determine the achievement of the general goals. Without this linkage, it may not be possible to determine whether an agency has a clear sense of how it will assess the progress made toward achieving its intended results. It is not clear from the plan how the FBI intends to measure its progress in achieving the long-term strategic goals and objectives because the plan’s strategic objectives and performance goals are not phrased as performance measures and the plan does not describe or make reference to another document that contains annual performance measures. The plan also lacks a discussion of the systems FBI will have in place to produce reliable performance and cost data needed to set goals, evaluate results, and improve performance. According to an FBI official and documents the FBI provided, the FBI has developed “performance metrics” for each of its strategic goals. External and Internal Factors that Could Affect Goal Achievement: While the plan clearly communicates how its forecast of external drivers helped to shape the FBI’s strategy, the plan does not discuss the external and internal factors that might interfere with its ability to accomplish its goals. External factors could include economic, demographic, social, technological, or environmental factors. Internal factors could include the culture of the agency, its management practices, and its business processes. The identification of such factors would allow FBI to communicate actions it has planned that could reduce or ameliorate the potential impact of the external factors. Furthermore, the plan could also include a discussion of the FBI’ s plans to address internal factors within its control that could affect achievement of strategic goals. The approach the FBI plans to take to track its success in achieving change within the agency should be an integral part of FBI’s strategy. A clear and well- supported discussion of the external and internal factors that could affect performance could provide a basis for proposing legislative or budgetary changes that the FBI may need to accomplish the FBI’s goals. Role of Program Evaluation in Assessing Achievement of Goals and Effectiveness of Strategies: Program evaluations can be a potentially critical source of information for Congress and others in ensuring the validity and reasonableness of goals and strategies, as well as for identifying factors likely to affect performance. Program evaluations typically assess the results, impact, or effects of a program or policy, but can also assess the implementation and results of programs, operating policies, and practices. The FBI’s strategic plan does not explicitly discuss the role evaluation played in the development of its strategic plan or its plans for future evaluations (including scope, key issues, and time frame), as intended by GPRA. The FBI has redesigned its program evaluation process and updated the performance metric for each program. This information could have been, but was not included in the strategic plan. As discussed elsewhere in this testimony, the FBI has a series of reengineering efforts under way that relate to six core processes they are seeking to transform. A discussion of how these reengineering efforts relate to and support the achievement of the FBI’s strategic goals would be a useful addition to the FBI’s strategic plan.