In March 2003, DHS began operations and set about the daunting task of merging 22 separate and autonomous federal agencies with homeland security-related missions under the centralized leadership of a single department. In doing so, DHS assumed operational control of about 209,000 civilian and military positions from these agencies. As we have previously reported, the creation and transformation of DHS is critically important and poses significant management and leadership challenges, and failure to address these challenges could have serious consequences for our national security. Consequently, in 2003, we first designated the department’s implementation and transformation as high risk, and we continue to do so today. IT is a critical tool in DHS’s quest to transform itself and carry out the department’s critical missions on a day-to-day basis. For fiscal year 2008 alone, the department is requesting almost $4 billion in IT budgetary authority. The department’s ability to effectively and efficiently invest these funds and deliver IT systems and infrastructure that perform as intended depends in large part on the capabilities of its IT human capital. As we have reported, DHS and the other federal agencies historically have been challenged in their ability to strategically manage human capital. For this reason, we first designated strategic human capital management as a governmentwide high-risk area in 2001, and we continue to do so today. To accomplish its mission, the department is organized into various agencies and directorates, each of which is responsible for specific homeland security missions and for coordinating related efforts with other DHS organizations, as well as external entities. Table 1 shows DHS’s principal organizations and their respective missions. Within DHS, responsibility for IT human capital management resides with the Management Directorate—specifically, the Offices of the CIO and the CHCO—and with component agency CIO and human capital offices. More specifically, the management directive of the DHS Office of the CIO’s states that the office is responsible for leveraging the best available technologies and applying proven IT management and human capital practices to provide shared services, coordinate acquisition strategies, maintain an enterprise architecture, and advocate and enable business transformation, among other things. To assist in managing these matters, DHS established the DHS CIO Council made up of the CIOs from each of DHS’s component organizations. The council identified eight priorities, including IT human capital, and for each priority, it assigned an executive sponsor that is responsible for overseeing the department’s efforts in that area. The council also established the IT Human Capital Resource Center (formerly called the IT Human Capital Center of Excellence) to support the council and the executive sponsor responsible for IT human capital. In short, the center is responsible for setting a DHS-wide vision and strategy for IT human capital and the functions that IT staff perform. The center is staffed by the component CIO organizations and, among other things, is responsible for coordinating the implementation of the department’s IT human capital initiatives. Figure 1 shows a simplified and partial DHS organizational structure, including the CIO IT human capital-related entities. According to the DHS overall strategic human capital plan, which covers IT and non-IT personnel, the Office of the CHCO is responsible for implementing initiatives to achieve strategic human capital goals in support of the department’s mission. With regard to IT, this includes planning and managing human capital to meet current and future mission needs, recruiting a high-quality workforce, developing a strong and capable workforce, motivating and retaining high performers, and fostering a culture of continuous learning and improvement. It also includes applying human capital best practices in carrying out these responsibilities. Each of the department’s component agencies has its own CIO and human capital director to, among other things, manage the implementation of their respective IT human capital initiatives. According to DHS, this includes recruiting staff to close competency and skill gaps, coordinating and delivering mission-essential training, analyzing workforce data, and aligning component human capital plans with the department human capital plans to achieve agency and department missions. To accomplish its mission, DHS relies extensively on IT. For example, in fiscal year 2007, about $4.16 billion dollars in funding was requested to support 278 major IT programs. Table 2 shows the fiscal year 2007 IT funding for key DHS components. To manage the use of these funds and carry out these programs, the department reports that it employs about 2,600 IT personnel. While these personnel represent about 1 percent of the department’s total workforce, they nonetheless perform critical mission functions. Specifically, IT personnel develop, manage, and operate mission-critical systems that are intended to unify the department under a common IT infrastructure and to facilitate agencies’ ability to analyze intelligence to identify threats, guard U.S. borders and airports, protect critical infrastructure, coordinate national responses to emergencies, and implement other security measures. Moreover, IT staff track and oversee the efforts of a sizable workforce of support contractors. According to DHS, the need to successfully manage its IT human capital is essential to effectively and efficiently leveraging technology in achieving the department’s mission. This need is compounded by the fact that the department faces major near-term IT human capital challenges. For example, DHS estimates that between 2005 and 2010, approximately 35 percent of its IT workforce will be eligible for retirement. Moreover, it reports that in light of the continued growth in demand of experienced IT professionals and the high rate of turnover experienced thus far, the department faces significant risk of critical skill shortages, which could hamper its mission imperatives. During the last 3 years, we have reported on the importance of DHS adopting a strategic approach to addressing its IT human capital challenges. For example, in August 2004, we reported that DHS had begun strategic planning for IT human capital at the headquarters level, but it had not yet systematically gathered baseline data about its existing workforce. We also reported on CIO staffing concerns and slow progress in this area. Accordingly, we recommended that the department analyze whether it had appropriately allocated and deployed IT staff with the relevant skills to obtain its institutional and program-related goals. In response, the DHS CIO approved funding for the IT Human Capital Resource Center in July 2004. Among other things, the center subsequently began work to complete an IT human capital plan. Consistent with our recommendation, the center was to ensure that the completed plan provided for an analysis of IT workforce skill sets. In May 2005, the DHS CIO issued a draft version of the IT human capital plan. This draft version was sent to the Senate and House Appropriations Committees on August 30, 2006, as part of the CIO’s report pursuant to requirements in DHS’s fiscal year 2006 appropriations act. According to the CIO Council senior executive leading the effort to develop this plan, it was developed in partnership with the DHS CHCO’s office and intended to direct the department’s IT human capital efforts. In March 2006, we testified on a number of IT human capital and other management challenges at DHS. We noted that DHS had undertaken a departmentwide human capital initiative, MAXHR, which was to provide greater flexibility and accountability in the way employees are paid, developed, evaluated, afforded due process, and represented by labor organizations. Part of this initiative involved the development of departmentwide workforce competencies. We testified that the department had intended to implement MAXHR in the summer of 2005 but had encountered delays. More recently, DHS officials stated that MAXHR had been canceled and is to be replaced by another initiative called the Human Capital Operational Plan. In May 2007, we reported that while DHS continues work to develop and implement departmentwide human capital initiatives, its overall progress in managing its IT and non-IT human capital had been limited. Since 2002, we have also reported on human capital management weaknesses associated with key DHS IT programs. For example: In September 2005, we reported that the program office for the Atlas program was not adequately staffed. Accordingly, we recommended that the Atlas program conduct a staffing needs assessment to determine the positions and the level of staffing needed for all Atlas projects, and that it develop a human capital strategy for meeting its staffing needs. DHS agreed with our recommendations and has since completed a needs assessment, developed a human capital strategy, and used it to staff the program office and projects. In February 2006, we reported that the US-VISIT program had developed a human capital strategy, as we had recommended 2 years earlier, and had begun implementing it. However, we also reported that several activities in the plan had not been implemented, such as assessing the extent of current employees’ competency gaps and developing a listing of competency-based training courses. To address this shortfall, among other things, the program recently developed a new human capital plan. We have not yet reviewed the new plan. In May 2006, we reported that the Automated Commercial Environment (ACE) program had yet to develop and implement a human capital management strategy, as we had recommended several years earlier. Instead, program officials told us that they were following a less formal approach to bolstering ACE’s workforce. Accordingly, we recommended that the department report to its appropriations committees on its strategy for managing ACE human capital needs. DHS agreed with our recommendation and has since been working to develop a strategy. A strategic approach to human capital management includes viewing people as assets whose value to an organization can be enhanced by investing in them. Such an approach enables organizations to effectively use their people and determine how well they integrate human capital considerations into daily decision making and planning for mission results. It also helps organizations remain aware of and be prepared for current and future needs as an organization, ensuring that they have the knowledge, skills, and abilities needed to pursue their missions. On the basis of our experience with leading organizations, we issued a model in 2002 for strategic human capital management. The model is built around four cornerstones: (1) leadership; (2) strategic human capital planning; (3) acquiring, developing, and retaining talent; and (4) results- oriented organizational cultures. We also issued a set of key practices in 2003 for effective strategic human capital management.