We reviewed department-wide human capital and resource management efforts for all objectives. We also selected four HUD program offices for further review that (1) had the largest number of FTEs, (2) were included in HUD’s agency priority goals for fiscal years 2012 to 2013, and (3) appeared in HUD’s annual performance plans for fiscal years 2012 to 2013. Three of the program offices—the Office of Community Planning and Development, the Office of Public and Indian Housing, and the Office of Fair Housing and Equal Opportunity—provide illustrative examples of planning and processes. In addition to those three offices, we used our prior work to gather information about HUD’s planning and processes in a fourth program office, the Office of Housing, which is HUD’s largest program office.those we did not include in our review. The findings from this work cannot be generalized to To review HUD’s strategic human capital and workforce planning efforts, we compared HUD’s planning efforts to the Office of Personnel Management’s (OPM) Human Capital Assessment and Accountability Framework. We also reviewed OPM’s June 2012 report on HUD’s human capital management and the key principles described in our prior reports on workforce planning to inform our efforts.methodology and found that it was reasonable for our purposes. We reviewed OPM’s To review the extent to which HUD’s resource management system reflects identified standards, we reviewed HUD documents describing its activities and compared them to the identified standards in the National Academy of Public Administration (NAPA) report for developing an effective resource management system for HUD. To understand how clearly HUD presents its rationale behind staff resource requests, we reviewed congressional budget justifications (CBJ) and met with HUD appropriations subcommittee staff, as they are the primary users of this information. For all objectives, we interviewed relevant HUD officials in the offices of the Chief Financial Officer and the Chief Human Capital Officer and in the selected program offices. We conducted this performance audit from July 2012 to March 2013 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. As noted earlier, HUD has faced longstanding challenges with staff resource estimation and management. To improve its ability to estimate FTEs and support budget requests, in 1999, HUD partnered with NAPA to develop standards for a resource estimation and allocation process. NAPA identified standards for HUD to (1) adopt a resource management methodology with estimates and allocations based on anticipated work and where it is to be performed; (2) include all of the departmental responsibilities in a resource estimation system; (3) identify work that can be accomplished with current staffing levels, which tasks must be done less often or are no longer required, and which tasks are to be contracted out; and (4) include a resource validation component that accurately measures actual staff activities. HUD agreed and appendix II provides additional detail on these standards. HUD intended that the resource estimation and allocation process it developed known as REAP would produce analytically-based data upon which HUD could accurately determine staff needs in relation to program requirements. REAP is composed of three components: resource estimation, validation, and allocation. Figure 1, an interactive graphic, illustrates the original design of REAP (see appendix I for more information). While the allocation component was piloted in the Office of Fair Housing and Equal Opportunity, ultimately it was not implemented agency-wide. As shown in the timeline in Figure 2, HUD’s present staff resource management efforts began with the development of REAP. Within HUD, the Office of the Chief Human Capital Officer has responsibility for developing HUD’s department-wide human capital and workforce plans. These plans set the tone for identifying an agency’s workforce goals and determining the activities and initiatives needed to achieve those goals. The Office of the Chief Human Capital Officer is also responsible for providing guidance to program offices in assessing their needs, performing workload analyses, and creating hiring plans. The Office of the Chief Financial Officer oversees HUD’s budget formulation and submission to Congress. In addition, each program office has its own budget office that formulates requests for its individual program office. These budget offices submit their requests to the Office of the Chief Financial Officer for consideration. According to the officials, this approach provides the program offices with flexibility to estimate their workload and staff resource needs. In April 2012, the Office of the Chief Human Capital Officer began soliciting a contractor to help HUD conduct a workforce analysis and update both the human capital and workforce plans. However, HUD placed award of the contract on hold while related initiatives were being evaluated. HUD then delayed this effort when its newly appointed Deputy Secretary requested information on the workforce planning process that established a workforce planning task force, among other things. The original target date for completion of these plans was September 30, 2012. However, as a result of the delay stemming from the creation of the new workforce planning task force, HUD signed the contract for the development of the workforce and human capital strategic plans in September 2012. According to officials, HUD has since modified the timeline for deliverables and the plans are now expected to be completed no later than fiscal year 2014. Although this contract is an example of HUD’s centralized efforts to prioritize human capital and workforce planning, the contract does not specify which years the plans will cover and calls for development of “multi-year” plans, starting in fiscal year 2012. HUD officials said that they will align the end date for the plans with the department’s strategic plan, which is currently applicable through 2015. By definition, plans should be forward looking, but once HUD’s plans are completed, the first two years—fiscal years 2012 and 2013— will have elapsed. In comments on a draft of this report, HUD stated its intention to modify the contract deliverables to reflect fiscal years 2014 and future years. Further, HUD stated in its comments that the deliverables will also be amended based on any changes caused by a revision to HUD’s strategic plan. According to the contract, the human capital plan is to be developed to align with OPM’s Human Capital Assessment and Accountability Framework.the desired outcomes and, among other things, identify strategies to: The contract states that the plans are supposed to outline provide a roadmap for accomplishing the mission and implementing HUD’s strategic plan goals; recruit, retain, and train a workforce with the skills and abilities to fulfill HUD’s responsibilities; and provide metrics to determine the effectiveness of the plan. According to HUD, the plan will support decision-making and prioritization of human capital initiatives. Separately, the contract states that the workforce plan must identify the human capital required to meet HUD’s organizational goals, conduct analyses to identify and close competency gaps, develop strategies to address human capital needs, and ensure that HUD is appropriately structured. The workforce plan is also to: link directly to HUD’s strategic plan and be used in decision-making for structuring and deploying the workforce; ensure mission-critical occupations and competencies are identified identify current and future workforce competencies; and implement a business forecasting process that identifies probable workforce changes, enabling HUD’s managers to anticipate changes in human capital that require action to ensure mission accomplishment. While HUD is continuing centralized planning efforts, some of its program offices are performing workload or workforce analysis to produce more specific information at the program level. For example, the Office of Community and Planning Development maintains a workforce and staffing plan that outlines all of the current positions and historical vacancies within the office. Similarly, the Office of Public and Indian Housing maintains a workload management tracking report that manages and tracks work activities that directly impact critical strategic and management plan goals. Both the Office of Community Planning and Development and the Office of Public and Indian Housing submit hiring plans to the Offices of the Chief Human Capital Officer and the Chief Financial Officer for review and input. Further, in 2011, we reported that the Federal Housing Administration addressed staffing challenges in its Office of Single Family Housing to some extent by hiring more contractors; increasing overtime; sharing resources among homeownership centers; and changing business processes to minimize loan reviews. In 2012, the Federal Housing Administration developed a workforce analysis and succession plan for the Office of Single Family Housing that included its future workforce planning priorities and strategies. Workforce analysis at the program office level is necessary and provides the offices flexibility and foresight in decision-making and devising FTE requests. Our prior work has shown that human capital and workforce planning are essential elements of an agency’s infrastructure. Each agency is responsible for ensuring that its human capital program capitalizes on its workforce’s strengths and addresses related challenges in a manner that is clearly linked to achieving the agency’s mission, goals, and objectives. Operationally, HUD interprets workforce planning and human capital planning as separate processes that are intended to support each other. According to an official in the Office of the Chief Human Capital Officer, workforce planning identifies the positions, skills, and competencies that will be required to continue HUD’s mission and service delivery requirements into the future. Separately, human capital planning in HUD is focused on current employees and includes activities such as performance management and employee retention. HUD’s most recent human capital and workforce plans expired in 2009. Although HUD has since launched several workforce planning efforts, it reported that these efforts were preempted by other priorities. According to HUD, when the administration changed in 2009, HUD was immediately immersed in the economic crisis that fell upon the housing market and nearly all of its attention was focused on implementation of the American Recovery and Reinvestment Act of 2009.