United States General Accounting Office GAO TESTIMONY Subcommittee on Commerce Justice State and the Judiciary Committee on Appropriations House of Representatives For Release on Delivery Expected at 10 00 a m EDT Friday June 21 2002 FBI REORGANIZATION Initial Steps Encouraging but Broad Transformation Needed Statement of David M Walker Comptroller General of the United States GAO GAO-02-865T Mr Chairman and Members of the Subcommittee I appreciate the opportunity to discuss the Federal Bureau of Investigation’s proposed reorganization and realignment efforts My testimony today will address five topics First it is very important to recognize that the FBI’s reorganization efforts represent a subset of a larger need to fundamentally transform the federal government in light of recent trends and long-range fiscal challenges This transformation should include a review reassessment and reprioritization of what the government does how it does business and who does the government’s business Second I will comment on major aspects of the FBI’s approach to realign its resources touching on both the promise of these efforts and the challenges yet to be faced Third I will surface other issues important to the success of the plan that are not specifically addressed in this phase of the FBI’s reorganization Fourth as the FBI moves forward I want to underscore the importance of adherence to some basic elements needed to ensure a successful transformation Finally I want to emphasize the importance of congressional oversight to the successful implementation of transformational changes like those planned by the FBI To prepare this testimony we reviewed 1 the reorganization and reprogramming documents submitted by the Department of Justice DOJ to this Subcommittee on May 29 2002 2 our prior work on organization transformation and on the FBI 3 studies of counterterrorism and or FBI operations conducted by various commissions an advisory panel1 DOJ’s Office of Inspector General and a management consultant2 4 strategic plans and other related documents developed by the Bureau and DOJ and 5 pertinent press releases and congressional testimony by DOJ and FBI officials We also interviewed selected current and former Justice and FBI officials concerning the reorganization and its context We did our work between May 30 2002 and June 20 2002 1 The Second Report of the Advisory Panel to Assess Domestic Response Capabilities for Terrorism Involving Weapons of Mass Destruction Gilmore Report Dec 15 2001 2 Arthur Anderson Management Study of the Federal Bureau of Investigation Dec 14 2001 Page 1 GAO-02-865T As you know our country’s transition into the 21st Century is characterized by a number of key trends including global interdependence diverse diffuse and asymmetrical security threats rapidly evolving science and technologies dramatic shifts in the age and composition of our population important quality of life issues and evolving government structures and concepts Many of these trends are intertwined and they call for a reexamination of the role of government in the 21st Century given changing public expectations 3 Leading public and private organizations here in the United States and abroad have found that for organizations to successfully transform themselves they must often change their culture Leading organizations also understand that their people processes technologies and environments are the key enablers that drive cultural change For governmental entities this evolution generally entails shifts away from Broader Transformation of Government Needed • • • • • • • • • • process to results stovepipes to matrixes hierarchical to flatter and more horizontal structures an inward focus to an external citizen customer and stakeholder focus management control to employee empowerment reactive behavior to proactive approaches avoiding new technologies to embracing and leveraging them hoarding knowledge to sharing knowledge avoiding risk to managing risk and protecting turf to forming partnerships While transformation across government is critically important to successful transition into the 21st century it is of utmost importance at the FBI This is the agency at the front line of defending the public and our way of life from a new and lethal threat that of terrorism against Americans At the same time the FBI maintains the responsibility for investigations of other serious federal crimes Every American has a stake in assuring the success of the FBI’s efforts The FBI is a unique organization comprised of thousands of devoted and capable public servants who live and breathe the agency’s motto of fidelity bravery and integrity everyday The FBI has a long and proud history and it does many things well But times have changed and the FBI must change with the times in considering what it does and how it does business At the same time the motto itself is timeless in nature Any changes at the FBI must be 3 U S General Accounting Office Strategic Plan 2002-2007 June 2002 Page 2 GAO-02-865T part of and consistent with broader governmentwide transformations that are taking place This is especially true as the establishment of a Department of Homeland Security is debated and put into place Moreover Director Mueller had noted that the FBI reorganization and realignment efforts that we are discussing today are just the second phase in a comprehensive effort that he is planning to address a broad range of management and organizational challenges This is in effect a down payment on a huge undertaking Director Mueller has taken the first and most important step in successfully undertaking the needed transformation at the FBI—he has demonstrated his personal commitment through his direct involvement in developing and leading the Bureau’s transformation efforts He has recognized a need to refocus priorities to meet the demands of a changing world and is now taking first steps to realign resources to achieve his objectives His continued leadership coupled with the involvement of other senior executives at the FBI and clear lines of accountability for making needed improvements will be critical if the effort is to succeed These factors are prerequisites to overcoming the natural resistance to change marshalling the resources needed to improve the Bureau’s effectiveness and building and maintaining the FBI-wide commitment to new ways of doing business The Director is early in his 10-year term This should prove very helpful because the experiences of leading organizations suggest that given the enormous challenges the FBI faces successfully completing needed cultural and other transformations may take up to 7 or more years At the same time some steps are critical and time sensitive As a result the FBI needs to develop a comprehensive transformation plan with key milestones and assessment points to guide its overall transformation efforts Major Aspects of the FBI’s Realignment Efforts FBI Director Mueller unveiled the second phase of the reorganization at a news conference on May 29 and discussed it further at a hearing before the Senate Judiciary Committee on June 6 2002 These proposed changes are designed to build on the initial reorganization actions Director Mueller took in December 2001 These earlier actions were to strengthen the FBI’s top-level management structure enhance accountability reduce executive span of control and establish two new divisions for Records Management and Security The central thrust of this next phase of the reorganization plan is to build an FBI with a national terrorism response capability that is larger and more mobile agile and flexible The key elements of this second installment of the reorganization include a shifting of some resources from long-standing areas of focus such as drugs to Page 3 GAO-02-865T counterterrorism and intelligence building analytic capacity and recruiting to address selected skill gaps In light of the events of September 11 2001 this shift is clearly not unexpected and is in fact consistent with FBI’s 1998 Strategic Plan as well as the current Department of Justice Strategic Plan Since September 11 unprecedented levels of FBI resources have been devoted to counterterrorism and intelligence initiatives with widespread public approval Indeed the goals of this phase of the reorganization plan are not highly controversial Enhancement of resources for counterterrorism greater sharing of information with the Central Intelligence Agency CIA and others improvements in analytic capacity establishment of a centralized intelligence unit to make sense out of the gathered information more training and recruitment of specialists all seem to be rational steps to building agency capacity to fight terrorism However some specific aspects of the plan should be highlighted Realigning Staff A key element of the reorganization is to “redirect FBI’s agent workforce to ensure that all available energies and resources are focused on the highest priority threat to the nation i e terrorism ” This shift is intended to move the FBI from a reactive mode of operation to a more proactive orientation The primary goal is to prevent terrorism rather than investigate and apprehend after an event occurs The FBI has been involved in proactive counterterrorism work for some time This reorganization is intended to make a greater commitment In accordance with the goal some agents from drug white collar and violent crime investigative work will shift their focus to counterterrorism Specifically the plan calls for 518 agents to be shifted—400 agents from drug work and 59 each from white collar and violent crime to be reassigned to work on counterterrorism security improvements and training Of the 518 agents being shifted 480 will be permanently reassigned to counterterrorism work In the case of drug enforcement this shift moves about 30 percent of the staff currently assigned to this activity to counterterrorism work For white collar and violent crime the shift is not as substantial representing about 2 5 percent and 3 percent of their staff years respectively Given the massive move of resources to counterterrorism following the events of September 11 this really represents fewer agents returning to their more traditional crime investigative work as opposed to agents moving away from current drug white collar and violent crime work According to FBI data the number of Page 4 GAO-02-865T field agents assigned to terrorism work jumped from 1 057 before September 11 to 6 390 immediately following the tragic events of that day FBI data show that a shift of 518 agents from drugs white collar crime and violent crime seems to do little to change the picture of the overall deployment of FBI special agent resources Counterterrorism agent resources go from about 15 percent of total agent resources to just under 20 percent Thus it seems that despite a change in priorities most of the FBI resources will remain devoted to doing the same types of work they have been doing in the past This realignment actually affects about five percent of the total FBI special agent workforce and therefore represents a relatively modest change in the focus of the Bureau as a whole at least for the present time Is this the right amount of resources to shift to counterterrorism at this time Is this too much Perhaps the more salient question is is this too little It is probably unrealistic to ask the FBI or anyone else for the answer to this question at this time given that the government’s information about the nature and extent of the terrorist threat is still evolving However this is a question that must be answered in due course based on a comprehensive threat assessment and analysis including the role the FBI and other government agencies should play in our future counterterrorism efforts According to the FBI the Special Agents in Charge SACs of the 56 field offices were asked to indicate how many agents could be redirected into terrorism work in their locations without unduly jeopardizing other investigative work In fact SACs generally volunteered more agents to shift to counterterrorism work than were actually shifted According to the FBI SACs were given general guidance but not specific guidelines or other directives upon which to base their decisions concerning reallocation of resources Thus for good or ill field offices may have used different criteria for determining how many resources could be reallocated FBI headquarters made final reallocation decisions based on resource needs requested by the Executive Assistant Director for Counterterrorism Counterintelligence Careful monitoring will be needed to ensure that the agents to be devoted to counterterrorism can be appropriately utilized and to what extent additional resources will be needed Conversely the impact of having fewer field agents working drug cases needs to be monitored and assessed over time Prior to September 11 2001 there was no indication from the FBI that their more traditional Page 5 GAO-02-865T crime areas were overstaffed FBI officials advised us that agents will still participate in as many crime-fighting taskforces as they have in the past but that the number of agents assigned to each effort will be fewer in order to free resources for counterterrorism work FBI officials also indicated that agents would be made available to assist state and local law enforcement with short-term needs such as adding agents when widespread arrests are planned In the drug area which is the hardest hit in this reallocation the Drug Enforcement Administration DEA is the major federal player While DEA’s resources have increased in recent years at this time we are not aware of any plans by DOJ to request additional resources for DEA to fill any gap that may be left by withdrawal of substantial FBI drug enforcement resources DEA has announced though that it will move some agents from headquarters to the field which could potentially help fill any gaps in federal-level drug law enforcement The reorganization plan also calls for a build-up of the FBI headquarters Counterterrorism Division through the transfer of 150 counterterrorism agents from field locations to Washington D C This seems consistent with the Director’s intention of shifting from a reactive to a proactive orientation in addressing terrorism and making counterterrorism a national program with leadership and expertise in headquarters and a response capability that is more mobile agile and flexible in terms of assisting the field offices These 150 positions would then be backfilled in the field through recruitment of new agents According to the FBI the enhancement of this headquarters’ unit is intended to build “bench strength” in a single location rather than have expertise dispersed in multiple locations When additional counterterrorism assistance is needed in field locations headquarters staff would be deployed to help Staff assigned to this unit would also be expected and encouraged through incentives to stay in counterterrorism work for an extended period of time Staying in place would help to ensure increasing the depth of skills rather than following the more usual FBI protocol of more frequent rotations through a variety of assignments An important part of the build-up of the Counterterrorism Division and making headquarters more responsive to the field according to the FBI is the establishment of “flying squads” with national level expertise and knowledge to enhance headquarters’ ability to coordinate national and international investigations and support field investigative operations The flying squads are intended to provide a “surge capacity” for quickly responding to and resolving unfolding situations and developments in Page 6 GAO-02-865T locations both within and outside the United States where there is a need to augment FBI field resources with specialized personnel or there is no FBI presence Another important part of the build-up is the establishment of a National Joint Terrorism Task Force to facilitate the flow of information quickly and efficiently between the FBI and other federal state and local law enforcement and intelligence agencies The national task force which is to be comprised of members of the intelligence community other federal law enforcement agencies and two major police departments is intended to complement and coordinate the already established 51 field office terrorism task forces Training is also essential to ensuring that resources shifted to counterterrorism work can be used most effectively There is no doubt that some of the skills needed for criminal investigations and intelligence work overlap with the skills needed for counterterrorism work There will however be a need for specialized training concerning terrorist organizations and tactics The FBI plans to fill this training need Director Mueller is planning a number of steps in this phase of the reorganization to align resources with priorities But a broader assessment of the organization in relation to priorities may identify other realignment issues Given the seeming disparity between priorities and resource allocation that will remain after the current realignment more resource changes may be needed Reconsideration may also be given to the field office structure Is the 56 field office configuration the most effective spread of staff in terms of location to achieve results in relation to the priorities of the 21st Century In December 2001 Director Mueller announced a headquarters reorganization that altered the number of layers of management But is more de-layering needed to optimize the functioning of the organization Director Mueller will also need to address significant succession planning issues According to a 2001 Arthur Anderson management study on the FBI about a quarter of the special agent workforce will be eligible to retire between 2001 and 2005 Of perhaps greater concern 80 percent of the Senior Executive Corps was eligible for retirement at the time of the Arthur Anderson review While the potential loss of expertise through retirements will be substantial this turnover also affords Director Mueller the opportunity to change culture skill mix deployment locations and other agency attributes Page 7 GAO-02-865T Building Analytic Capacity To build the capacity to prevent future terrorist attacks the FBI plans to expand its Office of Intelligence with an improved and robust analytical capability In the past the FBI has focused on case-specific analysis and on terrorism enterprise intelligence investigations intended to discern the structure scope membership and finances of suspect organizations Shortcomings in its analytical capabilities were identified by the FBI as far back as its 1998 strategic plan That plan stated that the FBI lacked sufficient quantities of high-quality analysts most analysts had little or no training in intelligence analysis and many lacked academic or other experience in the subject matter for which they were responsible Furthermore it stated that the FBI needed strategic analysis capability for spotting trends and assessing U S vulnerabilities to terrorist activities The events of September 11 and subsequent revelations highlight several of these continuing weaknesses The Office of Intelligence created in December 2001 as part of the first phase of the reorganization supports both counterterrorism and counterintelligence The Office will focus on building a strategic analysis capability and improving the FBI’s capacity to gather analyze and share critical national security information According to the FBI a new College of Analytical Studies at the FBI Academy will support the new Office by training analysts on the latest tools and techniques for both strategic and tactical analysis This is a long-term effort that is long overdue as is the need for technology that can support the analysts’ work Our May 2000 review of the Justice Department’s Campaign Finance Task Force found that the FBI lacked an adequate information system that could manage and interrelate the evidence that had been gathered in relation to the Task Force’s investigations 4 It is unclear how the FBI’s proposed analytical efforts will interrelate with the planned analytical capability of the proposed Department of Homeland Security The National Infrastructure Protection Center The National Infrastructure Protection Center NIPC at the FBI is the “national focal point” for gathering information on threats and facilitating the federal government’s response to computer-based incidents Specifically NIPC is responsible for providing comprehensive analyses on threats vulnerabilities and attacks issuing timely warnings on threats and 4 U S General Accounting Office Campaign Finance Task Force Problems and Disagreements Initially Hampered Justice’s Investigation GAO GGD-00-101BR Washington D C May 31 2000 Page 8 GAO-02-865T attacks and coordinating the government’s response to computer-based incidents In April 2001 we reported that multiple factors have limited the development of NIPC’s analysis and warning capabilities 5 These include the lack of a comprehensive governmentwide or national framework for promptly obtaining and analyzing information on imminent attacks a shortage of skilled staff the need to ensure that NIPC does not raise undue alarm for insignificant incidents and the need to ensure that sensitive information is protected At that time we recommended that NIPC develop a comprehensive written policy for establishing analysis and warning capabilities Although the Director of NIPC generally agreed with GAO’s findings and stated that the NIPC considers it of the utmost urgency to address the shortcomings identified we are not aware of any actions to address this recommendation The FBI reorganization plan calls for NIPC to be housed in the Cyber Division which is under the leadership of the Executive Assistant Director for Criminal Investigations This location seems inconsistent with ensuring that it focuses proactively on early warning as opposed to reactively The President’s plans for the Department of Homeland Security call for NIPC to be moved out of the FBI and into this new department Regardless of location a focus on enhancing its capabilities as outlined in our 2001 report is critical Recruiting The plan also calls for the recruitment of additional agents analysts translators and others with certain specialized skills and backgrounds In total the FBI is expected to hire 900 agents this year—about 500 to replace agents who are projected to be leaving the agency and 400 to fill newly created positions FBI officials stated that based on past experience they expect to be able to meet their agent-recruiting target and can accommodate the size of this influx at their training facilities However recruitment may become more difficult than in prior years because of the competing demand for qualified candidates particularly those with specialized skills e g technology languages and sciences from other law enforcement and commercial entities that are also planning to increase their investigative capacity this year This would include competition for qualified staff with the Transportation Security Administration and with the proposed Department of Homeland Security 5 U S General Accounting Office Critical Infrastructure Protection Significant Challenges in Developing National Capabilities GAO -01-323 Washington D C April 2001 Page 9 GAO-02-865T In January 2002 we reported on the need for additional translators and interpreters in four federal agencies including the FBI 6 We reported that of a total of about 11 4007 special agents at the FBI just under 1 800 have some foreign language proficiency with fewer than 800 about 7 percent having language skills sufficient to easily interact with native speakers Hiring new agents with foreign language proficiency especially those with skills in Middle Eastern and Asian languages is essential but could be difficult given competing market demands for their skills Obtaining security clearances and basic training will add additional time to the process of enhancing the FBI’s strength in language proficiency The FBI also uses part-time contract staff to meet translation and interpretation needs and to augment its 446 authorized translator and interpreter positions 55 of which are vacant at this time However counterterrorism missions may require flexibility that contract staff working part-time schedules cannot provide such as traveling on short notice or working extended and unusual hours While the FBI has shared linguistic resources with other agencies more opportunities for pooling these scarce resources should be considered Transformations of organizations are multifaceted undertakings The recently announced changes at the FBI focus on realignment of existing resources to move in the direction of aligning with the agency’s new priorities Earlier changes altered the FBI’s top-level management structure accountability and span of control A variety of issues will require the Director’s attention and that of others including Attorney General Ashcroft to successfully move the agency into the 21st Century Other Important Issues Related to the FBI Transformation These include • • • major communications and information technology improvements development of an internal control system that will ensure protection of civil liberties as investigative constraints are loosened and management of the ripple effect that changes at the FBI will have on other aspects of the law enforcement community 6 U S General Accounting Office Foreign Languages Human Capital Approach Needed to Correct Staffing and Proficiency Shortfalls GAO-02-375 Washington D C Jan 31 2002 7 This number includes special agents who are on reimbursable assignments Page 10 GAO-02-865T Communications has been a longstanding problem for the FBI This problem has included antiquated computer hardware and software including the lack of a fully functional e-mail system These deficiencies serve to significantly hamper the FBI’s ability to share important and time sensitive information with the rest of the FBI and across other intelligence and law enforcement agencies Sharing of investigative information is a complex issue that encompasses legal requirements related to law enforcement sensitive and classified information and its protection through methods such as encryption 8 It is also a cultural issue related to a tradition of agents holding investigative information close so as not to jeopardize evidence in a case Whereas in a more proactive investigative environment the need for more functional communication is of paramount importance and will be essential for partnering with other law enforcement agencies and the intelligence community Stated differently we do not believe the FBI will be able to successfully change its mission and effectively transform itself without significantly upgrading its communications and information technology capabilities This is critical and it will take time and money to successfully address In February 2002 as part of a governmentwide assessment of federal agencies we reported on enterprise architecture management needs at the FBI 9 Enterprise architecture is a comprehensive and systematically derived description of an organization’s operations both in logical and technical terms that has been shown to be essential to successfully building major information technology IT systems Specifically we reported that the FBI needed to fully establish the management foundation that is necessary to begin successfully developing implementing and maintaining an enterprise architecture While the FBI has implemented most of the core elements associated with establishing the management 8 Our February 2001 report entitled Information Security Advances and Remaining Challenges to Adoption of Public Key Infrastructure Technology GAO-01-277 discusses the challenges federal agencies face in implementing systems to protect the communication of such information Of equal concern to the FBI and other law enforcement agencies is the use of commercially available non-recoverable encryption products by terrorists and others engaged in serious criminal activity to prevent law enforcement from effectively using encrypted information obtained through electronic surveillances or seizure of electronic data This is attributable to the fact that law enforcement agencies cannot always obtain the means necessary to decrypt the encrypted information 9 U S General Accounting Office Information Technology Enterprise Architecture Use Across the Federal Government Can Be Improved GAO-02-6 Washington D C Feb 19 2002 Page 11 GAO-02-865T foundation it had not yet established a steering committee or group that has responsibility for directing and overseeing the development of the architecture While establishing the management foundation is an essential first step important additional steps still need to be taken for the FBI to fully implement the set of practices associated with effective enterprise architecture management These include among other things having a written and approved policy for developing and maintaining the enterprise architecture and requiring that IT investments comply with the architecture The successful development and implementation of an enterprise architecture an essential ingredient of an IT transformation effort for any organization and even more important for an organization as complex as the FBI will require among other things sustained commitment by top management adequate resources and time The Director has designated IT as one of the agency’s 10 priorities Although the FBI wishes to become a more proactive agency it needs to be cognizant of individuals’ civil liberties Guidelines created in the 1970’s to stem abuses of civil liberties resulting from the FBI’s domestic intelligence activities have recently been revised to permit agents to be more proactive For example these guidelines permit FBI presence at public gatherings which generally had been inhibited by the prior guidelines No information obtained from such visits can be retained unless it relates to potential criminal or terrorist activity To better ensure that these new investigative tools do not infringe on civil liberties appropriate internal controls such as training and supervisory review must be developed implemented and monitored Our central focus today is on the effects of changes at the FBI on the FBI itself and we have also alluded to a potential impact on DEA of a shift in FBI drug enforcement activity It is also important to remember that these changes may have a ripple effect on the nature and volume of work of other Justice Department units and their resource needs including the Office of Intelligence Policy and Review the U S Attorneys Offices and the Criminal Division’s Terrorism and Violent Crime Section For example if the volume of FBI counterterrorism investigations increases substantially and the FBI takes a more proactive investigative focus one could expect an increased volume of Foreign Intelligence Surveillance Act Page 12 GAO-02-865T requests to the Office of Intelligence Policy and Review 10 Moreover should those requests be approved and subsequent surveillance or searches indicate criminal activity U S Attorneys Offices and the Terrorism and Violent Crime Section would be brought in to apply their resources to those investigations In addition because of the FBI’s more proactive investigations one could expect more legal challenges to the admissibility of the evidence obtained and to the constitutionality of the surveillance or search 11 State and local law enforcement are also likely to be affected by a change in FBI focus Although the major gap that state and local law enforcement may have to help fill as a result of this realignment is in the drug area if additional FBI resources are needed for counterterrorism state and local law enforcement may have to take on greater responsibility in other areas of enforcement as well Basic Elements of a Successful Transformation As the FBI moves forward in its efforts to transform its culture and reexamine its roles responsibilities and desired results to effectively meet the realities and challenges of the post-September 11 environment it should consider employing the major elements of successful transformation efforts that have been utilized by leading organizations both here and abroad These begin with gaining the commitment and sustained attention of the agency head and all in senior-level leadership It requires a redefinition and communication of priorities and values and a performance management system that will reinforce agency priorities It will also require a fundamental reassessment of the organizational layers levels units and locations Any realignment must support the agency’s strategic plan and desired transformation Organizations that have successfully undertaken transformation efforts also typically use best practices for strategic planning strategic human capital management 10 The Foreign Intelligence Surveillance Act of 1978 P L 95-511 as amended among other things established legal standards and a process for seeking electronic surveillance and physical search authority in national security investigations seeking to obtain foreign intelligence and counterintelligence information within the United States 11 FBI Intelligence Investigations Coordination Within Justice on Counterintelligence Criminal Matters is Limited GAO-01-780 Washington D C July 16 2001 Page 13 GAO-02-865T senior leadership and accountability realignment of activities processes and resources and internal and external collaboration among others 12 Strategic Planning It has long been understood that in successful organizations strategic planning is used to determine and reach agreement on the fundamental results the organization seeks to achieve the goals and measures it will set to assess programs and the resources and strategies needed to achieve its goals 13 Strategic planning helps an organization to be proactive anticipate and address emerging threats and take advantage of opportunities to be reactive to events and crises Leading organizations therefore understand that planning is not a static or occasional event but a continuous dynamic and inclusive process Moreover it can guide decision making and day-to-day activities In addition to contributing to the overall DOJ Strategic Plan the FBI has developed its own strategic planning document Issued in 1998 and intended to cover a 5-year period the plan emphasized the need for many of the changes we are talking about today It is important to note that the 1998 plan called for a build up of expertise and emphasis in the counterterrorism area and a diminution of activities in enforcement of criminal law which is consistent with the focus of the Director’s current priorities These priorities as presented by the Director on May 29 2002 lay the groundwork for a new strategic plan that FBI officials have indicated they will be developing A new strategic plan is essential to guide decision making in the FBI’s transformation The Director has set agency priorities but the strategic plan can be the tool to link actions together to achieve success The first step in developing a strategic plan is the development of a framework This framework can act as a guide when the plan is being formulated 12 U S General Accounting Office Management Reform Elements of Successful Improvement Initiatives GAO T-GGD-00-26 Washington D C Oct 15 1999 and U S General Accounting Office Executive Guide Effectively Implementing the Government Performance and Results Act GAO GGD-96-118 Washington D C June 1996 13 U S General Accounting Office Agencies’ Strategic Plans Under GPRA Key Questions to Facilitate Congressional Review GAO GGD-10 1 16 Washington D C May 1997 and U S General Accounting Office Agencies’ Annual Performance Plans Under the Results Act An Assessment Guide to Facilitate Congressional Decisionmaking GAO GGD AIMD-10 1 18 Washington D C Feb 1998 Page 14 GAO-02-865T Strategic Human Capital Management The FBI’s employees or human capital represent its most valuable asset An organization’s people define its character affect its capacity to perform and represent the knowledge base of the organization We have recently released an exposure draft of a model of strategic human capital management that highlights the kinds of thinking that agencies should apply and steps they can take to manage their human capital more strategically 14 The model focuses on four cornerstones for effective strategic human capital management—leadership strategic human capital planning acquiring developing and retaining talent and results-oriented organizational culture—that the FBI and other federal agencies may find useful in helping to guide their efforts Director Mueller recognizes that one of the most basic human capital challenges the FBI faces is to ensure that it has staff with the competencies—knowledge skills and abilities—needed to address the FBI’s current and evolving mission The announced plan makes a number of changes related to human capital that should move the FBI toward ensuring that it has the skilled workforce that it needs and that staff are located where they are needed the most Hiring specialists developing added strength in intelligence and analytic work and moving some expertise to headquarters so that it can be more efficiently shared across the agency are all steps in a positive direction toward maximizing the value of this vitally important agency asset Given the anticipated competition for certain highly skilled resources some hiring flexibility may be needed The FBI does not have a comprehensive strategic human capital plan This plan flowing out of an updated strategic plan could guide the FBI as it moves through an era of transformation A performance management system that encourages staff to focus on achieving agency goals is an important tool for agency transformation and leads to positive staff development Senior Leadership and Accountability The importance of Director Mueller’s personal commitment to change at the FBI cannot be overstated His leadership and commitment is essential but he needs help to be successful Director Mueller has recently brought on board a Special Assistant to oversee the reorganization and re- 14 U S General Accounting Office A Model of Strategic Human Capital Management GAO-02-373SP Washington D C Mar 15 2002 Page 15 GAO-02-865T engineering initiatives This individual brings a wide range of expertise to the position and will perform many of the functions of a Chief Operating Officer COO The FBI can reinforce its transformation efforts and improve its performance by aligning institutional unit and individual employee performance expectations with planned agency goals and objectives The alignment will help the FBI’s employees see the connection between their daily activities and Bureau’s success High-performing organizations have recognized that a key element of an effective performance management system is to create a “line of sight” that shows how individual responsibilities and day-to-day activities are intended to contribute to organizational goals Coupled with this is the need for a performance management system that encourages staff to focus on performing their duties in a manner that helps the FBI achieve its objectives The FBI currently uses a pass fail system to rate special agents’ performance This type of system does not provide enough meaningful information and dispersion in ratings to recognize and reward top performers help everyone attain their maximum potential and deal with poor performers As a result the FBI needs to review and revise its performance management system in a way that is in line with the agency’s strategic plan including results core values and transformational objectives Realignment of Activities Processes and Resources An organization’s activities core processes and resources must be aligned to support its mission and help it achieve its goals Leading organizations start by assessing the extent to which their programs and activities contribute to meeting their mission and intended results They often find as the FBI’s efforts are suggesting that their organizational structures are obsolete and inadequate to meet modern demands and that levels of hierarchy or field to headquarters ratios must be changed As indicated earlier in this testimony this FBI reorganization plan deals directly with reallocation of existing resources to more clearly realign with the agency’s revised mission The Director has taken a major step in relation to this aspect of transforming an organization However ultimately the FBI must engage in a fundamental review and reassessment of the level of resources that it needs to accomplish its mission and how it should be organized to help achieve the desired results This means reviewing and probably revising the number of layers levels and units to increase efficiency and enhance flexibility and responsiveness Page 16 GAO-02-865T Internal and External Collaboration There is also a growing understanding that all meaningful results that agencies hope to achieve are accomplished through networks of governmental and nongovernmental organizations working together toward a common purpose In almost no area of government is this truer than it is in the law enforcement arena Effectiveness in this domain particularly in relation to counterterrorism is dependent upon timely information sharing and coordinated actions among the multiple agencies of the federal government states localities the private sector and particularly with the FBI the international community In his plan Director Mueller has indicated that he has taken and will take additional steps to enhance communication with the CIA and other outside organizations It should be noted that the CIA has agreed to detail analysts to the FBI on a short-term basis to augment FBI expertise In the law enforcement setting specifically at the FBI there are certain legal restrictions concerning the sharing of information that set limits on communications Recently some of these restrictions have been eased The USA PATRIOT Act P L 107-56 contains a number of provisions that authorize information sharing and coordination of efforts relating to foreign intelligence investigations For example Section 905 of the PATRIOT Act requires the Attorney General to disclose to the Director of the CIA foreign intelligence information acquired by DOJ in the course of a criminal investigation subject to certain exceptions Internally leading organizations seek to provide managers teams and employees at all levels the authority they need to accomplish programmatic goals and work collaboratively to achieve organizational outcomes Communication flows up and down the organization to ensure that line staff has the ability to provide leadership with the perspective and information that the leadership needs to make decisions Likewise senior leadership keeps line staff informed of key developments and issues so that the staff can best contribute to achieving the organizations goals New provisions that provide more authority to FBI field offices to initiate and continue investigations is in keeping with this tenet of leading organizations Page 17 GAO-02-865T The Importance of Continual Monitoring and Oversight for Success Transforming an organization like the FBI with its deep-seated culture and tradition is a massive undertaking that will take considerable effort and time to implement Specifically the reorganization and realignment plan are important first steps the implementation of the plan and the elements relating to a successful organizational transformation will take many years A strategic plan and human capital plan are essential to keep the FBI on course Continuous internal and independent external monitoring and oversight are essential to help ensure that the implementation of the transformation stays on track and achieves its purpose of making the FBI more proactive in the fight against terrorism without compromising civil rights It was such oversight of the FBI’s domestic intelligence activities in the 1970’s that helped identify civil liberties abuses and helped lead to the more restrictive Attorney General guidelines for such activities The DOJ’s Inspector General recently discussed several ongoing completed and planned reviews relating to counterterrorism and national security But it is equally important for Congress to actively oversee the FBI’s proposed transformation In its request for our testimony today the Committee asked us to identify issues relating to the reorganization and realignment for follow-up review and said that it may want us to do further reviews of the implementation of the reorganization plan We stand ready to assist this and other congressional committees in overseeing the implementation of this landmark transformation There are in fact specific areas relating to the reorganization and realignment that might warrant more in-depth review and scrutiny including 1 progress in developing a new strategic plan 2 a review of broader human capital issues 3 FBI uses of the funds appropriated to fight terrorism 4 measurement of performance and results 5 the implementation of the Attorney General’s revised guidelines and 6 the upgrading of information technology and analytic capacity In closing I would like to commend the Department of Justice and FBI officials for their cooperation and responsiveness in providing requested documentation and scheduling meetings needed to develop this statement within a tight timeframe Mr Chairman this concludes my prepared statement I would be pleased to answer any questions you and the Subcommittee members may have Page 18 GAO-02-865T Related GAO Products Homeland Security Homeland Security Key Elements to Unify Efforts Are Underway but Uncertainty Remains GAO-02-610 Washington D C June 7 2002 National Preparedness Integrating New and Existing Technology and Information Sharing into an Effective Homeland Security Strategy GAO-02-811T Washington D C June 7 2002 Homeland Security Responsibility and Accountability for Achieving National Goals GAO-02-627T Washington D C April 11 2002 National Preparedness Integration of Federal State Local and Private Sector Efforts is Critical to an Effective National Strategy for Homeland Security GAO-02-621T Washington D C April 11 2002 Homeland Security Progress Made More Direction and Partnership Sought GAO-02-490T Washington D C March 12 2002 Homeland Security Challenges and Strategies in Addressing Short- and Long-Term National Needs GAO-02-160T Washington D C November 7 2001 Homeland Security A Risk Management Approach Can Guide Preparedness Efforts GAO-02-208T Washington D C October 31 2001 Homeland Security Key Elements of a Risk Management Approach GAO-02-150T Washington D C October 12 2001 Critical Infrastructure Protection Significant Challenges in Safeguarding Government and Privately Controlled Systems from Computer-Based Attacks GAO-01-1168T Washington D C September 26 2001 Homeland Security A Framework for Addressing the Nation’s Issues GAO-01-1158T Washington D C September 21 2001 Critical Infrastructure Protection Significant Challenges in Developing Analysis Warning and Response Capabilities GAO-01-1005T Washington D C July 25 2001 Critical Infrastructure Protection Significant Challenges in Developing National Capabilities GAO-01-323 Washington D C April 25 2001 Page 19 GAO-02-865T Critical Infrastructure Protection Challenges to Building a Comprehensive Strategy for Information Sharing and Coordination T-AIMD-00-268 Washington D C July 26 2000 Critical Infrastructure Protection National Plan for Information Systems Protection GAO AIMD-00-90R Washington D C February 11 2000 Critical Infrastructure Protection Fundamental Improvements Needed to Assure Security of Federal Operations T-AIMD-00-7 Washington D C October 6 1999 Combating Terrorism Combating Terrorism Intergovernmental Cooperation in the Development of a National Strategy to Enhance State and Local Preparedness GAO-02-550T Washington D C April 2 2002 Combating Terrorism Enhancing Partnerships Through a National Preparedness Strategy GAO-02-549T Washington D C March 28 2002 Combating Terrorism Critical Components of a National Strategy to Enhance State and Local Preparedness GAO-02-548T Washington D C March 25 2002 Combating Terrorism Intergovernmental Partnership in a National Strategy to Enhance State and Local Preparedness GAO-02-547T Washington D C March 22 2002 Combating Terrorism Key Aspects of a National Strategy to Enhance State and Local Preparedness GAO-02-473T Washington D C March 1 2002 Combating Terrorism Considerations for Investing Resources in Chemical and Biological Preparedness GAO-01-162T Washington D C October 17 2001 Combating Terrorism Selected Challenges and Related Recommendations GAO-01-822 Washington D C September 20 2001 Combating Terrorism Actions Needed to Improve DOD’s Antiterrorism Program Implementation and Management GAO-01-909 Washington D C September 19 2001 Page 20 GAO-02-865T Information Security Code Red Code Red II and SirCam Attacks Highlight Need for Proactive Measures GAO-01-1073T Washington D C August 29 2001 International Crime Control Sustained Executive-Level Coordination of Federal Response Needed GAO-01-629 Washington D C August 13 2001 Combating Terrorism Comments on H R 525 to Create a President’s Council on Domestic Preparedness GAO-01-555T Washington D C May 9 2001 Combating Terrorism Observations on Options to Improve the Federal Response GAO-01-660T Washington D C April 24 2001 Combating Terrorism Comments on Counterterrorism Leadership and National Strategy GAO-01-556T Washington D C March 27 2001 Combating Terrorism Federal Response Teams Provide Varied Capabilities Opportunities Remain to Improve Coordination GAO-01-14 Washington D C November 30 2000 Combating Terrorism Linking Threats to Strategies and Resources GAO T-NSIAD-00-218 Washington D C July 26 2000 Combating Terrorism How Five Foreign Countries Are Organized to Combat Terrorism GAO NSIAD-00-85 Washington D C April 7 2000 Combating Terrorism Issues in Managing Counterterrorist Programs GAO T-NSIAD-00-145 Washington D C April 6 2000 Combating Terrorism Observations on the Threat of Chemical and Biological Terrorism GAO T-NSIAD-00-50 Washington D C October 20 1999 Combating Terrorism Need for Comprehensive Threat and Risk Assessments of Chemical and Biological Attack GAO NSIAD-99-163 Washington D C September 7 1999 Combating Terrorism Analysis of Federal Counterterrorist Exercises GAO NSIAD-99-157BR Washington D C June 25 1999 Page 21 GAO-02-865T Combating Terrorism Analysis of Potential Emergency Response Equipment and Sustainment Costs GAO-NSIAD-99-151 Washington D C June 9 1999 Combating Terrorism Observations on Growth in Federal Programs GAO T-NSIAD-99-181 Washington D C June 9 1999 Combating Terrorism Use of National Guard Response Teams Is Unclear GAO NSIAD-99-110 Washington D C May 21 1999 Combating Terrorism Issues to Be Resolved to Improve Counterterrorism Operations GAO NSIAD-99-135 Washington D C May 13 1999 Combating Terrorism Observations on Federal Spending to Combat Terrorism GAO T-NSIAD GGD-99-107 Washington D C March 11 1999 Combating Terrorism Opportunities to Improve Domestic Preparedness Program Focus and Efficiency GAO NSIAD-99-3 Washington D C November 12 1998 Combating Terrorism Observations on the Nunn-Lugar-Domenici Domestic Preparedness Program GAO T-NSIAD-99-16 Washington D C October 2 1998 Combating Terrorism Observations on Crosscutting Issues GAO T-NSIAD-98-164 Washington D C April 23 1998 Combating Terrorism Threat and Risk Assessments Can Help Prioritize and Target Program Investments GAO NSIAD-98-74 Washington D C April 9 1998 Combating Terrorism Spending on Governmentwide Programs Requires Better Management and Coordination GAO NSIAD-98-39 Washington D C December 1 1997 Combating Terrorism Federal Agencies’ Efforts to Implement National Policy and Strategy GAO NSIAD-97-254 Washington D C September 26 1997 Terrorism and Drug Trafficking Responsibilities for Developing Explosives and Narcotics Detection Technologies GAO NSIAD-97-95 Washington D C April 15 1997 Page 22 GAO-02-865T Justice Department Federal Bureau of Investigation FBI Intelligence Investigations Coordination Within Justice on Counterintelligence Criminal Matters Is Limited GAO-01-780 Washington D C July 16 2001 GAO’s Work at the FBI Access to Data Documents and Personnel GAO-01-888T Washington D C June 20 2001 Information Security Software Change Controls at the Department of Justice GAO AIMD-00-191R Washington D C June 30 2000 Campaign Finance Task Force Problems and Disagreements Initially Hampered Justice’s Investigation GAO GGD-00-101BR Washington D C May 31 2000 Year 2000 Computing Challenge Readiness of FBI’s National Instant Criminal Background Check System Can Be Improved GAO AIMD GGD-00-49 Washington D C December 16 1999 FBI Accountability for Drugs Used in Special Operations Deficiencies Identified and Actions Taken GAO AIMD-00-34R Washington D C December 2 1999 Year 2000 Computing Challenge FBI Needs to Complete Business Continuity Plans GAO AIMD-00-11 Washington D C October 22 1999 Combating Terrorism FBI’s Use of Federal Funds for CounterterrorismRelated Activities FY1955-1998 GAO GGD-99-7 Washington D C November 20 1998 FBI Advanced Communications Technologies Pose Wiretapping Challenges GAO IMTEC-92-68BR Washington D C July 17 1992 Justice Management The Value of Oversight Has Been Demonstrated GAO T-GGD-91-51 Washington D C July 11 1991 International Terrorism FBI Investigates Domestic Activities to Identify Terrorists GAO GGD-90-112 Washington D C September 7 1990 International Terrorism Status of GAO’s Review of the FBI’s International Terrorism Program GAO T-GGD-89-31 Washington D C June 22 1989 Page 23 GAO-02-865T FBI Domestic Intelligence Operations An Uncertain Future GAO GGD-78-10 Washington D C November 9 1977 Controlling the FBI’s Domestic Intelligence Operations GAO GGD-76-79 Washington D C March 29 1976 FBI Domestic Intelligence Operations — Their Purpose and Scope Issues that Need to be Resolved GAO GGD-76-50 Washington D C February 24 1976 Other Managing for Results Building on the Momentum for Strategic and Human Capital Reform GAO-02-528T Washington D C March 18 2002 A Model of Strategic Human Capital Management GAO-02-373SP Washington D C March 15 2002 Information Technology Enterprise Architecture Use Across the Federal Government Can Be Improved GAO-02-6 Washington D C February 19 2002 Foreign Languages Human Capital Approach Needed to Correct Staffing and Proficiency Shortfalls GAO-02-375 Washington D C January 31 2002 Information Security Advances and Remaining Challenges to Adoption of Public Key Infrastructure Technology GAO-01-277 Washington D C February 2001 Management Reform Elements of Successful Improvement Initiatives GAO T-GGD-00-26 Washington D C October 15 1999 Agencies’ Annual Performance Plans Under the Results Act An Assessment Guide to Facilitate Congressional Decisionmaking GAO GGD AIMD-10 1 18 Washington D C February 1998 Performance-Based Organizations Lessons From the British Next Steps Initiative GAO T-GGD-97-151 Washington D C July 8 1997 Performance-Based Organizations Issues for the Saint Lawrence Seaway Development Corporation Proposal GAO GGD-97-74 Washington D C May 15 1997 Page 24 GAO-02-865T Agencies’ Strategic Plans Under GPRA Key Questions to Facilitate Congressional Review GAO GGD-10 1 16 Washington D C May 1997 Executive Guide Effectively Implementing the Government Performance and Results Act GAO GGD-96-118 Washington D C June 1996 440138 Page 25 GAO-02-865T