The President's Management Agenda and Management Challenges
The Department has made substantial progress on each of the five President's Management Agenda (PMA) initiatives. As of December 2002, the Department achieved three "green" and two "yellow" scores for progress on implementation, based on OMB's scorecard evaluation. With respect to overall status, the Department has made significant improvements in several areas, even though the overall scores for status remain "red." The following is a brief overview of the status of PMA in the Department:
Strategic Management of Human Capital
- OVERVIEW: The President's first management reform initiative is to build, sustain, and effectively deploy a skilled, knowledgeable, diverse, and high-performing workforce that is aligned with mission objectives. This is key to making the government "citizen-centered." The goal is to have a workforce that will adapt quickly in size, composition, and competencies to accommodate changes in mission, technology, and labor markets.
- PROGRESS: The Department has successfully implemented the first year of the Diplomatic Readiness Initiative, designed to ensure adequate human resources through a more streamlined and aggressive hiring process. The Department also has implemented a mandatory leadership and management training initiative and emphasized those skills in performance requirements. The Department revalidated the Overseas Staffing Model and has completed the first phase of the Domestic Staffing Model and began development of a Civil Service Succession model that will provide a comprehensive approach to determining the optimal size, allocation, and organization of the domestic and overseas workforces. This workforce planning tool also will facilitate analysis for competitive sourcing decisions. An integrated strategic workforce plan will be developed and integrated with the mission and bureau level strategic planning processes. The use of OPM's Human Capital Assessment and Accountability Framework (HCAAF) to assess human capital activities is another important step ensuring management accountability and evaluation of progress in this area.
- UPCOMING ACTION AND POTENTIAL CHALLENGES: The Department will continue to work with OPM and OMB and use the HCAAF as the basic guide for implementing this PMA objective. The Department will continue to implement the Diplomatic Readiness Initiative and expand the leadership and management training initiative. Plans are also underway for Completion of Phase two of the Domestic Staffing Model and the piloting of a succession planning model for the Civil Service. In FY 2003, the Department will also develop a Human Resources Management accountability system and produce a comprehensive workforce plan.
- OVERVIEW: This PMA initiative is aimed at achieving efficient and effective competition between public and private sources, simplifying and improving the procedures for evaluating sources, and better publicizing the activities subject to competition.
- PROGRESS: The Department has developed a comprehensive management and competition plan outlining the target of competing 586 FTE, which exceeds the OMB goal of 306 FTE that would represent 15 percent of the 2000 Federal Activities Inventory Reform (FAIR) Act inventory. The Department has committed $2 million in FY 2003 to fund the initiative, and a program manager has been selected to provide overall leadership of competitive sourcing throughout the Department. Other actions include revising the Foreign Affairs Manual, publicizing competitive sourcing to all Department employees, notifying unions, and awarding two Blanket Purchase Agreements for study support.
- UPCOMING ACTION AND POTENTIAL CHALLENGES: The Department is implementing its Competitive Sourcing Plan and is hiring a Competitive Sourcing Program Manager to develop a detailed communications plan. Two major studies are underway; contractor support is being arranged for preliminary analysis and business/feasibility studies. In addition, the Department will coordinate one direct conversion effort.
Improved Financial Performance
- OVERVIEW: This PMA initiative will achieve improved accountability to the American people through audited financial statements, more accurate benefit and assistance payments, improved management controls, and installation of financialsystems that produce timely, accurate and useful financial information.
- PROGRESS: The Department is aggressively addressing the improved financial performance standards and has completedand reported on a detailed plan of action including milestones and measures referenced to the OMB established corecriteria. Implementation of the new Regional Financial Management System (RFMS) is well underway, with conversionof forty-four posts in FY 2002 (which represents 25 percent of overseas activity in dollar terms). This new system complieswith Federal financial systems requirements and replaces the two legacy overseas accounting and disbursing systems.The Department issued its first-ever mid-year (i.e., March 31, 2002) interim financial statements. The Department's FY 2001 Financial Statements were timely and received an unqualified opinion, marking the fifth consecutive unqualifiedopinion. The Department's FY 2001 Accountability Report, which included the financial statements, received the Association of Government Accountants prestigious Certificate of Excellence in Accountability Reporting. The Department resolved all remaining material weaknesses resulting in the first time since its inception that the Department has no outstanding material weaknesses to report under the FMFIA. Accordingly, the Secretary has issued an unqualified Statement of Assurance for FY 2002 regarding the Department's systems of management control - a core criteria for obtaining a "green" status on this initiative. Progress is also being made on consolidating and streamlining worldwide financial operations. The Department's operations at the Financial Service Center (FSC) in Paris are being relocated to the Charleston, South Carolina and Bangkok, Thailand FSCs. Certain functions were transferred in 2002, and the remaining functions will be transferred by December 2003. In addition, during FY 2002, American Payroll and Foreign Service Annuitant functions were relocated from Washington, D.C. to the Charleston FSC.
- UPCOMING ACTION AND POTENTIAL CHALLENGES: Future actions for this initiative include full implementation of RFMS worldwide by the end of FY 2003, timely issuance of the FY 2002 combined Performance and Accountability Report containing an unqualifed ("clean") audit opinion on the Department's Financial Statements, issuing timely quarterly financial statements for FY 2003, and on-going consolidation of worldwide financial operations to the Charleston FSC. The Department and USAID will conduct a feasibility study to assess integration of financial systems and to determine where financial management collaboration between the two agencies can be expanded.
Expanded Electronic Government
- OVERVIEW: The goal of this initiative is to make it simpler for citizens to receive high-quality service by expanding the federal government's effective use of electronic technologies. This includes support of information technology projects that offer performance gains across agency boundaries, such as e-procurements, e-grants, and e-regulation.
- PROGRESS: The Department is focusing on improving IT security by certification and accreditation of all systems by the end of FY 2004, by developing an enterprise architecture to guide IT investments and improve business processes, and by improving the capital planning process for IT investments. Also, State and USAID are exploring how to collaborate and improve coordination on parallel IT systems. FY 2004 Agency Capital Plans and Business Cases (OMB Exhibit 300s) submissions are being revised to reflect budget decisions and strengthen those considered "at-risk". They were submitted to OMB in January 2003.
- UPCOMING ACTION AND POTENTIAL CHALLENGES: Following completion of the UDCE, the Department will ensure National Institute of Standards and Technology security evaluations are conducted on all Department programs and systems. The Department will also develop security corrective action plans for any programs and systems with security weaknesses, and submit a Plan of Action and Milestones to correct those weaknesses to OMB. The Department will complete the C&A plan to improve system certification progress and submit it to OMB. The Department and USAID will develop a plan for a joint Enterprise Architecture, and identify opportunities for collaboration and consolidation of financial management and IT systems. The Department will use OMB's detailed assessment and roadmap to develop and submit a PMA e-government scorecard improvement plan to OMB.
Budget Performance Integration
- OVERVIEW: The Budget and Performance Integration initiative is designed to improve the performance and management of the federal government. It is one of the most challenging initiatives - seeking to link performance to budget decisions and improve performance tracking and management. Ultimately, the goal is to have better control over resources and greater accountability for their results.
- PROGRESS: The Department reorganized and consolidated its budget and strategic planning functions into one new Resource Management Bureau to improve coordination and achieve greater effectiveness. Significant progress has been made to link resources in planning and budgeting to achieve strategic and performance goals. Specifically, the Department has restructured the FY 2004 Performance Plan to better convey the linkages among policy priorities, budgetary decisions, and program outcomes. The Department has also worked with OMB to evaluate program effectiveness using the Program Assessment Rating Tool (PART) and is working to improve program manager accountability by incorporating PART elements into existing planning and budgeting processes. Efforts are underway to automate the Mission and Bureau Performance Plan (MPP and BPP) processes to streamline performance information with direct linkage to resources. These content and process improvements along with the identification and examination of existing programs to leverage best practices have resulted in movement toward a culture change in the Department with respect to strategic planning and budgeting. During FY 2003, the FY 2004 - FY 2009 strategic plans for State and USAID will be integrated into one formal plan.
- UPCOMING ACTION AND POTENTIAL CHALLENGES: The Department continues to develop attainable goals and tangible performance measures that accurately track its progress. The Department has restructured and strengthened the FY 2002 Performance Report with key improvements that better evaluate results. Closer examination of Foreign Assistance funds and linkages to performance also will be undertaken. The Department and USAID plan to integrate the two agencies' strategic plans into one consolidated FY 2004-FY 2009 plan to ensure closer collaboration on policy and management issues. Developing and implementing a new Central Financial Planning System will be a critical step in tracking and verifying actual performance data and linking it to Department-wide financial resources.
MANAGEMENT CHALLENGES AND RESPONSES
MANAGEMENT CHALLENGES IDENTIFIED BY GAO AND OIG 1 - Also identified as a government-wide "High-Risk" area.
The Government Accounting Office (GAO) and the Department's Office of the Inspector General (OIG) have identified several similar Management Challenges (MCs). Many of the areas of improvement cited by GAO, OIG, and the Office of Management and Budget (OMB) have been addressed through accomplishment of the Department's FY 2002 annual performance goals; others are being addressed through accomplishment of FY 2003 goals. The table on the following page shows the MCs by program area, as well as the actions taken by the Department in response to the MCs.
CHALLENGES AND ACTIONS FINANCIAL MANAGEMENT VISA PROCESSING AND BORDER SECURITY STRATEGIC AND PERFORMANCE PLANNING
MANAGEMENT CHALLENGES IDENTIFIED BY GAO AND OIG
1 - Also identified as a government-wide "High-Risk" area.