Chairman Reed, Ranking Minority Member Allard, and Subcommittee members, I thank you for the opportunity to appear before you today to discuss HUDís staffing, acquisition management, and information systems challenges. I am happy to provide you with an update of the substantial progress our Administration is making to address these challenges.
Under the leadership of Secretary Martinez, the first year of our new Administration was largely devoted to getting our management team in place, assessing HUDís management environment, and formulating viable strategies and plans to address the major management challenges and program risks still facing the Department. In formulating our strategies and plans, we strongly considered the input on HUDís management challenges and program risks from the U.S. General Accounting Office (GAO) and the HUD Office of Inspector General.
I believe our management team and the GAO share a common view that improvements to HUDís management of its human capital, acquisitions and information systems are essential to addressing HUDís remaining high-risk program areas -- the rental housing assistance and single family housing mortgage insurance program areas -- and to maintaining adequate controls over other program activities previously considered high-risk.
The inclusion of our management challenges and program risks in the Presidentís Management Agenda is indicative of the importance placed on these issues. As part of GAOís Biennial Performance and Accountability and High Risk Series Review for 2003, HUD already has provided the GAO with several reports that highlight our progress in addressing our management challenges, including our implementation of the Presidentís Management Agenda. We welcome the GAOís independent assessment, and I am confident that they will see that we are moving in the right direction to address our management challenges, reduce our program risk, and improve our program performance.
Human Capital Management
Human capital is HUDís most important asset. We have taken significant steps to enhance and better utilize our existing staff capacity, and to obtain, develop and maintain the staff capacity necessary to adequately support HUDís future program delivery.
Effective human capital management is the purview of all HUD managers and program areas. We view our human capital management challenges as consisting of:
To meet these challenges, we have taken or planned a number of significant actions.
Management and Staffing Realignments
The first issue I would like to address is the realignment of management and staffing that the Department already has undertaken.
HUDís June 1997 management reform plans were intended to realign the Department along functional lines, with the separation of outreach from program administration, and the placement of greater reliance on automated tools, processing centers and contracted services. These planned reforms were intended to enable the Department to better utilize a reduced staffing capacity to more efficiently and effectively deliver and oversee HUDís major program activities.
We found that the planned organizational and operational changes were implemented with varying degrees of success. Some of the intended organizational and process changes were never formally institutionalized with the need for delegations of authority and the issuance of current written policies and procedures to support staff training and ongoing operations. In addition, some of the 1997 organizational and staffing realignments have proven to be an ineffective use of HUDís human capital.
As a result, decisions were made and actions taken to pursue separate realignments of headquarters and field activities to better use our existing resources. At headquarters, we reduced the reporting relationships with the Secretary by 40 percent, including the following actions:
Our field office realignment and redeployment efforts included the following:
We have formalized our realigned structure, with publication of delegations of authority in the Federal Register, and are providing current operating policies and procedures to support staff training and on-going operations. These adjustments to HUDís operating structure will enable us to more efficiently and effectively utilize our available resources to strengthen our program delivery and oversight.
Human Capital Strategic Management Plan
A Human Capital Strategic Management Plan was developed in February 2002 to provide an overall framework for our human capital activities. An important part of this plan is our Senior Executive Steering Committee, chaired by the Assistant Secretary for Administration, which is currently developing a five-year plan to focus on: 1) staffing requirements, 2) organizational de-layering, 3) supervisor to employee ratios, and 4) front-line service delivery. This committee also will make recommendations regarding the need for new or revised policy guidance to support the Departmentís new human capital strategies.
Staffing Needs and Allocation of Resources
HUDís past management of its human capital was hampered by the lack of a system or process for estimating and justifying its staffing resource needs, and allocating the staffing resources available. In 2001, HUD completed the implementation of a new Resource Estimation and Allocation Process (REAP), with input from all HUD managers. The REAP was developed in conjunction with the National Academy of Public Administration.
The baseline outputs of the REAP were used to assist in making decisions on redeploying HUDís existing staff resources to address priority program staffing needs in the field. The deployment of resources in the prior Administration left us understaffed to perform critical program delivery and oversight functions, while too many staff were devoted to outreach efforts. REAP was useful in helping to identify the critical staff shortages.
We are now in the process of completing the first quarterly validation of the REAP staffing estimates through an assessment of actual staff time reporting via the implementation of the companion process to the REAP, the Total Estimation and Allocation Mechanism (TEAM). REAP and TEAM information will help HUDís management determine our staffing level request to Congress as part of our FY 2004 budget.
Our Fiscal Year 2003 budget submission did not request the full staffing levels supported by the REAP for several reasons. First, we wanted to allow time for HUD managers to complete the initial TEAM validation process and to further analyze REAP and TEAM data. TEAM was not in place when the FY 2003 Budget was submitted to the Congress. It has since been completed and is operational. Second, although the REAP methodology supported a significant increase in staffing requirements (with a total level of 10,600 FTEs), it was not realistic to assume that the Department could implement that amount of an increase at the same time that the redeployment of existing staff was also taking place. Now that our redeployment of existing staff is completed, we have turned our attention to expediting our hiring and orientation processes to assure that we can fully utilize the staffing ceilings already approved by the Congress. This is the highest priority for our new Assistant Secretary for Administration and Director of Personnel, who were just recently added to our management team.
HUD has developed a Departmental Succession Planning Strategy, which includes procedures for workforce analyses. As a part of the Departmentís succession planning strategy, we examined the top nineteen occupations in the department in relation to continued need and potential retirements over a 5-year period. An assessment was further conducted in relation to HUDís four core program disciplines -- in the Office of Housing, Office of Public and Indian Housing, Office of Community Planning and Development, and Office of Fair Housing and Equal Opportunity -- to assess the impact of potential losses over the 5-year period, and resulting skills imbalances. However, critical staffing needs exist throughout HUD programs and the focus will be on the entire Department. The Presidential Management Intern Program (PMI), the new HUD Intern Program, the Legal Honors Program, and the SES Candidate Development Program (SES CDP) are being utilized to establish a pipeline of well-qualified employees to meet staffing needs and anticipated skills shortages.
Training and Development
Training and development of HUD employees is a Departmental priority. The HUD Training Academy has been enhanced and energized to move forward with a new vision for the Departmentís training program, which is focused on investing in the power and potential of HUD employees. Agency specific technical training and career advancement training are readily available to all employees. Several other initiatives are in place to build a new HUD culture, focused on the value of training and continuous professional development. For example:
HUDís Program Assistant Secretaries have also been focused on the provision of updated program handbooks, guidance and training for HUD monitoring staff and program intermediaries. These are further examples of our commitment to developing and maintaining a competent HUD work force and program delivery structure.
The Department is acquiring an integrated human resources and training system entitled HUD Integrated Human Resources and Training System (HIHRTS). HIHRTS replaces 17 existing systems and will support workforce planning, succession planning, forecasting, and identification of staff competencies.
HUD had already been recognized for its progress in linking and aligning its staffing with its mission, goals, and organizational objectives, and we have continued and enhanced that process. Those linkages are made in HUDís Budget Submissions and Annual Performance Plans. We further use a management planning process that links field office and headquarters operating goals and other performance goals with the Departmentís strategic goals and objectives under the Government Performance and Results Act. It is important that HUD managers and staff know their contributions to HUDís mission objectives, and are held accountable for that performance. We assess progress against our Management Plan goals quarterly, and annual accomplishments are factored into staff performance evaluations and awards.
HUD is heavily reliant on contracted services in support of its current operations. HUDís contracted services go well beyond facilities maintenance and other routine services to many core program functions. Given the extent and significance of HUDís contracted services, HUDís acquisition management challenges consist of:
Our actions to address these acquisition management challenges include the following:
These changes are collectively expected to improve customer service and contractor performance and reduce the Departmentís overall cost of operation.
Information Systems Management
Adequate automated information systems are essential to the effective administration of HUDís large, diverse and complex program universe. However, we recognize that HUD has antiquated systems that are poorly integrated, inefficient and inadequate for meeting many essential program management information needs. Most of HUDís systems support is provided through contracted services.
HUDís major information systems challenges are to:
Our efforts to address these challenges include the following:
IT Capital Investment Planning
We have continued to refine and institutionalize HUDís IT Investment Management (ITIM) Process. Efforts were taken to seamlessly integrate HUDís ITIM, or IT capital planning process, with HUDís Enterprise Architecture (EA) and e-Government directives from the Office of Management and Budget, to better assure efficient resource use and effective business results. The IT capital planning process was enhanced to incorporate an EA assessment of proposed projects during the selection of IT projects for upcoming fiscal years. The scoring of initiatives is linked to HUDís e-Government Strategic Plan, the Presidentís Management Agenda, material weakness and high-risk issues, and other Departmental priorities.
HUD is also pursuing a performance-based, outcome-oriented infrastructure contract called HUD IT Services (HITS) that is expected to provide improved services and innovative solutions. Award is currently scheduled for November 2002. The selected HITS vendor will partner with HUD to specify, design, acquire, maintain and support the IT infrastructure, ensuring that enterprise architecture considerations, standards and policies are followed.
HUDís Enterprise Architecture (EA) initiative is designed to provide Department-wide documentation of HUDís current business and technology systems architecture baseline, as a basis for both better managing HUDís current information systems and better meeting future information systems needs. HUD recently completed a refreshment of the baseline EA in the Enterprise Architecture Management System. The EA team is completing work on the significant Single Family Housing segment of the target architecture for future systems development in this high-risk program area.
We have taken actions to improve IT systems project management and correct past problems of projects not being completed on time, cost overruns, and unlimited project scope. Through the IT capital planning process, HUD conducts quarterly control reviews of every IT project, requiring projects with significant cost or schedule variances to develop recovery plans to get back on track. HUD also provided IT Investment and Project Management training to over 100 IT project managers and plans to offer this training as an online course later this year. HUD instituted project management reviews at the highest levels to focus executive attention on projects needing direction. As previously discussed, IPTs or Integrated Procurement Teams were created to manage and implement the transition of IT support contracts to performance-based contracts.
We established HUDís Enterprise Security Program to provide protection for HUDís critical infrastructure, both physical and information systems. This entails developing and implementing effective security procedures, security awareness and training, disaster recovery/contingency planning, and monitoring compliance and effectiveness of security procedures, policies and standards. Significant accomplishments have been made. The HUD Office of Inspector Generalís audit of HUDís FY 2001 consolidated financial statements recognized both substantial control improvements in HUDís mainframe-computing environment, and considerable strides to improve software configuration management for both mainframe and LAN-based client/server applications. OCIO is responding to the Government Information Security Reform Act through security self assessments, developing and reporting on an overall HUD security plan, and providing a strategic Five-Year Plan for Security.
As you can see, our efforts to meet HUDís human capital, acquisitions, and systems challenges have been extensive. Our efforts to better manage our staffing, acquisitions and information systems have a direct relationship to the excellent progress we are making in addressing HUDís two remaining high-risk program areas Ė our rental housing assistance and single family housing mortgage insurance program areas. We welcome the pending independent assessment of our progress through the GAOís biennial government-wide review of major management challenges and high-risk programs.
That concludes my testimony. I look forward to working with you to address the continuing management challenges facing HUD, and I thank you for your on-going support of the Department.
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