President's Management Agenda
The President's Management Agenda (PMA), announced in the summer of 2001, is an aggressive strategy for improving the management of the Federal government. It focuses on five areas of management across the government where improvements and the most progress can be made to deliver results to the American people. It reflects the Administration's commitment to achieve immediate, concrete, and measurable results in the near term, while focusing on remedies to serious problems, and commits to implement them fully.
The five government-wide goals are Strategic Management of Human Capital, Competitive Sourcing, Improved Financial Performance, Expanded E-government, and budget and performance Integration. These goals are mutually reinforcing. For example, workforce planning and restructuring undertaken as part of Strategic Management of Human Capital will be defined in terms of each agency's mission, goals, and objectives--a key element of budget and performance integration. Agency restructuring is expected to incorporate organizational and staffing changes resulting from outsourcing and expanded E-government. Likewise, efforts toward budget and performance integration will reflect improved program performance and savings achieved from competitive sourcing and will benefit from financial and cost accounting and information systems which are part of efforts in improved financial management.
Strategic Management of Human Capital
Workforce Restructuring Plan - Since November 2001, FDA has been implementing its restructuring plan that included the Departmental consolidation of human resources, an administrative services study and implementation of a shared services organization, and the organizational de-layering project.
Consolidation of Human Resources - FDA has consolidated its Human Resources (HR) Organization from seven Center-based offices to one HR office in FY 2002. Beginning January 2004, FDA will receive its HR services from the Department's Rockville HR Center. This budget reflects the transfer of 104 FTE in FY 2004.
Administrative Consolidation - A consultant was hired to study FDA's administrative services and recommend the most efficient realignment of Agency resources, which would provide high quality administrative services from a single organization. During FY 2003, the new shared service organization (SSO) was developed and a phased stand-up began during the first quarter of FY 2004. Consolidation into the SSO, combined with improved business processes, will allow FDA to maintain administrative service levels with substantially fewer staff. Previously, FDA had between 800 and 850 employees providing these administrative services in the Office of the Commissioner, the Centers and the field organization. The SSO had 400 dedicated FTEs at stand-up, which includes the headquarters services only. ORA (field services) and NCTR will be added during the second quarter of FY 2004.
FDA received approval from the Office of Personnel Management to use Voluntary Separation Incentive Pay (as provided in Section 1313 of the Homeland Security Act of 2002) in FY 2003 and continuing in FY 2004 to reduce administrative staff as a result of consolidation efforts into the new SSO and competitive sourcing activities.
Delayering - Flat, streamlined organizations result in faster decision-making and better communication. The goal of the FDA de-layering initiative is to achieve faster decision-making by reducing the number of organizational layers to no more than four levels; increase the number of employees who provide services to citizens; and, eliminate duplicative functions. Each of these components' organizational structures, staffing, number of decision-making levels, and services provided are being assessed. Upon completion of the assessment, proposed reorganization changes will be implemented. An assessment of eight major organizational components was completed by the end of FY 2003.
Strategic Action Plan Initiatives - FDA is building on its past efforts to continue to recruit, train, retain, and use highly qualified scientific and technological personnel. In the Agency's Strategic Action Plan issued in August 2003, a key strategic goal is the "Strong FDA" of which the strategic management of human capital is an important objective. Under this objective, FDA has three overall initiatives with representative action steps:
- Build and maintain a strong science base:
- Share more partnerships / leveraging lessons learned and best practices throughout FDA; and,
- Teach FDA staff how to effectively manage and lead partnerships.
- Recruit, train, and retain a highly skilled workforce:
- Accelerate the hiring and decision-making processes;
- Conduct, on a pilot basis, in the Office of the Commissioner, the Gallup Q12 survey on organizational effectiveness with associated managerial training, conduct full agency study in FY 2004; and redesign and implement managerial training in FY 2005;
- Design and implement a training program for medical device reviewers to improve their regulatory review expertise; and,
- Implement a program to establish competencies for targeted job groups in mission-critical work such as consumer safety officers and science-based regulatory review.
- Enhance workforce diversity:
- Develop a pilot recruitment program for 3- 4 positions for geographical areas where large minority populations exist and FDA is located;
- Establish a central point for FDA to support special recruitment initiatives; and,
- Identify FDA employees who have graduated from colleges and universities with large minority populations and utilize these employees to recruit from their alma mater.
Accountability - During FY 2003, FDA incorporated the Department's 10 Program Goals and Management Objectives in developing the 2003 Performance Contracts for the Commissioner, all SES's and all GS-15's. FDA has now cascaded the plans to all Agency GS employees nationwide. This process continues in FY 2004.
Improved Financial Performance
Erroneous Payments - FDA conducted improper payments risk assessments for its Foods and Human Drugs programs. A risk assessment is being conducted for the Medical Devices program. FDA is also assessing what actions should be needed to comply with the recovery auditing mandate.
Financial Management Improvement - FDA met the Department's accelerated year-end due dates for providing financial information and preparing the annual financial statements and footnotes enabling DHHS to meet the FY 2003 due date of November 15, 2003. The FY 2003 audit report was the sixth consecutive year that FDA received an unqualified, or clean, opinion from the Office of Inspector General.
FDA continues to streamline its year-end financial statement preparation process in anticipation of the FY 2004 due date of November 15, 2004. To ensure that all FDA employees are aware of the accelerated due dates and their importance, the Office of Financial Management (OFM) has instituted several avenues of communication and training including monthly OFM Council Meetings and staff training including updated standard general ledger, Treasury reporting procedures, project management, and Oracle database training.
Each year-end, as part of the financial statement audit process, FDA prepares a comparative analysis of current year and prior year financial statement balances with explanations of any large variances and provides this to the auditors. FDA will perform similar reviews (i.e., of open obligations, expenses, etc.) that its auditors have used to ensure the account balances are reasonable. FDA reconciles the audited financial statement balances to FACTS I reported balances to ensure the balances are the same, and prepares other monthly and quarterly reconciliations as required by Department policies and procedures.
FDA drafted the FY 2004 year-end schedules in order to meet the accelerated year-end due dates already established by the Department. Since receiving its sixth consecutive clean audit opinion, FDA, along with the other HHS operating divisions, are working with the Office of the Secretary to ensure the Department will meet the OMB mandated year-end FY 2004 accelerated due date.
Agency-wide meetings to discuss and resolve FY 2003 audit issues and close out issues, and quarterly mini-close out meetings have begun. FDA has re-engineered procedures to obtain accurate information in a timely manner, performed quarterly reconciliations on property and other accounts, and trained center staffs.
Financial Systems - The Unified Financial Management System (UFMS) will replace five legacy accounting systems currently used by HHS OPDIVs. The UFMS will integrate the Department's financial management structure to provide more timely and consistent information, and promote the consolidation of accounting operations that will substantially reduce the cost of accounting services throughout HHS.
The Financial Enterprise Solution (FES) comprises a set of distinct and separate financial management applications that will be integrated into the UFMS framework. The goal of FES will provide innovative solutions to:
- Improve financial management services throughout FDA using the latest web-based technology to integrate systems;
- Improve response time and financial reporting to OMB, HHS and to FDA components;
- Replace 30-year old legacy systems and provide real-time access to financial information; and,
- Maintain a clean audit opinion.
As a strategic partner in the success of UFMS, FDA works with resources across the Agency to implement the system.
Much progress has been made these past two years to maintain legacy systems and to automate other processes. The Travel Manager application, which is a web-based travel authorization and voucher payment system has been completely implemented throughout FDA as of October 2003. In recognition of their successful collaboration on improving travel management, FDA and the NIH received a travel management award from the Government Executive Magazine in June 2003.
The agency location code unification project, which reengineered part of the accounting process, was completed in FY 2003, and the automated accounts systems payable implementation was completed in FY 2002. FDA is continuing a data clean-up in the field resulting in a reduction of the number of open documents and disbursement differences that amounts to a cost savings of $2.5 million. The clean-up effort has purged all duplicate and invalid common accounting numbers used in the field.
As these projects are completed, resources are assigned to other activities, including the implementation of the Purchasing Request Information System, the newly enacted Animal Drug User Fee Act program, a web-based 348 travel application as part of Travel Manager, and a participation in the e-Travel initiative. An important ingredient of a successful outcome is managing the change communication efforts so that all affected parties including employees, the FDA's union, stakeholders, and others know the business changes that will be occurring.
- FY 2004, FDA will begin the development phase of the UFMS project. This will involve evaluating the software to see if it meets FDA-specific needs, testing the new system and determining training requirements for users. The Agency will also continue data clean-up; collect management reporting requirements; and support the upgrade of the legacy systems.
- FY 2005, FDA will complete implementation of UFMS, replacing its old general ledger accounting system and continue planning for additional modules while continuing to support its current systems.
Accountability - For the past six years, FDA has received a clean (unqualified) audit opinion by emphasizing training and communications; putting increased emphasis on completing critical reconciliations, and holding managers accountable for their assigned areas of responsibility. While FDA's financial management systems do not completely comply with the Federal Financial Management Improvement Act, this non-compliance will not be an issue.
Financial performance measures are included in the performance plans of all senior executives at FDA. OFM managers are accountable for financial decision-making and compliance with regulations through their performance plans. Monthly and quarterly reconciliations are prepared to ensure the balances reported in financial reports are accurate.
Procedures for authorizing expenditures are structured to ensure multiple levels of review and approval for expenses including travel, publications, and conferences. Centers establish their own procedures for review of travel orders and procurement documents. Program and administrative personnel review these documents to ensure the expenses are necessary and appropriate. All travel and procurement documents are reviewed for funds availability prior to final approval. Procedures for authorizing expenditures are structured to ensure multiple levels of review and approval. During FY 2003, FDA updated financial policies and procedures.
Integrate Financial and Performance Management Systems - The requirement to support the integration of performance and financial reporting that meet the specifications in OMB Circular A-11, Part 6 has been identified within UFMS. A custom reporting solution in the Oracle Federal Financial software will be created to comply with this requirement. During FY 2005, FDA will perform an evaluation of the activity-based costing (ABC) systems to determine which system is more suitable to FDA's business needs and meets UFMS requirements. The implementation of an ABC system will enable FDA to become compliant to the Federal Financial Management Improvement Act. FDA has also agreed to participate in OMB's marginal cost pilot.
The FDA's Annual Financial Report includes a discussion on FDA's costs which is derived from the Statement of Net Costs. The discussion highlights costs by the object class (e.g., personnel services, contractual services, etc.) and by programs (e.g., foods, human drugs, biologics, etc.).
IT Consolidation - FDA continued its progress towards the consolidation of its IT infrastructure by collaborating with HHS towards achieving its "One HHS" goals and objectives; initiating efforts to accomplish the IT consolidation goals mandated by the reauthorization of PDUFA; and establishing an IT Shared Services organization to manage the FDA's consolidated IT infrastructure. To this end, FDA has:
- Launched the Office of IT Shared Services Organization - The goal of the FDA was to stand up this organization to facilitate the goal of IT consolidation, enabling the Agency to deploy IT effectively and efficiently. This was achieved on October 1, 2003. This organization will facilitate management of FDA's IT resources, enabling the Agency to devote more time and effort to its e-government efforts. In addition, the Office of the Chief Information Officer (CIO) was reorganized to ensure key strategic leadership in IT and as a better capability for ensuring that IT strongly supports FDA mission goals and objectives;
- Collaborated closely with HHS in the following manner:
- Assumed the project lead for the HHS-Net effort, to modernize the Department's network (FDA has already installed the necessary infrastructure and will be the first OPDIV to migrate to the new network in January 2004; and,
- Actively participated in the effort to outsource email to a single provider for all of HHS;
- Completed its PDUFA III IT Strategic Plan which outlines long term strategies for meeting PDUFA goals and effecting consolidation;
- Instituted the PDUFA IT Governance process to more closely link PDUFA IT initiatives to satisfying PDUFA III IT goals;
- Made substantial progress in the area of standardization by implementing the Electronic Common Technical Document (eCTD) specification, releasing draft guidance, and deploying the eCTD Viewer system as a tool in reviewing the new application submitted in the eCTD format;
- Developed "As Is" baseline architecture and initiated the Agency e-submission strategy which includes the development of a requirements and appropriate target architecture;
- Produced, and initiated implementation, of a corrective Action Plan to effect mature project management practices throughout the Agency including establishment of a PM training program;
- Developed and implemented on schedule the FDA Unified Registration and Listing, in the short term, produced a Food Registration and Account Management Module that met the mandatory requirement for Food Facilities to begin registration on October 12, 2003 and, in the long term, will consolidate other FDA registration systems; and,
- Advanced the Capital Planning and Investment Control process as a result of the establishment of the Project Management Office, which has fostered project management training, and development of policies relating to the systems development life cycle and governance process; and acquisition and institutionalization of a portfolio investment management tool.
Enterprise Architecture "IT Projects" - FDA has made significant contributions to this effort by offering up key IT and technical personnel to actively participate in each of the Department's project teams. This collaborative effort also extends to the Enterprise Human Resource Planning project and HHS CorporateUniversity. Agency IT staff have also contributed to the development of the HHS 5-Year IT Strategic Plan. The FDA has begun the development of an Enterprise Architecture, having completed an "As Is" baseline. The EA efforts continue to be closely aligned with the DHHS EA Program.
Government E-Projects - FDA is continuing to contribute key IT and financial technical personnel in support of various Departmental projects. For example, FDA is participating with the Department, who is a managing partner, in the Federal Health Architecture (FHA) initiative, which is a set of guiding technology and management principles that will impact the health industry by enabling innovation in care, reduced cost, and improved access and enhanced public health threat preparedness. FDA is participating in the interagency work group, which will create and develop an FHA business case; develop a pilot "Single Line of Business" architecture as a proof of concept; and promote the adoption of FHA principles across the public and private health sectors.
The Agency will be participating on the E-grants project team. FDA has assumed a leadership role in the Department for the On-line Rulemaking Initiative - the formal launch of Phase I of www.regulations.gov was successfully held on January 23, 2003.
The Online Rulemaking initiative is one of the G2B initiatives designed to improve business and citizen access to the Federal rulemaking process. There has been an average of about 60,000 to 75,000 hits per day. Comments made to the Helpdesk about the site have been very positive.
Work has begun on structuring Module 2, and a team has been set up to provide continuing maintenance and web site change control. The team is now involved in the Phase II requirements process. The team has a representative on the technical and the legal workgroups. The legal workgroup is currently identifying legal issues that will have to be resolved before moving to a central system. The technical workgroup is working to define the technical blueprint/road map for the construction of the eRulemaking system.
In addition, the Agency has a representative, the Associate Commissioner for Policy and Planning, sitting on the Executive Council. The purpose of the Council is to review funding and policy issues that may arise out of Phases II and III of the project.
FAIR Act Inventory - In accordance with the Federal Activities Inventory Review (FAIR) Act of 1998, FDA submitted its 2003 FAIR Act inventory, which identified 1,593 FTE as commercial and 8,943 FTE as inherently governmental.
Competition Schedule - In FY 2003, FDA completed all scheduled cost comparisons involving 231 FTE in an average of 12 months or less meeting both the old and new revised competitive sourcing standards for success. FDA's experience with the competitive sourcing initiative has replicated the research finding that A-76 competitive sourcing studies typically result in a reduction of about 20 percent in costs even if the Federal organization retains the function in-house.
Full cost comparison studies of graphic arts/visual information services, medical/scientific library services, and a television studio were done in FY 2003. The decision was to retain the functions in-house and the Most Efficient Organizations (MEOs) were implemented in December 2003. Full cost comparison studies on General Accounting, Facilities, and Biological Physical Science Technicians were completed in FY 2003 with decisions to retain these functions in-house and implement the MEOs in March of 2004.
From those six MEOs, FDA estimated total expected savings over a five year performance period for the six MEOs is $16,300,000 with no involuntary separations. All studies resulted in the function being retained in-house.
The clerical support services area is the next area that was selected for study. Since there are nearly 600 employees who serve in these clerical series, FDA management decided to define what clerical work would actually be studied. This is necessary to determine which positions actually fit the definition and would become the basis of the study. Phase II is scheduled to begin in FY 2004 and consist of completing pre-planning functions prior to beginning the study in February 2004 with completion scheduled for February 2005. The results of this assessment will shape how the scope of the competition study will be conducted.
Participates in Department-wide Initiatives - FDA will provide DHHS with the number of positions affected, names of new contractors, statues of employees studied when final decisions are announced. FDA is also renegotiating its Memorandum of Agreement with the National Treasury Employee's Union to reflect changes to OMB Circular A-76. FDA has also been instrumental in helping HHS formulate its competitive sourcing and green plan which was recently forwarded to OMB. In addition, FDA is working with HHS to develop criteria to define a high performing organization.
Budget and Performance Integration
This presidential initiative directs agencies to integrate performance review with budget decisions; provide increase indicators of program performance by developing outcome measures and associated cost information; and show the full cost of resources in budget documents. Progress is shown in three areas: annual plan / report, program outcomes, and program effectiveness.
Annual Performance Plan / Report -The Agency conducted an extensive planning process by which it created a strategic plan with strategic goals, objectives, and action plan. Strategic planning workgroups, composed of representatives from the Centers, ORA, and the Office of the Commissioner, developed long-term outcome goals for each strategic goal area. The work groups also developed an action plan that provides specific milestones for each strategy area. The intent of the action plan was to develop the capacity and processes necessary to meet agreed-upon performance commitments and outcome goals that are formulated in the Annual Performance Plans. The Strategic Plan was released August 20, 2003 and can be found at www.fda.gov/oc/mcclellan/strategic.html.
The FY 2005 Annual Performance Plan is built on the Agency's strategic planning process by aligning performance goals with the strategic direction outlined in the Strategic Plan, the DHHS Strategic Plan, and the Secretary's FY 2005 Priority Initiatives. The Plan's goals and measures flow from the mission through specific strategic goals and strategies and are tied to the three documents. At the strategic goal level, resource funding is provided as an aggregate amount and covers all of those performance goals under a specific strategic goal. The Plan included several long-term program outcome goals and one agency-wide efficiency goal that were finalized doing the OMB's FY 2005 Program Assessment Rating Tool (PART) review of FDA.
The FY 2005 Performance Plan is linked to the FY 2005 budget request. The budget request describes the use of the funding but the specific performance implications are included in to the annual performance plan. The FY 2005 budget request includes examples of specific performance goals throughout the document to illustrate the request's description with a specific performance measure.
Program Outcomes - The development of the outcome goals began during the fall of 2002 in response to the corrective actions promised by FDA for the FY 2004 PART evaluation. The FY 2004 PART also shaped FDA's planning and budgeting processes by focusing on improving program performance and accountability, and by identifying potential outcome goals and funding strategies. The results of the FY 2004 PART assessment showed:
- The five FDA programs showed even performance across the Agency;
- The field component of the Foods and Medical Devices and Radiological Health programs needed to be improved; and,
- Additional funding should be sought for those two programs that had received the lowest score.
The FY 2004 PART review and strategic planning process shaped the FY 2005 budget process by formulating long-term outcome and efficiency goals that were presented during the FY 2005 PART review. The PART meetings with OMB staff resulted in positive feedback in FDA's current approach.
Program Effectiveness - Performance contracts have been instituted that require senior program managers to commit to a level of performance as it is articulated in a specific performance goal. The senior program managers will also be involved in creating an organizational culture that focuses on outcomes and results. This engagement by the program managers will provide a greater incentive for the organization to achieve results. During FY 2003, FDA incorporated the Department's 10 Program Goals and Management Objectives in developing the 2003 Performance Contracts for the Commissioner, all SES’s and all GS-15's. FDA cascaded the management and program objectives into the plans of all Agency GS employees nationwide.
We have reduced the overall number of goals in the performance plan from 71 to 46, and included new long-term outcome goals. In addition, the mix of goals has been refocused toward high-risk goals, particularly to guard against the terrorist threat.
Five FDA programs were chosen for the OMB FY 2004 program assessment (PART). OMB gave the five programs (Foods, Human Drugs, Biologics, Devices, and Animal Drugs) a rating of "results not demonstrated." As a result of the FY 2004 PART evaluation, several long term outcome goals were developed. These were finalized and presented during the FY 2005 OMB PART Review.
In the FY 2005 review, OMB decided to review FDA as a single entity and not five programs. FDA presented a set of long-term outcome goals that would impact the public health. These goals were presented in the context of the five strategic goal areas. In this review, FDA received a higher score (77 percent) than in FY 2004 (59 percent) because of the significant improvements made. As a single entity program, FDA was able to demonstrate that it had developed long term outcome goals, several efficiency goals, the improved efficiencies in achieving goals, and the new linkage of the goals to achieve an incremental societal benefit.
PART Follow-up - FDA has created a new set of ambitious, measurable long-term outcome goals for FY 2005. Nevertheless, OMB was concerned that the goals were too new to show any measurable progress in meeting those goals and, in some cases, that baseline data was not yet available. While OMB did not issue any specific recommendations, the Agency is committed to develop the baselines and performance targets for achieving these goals.
In past three and half years, FDA has made considerable progress in reshaping its management systems and business practices to create a responsive, streamlined organization that will provide the right balance of support to mission-critical programs.