July 19, 2002 | Backgrounder on Department of Homeland Security
The creation of a Cabinet-level department is always a complex undertaking, but the establishment of the new Department of Homeland Security (DHS) is especially so. The proposed department would permit the integration of nearly two dozen component agencies under unified leadership so as to function in complementary fashion, eliminating unnecessary duplication and separating out activities with conflicting missions and goals.
The Administration and Congress can learn good lessons from past experiences. More than dollars, the DHS will need organizational, staffing, and funding flexibility if it is to succeed in its mission of protecting the American people from acts of terrorism.
The Process of
The first step in creating the new department is to define its functions and activities. This step is well underway, following on hard assessments that existing federal agencies and organizations had failed to foresee or forestall the tragic events of September 11. The Administration has concluded that a rationalization of functions and organizations into one focused Cabinet-level department is essential to remedy the current dispersed and decentralized responsible for homeland security.
The next step is to structure the department in a manner that permits the integrated components to function in complementary fashion, eliminating unnecessary duplication and separating out activities with conflicting missions and goals. The Administration offered a blueprint for this step in its legislative proposal to Congress (H.R. 5005).1 Of necessity at this formative stage, the proposal leaves many administrative details to subsequent determination. The blueprint calls for flexibility in organizational design, funding, and personnel management. Congress should follow suit as it crafts the final legislation creating the DHS.
Although congressional reviews of the Administration's proposal have focused on many of these flexibilities, they have predictably been attacked along lines that reflect the authorizing jurisdictions of many congressional committees. This is unfortunate, as the public debate is now more about congressional turf battles than about the core issue of devising, within a compressed time frame, an organizational plan for a department that is of such vital importance to the safety and security of every American. It is precisely because time is of the essence that Congress must take a different approach in considering this particular government reorganization plan.
The Need for
Past experience in establishing Cabinet-level departments offers the Administration and Congress guideposts for minimizing jurisdictional and bureaucratic turf battles in establishing the DHS. While the Departments of Veterans Affairs, Energy, and Education were each formed by elevating existing agencies to Cabinet status, the Department of Transportation (DOT) was formed as an amalgam of various independent federal agencies.
Indeed, DOT provides a useful model of what can go wrong in mapping strict congressional jurisdictions into a government enterprise. The Federal Aviation Administration (FAA), Federal Highway Administration (FHwA), Urban Mass Transit Administration (UMTA), Federal Railroad Administration (FRA), U.S. Maritime Administration (MARAD), and U.S. Coast Guard had been created as independent agencies through separate authorizing legislation. For the most part, after they were melded into DOT, their administrators retained budget authority and program responsibility. During the Reagan Administration, administrators for the FAA, FHwA, and UMTA would come before Congress to defend their budgets separately from the Secretary's budget.
This kind of compartmentalization of jurisdictions led to gross inefficiencies in addressing public transportation issues. For example, an airport authority planning a new or expanding an existing airport would seek a grant from the FAA. If an exit on an interstate or a connector road to an interstate were needed, a separate study was required and a separate proposal submitted to the FHwA. Commuter access by bus, jitney, or light rail and attendant parking facilities would involve UMTA. Even when local jurisdictions took an integrated approach to a transportation issue, the federal DOT would in effect force them to disaggregate their proposal.
Timing the arrival of funding from three separate federal agencies in support of one unified project proved to be more of an art than a science. Each DOT agency evaluated the merits of any proposal based on its own priorities and the availability of funding for its own grants. Though it is difficult to envision the planning of a commercial airport without including roads and public access, the statutory process effectively required such a piecemeal approach.
The Reagan Administration attempted to deal with such compartmentalization through the use of "block grants," permitting recipient jurisdictions to cut across artificial limitations in the use of public funding for local projects. A similar approach was used to eliminate duplication and other limitations in education grants, labor training programs, and housing projects.
In its review of President Bush's proposal, Congress is already laying the groundwork for a repetition of past functional conflict and disarray. One House committee has formally proposed that the Federal Emergency Management Agency (FEMA) maintain its independent status when it moves into the DHS. Other committees, asserting their jurisdiction, have called for splintering off various components of other agencies in the course of their move into the DHS.
The Need for
The DHS's many missions will each need to be fully funded. The Secretary of Homeland Security will need a flexible budget to enable the new department to hit the ground running and be ready to respond quickly to the ever-changing threats. Because terrorists may strike at any time, anywhere, DHS's priorities before, during, and after the budget process may change. The Secretary should not be required to ask Congress for approval to shift departmental resources each time terrorists' tactics change. Under H.R. 5005, the Secretary would have to report any reallocation 15 days in advance.2
With respect to the President's request that the Secretary of Homeland Security be granted the flexibility to reprogram 5 percent of the DHS budget to respond to dramatic new threats or national catastrophes, the House Select Committee on Homeland Security recently agreed to approve only 2 percent for two years. This shows precisely the kind of narrow congressional mindset that must be discarded in this time of war.
The Need for
The success of the new DHS also will require personnel flexibility so that its leadership can create a results-oriented and performance-based organization. Personnel systems and cultures will need to change. This will require the implementation of management systems that hold individual employees accountable for their performance. Excellence must be recognized and rewarded through promotions, pay increases, and performance awards. Likewise, poor performance resulting from inaction, poor judgment, or misconduct must be dealt with and appropriate disciplinary measures meted out.
Unless both ends of the performance spectrum are addressed and managed, accountability will not be sustained and, invariably, both performance and morale will deteriorate. The recent trend in the federal government has been to abandon robust multi-level evaluation systems and implement pass-fail systems. Tens of thousands of federal employees are now covered by such two-level systems. Group awards and group accountability are also being pursued with greater frequency.
Thus, in many government agencies, poor performance is tolerated because of the inherent difficulties and disincentives for managers to address the problem. The resulting culture of mediocrity complicates matters further, often driving away the best and most motivated employees.
Where such expectations for performance have deteriorated in the transferred components of the new DHS, the necessary cultural changes will not come easily. Hence, the Secretary will need broad personnel flexibility. According to a recent report in The Washington Post, the Office of Personnel Management (OPM) estimates that the Secretary of DHS will inherit seven payroll systems and up to 22 personnel systems.3 These systems will differ in how pay and benefits are determined; how employees are evaluated, rewarded, and disciplined; how they may be hired; and how much authority the department retains to assign or reassign individual employees. Management will indeed need great latitude in the personnel rules to build a successful institutional culture at DHS.
As the lessons from prior experiences in creating a new Cabinet-level department show, there are ways to facilitate efficiency and effectiveness and ways to undermine those goals. As Congress reviews the Administration's proposal for creating the Department of Homeland Security, Members should ensure that the final legislation will:
The second phase--reorganization--would extend beyond the transition period as various component agencies are integrated through the policy process and administrative procedures into a cohesive enterprise. This phase could take two to three additional years to implement. Only then should Congress address the formal codification of the DHS, using the benefit of operational experience to better evaluate the new department's effectiveness.
In the short term, management may need to smooth out unequal treatment of employees based on disparate pay systems. Cross-training across different occupational series to enhance the skills of entire groups of employees will require significant changes in the classification of current occupations. The department should consider establishing a streamlined dispute resolution system, providing for internal agency appeals and reviews and ending with the Secretary as final arbiter.
The Administration has proposed, in addition to the DHS Secretary, a deputy secretary, five undersecretaries, and 16 assistant secretaries to administer the department and manage its programs. Six of the assistant secretaries would be subject to Senate confirmation. In this early stage of organizational crafting, all 16 assistant secretaries should be proposed for presidential designation without confirmation. Only after the DHS comes before Congress for final codification should the decision as to which assistant secretaries should be Senate-confirmed be made. The decision should be based on the scope of their jurisdiction and program responsibilities.
The complexities attendant on managing this workforce, evaluating current skill mixes, and planning for evolving needs justify the flexibilities in personnel authority that the Administration has built into its proposal for the new department. The President's request for broad flexibility in dealing with personnel rules should be supported to the maximum extent possible.
Congress has the opportunity to give the new Department of Homeland Security a fresh start in addressing critical matters of public safety and security. After months of scrutiny and oversight over the shortcomings and failings of the current systems, the nation cannot afford for Washington to return to business as usual. The President's proposal with built-in flexibility for reform merits congressional support.
George Nesterczuk is President of Nesterczuk and Associates, a management consulting firm in Vienna, Virginia. He served as Associate Director of the Office of Personnel Management and held senior positions at the Department of Defense and Department of Transportation during the Reagan Administration. From 1995-2000, he served as Staff Director of the Subcommittee on Civil Service of the House Government Reform Committee.
1. For more information on the President's proposal, see http://www.whitehouse.gov/news/releases/2002/06/20020618-5.html.