Originally Broadcast October 27, 2007s
Welcome to The Business of Government Hour, a conversation about management with a government executive who is changing the way government does business. The Business of Government Hour is produced by The IBM Center for The Business of Government, which was created in 1998 to encourage discussion and research into new approaches to improving government effectiveness.
You can find out more about the Center by visiting us on the web at businessofgovernment.org.
And now, The Business of Government Hour.
Mr. Morales: Good morning. I'm Albert Morales, your host, and managing partner of The IBM Center for The Business of Government.
Healthy and productive individuals, families and communities are the very foundation of the nation's present and future security and prosperity. The Administration for Children and Families within the U.S. Health and Human Services Department partners with state and local governments, for-profits and nonprofit organizations, faith- and community-based organizations and Native American tribes to design, administer and promote programs that strengthen children, families and communities.
With us this morning to discuss ACF's efforts is our special guest, Curt Coy, Deputy Assistant Secretary for Administration at the Administration for Children and Families within the U.S. Department of Health and Human Services.
Good morning, Curt.
Mr. Coy: Good morning.
Mr. Morales: Also joining us in our conversation is Tom Romeo, IBM's general government industry leader.
Good morning, Tom.
Mr. Romeo: Good morning, Al.
Mr. Morales: Curt, let's start by talking about the Administration for Children and Families, otherwise known as ACF. Could you share with us a sense of the history, mission and activities of your organization, and how it supports the overall mission at HHS?
Mr. Coy: I most certainly will, Al. We like to think of ourselves at ACF as the social services of HHS, the Department of Health and Human Services. We're the human services piece of the HHS. Back in 1991, ACF was two different agencies, and they merged into one organization. And since then, as your introduction alluded to, we're principally responsible for those federal programs that promote the economic and social well-being of families and children and individuals.
We have a number of relatively well-known programs, one of which is the Temporary Assistance for Needy Families, commonly known as welfare, and other things like child care, child support, child support enforcement, community services. And we also have subagencies like the Administration for Native Americans and the Administration for Developmentally Disabled folks.
Mr. Morales: Now, this is certainly a very broad mission. So can you give us a sense of scale of the organization, how is ACF organized, the size of its budget, number of full-time employees and its geographic footprint?
Mr. Coy: In round numbers, ACF has about 1,250 federal employees, and a probably close to equal number of contractors, maybe a few less. And we are split essentially equally between Washington, D.C., or the central office, and 10 regional offices throughout the country. Depending on how you count them, about 120 different programs, social programs that we administer. And they're made up of all kind of programs; discretionary, mandatory, entitlement programs, research and development. Every kind of grant-type program there is, we manage at ACF.
Our current budget is somewhere around $47 billion, which makes ACF the second largest agency within the Department of Health and Human Services after Medicare and Medicaid folks within HHS. Our budget, just to put in some degree of context, is bigger than the National Institutes for Health, the Centers for Disease Control and Prevention and the Health Resources Services Administration combined.
Mr. Morales: That's a lot of money and programs to manage with a seemingly modest number of resources.
Mr. Coy: We like to pride ourselves on being able to manage these programs. In reality, ACF is about 2.1 percent of the entire HHS population, but we're managing probably more programs and more dollars than any agency within HHS.
Mr. Romeo: Curt, thanks for providing us with that sense of the organization. Perhaps now you could tell us a little bit more about your area and specific role within ACF. What are your specific responsibilities and duties as the Deputy Assistant Secretary for Administration? And maybe you could tell us a little bit about the areas under your purview.
Mr. Coy: I sure will, Tom. The Deputy Assistant Secretary for Administration, for all intents and purposes, is the chief operating officer of the agency. And you can well imagine all of those sorts of things that come underneath that: resource management, human resources, acquisition, contracts. I also wear the hat of CIO for the Administration for Children and Families. I also wear the hat of CFO, chief financial officer, and the chief grants officer. It's one of the largest grant-making agencies within the federal government. Within my specific office, we have about 220 folks. That's about 100 people here in Washington, D.C. and about 120 in the 10 regional offices that we have throughout the country.
Mr. Romeo: Regarding your responsibilities and duties, what are the top three challenges that you face in your position, and how do you address those challenges?
Mr. Coy: I don't know if these will be in order, but they're the ones that come to mind: first and foremost is the human resource or human capital, and the resource management of how we do our work in ACF. And that's a combination of factors of federal employees, contractor employees, support employees and so on and so forth. ACF's workforce, the demographics of that workforce, is clearly a challenge. It is a maturing workforce. And so getting in good folks and doing good succession planning is a real big challenge.
Most certainly is grants. But we do a lot of grants in ACF, and being able to mange that function effectively, to be good stewards of the taxpayer money, is critically important. On the other side of that fence is the chief financial officer or financial role that I play in ACF. And, again, that's ensuring that we are good stewards of the taxpayer money. But on a practical level, that's the CFO audit, that's all of those things that go with being the CFO.
That's three. And I would add probably two others: the technology challenge. That clearly is critically important as we go down the road and start looking at how we best utilize both our people and our contractors in our systems work.
And then finally, probably one that's more near-term in the next 18 months to two years is sort of stability. And what I mean by that is clearly, the election cycle is upon us, and looking at those challenges as we go down the road and ensuring that we have a stable senior leadership within ACF, and that stable leadership is comprised of both political appointees and career senior managers.
Mr. Morales: Curt, you and I have had the pleasure about 10 years ago of crossing paths, and I know you have a very interesting background. So I'm curious, can you describe for our listeners your career path and how you got started in your career?
Mr. Coy: It's probably one of the stranger career paths. I started out as an enlisted person in the Air Force. For some strange reason, I was accepted into the Naval Academy, graduated from there. Spent the next 20-some years in the Navy as a naval officer; first as a, if you will, a ship driver, and then the last 10 or 15 years as a supply corps officer. Supply corps officers in the Navy are generally considered the business and financial managers of the Navy.
After that, I went to work for Coopers & Lybrand, which then morphed into PricewaterhouseCoopers. I was there for about seven years. I was hired in 2000, in the fall of 2000 to be the director of the HHS Program Support Center, which is about a $400 million fee-for-service organization.
Two years later, I was asked by the new Secretary, then-Secretary Thompson, to become the Deputy Assistant Secretary over at ACF.
So that's the condensed version.
Mr. Morales: That's the Reader's Digest version.
So with all these broad ranges of experience, how has your career, both in the Navy and later on in the private sector, prepared you for your current leadership role and shaped your management style and approach?
Mr. Coy: I don't think any one thing shapes or makes a person what they are now. But there's a lot of background that goes with that. Folks have asked me similar-type questions. My background of being a naval officer is accountability. And that accountability leads to lots of other things.
Probably one of the characteristics that makes a good leader is curiosity. Why do these things work this way? Why do people do things the way they do it? And then probably, I've given a number of lectures at HHS about leadership, and one of the things I tell people is leadership is about taking care of folks. And there is a difference between management and leadership. And I often tell people that management is managing things and leadership is leading people.
Mr. Morales: Great. Thank you.
How is ACF integrating budget and performance information? We will ask Curt Coy, Deputy Assistant Secretary for Administration at the Administration for Children and Families, to share with us when the conversation about management continues on The Business of Government Hour.
Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Curt Coy, Deputy Assistant Secretary for Administration at the Administration for Children and Families. Also joining us in our conversation is Tom Romeo, general government industry leader for IBM.
Curt, let's talk for a moment about the President's Management Agenda, or the PMA. In the last OMB scorecard, about half of the federal agencies, including your department within HHS, received a red rating in financial performance. Could you tell us from your perspective why this is such a challenging area for federal agencies? And second, what has your agency done to contribute to your department's progress and improvement over the last year, so much so that OMB has provided a green rating in progress?
Mr. Coy: Well, that's a long question and an interesting one. In ACF, we've been very successful in the PMA overall. Each quarterly progress rating since 2003, ACF has gotten about 105 out of 109 green progress rating.
With respect to the financial management challenges, just set the stage very, very quickly. The Department of Health and Human Resources is 65,000 employees. In round numbers, their net cost of operations is about $623 billion. HHS also has about 12 operating divisions, of which ACF is one of them, National Institutes for Health is another, and so on and so forth, and about five major accounting centers.
HHS has been working very, very hard to implement a systems-oriented approach to financial management. We have a system called the Unified Financial Management System, but having said what I said about HHS and their budget and the number of divisions, you could say the same thing about the Department of Defense and Homeland Security. The complexity of these organizations is clearly a challenge.
What PMA does is they assign scorecard ratings of red, yellow, and green. And then they divide that further every quarter into progress ratings and status ratings. Right now, HHS is green in progress and red in status. The red in status is in large part due that we're not finished with our UFMS implementation.
The challenge of implementing the state-of-the-art sort of systems environment is exasperated by the size and complexity of what HHS does, or the other federal agencies that are red. But the good news is, as you look at HHS, the progress ratings -- and what progress does is says you're moving toward and doing the right things. And what's exciting about that is HHS has been receiving these green progress ratings. In other words, we're hitting the milestones.
So financial management is not just the CFO audit. It's also looking at how do we develop and adapt a world class financial management system and practices, and use that information on a daily, weekly, and monthly basis.
Mr. Morales: Now, could you talk a little bit about budget and good practices? Budget and performance integration lies at the heart of ensuring both strategic allocation and the efficient use of funds. Many organizations are working to implement the budget and performance integration aspects of the PMA.
But can you tell us about your agency's efforts to get to green and sustain for the budgeting and performance integration? And how has your organization expanded the use of financial data to inform the management decision-making process?
Mr. Coy: Our President's Management Agenda scorecard with respect to budget and performance integration is we have a green in status and we have a green in progress.
First and foremost is probably our PART success. And the PART is the Program Assessment Rating Tool. We are also using financial data to inform management on a number of things, such that we turn things around and use financial data to make decisions.
And I'll give you two or three examples. We use financial data to look at or improve program oversight, debt collection, implement actions resulting in cost savings to the agency. And some of these things are as mundane as prioritizing site visits to grantees, decreasing the number of open or active grants.
I will tell you, in ACF, we have a real success story with respect to grant audits. We've closed over 7,000 grant audits in the last three or four years. We've made a concerted effort to use that financial data to close out a number of our grant audits. We also improved our single audit compliance supplements and a number of our internal controls. Our Child Support Enforcement folks use the information out of UFMS almost on a daily and weekly basis to do forecasting, to take a look at actual expenditures, to take a look at how we prioritize conference spending and travel, and the list goes on and on and on.
The good news is, in all honesty, the use of financial information in today's government is critical. And I don't know that we're proud that we're using it. It's a practical application of what we have to do. And we have to do that because we don't have the kind of people -- numbers -- that we used to.
In the good old days, if you will, it was kind of fun and interesting and easy to have people with spreadsheets and keeping track of all of these things. And we don't have that luxury anymore. But again, it goes back to technology making things happen a little bit better and faster.
Mr. Morales: Now, Curt, earlier in describing your career, you used the word "accountability." So I find it interesting that your organization has received an unqualified opinion on its principal financial statements for the eighth consecutive year, I believe, which clearly demonstrates a pattern of financial accountability. What is the significance of having this clean opinion? And what are the keys to successfully achieving a timely and clean opinion?
Mr. Coy: Well, first, the significance to me is it clearly shows that we're working hard to be good stewards of the taxpayer money. It's not just simply making sure all the numbers are in the right columns or in the right categories. The CFO audit has become so much more than that. It shows that we're a professional organization, that we take pride in what we do, and we stay on these things.
And that's probably the next thing you have to remember: you got to keep up with this year-round. This is not a two-week drill at the end of the fiscal year. This is something that you do over and over and over again throughout the entire year. And probably most importantly is we've been -- knock on wood -- pretty fortunate to have some very, very sharp folks working on this. I think the success of any program in any organization, whether it's in the private sector or public sector, is dependent upon having good folks. And we have some incredibly sharp people that are doing these things, and they're incredibly dedicated.
Mr. Romeo: Curt, part of that accountability is around improper payments. And agencies are required to annually review programs to identify those susceptible to significant improper payments. Improper payments can include payments made in the wrong amount, to an ineligible recipient, or improperly used by the recipient.
Can you elaborate a little bit on the initiatives and strategies that the department has employed to manage and reduce improper payments? Tell us a little bit about the progress you've made. I think the progress you've made in the other areas is very impressive. And then talk a little bit about how much of a challenge that effort still presents to your agency.
Mr. Coy: In HHS, we have about seven programs that are tracked by the Department or OMB, the Office of Management and Budget. Of those seven programs, Medicare and SCHIP, and so on are some of the others -- but ACF owns four of them; the TANF program, which is welfare, Temporary Assistance for Needy Families, our child care program, our foster care program, and our Head Start program. And we also have an improper payments initiative called PARIS. I'm going to talk about that in a few minutes as well.
But the fact of the matter is these four programs are integral to the Department of Health and Human Services' improper payments initiative. And each one presents a different challenge. For example, for the Temporary Assistance to Needy Families, or welfare, that's principally a block grant program that goes out to states. The federal government, for all intents and purposes, does some oversight of that program. But it's left principally up to the states to develop their own welfare programs. That was part of welfare reform back in 1996, and was reinforced again by the reauthorization just last year.
When you say improper payments, we shouldn't be giving money out to the wrong people in the wrong amounts of money. For example, TANF, each state has different eligibility requirements. And so do you measure those that are ineligible, do you measure how many improper payments go to people that aren't supposed to be getting it? Just coming up with those kind of small nuances is critically challenging, if you will.
On the flip side of that is the Head Start program, which is a lot more discretionary program. And what we've done is we've developed an error rate, and we're reporting these things in our budget on a yearly basis. And so -- in each one of these things, they're each done separately.
Now, we've also done about 7 to 15, depending on how you count it, risk assessments of programs that we also have. And we are very serious about it. ACF deserves a lot of credit, those program folks deserve a lot of credit for coming up with strategies to implement the 2002 law.
Mr. Romeo: I can see where, with as many programs as the ACF oversees, it could be a real challenge to track payments across all of those and ensure the correct payments, especially with the number of people that you have as employees.
Mr. Coy: Well, it really is a challenge, because each of these four programs are entirely different, so you can't measure improper payments in Head Start the same way you might measure improper payments in the welfare program. And then there is the child care program and the foster care program. And they're all different size budgets, but they all go out and they're managed by states. The Head Start program is managed by Head Start grantees. And so you can imagine the rolling effect of this.
But what's also interesting is watching the end users of this improper payments initiative and that cultural change, because their first instinct was, "We don't want to have anything to do with this. It's not my problem. That's a federal government problem." Then it went to, "Well, I really don't want anybody to know my error rate." "Who wants to be told what your error rate is? I don't care if it's 1 percent or 50 percent. Nobody wants to be told that you have an error rate."
And that cultural shift is changing now, such that you see things, the nuances of seeing state and local websites that say, "And we're doing these things to support the President's Management Agenda." Or "We're doing these things," maybe not necessarily to support it, but in response to the President's Management Agenda, or in response to the Improper Payments Act.
And we've taken it from, if you will, an environment, I think anyway, that is negative in nature, such that it's now looked at in terms of, "This is critically important." It doesn't mean that you're going to get back all of this money. It doesn't mean that there is going to be billions of dollars that gets poured back into the federal treasury. But what it means is that we, as good stewards of the taxpayer, both at the federal level and at the state and the grantee level, are paying attention to this. And I think that's really the cultural change that one's looking for.
Mr. Romeo: I think the effective application of those dollars to the people they're intended for is a very positive outcome of the programs that you're running.
Mr. Coy: Well, if you look at any one of these significant Improper Payments initiatives, for every dollar that is not spent in the wrong areas is another dollar that can be spent on a Head Start grantee or can be spent on the state's welfare system, can be spent in child care and foster care.
Mr. Romeo: One other area of assessment is the PART tool. So in 2003, the Office of Management and Budget initiated its Program Assessment Rating Tool, commonly referred to as PART. It places greater emphasis on results and outcomes rather than processes and outputs. Can you tell us a little bit about how your agency has performed under the PART? And how has PART enhanced your agency's performance management efforts?
Mr. Coy: PART is rather interesting, and it started out rather slow. And the concept is, "We're not going to just give you money. And to fix your program, we're going to have to give you more money."
What the Program Assessment Rating Tool tries to do is take a look at the intent of the program, and is the program successful with respect to the intent of that program. And so they break PART down into about 25 questions and its four different areas, with the first and fourth section the most important. And then they rate each program as effective, moderately effective, adequate, ineffective, or results not demonstrated.
In ACF, we have had the absolute pleasure of being, if you will, "PARTed" 27 times in the last several years. And we've gotten the following ratings: three were effective, that's the highest score you can get. Eight were moderately effective; that's, if you will, a, b, c, that's the b of things. Seven were adequate. Nine were results not demonstrated. And none of them were ineffective.
We have a great deal of pride that our Child Support Enforcement program scored about 90 percent, which is the highest score for any social services program within the federal government, period, bar none. About 98 percent of ACS performance measures track outcomes rather than outputs. While it may sound like a nuanced response, measuring outcomes instead of how many widgets are you producing with this money and so on, but what is it that you're actually getting for this program, is critically important. And we've seen this success translate into green PMA scores in status and progress.
Our PART team within ACF recently got a Secretary's Distinguished Honor Award. And the other good news is our PART scores are improving. Over the course of 2002 through 2005, we had about 57 percent of our programs that were evaluated rated as results not demonstrated. For the period of 2006 and 2007, only about 12 percent of those scores were results not demonstrated.
So what it shows is two things: first is, there is a little bit of science that goes into the rating tool. But it also points out that you may need to make changes into your program to get the results that you're looking for. And we've used this tool, and now we've inculcated it into our budget and into all of our budget documentations.
Mr. Morales: Curt, we only have about another minute left in this segment. But I do want to ask you about grants management. The grants management line of business seeks to establish a government-wide solution to support the end-to-end grants management activities.
Now, earlier, you mentioned that ACF is perhaps the second largest of the grant-making agencies within the federal government, just behind CMS. Could you tell us about your agency's efforts to become a grants line of management shared services provider within the federal government?
Mr. Coy: We are one of three agencies selected by the Office of Management and Budget to be a Center of Excellence for grant systems processing.
A couple of years ago, in the essence of time here, OMB asked agencies and the private sector to submit proposals to be a Center of Excellence. We did. We were successful. And so now we have about eight different partner agencies. We process about $59 billion in grants through our system alone.
The net operating costs remain at $5 to $6 million a year, which is, if you go look at some of the other grant systems in the federal government, about 10 times less than them. And we got into it for in large part selfish reasons. As you indicated, we're one of the largest grant-making organizations in the federal government. And one could even argue that the Medicaid, Medicare services-type things aren't pure grants as we know them as grants.
We were the big dog, if you will, with respect to the number of grants that were put out -- both in dollars principally. And we thought we had a pretty good system. We wanted to become a Center of Excellence so we wouldn't have to go to anybody else. But the key concepts of the whole Center of Excellence that we've inculcated into ACF is, we look at it as a partnership with our folks that are part of us. It's a shared cost. The overall operating costs are about $5 or $6 million. If you do half of the grant transactions through there, then you pay half the cost.
ACF used to pay the full freight of that $5 or $6 million. Now we pay about 60 percent of it. That money that is physically saved goes back into any number of things, whether it be more grants, whether it be more training opportunities, whether it be more travel opportunities. And so being one of the Centers of Excellence has been really successful for us.
And we've been recognized with a number of awards. We got just this past fall a President's Quality Award, which was HHS' very first President's Quality Award. We've also gotten just recently the Civilian Leadership in Enterprise Architecture Award, presented by the E-Gov Institute.
We were also given the National Grants Contract Management Association Award for Electronic Solutions just this year in April. So we're pretty excited about that.
Mr. Morales: Great, excellent.
What about the Faith-based and Community Initiative? We will ask Curt Coy, Deputy Assistant Secretary for Administration at the Administration for Children and Families, to share with us when the conversation about management continues on The Business of Government Hour.
Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Curt Coy, Deputy Assistant Secretary for Administration at the Administration for Children and Families.
Also joining us in our conversation from IBM is Tom Romeo.
Curt, discretionary grants permit the federal government to exercise judgment or discretion in selecting the applicant or recipient organization through a competitive grant process. In the last fiscal year, the agency provided substantial discretionary grants awards. Could you tell us about the agency's effort to ensure efficiency and manage or reduce risk in this area?
Mr. Coy: I sure can. Let me give you the broad picture. In round numbers, ACF awards about 7,700 grants a year. That's about 20,000 transactions when you add in all of the MODs and this and thats to them, for a total cost of about $47 billion of grants. Of those, about 3,000 of those are discretionary grants, and about 8,800 transactions, worth about $7.5 billion.
And we have a very structured and rigid process with respect to providing discretionary grants. And it all starts with the program announcement. In the contracts world, that's called the Request for Proposal. By the time we get it on the street, it has been vetted by a number of folks. And the program announcement clearly indicates what you're looking for, so that it's critically important that this program announcement be very clear and hopefully very crisp.
In almost every case, we have panels of outside civilians, non-feds, that sit on the panels and evaluate these proposals. And we come up with a rating and ranking list based upon those evaluations. And so they're independent panels overseen by the feds. And so the panel is done. We normalize those scores across panels. And you sort of draw the line on how much money do you have for that particular program. And you draw the line and everybody below the line is not funded, and everybody above the line is funded.
Those grants that we think we're going to fund, we make sure that perhaps there is a geographic distribution that's there. You don't want to have two highly rated grant proposals but they're right next door to each other in the same city, state. You want to try and spread opportunities out across geographic areas.
You also take a look at those grants or proposed grantees and see how they're performing. There are some grantees that are on watch lists because of audits and so on and so forth. So we take a look at it from that aspect.
Once we get done with all of that, that list is then vetted through the grants officers. So the program staff puts it together. Once those two pieces come together, the program staff and the grants staff, and that list is finally established, it comes to me. As the chief grants officer, I take a look at it. Then it goes to the Assistant Secretary. The Assistant Secretary looks at it. And then once the Assistant Secretary says, "Yes, check," then those grants are sent over to the department for sort of one last vetting before we actually make the grants.
Mr. Romeo: Curt, President Bush's Faith-based and Community Initiative represents a new approach to government's role in helping those in need, through its oversight and implementation of key elements of the initiatives agenda. Would you elaborate on how ACF has significantly expanded the number of faith-based communities partnering with HHS?
Mr. Coy: Well, you're hitting on all of the ACF milestones here. ACF is one of the leaders with respect to the President's Faith-Based and Community Initiative programs. And we have a whole wide variety of them, ranging from the Mentoring Children of Prisoners, which the President spoke about in his State of the Union address a couple of years ago, the Healthy Marriage Initiative, the Fatherhood Initiative, the Compassion Capital Fund.
And all of these programs are meant to further the President's Faith-Based and Community Initiative program. And they do it by a number of different areas. Our Compassion Capital Fund initiative, if you will, is sort of a two-part initiative. One is to set up intermediary organizations to help these grassroots, faith-based and community associations apply for federal grants. And so we've been very successful in awarding grants to these intermediary organizations whose sole function is to help those organizations do just that.
We also have another component of the Compassion Capital Fund. We call them mini-grants. And they are $50,000 one-time grants to help a faith-based or community organization in any number of things. And we evaluate those. We started out with, in round numbers, about 52 of them. And in this last year, we gave out about 310. And they range from things -- simple examples of, "Gee whiz, I really could use a new van to get folks from here to there. And that would help my faith-based and community organization do this and that. So I need $47,000 or whatever the number is to do that." "I need a new computer system and printer to be able to print up flyers and so on, so I can do outreach to these folks."
Whatever you might imagine $50,000 might account for, people apply -- and we've given out close to 1,000 of these $50,000 grants, which -- when you think of the federal government, they're worth billions and millions of dollars and hundreds of thousands of dollars. But $50,000 will go a long ways to help one of these organizations. And that might be just the thing that kind of kicks them over the top when it comes to that. So we're very proud of that type of situation.
Our Mentoring Children of Prisoners, as I alluded to, what that does is it gives grants to community organizations that provide children and youth of incarcerated parents with mentors. And we're looking at these kinds of things and seeing very, very positive results when it comes to having good mentors to folks who have kids but are incarcerated.
As well, the Deficit Reduction Act, or TANF, which was reauthorized last year, included about $150 million to support programs that were designed to help couples form and sustain healthy marriages. And so many of these kinds of grants with respect to that are faith-based and community-type grants.
But one of the things that we try not to do is we don't discriminate one from another. What we are trying to do is make sure that faith-based organizations can apply for federal funds just like anybody else. And that's the thrust of what the President's initiative of faith-based is.
So our coalition partners include local governments. They include civic groups; they include churches. They include ethnic and immigrant groups, women's organizations, labor organizations, immigration organizations, community health providers, faith-based organizations, nonprofit social services. And so it's a large encompassing program that we've taken a great deal of pride on its success in the last several years.
Mr. Romeo: Curt, another area that your department has made progress in is improving its real property asset management and rightsizing your asset inventory. Would you talk about how your agency has contributed to the Department's efforts in this area?
Mr. Coy: Well, the Department has a large real property inventory. Under the leadership of the Assistant Secretary Joe Ellis, we have really come a long ways in managing this property. If you sort of think about it, we have the Indian Health Service and the Department of Health and Human Services. They have anything from hospitals to warehouses to all kinds of things.
We're developing a computer-based organization that tracks leased property and owned property by the government, and starting to look at how we manage this property in a much better fashion. Within ACF, we're relatively easy. So I would like to say that we contributed significantly to HHS. But we don't own any buildings. We lease our space. And so our input to real property is principally ensuring that our leases are input into the database, that our leases conform to the kinds of things that the Assistant Secretary has said we need to conform to, as well as OMB.
Mr. Romeo: One of your many hats in the agency is also as the information technology portfolio lead. What are some of the key IT management challenges that ACF faces? And what has your agency done to enhance its IT capabilities to meet such challenges?
Mr. Coy: Well, probably, as I alluded to earlier, the thing that consumes most of our time in the IT world is our grant system Center of Excellence. And we have a number of partners, as you might imagine, and managing that system has become increasingly important.
As CIO, we also are looking at our IT infrastructure. And the IT infrastructure is servers and e-mail and just the business of doing things on a daily basis. ACF has joined a number of other HHS agencies in a shared service platform, it's called the Information Technology Service Center, ITSC, in the hopes of putting together those scale of services, such that we're not managing all of these servers and the nuances of those kinds of things.
Probably the next challenge is the Unified Financial Management System. We implemented that just this past year. There are still things that we need to get the bugs worked out of. And so that consumes time and energy and resources.
And quite frankly, as you look at ACF's budget with respect to discretionary funding, we have been, for all intents and purposes, flatlined for the last several years. What does that mean? We're absorbing pay raises, we're absorbing the cost of increased server costs, we're absorbing the costs of increased IT. And so you get to a point where you have to make some decisions on -- while you would like to do this, what's the business case to be able to go out and get that multimillion-dollar server, for example.
Mr. Morales: Curt, just to change tracks here a little bit. With such a critical and broad mission, collaboration must be critical to your success. What kinds of partnerships are you developing now to improve operations or outcomes at ACF? And how many of these partnerships change over time?
Mr. Coy: Well, to answer your last question first, they change all the time. But one of the things -- and it's most interesting having the CIO role, the CFO role, and the chief grants officer role, and Deputy Assistant Secretary role, because what you're looking at is technology is allowing and the drive to improve business services and government efficiency. It has to. So it's forcing a change in the way organizational boundaries are looked at.
Technology is clearly -- simple things like e-mail. It used to be that you'd take a memo from here to there, and you'd have a runner that would take it to the next building to the -- and now you can communicate almost instantaneously. The grant Center of Excellence that we have is probably an excellent example on how multiple agencies have decided that they have a common interest that's best served by going outside their agency. But they still need to ensure that their mission-critical services are done, and they're done preferably and hopefully at a lower cost.
And so the key to working on this, and a reason this line of business is succeeding for us anyway, is that the vision has to be structured not just on ACF, but the vision has to be structured on what's the bigger picture. And the vision of, in reality, our grant system Center of Excellence is to get grants out the door in a timely and cost-effective manner. It's not to get grants out the door. The way ACF does it, in a timely and in an effective manner. And so these kinds of things become the catalyst as you're working across different agencies.
But the fact of the matter is, you can say technology and you can say financing, you can say all of those things. But you're never going to avoid that interpersonal relationship, the working with other senior staff across agencies. And once you create that bond of that senior staff in fact developing common goals and visions, they quickly become the primary agents of any transformation that you're talking about. And they redefine where those organizational boundaries really are.
I would suggest that across the board, the example that we've seen with our Center of Excellence for the grant system has been a very successful tool. It's been a very collaborative effort, and it's actually been sort of fun.
Mr. Morales: What does the future hold for the Administration for Children and Families?
We will ask Curt Coy, Deputy Assistant Secretary for Administration at the Administration for Children and Families, to share with us when the conversation about management continues on The Business of Government Hour.
Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Curt Coy, Deputy Assistant Secretary for Administration at the Administration for Children and Families.
Also joining us in our conversation is Tom Romeo, IBM's general government industry leader.
Curt, I'd like to transition now and look towards the future. What are some of the major opportunities and challenges your agency will encounter in the future, and how do you envision your office will evolve over the next, say, three to five years to meet these challenges?
Mr. Coy: Well, I think our office is evolving a lot. And that's principally as a result of a maturing workforce. You can call it what you like, but the fact is, retirees are on the rise within the federal government. And so how do we handle that kind of succession planning as you lay out training and lay out hiring schemes and so on and so forth. So that's probably the biggest challenge is we're looking at how do we in fact ensure that our programs are done and done properly.
Technology has to be one of those challenges. It also has to be the opportunity that technology is going to allow us to do things better, faster, hopefully more inexpensively, and to be able to leverage our assets across the board.
And then finally, strategic hiring. How do we bring in the right people? So we have a whole strategic hiring process that we have. As we transition to next year and the year after and the year after, I would suggest that in the near term, those are the kinds of things that keep me awake at night.
Mr. Romeo: Two of those points were about your human resources. How do you ensure that your employees have the appropriate training and skills? And what is the organization doing to ensure that it has the right staff mix to meet the upcoming challenges?
Mr. Coy: Well, we're doing two or three things. We have a very robust training plan. In the past several years, we've seen well over 90 percent of ACF staff participating in some degree of training. And that can be extensive training. It can be sort of online training for computer usages, but we've been very aggressive in trying to ensure that all staff have training opportunities.
We also have taken a look at our training funds. We've fenced training funds. And we've made training part of all of our SES performance contracts. Training's important, and we're going to measure it. Senior staff are being held accountable for those kinds of training things. And so we're making that accountability in training on ensuring that we have the skill set.
We're trying to stand back and look at our hiring from a more strategic sense. And what I mean by that is in the days of past, if you will, if a Head Start program person left, then you would go look for another Head Start program person. But in reality what you want is somebody who could read and write well, somebody who can do analysis and strategic planning and so on and so forth. And what are those kinds of characteristics that we're looking for in our entry level workforce as we move up the whole career path that we have.
And so when you look at the human capital aspect of ACF, we've been very successful in retaining good folks. We've been very successful, and recognized for it. So we're looking at the kinds of skill sets that we're looking at when we hire people; once we have them, to ensure that we have training opportunities; and in some cases, training opportunities at the expense of other things, at the expense of perhaps travel, and perhaps even at the expense of hiring another person. Because for every $100,000 that you put into the travel kitty, in round numbers, that's a person that you're not hiring.
Mr. Romeo: Are there special steps taken to attract and maintain high quality technical and professional resources?
Mr. Coy: Well, one of the things that we're trying to do is a strategic hiring process. And we've done is we've tried to lay out and look at our workforce somewhat more strategically.
If you look at the number of occupational codes or series that the Administration for Children and Families have, in round numbers, there are four occupational codes or series that account for over 82 percent of the staff at ACF. So if you manage those four occupational series and you do it well, the other 18 percent you can do on a onesie-twosie basis, on an as-needed basis as you go down the path.
So we've created hiring schemes for those four occupational series, and gone out nationwide and advertised for those jobs. And folks come in and they apply for these jobs. And we have panels from all of the programs that come in and interview them. And so then we end up ranking and rating these folks. And we may hire 20 of them at a pop, or 30 of them, depending on what our budget looks like and so on and so forth. And there is a hope and the intent that we can almost take any one of these 20 or 15 or 30 folks and plug them into almost any program office within the Administration for Children and Families and they'll be successful, because they have the requisite skills to be able to do that.
How do we keep and attract these folks? What we've had from entrance interviews as well as feedback from our process is -- we have things like a student loan program. We're one of the few operating divisions within the Department that has a student loan reimbursement program. We have a tuition assistance program. We have a leadership development program that is designed to develop high-performing GS-12s, and 13s, and 14s, and 15s.
And then finally, we have developed a culture, if you will, that we only hire -- for the most part, there are exceptions like anything, but for the most part, we only hire at the 9, 11, 12 level. When we need to advertise for a GS-13, 14, or 15, we do that internally. And it forces two or three things. It forces that manager out there to say, "Wait a minute. You're not going to get your next GS-14 replacement off the street. It's going to be from that pool of folks that you see right now. So you better make sure that those folks are getting the training and the opportunities that they need." So we have a very robust program when it comes to those kinds of things.
Mr. Morales: Now, Curt, earlier you mentioned the pending retirement wave. So specifically how are you handling this situation, and what are you doing to ensure that the organization has the right mix as you move into these years?
Mr. Coy: Our workforce has shrunk about 10 percent over the past five years. We've often reported -- as you look at the demographics and the statistics -- and I do -- but ACF remains -- as you look at the Department of Health and Human Services as a whole, we're more diverse, we're more educated, and we're more experienced than HHS. And those are all good news things.
The bad news is that in the next five years, about 50 percent of our non-supervisors will be eligible for retirement. That's almost double what the population of HHS is. Within the next five years, 75 percent of ACF supervisors will be retirement-eligible. That's again way above any of the norms that you even read about in HHS or in the federal government as a whole.
And so we need to take a look at those key issues, and we have been, when we do succession planning. Because what we've seen is, number one, we try and manage ACF as a whole. It's not managing as entities. And we haven't said, "Okay, you get five people. You get 10 people. You get 20 people, 30 people, 200 people."
We take a look at ACF across the board and we make serious management decisions on where we need to do that backfill, because what happens is, over the past five years, in round numbers, we've been able to replace about three people for every five that leave.
And so if you take the leadership aspect of being able to manage the workforce and then bringing in the right folks at the entry level in those four occupational codes and series and you focus on those, hopefully we'll be in a good place. Sometimes change is difficult. But we also look at this opportunity -- when it comes to the percentage of supervisors and non-supervisors who are retirement-eligible, and then you stand back and look at the demographics of that. And in any given year, about 20 percent of those who are eligible actually do retire. But you don't know who that's going to be.
That's the very frustrating part is, you can't do succession planning based upon Bob, and Mary, and Joe, and Susie and so on and so forth, because you're not even allowed to ask somebody when they're thinking about retiring. And so you have to do it on a more global sense, not on a more finite sense. That provides a little bit more of a challenge.
Mr. Morales: Curt, you've had a very extensive and very successful career both in public service as well as in the private sector. So I'm curious, what advice might you give a person who is considering a career in public service?
Mr. Coy: Public service is an honor. As corny as it sounds, people ask me, "What made you get back into the government?" The fact of the matter is, public service really is an honor, and that public service is critically important to the way that you view your job.
I would also suggest when it comes to young folks in government service, my advice would be "be curious." That's probably the one attribute that I value the most. Leverage those who go before you. Make sure that you get everything you can from them before they leave. Don't accept the status quo. It's one of the things that probably, stereotypically, government employees have their worst reputation. And that's the status quo. Don't look at things from a status quo perspective.
And then finally, I would suggest that you celebrate what you do and how you do it and why you do it. Because if you're not in that shower in the morning thinking of all those things that you got to get done today, and if you're not driving home at night or going home at night going, "I didn't get these things done today," I would suggest that you're not having fun. And maybe you need to look for something else to do, because at ACF, there's no way that you can't possibly not be challenged by the kind of work that we do.
Mr. Morales: That's fantastic advice. Curt, unfortunately we have reached the end of our time. I want to thank you for fitting us into your busy schedule. But more importantly, Tom and I would like to thank you for your dedicated service to our country both as a naval officer and now at the Administration for Children and Families.
Mr. Coy: Thank you, Al. I appreciate it.
Mr. Morales: This has been The Business of Government Hour, featuring a conversation with Curt Coy, Deputy Assistant Secretary for Administration at the Administration for Children and Families.
My co-host has been Tom Romeo, IBM's general government industry leader.
As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad who can't hear this morning's show on how we're improving their government, but who deserve our unconditional respect and support.
For The Business of Government Hour, I'm Albert Morales. Thank you for listening.
This has been The Business of Government Hour.
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