Weekly Roundup: February 26-March 2, 2018

Friday, March 2nd, 2018 - 15:42
Michael J. Keegan Meet the 7 leaders who will be steering modernization dollars. The Office of Management and Budget announced seven members for its new Technology Modernization Fund board, drawing IT expertise from across the federal government to oversee the distribution of $500 million in IT modernization funds over the next two years as part of the Modernizing Government Technology Act.

Jumpstarting Performance Management

Monday, September 28th, 2009 - 17:04
Last week, Senator Tom Carper held an important hearing based on a key finding from a Government Accountability Office (GAO) released last year.  GAO’s 2008 report summarized a survey it conducted of agency program managers on their use of performance information.  It found wide differences between agencies and that, over time, some agencies increased their use and others infrequently used performance info

James Cason interview

Friday, December 14th, 2007 - 20:00
Mr. Cason is the Associate Deputy Secretary for the Department of the Interior
Radio show date: 
Sat, 12/15/2007
Intro text: 
Financial Management; Managing for Performance and Results; Human Capital Management; Collaboration: Networks and Partnerships...
Financial Management; Managing for Performance and Results; Human Capital Management; Collaboration: Networks and Partnerships
Complete transcript: 

Originally Broadcast December 15, 2007

Arlington, VA

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

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.

Today, the U.S. Department of the Interior has evolved into the principal federal conservation agency, managing the protection of many of the nation's special natural, cultural and historic places. With us this morning to discuss his organization's leadership in conserving habitats, species, lands and waters, while effectively managing its fiscal resources, is our special guest, James Cason, Associate Deputy Secretary at the U.S. Department of the Interior.

Good morning, Jim.

Mr. Cason: Good morning.

Mr. Morales: Also joining us in our conversation is Steve Seike, director in IBM's federal civilian industry.

Good morning, Steve.

Mr. Seike: Good morning, Al.

Mr. Morales: Jim, perhaps you could share with us the sense of the history and mission of the U.S. Department of the Interior. When was it created, and what is its mission today?

Mr. Cason: The Department of the Interior is a wonderful organization. It has a very broad mission within the United States. Somewhat unusually, when we think about the Interior, it's really the Department of the Outside as opposed to the Interior, because most of the agencies that are involved within the Interior manage the outdoors within the United States.

For example, within the Department of the Interior, we have the National Park Service, the National Fish and Wildlife Organization, the Bureau of Reclamation, the Bureau of Land Management, Indian Affairs, and a number of other agencies, and collectively, those agencies manage about one out of every five acres in the United States. We have wonderful vistas, watersheds, critical and endangered species habitat. We manage coal mining, oil and gas developments; we manage water, and water development and distribution. There's a host of programs within the Department that have direct impacts upon the lives of many people within the United States.

The Department of the Interior was created back in 1849, and over time has had an evolvement of its mission and an accretion of duties. And today, it has a huge duty in both preserving our environment and conserving our environment with our partners, and it also has a very large contribution into the economic fabric of United States through energy and minerals development, through timber harvesting, grazing and a number of other things.

Mr. Morales: So with such a broad mission, can you perhaps give us a sense of the scale of the organization in terms of the size of its budget, number of employees, and the geographic footprint?

Mr. Cason: The Department of the Interior is a pretty large organization within the federal family. We have about 70,000 employees that are scattered in large part all over the world, but mostly in the United States, western half of the United States. We have about 2,400 offices of various sorts: some very large ones, some very small ones. We are typically a rural-based organization, because we do manage the outdoors so much, but we span many time zones in the world. Some of our interests like Insular Affairs, we have responsibility for Guam and American Samoa, and the U.S. Virgin Islands for example. And then we also have many of the lands in the West.

Mr. Seike: Jim, now that you've provided us with the sense of the larger organization, perhaps you could tell us more about your area and specific role within Interior. What are your specific responsibilities? And can you tell us how your area is organized, the size of your staff and budget, and how it supports the mission of the Department?

Mr. Cason: Well, that's an interesting question. The position I hold at the Department of the Interior is called the Associate Deputy Secretary. On an organizational chart, I report directly to the Deputy Secretary of the Interior, and that person is named Lynn Scarlett. Lynn is the number two person within the Department, and the number one person is obviously the Secretary. The Secretary is a cabinet officer, his name is Dirk Kempthorne. I report directly to the Deputy Secretary, and my role overall within the Department of the Interior is to assist the Secretary and the Deputy Secretary to manage the affairs of the Department.

In terms of immediate staff, I'd have to give you two answers on that. One answer is in an informal way, the entire staff of the Department is part of my portfolio and managing along with the Secretary's office. In another way, I also have another duty, that has been assigned to me by the Secretary, and that's to be the Assistant Secretary for Policy, Management and Budget. And in that capacity, I have a staff of several thousand people who are focused on the task of providing administrative services, policy services, framing the budget and a number of other things that support the broader mission of the Department of the Interior.

Mr. Seike: Well, it sounds like your hands are pretty full.

Mr. Cason: They are.

Mr. Seike: Let me ask you another question about responsibilities and duties. What would you see as the top three challenges that you face in your position, and how have you addressed those challenges?

Mr. Cason: Well, within my position, I would say it's a mix of a couple of things, and what I mean by that is, I have for me personally a task within the Department of the Interior that is a huge challenge, which is managing what we call the "Cobell litigation."

Cobell is a litigation and it was filed by individual Indians against the Department about the stewardship of the Department over the last 100 years of trust assets. It's been a very contentious litigation. We've spent hundreds of millions of dollars in working on this issue, and we've had extensive periods of time in court managing that issue, and I have the principal responsibility for the Department to manage the programs within the Department that are implicated by the Cobell litigation, and to work with the Department of Justice and the courts on this issue.

Secondly, I would say the next major challenge really is I would say coordination among the various parts of the Department. Many of the things that we do cross organizational lines, and it requires someone to coordinate those activities so that the right hand knows what the left hand is doing. Let me give you an example with our fire program. Within our fire program, we have several agencies that participate in our fire program, and that's the Fish and Wildlife Service, the Bureau of Indian Affairs, Bureau of Land Management and the National Park Service. And when we have fire issues that involve policy or deployment of resources, we need to make sure everybody is on the same page about what we are doing and why we are doing it.

We have a number of those types of things that involve initiatives of the Department that cross the lines within the Department, or we have problems that involve several parts of the organization, so that's a piece of it. And then the final thing that I think is the biggest challenge is communication among all of the parts of the Department, and that's to make sure everybody knows where we are trying to head, and I'll give you an example like goals and objectives.

It's very beneficial if everyone from the Secretary down to the lowest manager understands what the mission is, what our priorities are, what we are trying to get done, and that's a constant effort you have to go through to make sure that everybody is pulling in the traces in the same direction.

Mr. Morales: Now Jim, you've spent some time at the Department and in government. Could you describe your career path for our listeners? How did you get started?

Mr. Cason: Well, using the term "career path" may be an anomaly here. I've had a number of interesting jobs over my working lifetime. I've spent about half of my working life in government, and half of it in the private sector, and I've had the opportunity to go back and forth. I started off actually at a very young age of working, I probably started working when I was five or six; I came from a family of itinerant farm laborers. So my family would move with the crops in the western part of the U.S. We would actually live in Missouri during the winter, and in springtime we would go to Southern California and pick crops through California, Oregon, Washington, pick potatoes in Idaho, cut Christmas trees in Colorado, go back to Missouri and winter out.

It was an interesting upbringing, a little bit stressful, because I went to multiple schools each year, and interestingly, the Missouri schools are about two years behind the West Coast schools. So I was going back and forth. And in terms of professional career after college, I worked for a trade association dealing with environmental issues. This particular association was called WETA. That stands for the Western Environmental Trade Association. That organization represented labor in industry and environmental issues.

I also had a stint working in Iran. And I was in Iran shortly before the hostages were taken, or I left shortly before the hostages were taken. So I had the opportunity to watch that Iranian revolution up close and personal. And as it turned out, my entr�e into the federal government happened about that time once I got back from Iran; I actually spent a year as a resident fireman for the U.S. Forest Service, a GS-4 job. And then a friend of mine came back to Washington, went to work for the Bureau of Land Management, called me up one day and said I got this perfect job for you.

And I interviewed for it, came back and became a special assistant to the director of BLM. Moved up to become a Deputy Assistant Secretary, then an acting-Assistant Secretary, went over to the Department of Agriculture, ran the Federal Crop Insurance Corporation. Left town for eight years, and then when this administration was elected, I got the phone call that said, gee, this is a really big agency, can you guys come and give me a hand? So I returned to Washington and have been back for six years with this administration.

Mr. Morales: That's a fantastic history. So I'm curious, if you sort of tie all that together, how have these experiences prepared you for your current leadership role and sort of shaped and formed your management style?

Mr. Cason: It's an interesting thing that when you look at your life's experiences, all of them in one way or another contribute. I find that I developed, at a very young age, a very strong work ethic. And I attribute that to the upbringing I had with my parents and the hard work that we did as a kid. So doing really hard work now, spending long hours doing the things I do is just part of my make-up, and I think that contributed

I came from a very poor upbringing, so the reaching out to individuals, to understand and be empathetic about their needs, is really important. And one of the areas that's been very beneficial to me is I had a couple of years as the acting-Assistant Secretary for Indian Affairs during this administration. And there's lots of really poor people in Indian country, and it gave me an opportunity to be empathetic with them. And in terms of management style, I've had the opportunity, now that I'm over 50, to have managed a long time and to experiment with what works and what doesn't.

And what I find as helpful in my capacities is that most times, most people who work for you want to do a good job. And they also want to be part of the process. And what I found through my experience is that if you give people an opportunity to be part of the solution, to be part of getting things done, their active participation is a lot more effective in extending your capabilities, and then you have a workforce environment where people are energized and positive about what they wanted to do.

So I find that in my capacity -- though at one point and another I have hundreds of dozens of people, dozens or hundreds or thousands that work for me -- what I try to do is actually give very few orders and actually work collaboratively with the management team to agree upon what we need to do, and then charge them to go do it.

Mr. Morales: That's great.

How is the Department of the Interior integrating budget and performance information? We will ask James Cason, Associate Deputy Secretary at the U.S. Department of the Interior, 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 Jim Cason, Associate Deputy Secretary at the U.S. Department of the Interior.

Also joining us in our conversation from IBM is Steve Seike.

Jim, let's talk for a moment about the PMA, or the President's Management Agenda. Budget and performance integration lie at the heart of ensuring both that the strategic allocation and efficient use of funds are kept in check. Could you tell us about your Department's effort to get to green for budgeting and performance integration, and how has your organization expanded the use of financial data to inform its management decision-making process?

Mr. Cason: That's a great question. I think I'd like to start by backing up just a little bit. I would imagine that a lot of readers don't even know what the President's Management Agenda is. And basically, there is another side of the President and the White House that a lot of people don't get. And that is, the President is very interested in good, solid thoughtful management of government programs. And the President, through a variety of means, has basically said that he wants all of his subordinate managers to do a good job in marshalling their resources, using them effectively, because at the end, all of these monies that we use within the federal government comes from the taxpayer. And he wants to make sure that the taxpayer is getting their money's worth.

The President's Management Agenda is basically a reflection of that thought process, where the President said there are certain things that you have to do in order to run an organization well. You have to manage your money well, you have to manage people well, you have to manage property well, and so our President's Management Agenda is a compilation of several items like that where we have agreements with OMB reflecting the White House's views. We work toward becoming more efficient on those items to make sure that we can actually stand with a straight face and say we're marshalling our resources well.

Within the part of performance integration between budget and performance, the basic process that we go through to deal with that issue is to establish metrics of performance that basically says I'm investing a certain number of dollars in this area, I expect to get a certain performance or result as a result of the money. And then to actively measure that over time. If we find that we are getting more results than we expected, that looks like a pretty good investment, and you can make decisions about whether you do more or less of that. If you find you are not getting the results, it indicates at least there is a possibility of a management problem that needs to be addressed.

The Department of the Interior has been very active at looking at metrics. We've actually developed a Department strategic plan. Within that strategic plan is the mission areas and the metrics we use to measure performance, and we use that on a quarterly basis to make sure that we stay on track.

Mr. Morales: In the last OMB Scorecard, nearly half of the federal agencies received either a yellow or red rating in financial performance. Could you tell us from your perspective why this is such a challenging area for federal agencies, and more importantly, what has your organization done to progress and improve over the last year, so much so that OMB has provided you a green rating in progress?

Mr. Cason: Well, financial management is an important part of the scorecard, and it's also a very difficult area. Let me illustrate with our auditing process. One of the things that we do within the Department of the Interior and across government is we perform an annual audit of how we've managed our appropriated funds. And then at the end of that annual audit, you get a sense of what sorts of material weaknesses do you have in internal controls, how has your financial performance been, how have you managed your money?

It's a difficult process, and when we began this administration, that process usually took six or seven months after the end of a fiscal year before you could close your books. We now do this within the Department of the Interior within 45 days. And we have moved from -- in 2001 when we started the administration, we had 17 material weaknesses in our books, along with a host of other findings, and it looks like moving in a direction for this year that will have none. So we have spent a lot of time and efforts within the Department in our various bureaus to actually make sure that we take the steps necessary to manage our money well.

And let me give you one other example. While I was acting as the Assistant Secretary at Indian Affairs, one of the things we did there is in prior years' audits found that the material weaknesses in part were rooted in Indian Affairs. So one of the things I did is every two weeks, we sat down with the senior management of Indian Affairs, went over our finances, went over how we were dealing with weaknesses in our finances, and made it the management team's responsibility to deal with it. This year, they're coming out with zero material weaknesses. So it's that management process that we go through.

Mr. Seike: That's a fantastic story. Jim, as you know, in addition to improving financial performance, the PMA has an additional initiative for rightsizing the federal government's real estate. The federal government currently owns hundreds of billions of dollars in real property assets, so improving the management of these assets is really important to ensuring that taxpayer dollars are spent wisely and efficiently. Would you tell us more about Interior's real property asset management initiative?

Mr. Cason: Al, as I mentioned earlier, the Department of the Interior manages one out of every five acres in the United States. That's a huge real estate responsibility, not only the real estate itself but improvements on the real estate, because we have 2,400 offices across the country. So what's important to the Department is to make sure that we are being very thoughtful about how we can manage such a large land mass cost-effectively. Some of the things we do in that arena is to block up our properties through sale or in exchange.

If you are familiar with the West, one of the things that happened in opening up the West was tracts of lands were given to railroads across the West to build railroads for transportation. And that ended up fragmenting the land ownership pattern. So you'd have the states had some tracts, then we had some tracts, railroads had some tracts, and then you had other third party private people had tracts. And so one of the things we do to manage effectively is to block up our lands through sale or exchange, because contiguous properties are easier to manage.

Within the confines of what we do have to manage, we are also taking a look at the real estate buildings that we have, to make sure we have a proper inventory -- which we didn't start with, but we have an inventory of our real estate buildings now. We look at the condition of those buildings and we look at the utilization of those buildings so that we are in a position to say if we don't need it, let's dispose off it. If we do need it, if it's in bad repair, let's repair it, and we make sure that we are getting a cost-effective response out of the real estate that we do manage.

Mr. Seike: Your department received an unqualified opinion on its principal financial statements for the seventh consecutive year, demonstrating a clear pattern of financial accountability. First, what is the significance of a clean opinion, and then if you could, follow-up and talk about the keys to successfully achieving a timely and clean opinion?

Mr. Cason: I think the key is first that you make sure it's perceived as the responsibility of the entire organization to manage its finances well, and that's one of the things we put a premium on at the Department. We actively involve our employees and our management team to make sure that everybody is being physically prudent, and that they are following the policies and procedures that we have for managing our money.

The significance of a clean opinion is a reflection by a third party auditor who has no business or ties to the Department, that they've independently looked at our books, looked at how we manage our business, and have drawn a conclusion that we are following policies and procedures, and that we are managing the money well, that it's going to the right place, in the right amounts, and at the right time. So it's very important for us to have that third party assessment to make sure that we are doing a good job, and that we are identifying any problems that are there so they can be fixed in a timely way.

Mr. Morales: Jim, to continue this path of kudos, I understand that once again your Department has also received the CEAR Award, which stands for the Government Accountants Certificate of Excellence in Accountability Reporting. Could you tell us a little bit about this award and its significance?

Mr. Cason: It's an important recognition for the Department about the job that we're doing. The organization, Association of Government Accountants, basically reflects the accounting practices and business within the federal government. And in receiving the Certificate of Excellence in Accountability Reporting award from them, it basically gives us a sense that within the federal family, that we are being recognized for the efforts that we make to manage our money well, and we're being recognized by other people who clearly understand the environment that we operate in within the federal government.

The federal government, as most people understand, is sometimes very complex, we have a lot of rules and regulations and policies that we have to follow. And this award is basically given by people who live in that environment, understand all those things, and who are attesting to the fact that we are doing a good job in that environment.

Mr. Morales: Jim, earlier, you started this segment by describing this administration's focus on being good stewards of the taxpayer dollars. So what steps has Interior taken to better track and manage its costs, and can you tell us a little about the efforts in implementing activity-based costing and management within your Department?

Mr. Cason: Activity-based costing is a technique of cataloging the individual costs that we sustain against some project or initiative. And it gives us the opportunity to begin the process of conducting cost-benefit analysis that should be the driver for our investments in government programs. And just generically, I'd illustrate that that if have to spend a lot of money to get very little benefit, and I find that by saying here's -- I track how much I spent, I look at what results I created, then you say I don't want to spend any more money in that place.

If you go on the other hand, say I created a lot of benefit by a relatively small marginal investment, then that's a kind of area you want to explore more. So we have a host of programs and services within the Department of Interior that are given to us through statute by Congress and through appropriations. And what we use the activity-based costing for is to further our knowledge about the relative costs and benefits that come as a result of our implementing programs, and it allows us to tailor our efforts within the Department to get the biggest bang for the buck for the taxpayer.

Mr. Morales: So in a sense it's some way of quantifying a cost per unit of output and the benefit of that output?

Mr. Cason: Yes, yes.

Mr. Morales: Great.

What is Interior's financial management modernization strategy? We will ask Jim Cason, Associate Deputy Secretary of the U.S. Department of the Interior, 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 Jim Cason, Associate Deputy Secretary at the U.S. Department of the Interior.

Also joining us in our conversation is Steve Seike, director in IBM's Federal civilian industry practice.

Jim, could you tell us about Interior's Federal Business Management System, or FBMS? Specifically, how key is it to your financial management modernization strategy in meeting the future business needs?

Mr. Cason: The FBMS or Federal Business Management System is hugely important to the future ability of the Department to manage its business. The precursor to committing to FBMS was an assessment of the Department of Interior about how we did our business early in this administration in about 2001.

What we found is that our ability to manage budget programs, finance programs, accounting, property management, acquisition, that within the Department of Interior, even though we have nine bureaus, we had 180 different systems that did those functions. Those systems were not well-integrated, which led to a relatively inefficient way to gather information and provide reports to Congress to integrate our books, get our books closed on time, et cetera.

And having that systems like that were of such an age, we had found that in some of the key systems, that the support contractors would no longer support the systems. So we basically arrived at a time that the legacy systems we have just wouldn't do the job into the future. Our management team got together, looked at this and decided that this was the number one investment we needed to make in the Department so that we could manage our affairs well.

And we've embarked on this project over the last few years to develop an integrated system that basically integrates budget, finance, property acquisition and a number of other subsystems into one common system with a common data warehouse that enables us to have an integrated system that gives us much more cost efficiency, better internal controls, better integrated management of the finances, and enables our management team and Congress to get robust reporting out of our system much more quickly.

Mr. Morales: Let me switch topics for a moment, and switching to something that is very real and in the public eye, and that's wildland fires. In 2006, according to the National Interagency Fire Center, there were almost 90,000 wildland fires that burned about 9.5 million acres. And so far this year, there's been close to 78,000 wildland fires that have burned 9.3 million acres. Could you elaborate on your Department's efforts in coordinating the federal response to wildland fire suppression, and specifically, your collaborative efforts with other entities such as state and local officials to effectively battle these fires?

Mr. Cason: The Wildland Fire Program is an interesting one that is not commonly understood. There is a base program strategy that's important to know. And the base program is, initial attack is the most important time. And the way the strategy gets oriented is across the country without regard to whose land it is.

We first depend upon the local fire departments to go put out the fire. Because if you can catch the fire when it first starts, and you can get it put out when its really small, it's relatively inexpensive to manage. Then, according to this national strategy, if a local fire department doesn't have enough resources to deal with the fire, it gets out of their control, then we have a regional structure in place where other fire companies, other fire equipment and personnel are brought in to help with the fire within that region. And then once the fire gets out of -- exceeds the capacity of that region to deal with, then it becomes a national issue, where on a national basis we use a place called NIFC, or the National Interagency Fire Center, to supply national program assets.

To illustrate, we just had the wildfire situation in Southern California. We had a lot of fires that were out of control, and this process worked exactly the way it was designed. What we had at that time was small fires got out of control. The southern half of California region brought in all its assets. Those were insufficient. They called our NIFC program, and we sent down hundreds -- I think about 2500 federal firefighters -- we arranged for fire engines and fire equipment from all over the West to come to Southern California to battle these fires. And collectively as a team effort, we were able to control the fires within a little over a week, put them out. We still have some assets that are still there.

In terms of communications, this is an area that a lot of players got together and worked well together. There were interagency discussions with Homeland Security, the Department of Interior, the Department of Agriculture, HHS and others, who said we got a problem here. We need to manage this problem. Everybody got into gear. Everybody knew their assignments that had been worked out. FEMA was on the ground. They were doing their thing.

All I've heard out of this is basically rave reviews about how well the system worked this time in making sure that we were taking care of the needs of the people that were affected by those fires.

Mr. Seike: Jim, let's go back for a moment to the President's Management Agenda. Interior continues to maintain green status in human capital management under the PMA. Could you elaborate on your efforts in getting to green? What challenges did Interior have to overcome to get to this level? And what does the Department need to do to sustain a green status rating?

Mr. Cason: There's a couple of things that's important to this answer. Getting to green is basically like the stoplight when you drive. Red is you're not doing so good; yellow is you're making progress but you're not there yet, and green is okay, I'm delivering on the things that I said I would do. So it has that connotation by analogy.

In managing our human capital program under the President's Management Agenda, we as a Department have recognized we had certain challenges that we have to address. And we have certain obligations to our employee workforce. The human capital management part basically involves some key issues. For example, when we survey our Department and we look at our management team, we are in a position that we could lose as much as half of our management team in just the next few years through retirement.

We have an aging workforce within the Department of Interior. And so succession planning for that is an important thing for us to manage our human capital. Because if we don't have well-trained, motivated employees, we won't cost-effectively implement our missions. So succession planning has become a key element within the Department of the things that we do. That leads to recruiting.

We are very actively out looking for new employees as spots open up. In most cases, those positions are advertised competitively, and we search for the best candidates we can bring into the Department. It also implicates training. We have robust training programs within the Department in a variety of ways both put on by Departmental entities and by third-party vendors that we bring in to give specialized training.

So these are examples of the things that we are doing in our human capital area to make sure that over time, we can address the movement of our employees into retirement, backfill them with trained, capable people, develop the management team that we need to lead the Department into the next decade.

Mr. Seike: Jim, the Department consists of a number of large bureaus with their own priorities. They all have their own challenges and workforce needs, and they've got employees working across all parts of the country. Given the size and the diversity of the Department, how do you in your role as the Department's chief human capital officer make sure that there is a corporate approach to workforce planning while at the same time making sure the bureaus still meet their own unique needs?

Mr. Cason: This is a combination of having a systems approach that is well-understood to managing your employee base and being specific about measuring your needs. And let me illustrate. In the management piece, we have a chief human capital officer, that's myself. I have a deputy human capital officer, a person of great experience named Kathleen Wheeler. Within each agency we have a human capital officer that manages this on an agency-by-agency basis. And collectively, we try to marshal a consistent strategy and plan about how we attack this problem.

Within each agency, if you moved to the specific side, the type of people we need in the National Park Service is different than the type of people we need in the Minerals Management Service, because their principal function is managing oil and gas exploration in our outer continental shelf and managing royalty collections of processing versus preserving and conserving scarce properties -- beautiful properties that we have in our national parks.

So what we try to do is have an inventory of the skill mix that we need, figure out how we acquire the people that have the base skills, how we give them training, how we encourage them into management and train them to manage, et cetera. So it's a combination of a good consistent way of doing business that is a management approach, along with a specific assessment of what each bureau or agency needs.

Mr. Morales: So Jim, to continue along this line of the diversity of skill and mission of the folks over at DOI along with the geographical dispersion you mentioned earlier, 2,400 field offices -- how does Interior evaluate HR field performance as well as impart some of the best practices across this broad community? And specifically, what steps are being taken to ensure that HR policies and procedures are documented and communicated in a timely manner, and that implementation is monitored?

Mr. Cason: Well, two things. The Department of Interior, since it's been at its business since 1849, already has a set of policies and procedures in place that is robust, that has been developed over the decades. And what you find in that area is a fairly constant reassessment of what those policies and procedures are based upon your current experience. So you are constantly on the watch for, is this working the way I want it to? And if it's not, okay, fine, we need to change it. I embody a new expectation, communicate that expectation to others.

Let me give you an example here. One of the things that we do in hiring senior executives -- the senior-most people within the federal government are called senior executives on the career side. And one of the more recent things that we worked out with the Office of Personnel Management is the time it was taking agencies to complete the hiring process on senior executives was too long. And so we worked out a different expectation that, from the time you advertise to the time you send a package for clearance to OPM, 90 days. And if you don't get it in 90 days, it's not timely. Start over.

So that sort of thing has prompted changes within our process to make sure we are holding much more tightly to an advertising period of time, how we panel those and review the applications that we get, how we do interviewing, how we process the selection to make sure that we are hitting this expectation. And that happens across the board no matter who we are hiring, that we want to make sure that the process works well. And it if doesn't, we change it.

Mr. Morales: That's great.

What does the future hold for the Department of the Interior? We will ask Jim Cason, Associate Deputy Secretary at the U.S. Department of the Interior, 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 Jim Cason, Associate Deputy Secretary at the U.S. Department of the Interior.

Also joining us in our conversation from IBM is Steve Seike. Jim, one of the administration's key goals is on creating a federal government that is accountable, results-oriented and appropriately aligned with the strategic goals. Could you tell us how federal managers can effectively manage an ever-increasing blended workforce composed of both contractors and federal workers? And what are some of the key differences intrinsic to these two types of people?

Mr. Cason: The federal government has a lot of experience in managing a mix of contractors and employees. Over time, that mix changes depending on circumstances and expectations and opportunities within the market. We, the Department, have hundreds of contractors that we work with on an active basis. It provides us the opportunity to concentrate on our core mission and skills, while bringing in other organizations' contractors who have capabilities that are more mobile and nimble than ours, who have not the same degree of limitations that sometimes we do as a federal government, and who can move quickly to satisfy our needs.

In this particular case, in large part, it's a matter of having money available to get what you need rather than taking all the infrastructure time to go find the employees, set up an organization, set up policies and procedures -- that you can bring in a contractor to do that work much more quickly when it's their business.

So it ends up allowing us to manage much more cost-effectively and in a more timely way to approach the job that way. In the area of competitive sourcing, for example, one of the things we do is test ourselves. And in testing ourselves, we will take discrete programs, study them and make a determination about whether or not we would make that available for the private sector to come in and compete for those jobs.

And one of the things that we found in going through that process is that it helps our staffs to actually sharpen up their business acumen and the results that they deliver for the money that we invest in them, or we find that the private sector can come in and compete better. So it's an important tool for us to do the job well over time.

Mr. Morales: Jim, we've touched a bit upon the topic of collaboration. So I'm curious, what kinds of partnerships are you developing now to improve operations or outcomes at the Department, and how may these partnerships change over time?

Mr. Cason: Collaboration is a really important part of the work that we do, because given that the Department manages one out of every five acres in the United States, we touch in large part lots of lives within the U.S., and that as resources come from our federal lands, we're part of the active marketplace.

The collaboration part is a recognition that we don't stand on our own. We have neighbors where we operate; that states have interest in how we manage our lands; or tribes have interest how we manage their lands; that private sector organizations, environmental groups, private individuals who depend upon our lands care about the decisions we make and how we do what we do. What we try to do in the area of collaboration is to leverage the resources that we have in the maximum way by involving other people in the jobs that we do.

And let me use an example, like volunteers. We have tens of thousands of volunteers who have various interests, like I want to work in a park, or I want to help manage wildlife on a Fish and Wildlife Refuge. And that these people help us leverage the resources we have available to get the missions done, and they can help us do that cost-effectively because we leverage their volunteer time to get a bigger response than we could do by paying for it ourselves.

Mr. Seike: Jim, I'd like to transition now to the future. Can you give our listeners a sense of some of the key issues that will affect CFOs and budget offices government-wide over the next year?

Mr. Cason: I would start with appropriations. The appropriations process has been ongoing for a number of years but it's not entirely stable. This year, for example, our fiscal year '08, which began October 1st, we operated under a continuing resolution because our budget didn't get done. It looks like we're going to have another continuing resolution because the budget is not done. And that resolution probably will run until mid-December. We don't know where it's going to go after that. I think there's going to be, in addition to just the complication associated with not knowing what your financial picture is with any certainty, there's more complications that we would anticipate to come in to our sphere over time.

And that is expectations of how accurately you manage your books, how quickly you can report information out of your books; how you can integrate government information from the lowest level to the top in a time-sensitive way; how you can integrate information together. The implications associated with information technology, that technology is going to change hugely over time and we have to be prepared to accommodate that; software systems that do this work are getting old and dated and need to be replaced and that causes change. So there's a number of challenges that we anticipate coming into the future that we will have to manage, and we're capable of doing that, but it will result in change.

Mr. Seike: Jim, as we look at Interior, what are some of the major opportunities and challenges your organization will encounter in the future, and how do you envision your office will evolve over the next five years?

Mr. Cason: The Department of Interior has a lot of pressures that it has to respond to in the public arena. And let me illustrate it with the degree of litigation that we have with our programs, since we manage one of out every five acres in the United States as an organization, and we have some other missions as well -- but given our very broad line management portfolio, one of the things we find in interacting with the public is pretty much on an acre-by-acre basis, there is somebody who wants to develop it, and there is somebody who wants to preserve it, and that we have this constant dialogue about what decisions we make in how we manage this land over time. Sometimes, that dialogue spills over into litigation. You didn't do it the way I want you to do it and so we end up in court, and we end up having a judge tell us what to do.

My experience with the Department of Interior, having worked there in the 1980s and now in the 2000s, is that the degree and energy put into litigation has been a significant issue. I think there are some other things that we're going to encounter over time that are issue-based, like it appears that we have a pretty widespread drought right now, and that there is concerns about whether we're prepared completely for a widespread drought; how long it's going to last; will it resolve itself in a short time; will it be a long time before it does; how broad it will be; do we have water transportation and storage systems in place to deal with it in a good way.

Climate change is a possibility. What kind of impact will that have? What will that do to our programs over time? Where do we go with that? The pressure of people moving into habitats that have an effect on species. We have a threatened and endangered species program that inevitably over time, you get more pressure as a result of human habitation moving into species' habitat.

Wildfire, you know we have a really big country that is subject to drought in a lot of places and the prevalence of wildfire is growing, and what we call the WUI, or the interface between the woods and urban community, is growing in the country. And it makes that much more expensive to manage a fire where houses are stuck inside the woods.

So there's a number of things that are coming up as our country changes over time that the Department of Interior will have to assess and change with it.

Mr. Morales: Now Jim, you described earlier your movements in and out of government. So I'm curious, what advice could you give to a person who perhaps is considering a career in public service?

Mr. Cason: My experience has been basically half in the private sector, half in government. And I have found that I've been very fortunate to have very interesting jobs on both sides of that fence. For anyone interested in public service, my opinion is that if you have an interest, you ought to try it. I have found that my time in public service has been very rewarding.

I've worked for the federal government for probably 17-18 years in total. And I would say I've never been bored a day of that time. It offers a wealth of opportunity, really interesting things to do. I find that I never have a lack of a problem that needs to be addressed, and so it's very interesting from that standpoint.

I would say I have equally rewarding experiences in the private sector as well. But the public sector offers something that's unusual that folks may be attracted to, and that is in my life, I had opportunities to work with the Department of Justice and our legal system, work actively with lawyers who are managing litigation; the opportunity to go up and be part of the Congressional process and see how legislation is actually developed and how it affects our lives on a day-to-day basis.

And so it has some things that you don't normally get in the private sector that make it very interesting. So anybody that's interested in trying it, I would encourage them to do so.

Mr. Morales: That's fantastic. Jim, unfortunately we have reached the end of our time. I want to thank you for fitting us into your busy schedule. But more importantly, Steve and I would like to thank you for your dedicated service to our country in the various roles you've held at the Department of the Interior. Mr. Cason: Well, thank you very much for the opportunity to come and join you. The Department of Interior is a great organization; it has a very broad mission that touches the lives of tens of millions of people within the United States. And I would suggest that to the extent that your listeners have the opportunity to go visit a national park or a Fish and Wildlife Refuge, they're really great places to be to recreate and reconnect with nature.

Mr. Morales: That's fantastic Jim. Thank you.

This has been The Business of Government Hour, featuring a conversation with Jim Cason, Associate Deputy Secretary at the U.S. Department of the Interior. My co-host has been Steve Seike, director in IBM's federal civilian industry.

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 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.

Announcer: This has been The Business of Government Hour. Be sure to join us every Saturday at 9:00 a.m., and visit us on the web at There, you can learn more about our programs and get a transcript of today's conversation.

Until next week, it's

Lynn Scarlett interview

Friday, May 31st, 2002 - 20:00
Lynn Scarlett
Radio show date: 
Sat, 06/01/2002
Intro text: 
Financial Management...
Financial Management
Magazine profile: 
Complete transcript: 

Arlington, Virginia

Thursday, May 2, 2002

Mr. Lawrence: Welcome to The Business of Government Hour. I�m Paul Lawrence, a partner at PricewaterhouseCoopers and the co-chair of The Endowment for The Business of Government. We created The Endowment in 1998 to encourage discussion and research in to new approaches to improving government effectiveness. Find out more about The Endowment by visiting us on the web at

In The Business of Government Hour, we feature a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Lynn Scarlett, Assistant Secretary for Policy, Management and Budget at the U.S. Department of Interior.

Good morning, Lynn.

Ms. Scarlett: Glad to be with you.

Mr. Lawrence: And joining us in our conversation is another PwC-er, Ken Bresnahan.

Good morning, Ken.

Mr. Bresnahan: Good morning, Paul.

Mr. Lawrence: Lynn, let�s start by finding out more about the Department of Interior. Could you describe its various missions and activities for us?

Ms. Scarlett: Yes, the department is actually a wonderful place to be. We have eight bureaus. What people will most recognize of course is the National Park Service, that all of our citizens go to, Fish and Wildlife Service, U.S. Geological Survey, Bureau of Reclamation. We also are responsible for our outer continental shelf, through our Minerals Management Service. Our Office of Surface Mining does regulation of and reclamation of coal and coal mines.

So we really have a breadth of different agencies, but you can boil our mission down to four main areas. We do resource protection. We are probably the nation�s premier federal resource protection agency, conservation, migratory bird protection. We are the guardians, if you will, of the Endangered Species Act. The second area is resource use. Many of our public lands, by their founding were there for access by American citizenry for mining, for energy production. So managing our resources and providing access is a second mission.

Our third mission would be in the realm of -- we kind of lump it under what we call service, but we are guardians, or trustees, for certain native American Indian assets. We actually provide health care funds, some education and related social services to tribes and Indian members. We also have responsibilities for our island affiliates: The Virgin Islands, Guam, et cetera. And then our fourth area, besides the resource protection, the resource use, the services is recreation. People think of our national parks and they think getting on those lands, hiking, biking et cetera. So those are our four main missions. Really pretty vast.

Mr. Lawrence: Now, as the Assistant Secretary for Policy, Management and Budget, what�s your role?

Ms. Scarlett: Well, sometimes I like to think of it as everything. The budget for the entire department goes through me. It is about a 10.6 billion -- or proposed for 2003 is a $10.6 billion budget. We have 70,000 employees; we have 2,500 locations across the nation. You can imagine, with those wildlife refuges, with those national parks. We have about 57,000 facilities, meaning that at our parks, our wildlife refuges, Bureau of Indian Affairs facilities, Bureau of Reclamation. We have many, many, both buildings as well as infrastructure.

When I talked about our mission as having a role in resource use, I should underscore that one of those roles is water. The Bureau of Reclamation is within the Department, so we operate Hoover Dam, Grand Coulee, Shasta, Glen Canyon. Those provide water to 31 million Americans in the West. The dams also -- I love this figure -- the dams also irrigate lands that provide 60 percent of the nation�s vegetables and about 25 percent of the nation�s fruits and nuts. So we are all across the landscape in many different ways.

And my role, I oversee the budget; I also have a lead role in overseeing the President�s management agenda. The President has initiated a 5-pronged agenda that is intended to improve governance and my � well, the bureaus have responsibility for on-the-ground implementation where kind of the big picture of where we�re going to go, how we�re going to stitch all this together. And then there is a policy piece.  The policy piece, again, while our bureaus have a lot of day-to-day policy decisions and issues management, my shop plays a role in figuring out the big picture, where we�re going to go with the Endangered Species Act, what are we going to do with the National Environmental Policy Act, how are we going to work with our bureaus to move forward with a positive policy agenda.

Mr. Bresnahan: We have a lot more to learn about these initiatives, but tell us a little bit about your background and your career prior to the Interior Department.

Ms. Scarlett: I have spent 20 years coming out of the policy think-tank world, so this experience in Washington is my first, not only in Washington, but my first in government altogether. I spent 20 years in a public policy think-tank, a couple of years as a visiting lecturer at the University of California, Santa Barbara, actually taught public administration a couple times. But in those 20 years at a think-tank in Los Angeles, I primarily focused my own research on environmental policy but was executive director of the think-tank. So, I oversaw all of our work.

One feature that I have discovered has been particularly relevant to my experience at Interior is that this think-tank actually had a good governance program. We did work on nuts and bolts stuff like activity-based costing, competitive contracting, contract monitoring; we did work on things like best practices in service delivery, so I found when I arrived at the Department of the Interior and was responsible for the President�s management agenda implementation, I was a step ahead, because I knew what the heck activity-based costing was, and I knew what some of the best practices were in implementing it. The same was true of competitive contracting. In fact, the organization that I came from invented the word "privatization," a little-known fact.

Mr. Bresnahan: Now that you�ve been at Interior for about a year, what top management priorities have you set for yourself?

Ms. Scarlett: Well, the Department is vast and so we have many, many different management challenges and issues, but of course, my number one priority is to take the President�s management agenda and make it real. That agenda has a competitive contracting component. I�ll get a little bit more into that later, but let me outline the five areas: Competitive contracting. The second is e-government; how can we utilize information technology and IT technology to really serve the citizens directly. And so we�re looking at e-government not just as a matter of improving efficiency but actually as direct delivery of services.

We have for example a recreation one-stop website that we have underway, which is a

multi-agency website. If you�re a citizen, the idea is that you can go there and say gee, I want to go canoeing. Click, where are my opportunities? Up will come a screen that says gee, you know, you go canoeing, which state do you want to go in? You click on the state and you will then find the state opportunities, the federal land opportunities, maybe even some private. If you need a permit, you can click on and get it. That�s the idea. Kind of a one stop shop for recreation.

The third area is financial management. Of course, no government entity and no management agenda can neglect that incredibly important realm. For us, the single biggest goal on financial management is really to increase transparency. So if you�re a citizen, you can say ah, I see what they�re spending their money on. And accountability; ensuring that our financial management is such that you really link the financial numbers with accountability for the efficient and careful use of those monies.

The fourth area is performance and budget integration. Longstanding effort by the Office of Management Budget to say gee, we really would not just look at your budget in terms of what did you spend last year and how much are you increasing. What we really want you to ask is, are you performing your mission? What are the outcomes? And are you then developing your budget in a way that links those two so that your priorities drive your budget, your performance drives your budget, not last year�s budget driving your budget.

And then the fifth area is human capital, workforce planning and workforce management. So, my number one priority, and I know that sounds like a breathless and breathtaking description, but really, we have responsibilities across all five fronts. Now, I could add to that a laundry list of other endeavors. We have some real challenges with facilities management, making sure we have good inventories of our facilities; condition assessment so we know, is the roof on? What�s missing? Are the toilets functioning well? That�s a big challenge for us. We have maintenance backlogs at the national parks, we have maintenance backlogs at our Fish and Wildlife Service. So the President has made that a premier mission and we in turn have made it our premier mission.

Mr. Lawrence: That�s a good stopping point. It�s time for a break, but stick with us as we continue our conversation with Lynn Scarlett of the Department of Interior.

Do you know what activity-based costing is? You�ll find out in the next segment when we ask Lynn how it�s being used at Interior.

This is The Business of Government Hour. (Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I�m Paul Lawrence, a partner at PricewaterhouseCoopers. And today�s conversation is with Lynn Scarlett, Assistant Secretary for Policy, Management and Budget at the U.S. Department of Interior.

Joining us in our conversation is another PwC-er, Ken Bresnahan

Mr. Bresnahan: Well, Lynn, you talked a bit about the importance of integration of budget and performance information, why is it so important and what is the current state of affairs at the Interior Department?

Ms. Scarlett: You know, it�s just an incredibly important focus. I would say almost the central focus. Government is about ultimately delivering services, and yet ironically, we haven�t always, when measuring our success, asked, well what was the outcome? Did we, for example create a healthier forest by virtue of our investment in, say, riparian or stream restoration. Have we actually delivered good education outcome in the delivery of our education dollars, say, to the Bureau of Indian Affairs and to their constituents, the Indians.

So what performance and budget integration is all about is to focus on the outcome. Say, what is our mission, what are the components of that mission, what really constitute success, and are we doing it? Are we achieving it? One of the things that we have done in the past, or many agencies have done in the past is to tend to define their goals as outputs. That is, instead of saying gee, is the air cleaner, or boy, is the water cleaner, or have we developed good education, it�s to say, how many permits did we issue? That�s an output; that�s not an outcome.

How many permits you issue doesn�t tell us at all about whether the world is a better place to live, or we have measured them in terms of inputs. Gee, success in terms of resource management is how many biologists have we hired? Well that�s an input. Likewise, how many dollars -- even the American public is often driven to kind of define success in these terms. What�s your budget for conservation? What�s your budget for some building project? Well, when you think about it, it�s not the dollars that�s the test of success, it�s did you really on the ground achieve conservation results? Have you protected endangered species, have you improved a forest and its sustainability, for example.

So the first part of budget and performance integration is actually to say what the heck is performance, and have we defined it in terms of real outcomes, not inputs or outputs. But that�s just the first step. You then need to say well, what resources do we need and what sets of activities do we need to do to make sure we�re delivering those outcomes. And so we�re undergoing a new strategic planning process. We brought together all of our stakeholders, we had them talk about our mission, we had them discuss, well, what do you think is the real outcome of these programs. We then took that information, we kind of digested it, worked with all of our bureaus then to take the outcomes that the citizenry said that they think Interior is about delivering and then say, well, how do you measure that? And it�s one thing to say, well, our mission is healthy landscapes, but then of course the challenge is, well, how in the world do you measure that?

So we�ve worked really hard over the last three or four months with our bureaus to figure out how do you measure that. We�ve come up with some outcome measures. The next step will be to then say, okay, now we�ve got these outcome measures, what programs and activities are we currently doing, does it look like they are going to really yield those outcomes that we�ve decided we need to measure. If not, how do we change those programs and activities. And then in our budget request, make sure that the request is for those activities and those programs and those priorities that link to or that we think link to achieving those outcomes. So that�s what it�s all about, making sure that you�re driving your resources towards achieving the outcomes that Congress bequeaths to us for our responsibilities.

Mr. Lawrence: Let me ask you about something you mentioned in the last segment. Activity-based costing. I guess in a nutshell, what is it and why is it so important to decisionmakers?

Ms. Scarlett: Activity-based costing is really a pioneering for government way of kind of crunching its numbers, if you will, and managing its activities. Most government budgets historically have been budgets based on simply line item accounts, things like, here is your labor budget, here is your fuel budget, here is your facilities operation account. Things like that. While on the one hand, that enables, say, Congress or a legislator to say, well, you know, how much money are you spending on personnel, it doesn�t in any way allow us to say, gee, how much does it cost us to run a National Park Service visitor center? It doesn�t tell us, uh, how much does it cost to deliver our grazing program out in the West? It doesn�t allow us to answer the question, how affectively are we operating our dams that provide water for irrigation or that provide hydropower? How do we compare with, for example, the private sector that also operates dams, or the local conservation districts that also provide irrigation?

So what activity-based costing does is to begin to collect information where you�re allocating people time by amount of time spent on a particular program or activity. You�re allocating your facilities or equipment to the program that it actually delivers, and that allows you to do all kinds of really good management things.

An example that we have, Bureau of Land Management and Office of Surface Mining. They are two pioneers. I�m pleased to say at Interior, we�re kind of ahead of the 8-ball on this. Bureau of Land Management went to activity-based costing. It took it four years to introduce it. It was not easy, but they are now able to present, how much does it cost their field offices to operate grazing fee permitting programs. What that allows them to do is to say, well, gee, here is the trend line; this looks like the general trend line. How come that field office is way down there in the low cost area and how come this other one is way up here in the high cost area?

Now, it doesn�t mean that the low cost one is really efficient. When you ask that question, you might find out they�re cutting corners, or when you look at the really expensive one, you may find out that their operating conditions, their geographic circumstances, are particularly challenging. But it allows you to ask that question, begin to identify best practices and then roll them out across all the field offices.

Office of Surface Mining. One of the ways that it was able to use this tool was that it operates an abandoned mine reclamation program, but states also do. And one of the claims had always been well, gee, your offices at Interior are more expensive than our state offices providing these same programs. Activity-based costing allowed us to look inside our particular office and say, hmm, how many people they have to run the same program. We found two surprising things. One reason they were more costly was because they were actually not only our offices that were providing mining reclamation, were not only providing that service, but they were providing a lot of research and information to the state offices so they had some personnel dedicated to that; a kind of extra service.

However, the Office of Surface Mining was also able to find out, well, even if we account for those resource services, even if we account for those extra people doing that above and beyond, we still are a little people-heavy there, and so maybe over time we need to, through -- as that office evolve and as people retire, we need to think about tightening up the ship a little bit. So that�s what activity-based costing allows us to do, to find that information, identify those management challenges and then manage towards them.

Mr. Lawrence: You said it took BLM four years to implement activity-based costing.  Why did it take so long?

Ms. Scarlett: Well, the Bureau of Land Management is a very large agency with a lot of field offices. It did not have the basic accounting tools or the data. Remember that if you have been doing your accounts by simply what�s our labor costs, what�s all this cost, you need to implement a system whereby your field offices begin to report. Break their day up into parts. Well, I spent two hours on this activity and three hours on that. They needed to develop those tools; they needed to develop the accounting systems and kind of migrate the information over.

However, that shouldn�t scare people, because by contrast, the Office of Surface Mining was able to implement in a very quick and very seamless fashion activity-based costing. It�s expense to do so was minimal, almost an eyelash of its total cost. So sometimes this can be done quickly and sometimes at really relatively little expense. In the case of Bureau of Land Management, a much more complicated agency, it took a little more doing and a little bit more investment.

There is also a learning curve. We are now rolling out activity-based costing across all of our eight bureaus, so there is six others. We do not expect the complicated other bureaus, National Park Service, it�s equally as complex as BLM, in fact probably even more so. But we don�t expect it to take four years. We think that it will be able to learn from BLM. It already has begun to implement business plans in some of its parks. Some of those business plans already include activity-based costing as part of the business planning process. So it need not take years, and I think that with the learning curve, that time frame decreases rapidly as new agencies come on board.

Mr. Lawrence: That�s a good stopping point. Rejoin us in a few minutes as we continue our conversation with Lynn Scarlett of the Department of Interior.

What would your life be like without e-mail? We�ll ask Lynn when The Business of Government Hour continues. (Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I�m Paul Lawrence, a partner at PricewaterhouseCoopers. And today�s conversation is with Lynn Scarlett, Assistant Secretary for Policy, Management and Budget at the U.S. Department of Interior.  

Joining us in our conversation is another PwC-er, Ken Bresnahan.

Mr. Bresnahan: Well, Lynn, getting back to -- your prior experience in competitive sourcing seems to have prepared you well for the challenges in the President�s Management Agenda in that area. We understand that Interior has some innovative ideas for competitive sourcing, and we�d like to learn a little bit more about that.

Ms. Scarlett: Let me begin by a kind of big picture comment with competitive sourcing. You may recall in the �80s, an earlier competitive sourcing effort in government, and certainly across the country. Oftentimes, the initial focus was on simply cost savings and efficiency. At Interior, we do not view that as the centerpiece of what competitive sourcing is all about. Our entire management focus is on what we call citizen-centered governance. How can we best deliver services to the American people? Not only quality service, but cost-effectively.

So we view competitive sourcing as a way of asking ourselves, gee, if we look at our internal operations, are they best structured to deliver that service? Might we restructure our services in-house in a different way that would allow us to be more effective, or, by golly, through contracting,might we better achieve the good deliver of the service? The contracting gives us opportunity, for example, to access technology that we might not otherwise have. It might give us access to skill sets that would be otherwise difficult for us to get.

In my former life in the think-tank world, one of the things we learned in surveying cities and counties and states that engaged in competitive sourcing is that often, it wasn�t cost-cutting or RIFs, Reductions-In-Force that this was all about. It was, gee, if you�re a small local government, for example, that can�t afford your own engineer. By contracting, you can contract with a company that might have lots of engineers, and you�re just buying a little piece of that engineer�s time, so it gives you access to skill sets. Here we are at Interior, we�re a very large agency, 70,000 people, we�re almost like a small city ourselves, we view competitive sourcing as a way to access those skill sets, to put ourselves to the test of are we delivering in the best way possible.

That brings me to the mechanisms. The more traditional mechanism to do competitive sourcing, and the emphasis, by the way, is on competition. Putting ourselves to that test of, you know, how do we measure up against everybody else providing similar services. A-76 was the

old-fashioned way of doing that. It�s a fairly cumbersome process, where you look at your particular business unit, you do cost comparisons hypothetically against external units. We

think that while A-76 has some utility, in some ways, the tool itself is more cumbersome than the outcome that you�re trying to achieve. So, we have developed an expedited review process.

A lot of our field units -- I mentioned that we have 2,500 or so -- are really small units with just a few people. We can�t recombine those people. And by the way, they�re often in the West, miles apart from each other, so we can�t recombine those into bigger business units that would be suitable for, say, an A-76, or competition comparison. Many of our units are 10 people or less. Well, a 10-people or less kind of entity doesn�t render itself well to this fairly lengthy and complex review process. So we have an expedited review process that�s geared towards being able to compete some of those commercializable services that are 10 units or less.

We have developed guidelines. It�s a 60-day review process. For those folks who have ever gone through an A-76, they know 60 days is really short and probably not doable under the more traditional A-76. So, it�s a mechanism to kind of, in a general way, doing a competition and a cost comparison without worrying about whether every last dollar was identified and every T crossed and every I dotted. It�s kind of a generic way of doing a competition.

Mr. Lawrence: What have been the results of those small competitions?

Ms. Scarlett: Well, we�re actually just beginning, so there is no "there" yet. We just completed in the middle of April identifying all of the different activities within the bureaus that would be subject to competitions under competitive sourcing, and we�re now beginning the process of doing those reviews. So it�s too early to tell, but we should know pretty soon what the results are. I should say, by the way, that we expect, if we look at the experience of the Department of Defense in the past, or even, for that matter, cities or counties, we expect that we�ll compete pretty well on some of the services and we�ll likely retain some of them in-house. Others, we�ll expect to find that, gee, the private sector really is going to be able to do this better or higher quality or better access to technology. So we are agnostic on the outcome; we want the results to determine where we go.

Mr. Lawrence: Even though the Department of Defense has that experience, I think when people think about competitive sourcing or A-76, they think about job loss, and I note that by the end of 2003, the Department is supposed to compete 15 percent of its commercial activities workforce. How is that working its way through the Department?

Ms. Scarlett: The President�s Management Agenda tried to set some goals, and they set that 15 percent goal. Interestingly enough, we right from the beginning cautioned that it would be probably better to focus on outcome -- that is, you know, are you achieving higher quality

low-cost service and where is it that you can do it -- than on some kind of arbitrary number. But they set that benchmark. So we went out and we used the Fair Act. Many people are familiar with that Act, which asks us to identify commercializable services within the Bureau, and of that universe, we then identified 15 percent to go through this review process.

But what we tell folks is, remember, there is a big difference between 15 percent going through a review process and any outcome as it relates to employees and employee cuts in jobs. We do not know what the impact will be overall from that competition on our employees and on our workforce. But here again, I should underscore that what we have emphasized is trying to work with our employees.

One of the first things I did when I got on board, when I learned of the President�s Management Agenda, learned that competitive sourcing was one of those five prongs, was to call a meeting with our union. We sat down with the unions, we actually have a resolution with the unions to work with us. So if a competitive outsourcing effort results in the decision to outsource, we will then work with our unions on transition strategies, giving those employees alternatives somewhere else in the department, retraining them, finding some kind of workforce transition so that those folks about whom we care and care deeply will, to the best extent possible, be able to have a job.

Mr. Lawrence: One of the things I noticed is right now, the Department is experiencing some restrictions on electronic communications, websites and e-mails and the like. What kind of management challenges is that presenting?

Ms. Scarlett: This challenge has been unbelievable. We could spend 10 or 11 of your programs on this challenge. As a result of a court decision, we were disconnected from the Internet across all of our 8 bureaus. That occurred in December, December 5th or 6th. We are now about 80 percent back up. My office and the Office of the Secretary continues not to be connected to the Internet. Most of the bureaus did not get back online until sometime in March or April.

Think about it for a minute. All of our payroll systems are computerized, and a lot of electronic payments of reimbursements, of payroll systems. We were going through our annual accountability report, our 2001 financial accounting. All of that information had typically been transferred electronically between our bureaus in the field and between us and the Treasury, to do, for example, reconciliations. The areas of impact were so vast that we began to do a daily impact report, which was just a table, and it was about a half-inch thick of lists and lists and lists of impacts.

Some of the impacts were surprising. All of us can imagine, uh, oh, you got no

e-mail. That�s kind of been good; it takes an hour off the front of my day. I don�t have to go through my e-mail. I sort of like that. But it really has been in all of these kind of hidden and unexpected places, such as how do you do reconciliations? We actually had people from our Denver business center have to get on an airplane with a floppy disk and fly it to Washington during our 2001 accountability process. That�s the kind of thing that we had to experience.


Mr. Lawrence: That�s a good stopping point. Rejoin us in a few minutes as we continue our conversation with about management with Lynn Scarlett of the Department of Interior.


What does the future hold for Interior? We�ll ask Lynn for her thoughts when The Business of Government Hour continues. (Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour.  I�m Paul Lawrence, a partner at PricewaterhouseCoopers. And today�s conversation is with Lynn Scarlett, Assistant Secretary for Policy, Management and Budget at the U.S. Department of Interior.

And joining me is another PwC-er, Ken Bresnahan.

Mr. Lawrence: Well, Lynn, in our conversations about the mission and activities of the Department, you described a lot of things, and I noticed that there were several landmarks near Manhattan. So I�m wondering how the events of 9/11 disrupted things, or what management challenges they brought.

Ms. Scarlett: Obviously, 9/11 throughout the entire government, the federal government, and frankly, state and local, has been an enormous challenge for us. For the Department of the Interior, we really do have a lot of critical infrastructure. We have, as I mentioned earlier, a number of the dams, Hoover, Glen Canyon, Shasta, et cetera. And we have a lot of national icons. People think America, they think, guess what, Statute of Liberty, they think the Washington Monument; those truly are emblematic of who America is.

So we did have to face immediate challenges of ensuring the protection of those facilities. And right in the New York area, of course, we have, and I did not know this until 9/11, we�re one of the largest landowners or landholders in the Manhattan area. There are the Statute of Liberty and Ellis Island and a lot of other lands that are Department of the Interior-managed lands. We also have Federal Hall, which was where George Washington was sworn in. It�s about two blocks, three blocks from the World Trade Center.

So when the World Trade Center collapsed, it was the equivalent of about a 6.5 earthquake in terms of the impact on the ground. That caused some cracking damage to Federal Hall, and we did have to go in and figure out how to ensure the structural integrity of that building. We played a big role right on that day because of our National Park Police presence in New York of providing some additional help in that terrible, terrible disaster that drained all of the manpower of every police force and emergency force in the area. A lot of people fleeing the site ran to Federal Hall for protection. It was an area of refuge. People came in to get away from the dust, to get away from the calamity. So we set up kind of a mini health care center there. So we were right on the ground working right there.

The 9/11 affected us in other ways. We have 4,300 law enforcement, federal law enforcement agents. National Park Police, Park Rangers, Fish and Wildlife Rangers, Bureau of Indian Affairs, Bureau of Land Management. Their resources all were tapped to help out. Whether it was in the Air Marshal program or protecting all of these infrastructures. So we played a very direct role, and of course, the challenges are ongoing. We have a special challenge, because our mission is access to lands, recreation. We can�t simply become a fortress. We have to keep our Washington Monument open to people. That�s what it�s there for. So how do you balance that access with protection?

Mr. Bresnahan: Well, Lynn, that certainly highlights the importance of having well-trained federal employees available to help in a crisis and emergency. We hear almost constantly about the wave of retirements that are about to begin, or perhaps have already begun. What steps has Interior taken to prepare for this wave of retirements?

Ms. Scarlett: Interior is, like many other agencies, facing some looming retirements, and one of the things that we�ve done as part of our ongoing effort to address that is to try and develop an overall workforce planning strategy; identify first of all who are those people that are about to retire, what kinds of jobs are they in. We�ve learned, for example, that about 20 percent of our workforce that�s trained in property management and acquisition and procurement is going to retire in the relatively near future. So that means, by golly, we�ve got to get folks like that trained. Likewise, in certain other key areas, we�re facing a big, big percentage of people that are about to retire.

So we�ve done a couple things. We have a really innovative internship program on the procurement and acquisition side. We launched it a few years ago, we�ve revved it up. This year, we had 700, I think, applicants to come in and go through special training. They do an internship with procurement and acquisitions people. They go through special training. And we�re hopeful, and in fact it�s already borne fruit to some extent, that some of these people will say well, this is a really cool place to work; we�re going to have our careers here.

We�ve done the same on financial management. We have a real need for financial managers, and we�ve created an internship program there with a similar result. Lots of people saying, hmm, I�d like to go try that. The National Parks Service, quite creative, has recognized that it has a dearth of MBAs, just folks who really are trained in business management. So they have a special business plan program, they bring interns in from MBA schools and they actually work with the park superintendents developing business plans. And as part of that internship program, what we�re finding is people say, gee, I thought I was going to work in some corporation. This is kind of cool to be working at some wonderful national park and applying my business skill. So some of them are staying on, and that�s the kind of thing we�re doing.

Mr. Bresnahan: How about technology workers?

Ms. Scarlett: Well, we need technology workers as well. Really across all these fronts. Where we have identified key needs, those are the areas where we�re developing. Now, I don�t believe we have quite as large an internship program like we have for financial management or acquisition and procurement in the realm of technology per se, but there is a tremendous need there. And I�ll tell you what, what there really is a need for is not so much just people with technical expertise, but people who combine technical expertise with management experience and can do that crosswalk between the techie world and the business world and the management world.

Mr. Lawrence: Let me ask you about your thoughts for the future of the Department of the Interior for the next five years, ten years.

Ms. Scarlett: The Department of the Interior, it is a wonderful place, let me say first of all. I am so privileged to be able to be working here, because it does manage all of America�s treasures. I think as we look to the future at Interior, there will increasingly be a greater business management focus brought to bear as we manage those facilities. I think, as I look on the horizon, we�re going to see more cross-department integration. The bureaus will retain their independence and their personalities and their particular missions, but we�re finding a need to work together more, have common business practices.

In some instances, we�re doing what�s called co-location. Instead of Bureau and Land Management having one office and, let�s say, our neighbors at the Department of Agriculture and the Forest Service who are on lands right adjacent having another office, we�re saying, maybe we can work in the same facility together and jointly provide the services across a landscape, which by the way, doesn�t respect jurisdictional boundaries. Invasive species run right across those boundaries. How do we work together?

So, integration, better integration, a business orientation I think is part of our vision for the future. And then, just this performance focus, really steering towards asking that question of have we got the job done? That�s what I would see for the future of Interior.

Mr. Lawrence: What are the challenges of performing integration like the examples you described?

Ms. Scarlett: Each bureau has its own corporate culture. It�s a little bit like doing mergers between companies. There are different corporate cultures, and transcending those corporate cultures and getting people to work together is a challenge. Sometimes it gets down to very simple technological things. One agency will have a phone system that is different from another agency�s and they can�t call each other in the same office. So how do we figure out how to make that work. So there are technical barriers, there are cultural barriers, if you will, but we are finding really a lot of desire to have this more citizen-centered service as opposed to a

bureau-centered focus. And people stepping up to the table saying, well, we can keep our unique characteristics, but where we have shared responsibilities, let�s integrate our efforts to address them.

Mr. Lawrence: What advice would you give to a young person considering a career in public service, let�s say, at the Department of Interior, for example?

Ms. Scarlett: The advice I would give to someone wanting a career in public service is that it�s very important to have some sort of skill set that would be or you think would be applicable.  You could be just passionate about environmental protection, for example, and that�s a good thing, that�s a good motivator. But ultimately, when push comes to shove, if you�re going to serve in government, you�re going to need to have those skills as a biologist, for example, or as an IT specialist, or as a, I would say, boy, there is a lot of room for folks with their business skills.

So get yourself a skill set and then that will allow you to find a good and useful place in the government. And by the way, there is almost no skill set that isn�t relevant. We do so much at Interior or just across the other agencies. So there is almost no skill set that�s irrelevant.

Mr. Lawrence: Well, Lynn, I�m afraid we�re out of time.

Ken and I want to thank you for being with us this morning.

Ms. Scarlett: Thank you.

Mr. Lawrence: This has been The Business of Government Hour, featuring a conversation about management with Lynn Scarlett, Assistant Secretary for Policy, Management and Budget at the U.S. Department of Interior.

Be sure and visit us on the web at There, you can learn more about our programs and research. You can also get a transcript of today�s very interesting conversation. Again, that�s

This is Paul Lawrence. See you next week.