Lack of planning hampers agency downsizing efforts

Haphazard downsizing in the federal government has, in some cases, resulted in fewer employees providing less service while handling twice as much work, according to a new General Accounting Office report.

Reviews of agency downsizing efforts between 1993 and 1997 show that careful strategic planning before offering buyouts to employees is essential, GAO concluded in its report, "Federal Workforce: Payroll and Human Capital Changes During Downsizing (GGD-99-57.)"

"A lack of adequate strategic and workforce planning during initial rounds of downsizing by some agencies may have affected their ability to achieve organizational missions," the report said.

Legislation requiring agencies to submit comprehensive buyout plans to congressional oversight committees before buyout authority is given is key to ensuring that downsizing does more good than harm, GAO said.

The size of the federal workforce decreased from 2.2 million to 1.9 million between fiscal 1993 and 1997. But buyouts offered in the latter years of downsizing were more effective than earlier downsizing efforts, GAO found, because of statutory requirements that agencies prepare and submit strategic buyout plans. Such plans usually require agencies to outline how buyouts will be used and to describe how the agency will operate without eliminated positions and functions.

According to Sen. Fred Thompson, R-Tenn., the report provides evidence that federal downsizing has been poorly executed. "You can't just cut employees randomly and think you're going to have a better workforce at the end of the day," Thompson said.

Thompson, the chairman of the Senate Governmental Affairs committee, requested the report to determine why the federal payroll increased during a period in which the workforce was declining. Between 1993 and 1997 the federal payroll grew by $8.7 billion while the size of the workforce decreased by about 14 percent.

For the most part, the increase in payroll can be attributed to the cost of annual across-the-board and locality pay increases. "It's clear that without downsizing, our federal payroll costs would be much higher than they are today," Thompson said. "But without proper planning, downsizing may result in much higher costs from waste and mismanagement."

Agency representatives told GAO that downsizing often resulted in loss of institutional memory and more burdensome workloads, as well as decreased quality of service. Congress should require agencies to think about the impact downsizing will have before authorizing buyout authority, GAO recommended.

Only the Defense Department and the Office of Personnel Management responded to the report, but both agencies concurred with its conclusions.