GAO prepares for pay system overhaul

The investigative branch of Congress is preparing to divorce itself completely from the executive branch pay system as early as January, Comptroller General David Walker said Wednesday.

Under the GAO Human Capital Reform Act (H.R. 2751) signed by President Bush last week, Walker gained the authority to deviate from across-the-board annual executive branch pay raises next year in the event of "extraordinary" economic conditions or serious budget constraints. In the absence of those circumstances (the more likely scenario), the changes will kick in two years from now.

The act also gives GAO a more fitting name, Walker said, and allows the watchdog agency greater flexibility to shape its workforce and attract and retain top-notch employees. GAO now stands for "Government Accountability Office" rather than "General Accounting Office."

The name change will cost very little, as much of GAO's work is published electronically and the agency is best known by the acronym, Walker said, adding that he has asked employees to use up existing business cards and stationery before switching over to products bearing the agency's new name. At the same time, Walker expects the change to help attract and recruit lawyers, economists and others previously deterred by references to accounting.

"Our old name was very misleading," Walker said. "It was not reflective of what we do, or have ever done."

The watchdog agency, established in 1921 to advise Congress on improving the government's financial management in the wake of World War I, used to "pre-audit vouchers," Walker said. But "we've never been the ones responsible for maintaining [agencies'] books and records."

Under the personnel reform act, GAO also is able to offer job candidates who have significant experience outside government more attractive benefits, including longer annual leave. Agency officials also can set up an executive exchange, allowing employees in areas where GAO is having trouble maintaining optimal skills sets to trade places with private-sector counterparts.

The act is the third major piece of legislation broadening GAO's personnel flexibilities. A 1980 law allowed GAO to escape some aspects of the executive branch pay system and led to the 1989 establishment of a pay banding system for its attorney and analyst workforce.

Under the human capital reform act signed last week, GAO can fully "decouple" itself from the executive branch system, Walker said. The agency is hiring a "world-class" consultant to compare GAO's pay rates and job classifications to those at comparable institutions outside government, including private businesses and nonprofits.

Once GAO determines appropriate compensation ranges for various job categories, levels and locations, agency officials will use them to guide a performance-based system, where employees earn a basic raise to cover the costs of inflation each year (as opposed to the governmentwide executive branch raise) and receive additional raises based on merit. A small group of employees already may receive salaries above the range decided upon, and may therefore fall outside the new system, Walker said.

GAO is studying demonstration projects at other agencies to gather ideas on judging individual performance, Walker said. For instance, GAO is looking at an Army pay system for scientific and technical employees.

At the same time, Walker said he has not seen "anybody out there" that he believes has all the answers. "I can honestly say we're clearly in the lead with regard to human capital reform in the government," he said. "We've been told that in many cases we're ahead of the private sector."

GAO will gather input from employee groups, including an employee advisory council, before proceeding with changes, Walker said. "Any time you make changes that deal with classification and compensation issues, there's obviously going to be a lot of concern," he said. "There aren't more fundamental issues. I expect that there will be a lot of interest [and] a lot of questions . . . [We're] dedicated to keeping our people informed."

The second piece of major GAO personnel reform legislation, enacted in 2000, granted the agency temporary authority to offer early retirement options and voluntary separation payments. The trial expired on Dec. 31, 2003, but last week's personnel reform law hands the authorities back and makes them permanent.

Most executive branch agencies are able to offer early retirement or voluntary separation, but GAO's authorities differ in three key ways, Walker said. The GAO Human Capital Reform Act allows the comptroller general to better target options to various levels and positions, he said. The watchdog agency also can use the options to realign its workforce, rather than downsize. Third, the comptroller general retains the ability to deny high-level performers the right to exercise the options as necessary to maintain a top-notch staff.

Most of the provisions took effect last week, though GAO officials have not yet ironed out the details necessary to exercise all the flexibilities immediately.

GAO will be required to keep Congress updated. For five years, the agency is required to submit annual reports summarizing all actions taken in regard to the new flexibilities.

Rep. Jo Ann Davis, R-Va., the act's sponsor, said lawmakers are confident in GAO's ability to act responsibly.

"As members of Congress, we heavily rely on GAO for its investigative skill and impartiality as we try to improve the performance and ensure the accountability of the federal government," she said in a press statement. "This act will improve the performance of GAO, and consequently Congress, and that is a big win for the taxpayers."