In February 2006, the Task Force of  the Homeland Security Advisory Council defined resiliency as “the  capability of a system to maintain its functions and structure in the face of  internal and external change and to degrade gracefully when it must.”  Later in 2006, the Department of Homeland Security’s National  Infrastructure Protection Plan—again focusing on critical infrastructure,  not agencies—defined resilience as “the capability of an asset, system, or  network to maintain its function during or to recover from a terrorist  attack or other incident.” In May 2008, the House Committee on  Homeland Security held a series of hearings focusing on resilience at  which government and private sector representatives, while agreeing on  the importance of the concept, presented a variety of definitions and  interpretations of resilience. For example, in 2004, the Federal Emergency  Management Agency’s (FEMA) Hurricane Pam exercise simulated a  category 3 hurricane. Furthermore, during a disruption, some attributes may  prove to be more important than others. During the peak of the 2008  taxpayer filing season, IRS also had to process payments to taxpayers as  directed by the 2008 economic stimulus legislation. As a result, even  with this increased workload, IRS was also able to deliver a generally  successful filing season. In response to the need to improve exercises  across IRS and implement new requirements from the Federal Continuity  Directives, IRS assembled its Emergency Management and Preparedness  Working Group, which coordinates emergency activities among its  business units, for a 2-day workshop. The  simulations involved in these types of exercises create more realistic  conditions and a better experience to prepare employees to contend with  an actual emergency event. In past disruptions, IRS has used its seasonal workforce to respond to  changing circumstances. IRS has also demonstrated the ability to be flexible after disruptions and  reallocate physical resources quickly. Although IRS has a number of programs in place to build staff motivation,  less than half of respondents in the 2008 IRS Employee Survey agree with  the statement, “In my organization, leaders generate high levels of  motivation and commitment in the workforce.” This is lower than the  percentage of IRS employees responding positively to most other survey  questions, with which an average of more than 65 percent agreed. However, IRS  currently has no requirement for including external stakeholders in tests  and exercises. IRS’s strategic flexibilities and tools to  distribute leadership capabilities through the workforce and hold  individuals accountable are additional ways that IRS builds its capacity for  resilience. While IRS has been generally successful in the face of past disruptions, its  current test and exercise strategy does not include simulations of real  events through functional or full-scale exercises, which limits the ability of  IRS staff to gain experience in responding to more realistic circumstances. In  addition, we interviewed 11 academic and practitioner experts—in  emergency preparedness and disaster management, management and  organizational psychology, critical infrastructure, and strategic planning— regarding organizational resilience. These attributes were then arranged into five broad categories:  emergency planning, organizational flexibility, leadership, committed  workforce, and networks. To identify the ways that the Internal Revenue Service (IRS) exhibits the  attributes of organizational resilience and the opportunities that IRS has to  take on additional practices which would make it more resilient we  selected relevant parts of IRS, completed a document review, observed  organizational meetings, and held interviews with IRS officials. For each of the four business units and IRS headquarters,  the Commissioner or designated representatives as well as representatives  from the offices of human capital and emergency planning were  interviewed. Additionally IRS provided documentation and analysis  related to the IRS Employee Engagement Index, which is based on the IRS  Employee Survey data. Appendix II: Expanded Discussion of Organizational Resilience Attributes

Organizational resilience is the quality that would enable an organization  to restore itself or thrive following a disruption, by which we mean a  sudden and externally imposed circumstance that has the potential to  substantially compromise an organization’s ability to accomplish its  mission. Test and Exercise Requirements that Challenge Employees to Respond to Unexpected and Stressful Circumstances that Require Adjustments to Established Plans and Procedures

An organization that performs regular tests and exercises of their  emergency plans will likely better know how to handle a real disruption. This attribute can be observed through employee feedback  and employee involvement in organization-wide initiatives.
Why GAO Did This Study

The Internal Revenue Service (IRS) collects the revenues that fund the federal government and issues billions of dollars in refunds. Consequently, IRS's ability to demonstrate agility and speed in restoring its functions after a disruption is vital to the government and the economy. GAO (1) identified the definition and attributes of organizational resilience; (2) examined the extent to which these attributes are exhibited within IRS; and (3) reviewed the challenges and opportunities faced by the IRS in becoming more resilient. GAO gathered and analyzed the attributes of resilience based on discussions with academic and practitioner experts in the field. GAO then reviewed IRS human capital and emergency preparedness policies and strategic plans, observed campus operations and emergency working group meetings, and interviewed officials from headquarters and each of the four business units.

What GAO Found

Organizational resilience is the quality that would enable an organization to restore itself or thrive following a disruption that substantially compromises its ability to accomplish its mission. Five categories of attributes can help an organization be more resilient: robust emergency planning, flexible organizational assets that can be accessed during times of change, leadership capacity distributed through the organization, a committed and skilled workforce, and strong relationships with internal networks and outside organizations. Although each of these categories is important, the characteristics of whatever disruption an organization faces may make some attributes more valuable than others. In its emergency planning, IRS has learned from experiences requiring organizational resilience. For example, during the peak operations of the 2008 filing season, the economic stimulus legislation required that the IRS process stimulus payments totaling $94 billion. Through adjustments to the workforce, IRS was able to implement the change and delivered a generally successful filing season, while making key trade-offs. Although the IRS has learned from past events, its current test and exercise strategy is limited. Functional or full-scale exercises--which are not part of IRS's strategy-- provide more realistic conditions and a better experience to prepare the leadership and emergency personnel to contend with an actual event. Demonstrating the ways that IRS has flexible organizational assets that can be accessed during times of change, IRS strategically has made some operations redundant, which allows work to be shifted between offices when needed. The IRS has also exhibited the capability to use seasonal workers to increase its workforce after a disruption, as was the case in the support it provided to the Federal Emergency Management Agency after Hurricane Katrina. In building leadership and a committed workforce, the IRS has numerous formal training and development initiatives to build the leadership capability of both its management team as well as its non supervisory employees. While IRS employees understand how their work contributes to the IRS's goals and priorities, currently less than half of IRS employees believe that agency leaders and managers generate motivation and commitment in the workforce. A number of IRS initiatives are now in place to address this issue, including coaching of managers based on employee feedback survey data and outreach by managers to IRS employees. Lastly, IRS is highly networked both within and outside of IRS, which provides opportunities for accessing additional resources after a disruption. IRS has requirements for including internal stakeholders in tests and exercises. When IRS has involved external stakeholders in tests and exercises, it has proven useful, but this practice is neither formalized nor widespread.