Although the effects of centralization on employees varied, cumulatively  they have negatively affected the ability of these employees to carry out  their mission work. Centralization Has Improved Financial Accountability and Led to More-Informed Management Decisions and More-Consistent Policy Implementation

By consolidating and standardizing the Forest Service’s financial systems  and procedures, centralization helped alleviate some of the agency’s  long-standing problems with financial accountability. By consolidating and standardizing its  finance, accounting, and budget processes through the centralization of  budget and finance, the agency was able to improve its financial  management and sustain clean financial statement audit opinions more  easily and at a lower cost than before centralization, according to agency  officials. Centralization Shifted How Business Services Were Delivered in Ways That Largely Increased Responsibilities for Field- Unit Staff

Even with these improvements, we found that centralization—particularly  of human resources management and information technology—has had  significant and widespread negative repercussions for field-unit  employees. Centralization of human resources management and information  technology entailed greater reliance on numerous automated systems,  yet through our interviews, focus groups, and reviews of recent internal  agency assessments, we found widespread agreement among field-unit  staff that many of the agency’s systems are not user-friendly and have  not helped employees carry out their work. The Forest Service Assesses Its Delivery of Centralized Business Services in Multiple Ways, but It Is Unclear Whether Proposed Remedies Will Fully Address Identified Shortcomings

The Forest Service has undertaken a number of actions to assess its  delivery of centralized business services, in part because of the  significant change centralization brought to employees across the Forest  Service. Specifically:    Budget and finance. Efforts to Address Shortcomings Include Initiatives to Improve Human Resources Management and Information Technology, but It Is Unclear to What Extent Problems Will Be Resolved

In part following recommendations made in various assessments of its  business services, the Forest Service has taken, and continues to take,  steps to improve performance in each of these services. Because some  of these initiatives are relatively new, their impact on field-unit employees  has not yet been assessed. The Forest Service Could Not Reliably Demonstrate Cost Savings Resulting from Centralization but Estimated That Anticipated Savings May Have Been Achieved by One Business Service

Achieving significant cost savings was one of the key goals of the Forest  Service’s centralization effort, with the agency estimating it would save  about $100 million annually across the three business services—budget  and finance, human resources management, and the ISO component  within information technology. But because of limitations with the  agency’s documentation supporting the data, assumptions, and methods  used in developing its cost information both before and after  centralization, we were unable to fully ascertain the reliability of its cost  estimates for (1) baseline costs of providing each of the business services  before centralization, (2) projected costs for providing those same  business services after centralization was complete, or (3) actual costs of  providing the business services after centralization. The Forest Service Estimated That Centralization Achieved Intended Cost Savings in One of the Three Business Services

Despite limitations in the information it provided, the Forest Service  estimated that, through fiscal year 2010, it achieved intended annual  savings in budget and finance but was not able to achieve intended  savings for human resources management or the ISO component within  information technology. Recommendations for Executive Action

To maintain and strengthen the Forest Service’s delivery of business  services and help ensure customer satisfaction and cost-effectiveness,  and in conjunction with its current initiatives to redesign and reorganize  the agency’s approach to delivering human resources management and  information technology services, we recommend that the Secretary of  Agriculture direct the Chief of the Forest Service to take the following  three actions:    Complete a systematic examination of the tasks associated with these  two business services to determine (1) which tasks can be efficiently  and effectively carried out under a self-service approach and  (2) which tasks may require more direct support by specialists. Appendix I: Objectives, Scope, and Methodology

This report examines the (1) types of effects centralization has had on the  Forest Service and its employees, particularly in field units; (2) actions the  Forest Service has taken to assess its delivery of centralized business  services and to address identified shortcomings; and (3) extent to which  the Forest Service can demonstrate that it achieved centralization’s  intended cost savings.   Budget reviews by the agency’s Operations Customer Service Board.
Why GAO Did This Study

In the early 2000s, the Forest Service, within the Department of Agriculture, centralized the operations of three major business services: (1) budget and finance, (2) human resources management, and (3) information technology. The agency's goals in centralizing these services, which were previously delivered by staff in field units throughout the country, were to streamline and improve operations and reduce costs. Congressional committees directed GAO to independently analyze whether centralization had achieved intended efficiencies and cost savings. Accordingly, this report examines the (1) types of effects centralization has had on the Forest Service and its employees, particularly in field units; (2) actions the agency has taken to assess its delivery of its centralized business services and to address identified shortcomings; and (3) extent to which the agency can demonstrate that it achieved intended cost savings. GAO examined agency reports, performance studies, cost estimates, and other documentation and interviewed and conducted focus groups with employees across the agency.

What GAO Found

The Forest Service's centralization of business services contributed to several agencywide improvements, but it has also had widespread, largely negative effects on field-unit employees. For example, centralization consolidated and standardized agency financial systems and procedures, which helped alleviate some of the agency's long-standing problems with financial accountability, and helped it sustain clean financial statement audit opinions more easily, according to agency officials. Nevertheless, GAO found that centralization of human resources management and information technology services had many negative repercussions for field-unit employees. Under centralization, the agency relies on a self-service approach whereby employees are generally responsible for independently initiating or carrying out many related business service tasks. According to field-unit employees, these increased administrative responsibilities, coupled with problems with automated systems and customer support, have negatively affected their ability to carry out their mission work and have led to widespread employee frustration. The Forest Service has undertaken a number of actions to assess its delivery of centralized business services, but it is unclear whether proposed remedies will fully address identified shortcomings. For example, the agency established a customer service board to continually monitor service delivery and recommend improvements. The agency has also undertaken initiatives to redesign and reorganize its human resources management and information technology services to improve service delivery in these areas. For example, human resources management hired additional staff and established regional service teams, and information technology developed a strategic framework and is in the early stages of a significant reorganization. Nevertheless, the agency has not yet systematically assessed which types of services are best suited to a self-service approach, and because many of the agency's other initiatives are in their early stages, it is unclear to what extent they will address identified shortcomings. The Forest Service could not reliably demonstrate cost savings resulting from centralization, but the agency estimated that anticipated savings may have been achieved in budget and finance. Achieving significant cost savings was one of the key goals of the agency's centralization effort, and the agency estimated it would save about $100 million annually across the three business services. (This estimate applied to budget and finance, human resources management, and a component within information technology known as the Information Solutions Organization, which was established to provide technology support services.) But because of limitations with the agency's documentation supporting the data, assumptions, and methods used in developing its cost information both before and after centralization, GAO was unable to fully ascertain the reliability of the cost estimates for (1) baseline costs of providing each of the business services before centralization, (2) projected costs for delivering those same business services after centralization was complete, or (3) actual costs of providing the business services after centralization. Nevertheless, the Forest Service estimated that anticipated annual savings through fiscal year 2010 may have been achieved in budget and finance but not in human resources management or the Information Solutions Organization, where the agency estimated that savings fell far short of its cost-savings goals.

What GAO Recommends

GAO recommends that the Forest Service systematically examine business service tasks to determine which ones can best be carried out under a self-service approach, take related steps to improve service delivery, and adequately document and assess the costs of current initiatives and business service delivery. The Forest Service generally agreed with GAO's findings and recommendations.