2016 Annual Performance Plan
EFFECTIVE MANAGEMENT OF STRATEGIC RESOURCES
The FDIC recognizes that it must effectively manage many critical strategic resources to successfully carry out the annual performance goals outlined in this plan. These resources must be aligned and deployed to the areas where they are most needed. An overview of planned 2016 initiatives to enhance the FDIC’s management of its key strategic resources is provided below.
Financial Resources Management
The FDIC does not use taxpayer funds. Its operational expenses are predominantly paid from the Deposit Insurance Fund (DIF), which is funded from assessments paid by insured financial institutions. The FDIC takes very seriously its fiduciary responsibilities to use these funds efficiently and cost-effectively to meet its mission responsibilities. To that end, the FDIC engages annually in a rigorous planning and budget formulation process to make sure that budgeted resources are properly aligned with workload projections and designated corporate priorities (see Appendix B).
The FDIC’s disciplined approach to managing its financial resources has been apparent over the past several years. From 2008 through 2010, the FDIC’s annual operating budget almost quadrupled and its authorized staffing level almost doubled in response to a rapid increase in the number of problem institutions and insured depository institution failures. The FDIC relied primarily on nonpermanent staff and contractor resources to address the resulting uptick in its supervisory and resolutions workload in order to facilitate future budget and staffing reductions when workload returned to more normal levels. In subsequent years, both the annual operating budget and authorized staffing level declined substantially. For 2016, the FDIC’s annual operating budget and authorized staffing are approximately 45 percent and 27 percent, respectively, below the peak levels experienced in 2010 and 2011. The FDIC will continue to carefully monitor both its supervision and receivership management workload and will take steps to further reduce expenses for these programs as underlying workload declines.
Human Capital Management
The FDIC’s most important resource is the “intellectual capital” that its employees bring to bear on the accomplishment of its mission. For that reason, the FDIC strives to attract, develop, and retain a highly skilled, diverse, and results-oriented workforce and to be regarded as a preeminent place to work among federal agencies, especially those whose workforces consist primarily of financial professionals. More than one-quarter of the FDIC’s current permanent workforce is projected to retire over the next ten years. This will provide the FDIC a unique opportunity to reshape its permanent workforce to provide effective regulatory oversight to meet the emerging challenges of an increasingly complex U.S. financial system in the 21st century. In 2016, the FDIC will continue to pursue several ongoing initiatives to shape its future permanent workforce while addressing immediate staffing needs.
Workforce Development Initiative
Like many other federal agencies, the FDIC faces potential succession management challenges as many of its long-term, experienced employees retire. Introduced in 2013, the FDIC’s Workforce Development Initiative emphasizes the need to prepare employees to fulfill current and future workforce capability and leadership needs. This focus ensures that the FDIC has a workforce positioned to meet today’s core responsibilities while preparing to fulfill its mission in the years ahead.
During 2015, the FDIC continued to develop and implement the Workforce Development Initiative. The effort is designed to address comprehensive succession planning needs and workforce development challenges and opportunities. The initiative is focused on four broad objectives: to attract and develop talented employees across the agency, to enhance the capabilities of employees through training and diverse work experiences, to encourage employees to engage in active career development planning and seek leadership roles in the FDIC, and to build on and strengthen the FDIC’s operations to support these efforts.
In 2016, the FDIC will continue to develop and implement the strategies, programs and infrastructure to support the attainment of these objectives in meeting its long-term workforce needs. The FDIC is in the early stages of a multi-year effort to identify future workforce and leadership requirements assess current workforce capabilities, support employees who aspire to leadership and management roles, and develop and source the talent to meet emerging workforce needs.
In 2015, an interdivisional pilot succession planning review was conducted to consider the current state of management talent at the FDIC and establish developmental recommendations for aspiring senior leaders. In 2016, this process will be expanded agency-wide to include more than 900 FDIC managers and leaders. The long-term goal of the effort is to increase the pool of capable employees eligible to apply for leadership positions through a systematic, deliberate approach to cultivating leadership talent.
During 2015, several programs were launched to support both aspiring leaders and employees in broadening their capabilities. One example is the expansion of the Mentorship Program to include a leadership mentoring focus. More than 300 employees and managers enrolled in the program as mentors and/or mentees in 2015. This program is designed to establish a partnership between an employee and a more experienced advisor with the goal of exploring professional development and career plans. In 2016, the FDIC plans to further the implementation of these and other efforts to achieve the goals of the Workforce Development Initiative. The FDIC continues to focus on ensuring the availability of a workforce prepared to meet today’s core mission functions, including oversight responsibilities required under DFA.
A key component of the FDIC’s long-term workforce development strategy continues to be the Corporate Employee Program (CEP). The CEP is the primary vehicle used to fill new, entry-level positions in the FDIC’s core bank supervision and resolutions and receivership management functions. The CEP emphasizes the development of a cross-trained, flexible workforce that can be redeployed rapidly to address new workload priorities resulting from changing conditions in the banking industry and the broader economy.
Once employees complete the CEP training program and are commissioned in their assigned disciplines, they have numerous opportunities to further their expertise in particular specialized areas. In 2015, the FDIC began a multi-year effort to develop more advanced skills through rigorous and structured training programs for specialists in such areas as accounting, capital markets, information technology, Bank Secrecy Act compliance, anti-fraud, anti-money laundering, large bank supervision, and a variety of other specialized areas. The FDIC also provides opportunities to prepare employees for managerial and leadership positions.
Another outgrowth of its strategic workforce planning is an employee development program designed to expand the number of FDIC employees who have broad, cross-divisional experience with the largest and most complex FDIC-insured banks and bank holding companies. The program provides experience in supervision, risk analysis and monitoring, deposit insurance pricing and fund management, and resolution planning.FDIC employees and leaders have a long tradition of responding effectively in times of crisis, while continuing to execute day-to-day mission requirements. Through further development of its human capital strategies, the FDIC will work to ensure that the future FDIC workforce is as prepared, capable, and dedicated as the one it has today.
Workforce Diversity and Inclusion
In 2016, the FDIC will continue to pursue a more comprehensive, integrated, and strategic focus on diversity and inclusion within the FDIC workforce. The FDIC Diversity and Inclusion Executive Advisory Council, composed of key senior executives, oversees the implementation of the FDIC Diversity and Inclusion Strategic Plan, which was initially issued in early 2013 and is updated annually.
The plan lays out a course for achieving workforce diversity through targeted recruiting; cultivating greater workplace inclusion through collaboration, flexibility, and fairness; and ensuring the sustainability of diversity and inclusion achievements by equipping leaders with the ability to manage diversity, monitor results, and refine approaches on the basis of actionable data. The plan details specific steps to enhance diversity and inclusion at the FDIC in the areas of recruiting, hiring, succession planning, leadership engagement, analytics and reporting, training, communications, strategic planning, and performance management rating enhancements.
A Culture of Workplace Excellence
Over the past several years, the FDIC has participated in annual employee surveys conducted by the U.S. Office of Personnel Management. These surveys identified major areas of strength as well as opportunities for improvement in employee satisfaction and engagement within the FDIC workforce.
Survey results have consistently demonstrated that FDIC employees have an excellent understanding of the FDIC’s mission and strategic direction and know how their work fits into the organization’s goals and priorities. They enjoy their work, believe it is important, and gain a sense of personal accomplishment from it. Employees are also highly satisfied with their pay and benefits, as well as the FDIC’s family-friendly work-life balance programs, physical work environment, and training, technology, and other resources.
The FDIC’s Workplace Excellence (WE) Program plays an important role in helping the FDIC maintain a culture of excellence. The WE Program is composed of a National WE Steering Committee and individual Division/Office WE Councils focused on maintaining, enhancing, and institutionalizing positive workplace and cultural change at the national and division/office levels at the FDIC. The WE Program enhances communication, provides additional opportunities for employee input and engagement, and promotes employee empowerment.
Employee Learning and Development
The FDIC provides employees with skills-based training and leadership development opportunities to help achieve its mission. In 2016, the FDIC’s Corporate University will continue to offer innovative solutions to prepare both current and new employees for the challenges ahead. It will also continue to use its learning programs as opportunities to strengthen its organizational culture, build key competencies, and reinforce corporate values.
The FDIC provides its workforce with the technical knowledge and skills necessary to examine and supervise financial institutions and manage receiverships. In 2016, the FDIC will continue to develop and implement the priority components of the approved Division of Depositor and Consumer Protection (DCP) and the Division of Risk Management Supervision (RMS), as approved by the divisions’ Training Oversight Committee. This work will ensure the currency of examiner curricula with recent regulatory changes, and expand the use of distance-learning methods to expand access of field staff to training resources. The FDIC also will conclude a three-year effort to develop a comprehensive curriculum to provide foundational knowledge, specialized skills, and cross-training opportunities across functions for employees in the Division of Resolutions and Receiverships (DRR) to promote a flexible workforce and ensure readiness for future resolutions and receiverships activity. In support of the FDIC’s responsibilities for the possible orderly liquidation of a systemically important financial company, facilitated discussions and tabletop exercises will continue to be used to enhance strategic and operational readiness, build interagency relationships, and implement and test new policies and procedures.
In addition to technical training, the FDIC is focused on developing employees as leaders at all levels of the organization. The FDIC has a comprehensive leadership development curriculum that consists of core courses, electives, and enrichment activities. Development of the core leadership curriculum was completed in 2011 and significantly updated in 2015. In 2016, new courses will be added to the robust electives program and enrichment programs and customized training will be offered at headquarters and in the field.
Management of Information Technology Resources
The use of information technology (IT) is essential to accomplishing the FDIC’s mission. Innovative, timely, reliable, and secure information helps the FDIC meet its annual performance goals and carry out daily operations. Protection of digital information is vital as technology becomes an increasingly integral component of business functions. In 2016, the FDIC will focus on managing its IT resources to improve information security, support its responsibilities under the DFA, and improve performance and efficiency across all program areas.
The FDIC has a robust, risk-based, organization-wide information security program. Digital information and information systems are treated as corporate assets to be protected, with controls at a level commensurate with the sensitivity of information processed, stored, or transmitted. Since government agencies face increasing and ever-changing cyber-threats, the FDIC must continue to enhance its continuous threat monitoring capabilities. The FDIC maintains a risk management approach to cybersecurity that provides an accurate picture of the FDIC’s security risk posture at all times. The approach provides visibility into assets, leverages automated data feeds to quantify risk, ensures security control effectiveness, and supports prioritized remedy implementation. In 2016, the FDIC will continue implementing enhanced strategies for ensuring the security of the FDIC’s systems and IT infrastructure against external intrusion.
Security and privacy are embedded into the FDIC’s culture. Each employee and contractor must review and complete annual information security and privacy awareness training to acknowledge their responsibilities under the information security and privacy programs. The privacy program is primarily focused on ensuring that appropriate steps are taken to protect personally identifiable information from unauthorized use, access, disclosure, or sharing and to protect associated information systems and websites from unauthorized access, modification, disruption, or destruction.
Continuity of Operations (COOP)
The FDIC has been classified as a Category II FEMA organization, which means that systems providing mission essential functions must be recovered within 12 hours should a disaster occur. In 2015, a COOP tabletop exercise identified needed changes to communications used during a disaster. In 2016, documentation will be developed and approval sought to execute improvements to disaster recovery capabilities.
In 2014, the FDIC placed into operation a Sensitive Compartmented Information Facility (SCIF) to meet COOP requirements for a Category II agency. This project included hiring a full-time Special Security Officer and constructing the SCIF to standards of Intelligence Community Directive 705, Sensitive Compartmented Information Facilities. The SCIF received physical security accreditation in August 2014. Communications testing was successfully completed in 2015 through the interim classified communications platform that was installed pending the full installation of the system.
In 2015, the FDIC worked with DOD and Intelligence Community classified communications service providers to conduct the initial site assessments for the installation of the communications systems necessary to meet the standards set forth in NCSD 3-10 for continuity of communications. In 2016, the FDIC will continue to work with the communications systems providers to complete the installation of the critical classified communications platforms that are required to ensure compliance with NCSD 3-10.
The FDIC participated in the training and exercises directed by the White House and FEMA through the annual continuity exercise, Eagle Horizon 2015. In addition, an internal FDIC continuity exercise was conducted with senior leadership to detect potential risks and identify mitigation strategies to safeguard operations. The exercise highlighted potential gaps that will be addressed in 2016 along with best practices to enhance the FDIC’s ability to continue to perform its mission essential functions during emergency events.In 2015, the FDIC worked with key stakeholders on a Business Impact Analysis/Business Process Analysis for all divisions and offices that will continue in 2016. The findings and best practices identified in the two analyses will be integrated into the Corporate Continuity of Operations Plan to refine roles and responsibilities during an emergency. Those findings and best practices will be also used to update and complete Business Continuity Plans for all FDIC Regional Offices. These plans will help to minimize disruptions to FDIC operations, thus enabling continuous performance of essential FDIC functions.
As an integral part of its stewardship of the DIF, the FDIC maintains a comprehensive risk management and internal controls program that is designed to improve the efficiency, effectiveness, control, and risk-focus of internal operations. Staff in the FDIC’s internal controls program advise and assist with issues such as risk management, internal controls, system security, privacy, operational effectiveness and efficiency, post-project reviews, and audit follow-up. As the FDIC transitions back to post-crisis operational status, those efforts will return to ensuring that key financial operations and processes maintain sound internal controls. The goal will be to ensure that these operations are managed appropriately and that opportunities to improve the control environment are identified and implemented in an efficient and timely manner.
In 2016, the FDIC will focus on improving its core business functions, with a continuing emphasis on activities associated with DFA Title II implementation, system security management, system development risk management, enhanced performance metrics, and the operational risks accompanying client-led development. In 2016, the FDIC will also continue to review a sample of transactions and invoices to confirm management attestations that financial reporting and internal control procedures have been correctly followed. Process maps are being developed for critical operations, and billing reviews will be performed on high-dollar contracts as part of monitoring exposure to improper payments. All of these efforts support processes to make sure that the foundation of controls remains strong throughout the Corporation.
During 2015, the FDIC began implementation of policies and controls to govern internal decision support models used by its divisions and offices. That effort will continue in 2016, with the initial implementation of a comprehensive, corporate-wide model validation program. This program will ensure that FDIC models are sound through routine testing and evaluation carried out according to tailored model validation programs approved by FDIC senior management.