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Operating More Efficiently
The Corporation took a number of
steps in 2002 to improve its overall
efficiency and effectiveness, from
internal restructuring and downsizing
to enhancing technology-related
tools.
Corporate Reorganization
The FDIC substantially revamped its
internal organizational structure to
improve operational efficiency and
unify corporate efforts in each of the
three major business lines: insurance,
supervision, and receivership
management. As part of this major
restructuring, the FDIC also streamlined
the Corporation’s management
and support structures.
The major organizational changes
made in 2002 include:
- The Division of Insurance and the
Division of Research and Statistics
were merged into a new Division
of Insurance and Research to
facilitate a more integrated and
effective research and policy
leadership capability.
- The Division of Supervision and
the Division of Compliance and
Consumer Affairs were merged
into a new Division of Supervision
and Consumer Protection. The
regional and field structure of the
new division was also streamlined,
with a reduction in the number
of regional offices from eight
to six. Additionally, 89 field offices
were consolidated into 52 territories
for safety and soundness
functions, and 73 field offices were
consolidated into 30 territories for
compliance functions.
- The receivership accounting
operations of the Division of
Finance were transferred to
the Division of Resolutions and
Receiverships to better align
business processes in the
Corporation's receivership
management program.
- Personnel and training functions
were merged to create a new
Human Resources Branch within
the Division of Administration.
Downsizing
The Corporation also took steps to
complete the downsizing that it has
been addressing for much of the
past decade. Employment dropped
from 6,167 at the beginning of 2002
to 5,430 at year-end 2002 as a result
of declining workloads and organizational
streamlining. Much of the
needed reduction in staffing was
accomplished voluntarily through
targeted buyout programs that
resulted in the retirement or resignation
of approximately 700 employees
and the reassignment of surplus
employees to vacant positions
elsewhere within the Corporation.
In addition, approximately 30 surplus
attorney positions were eliminated
through a reduction-in-force in
May. The decade of downsizing
is substantially completed.
The savings resulting from corporate
restructuring, downsizing and other
initiatives directed toward cost containment
and improved operating
efficiency will, when fully realized,
reduce future corporate operating
costs by an estimated $80 million
annually. The initial impact can be
seen in the 2003 budget adopted
by the Board of Directors in
December 2002. Estimated 2003
spending will decline by seven
percent from 2002 spending.
Corporate University
In another move to improve its long-term operational efficiency and effectiveness, the Corporation began developing a new Corporate University that will be modeled on the best practices of high-performing organizations in both the public and private sectors. The new Corporate University will provide an integrated framework for addressing future leadership development and skill requirements. It will include core training programs for the FDIC’s three major business lines – insurance, supervision, and receivership management – and give employees the opportunity for cross-training and job rotation. This will facilitate the establishment, over time, of a flexible, permanent workforce capable of responding expeditiously to changing workload needs and priorities. Leadership development programs will assist in providing a strong foundation for current and future FDIC leaders. The Corporate University will use technology, seminars, hands-on experience and traditional instruction to make learning easier, more convenient and continual.
Information Technology Initiatives
In 2002, the Corporation also continued to pursue a number of major technology-related investments that will, when implemented, reduce future operating costs. The largest of these projects, the New Financial Environment (NFE), will greatly improve operating efficiencies and provide substantial cost savings to the FDIC after it is implemented in mid-2004. The NFE will replace the Corporation’s current accounting and related systems and will facilitate the implementation of streamlined work processes. It will also provide better information and support to FDIC management for decision-making.
In addition, the FDIC continued to develop FDICconnect, a secure electronic Web-enabled environment allowing the Corporation to electronically exchange information with insured financial institutions. With the automation of data exchanges, the FDIC will be able to streamline and improve business processes, and reduce costs. In particular, the faster receipt of information will enable the FDIC to provide more timely information to the public.
Phase II Construction of the
Seidman Center
In March 2002, the FDIC Board of
Directors unanimously approved the
expenditure of $110.9 million for
Phase II construction at the FDIC’s
existing Seidman Center facility in
Northern Virginia. The Corporation’s
decision was based on an extensive
analysis of various lease, purchase
and build scenarios. Phase II construction
was determined to be the
most economical option over the
long term. The project will save the
FDIC an estimated $78 million over
20 years on a net present value basis
compared to the projected costs
of continued leasing in downtown
Washington, DC. Phase II construction
is targeted for completion by
2006.
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