2014 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 and accomplish its mission. These resources must be aligned and deployed to the areas where they are most needed. An overview of planned 2014 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 institution failures. The FDIC relied primarily on non-permanent 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 have declined substantially. For 2014, the FDIC’s annual operating budget and authorized staffing are approximately 40 percent and 23 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 2014, the FDIC will continue to pursue several ongoing initiatives to shape its future permanent workforce while addressing immediate staffing needs.
Like most other federal agencies, the FDIC faces potential succession management challenges in the future as many of its long-term, experienced employees retire. The FDIC reassesses its vulnerabilities to retirements annually and implements appropriate strategies to mitigate that risk. In late 2013, the FDIC began a succession planning initiative with involvement from the highest levels of the agency. In 2014, the FDIC will define and begin implementation of a comprehensive succession management framework to ensure that it has well qualified successors available to fill critical staffing needs at all levels of the organization.
In addition, the FDIC has undertaken a multi-year initiative to develop competency models for all mission critical job families. The proficiency levels of existing employees will be assessed for each applicable competency and the results used for employee development, career planning, training, and workforce/succession planning. The long-term goal is to have a pool of current and projected potential successors available for all competencies associated with the FDIC’s mission critical occupations.
One key component of the FDIC’s succession management and strategic workforce planning strategy is 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 more flexible workforce that is cross-trained in the FDIC’s core mission functions. The objective is to build and maintain a workforce that can be redeployed rapidly to address new workload priorities in response to unexpected external events or changing conditions in the banking industry and the broader economy.
During the first phase of the CEP, newly hired Financial Institution Specialists (FISs) are exposed to each of the FDIC’s key business processes: deposit insurance, risk-management supervision, compliance supervision, and resolutions and receivership management. After the completion of the rotational phase of the program, they are assigned to a specific commissioning track for more in-depth and specialized training. Upon successful completion of the rigorous three-year training program, they are commissioned as Financial Institution Examiners (FIEs) or Resolutions and Receiverships Specialists. At the end of 2013, the FDIC’s field examination and resolutions and receivership management workforces included 401 FISs and 486 FIEs hired through the CEP. The FDIC expects to hire an additional 120 FISs in 2014.
The FDIC initiated in 2011 its flagship Financial Management Scholars (FMS) Program that has been a valuable resource for recruiting new FISs into the CEP. FMS is a structured summer internship program that exposes talented students to the FDIC’s supervisory and receivership management business lines between their junior and senior years of college. Successful FMS participants are offered positions in future CEP classes following their graduation. Almost 50 former FMSs have joined the CEP thus far, with another 45-50 expected to come on board in 2014.
Workforce Diversity and Inclusion
In 2014, 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 (EAC) composed of key senior executives and managers, oversees the implementation of the FDIC Diversity and Inclusion Strategic Plan, which was issued in early 2013. The EAC reviews and updates the plan annually, as needed, to support the FDIC’s overall goal of promoting diversity and inclusion on a continuing basis. The plan lays out a course for achieving workforce diversity by recruiting from a diverse group of qualified potential applicants; cultivating greater workplace inclusion through collaboration, flexibility, and fairness; and equipping leaders with the ability to manage diversity, measure results, and refine approaches on the basis of data. The plan details specific steps to enhance diversity and inclusion at the FDIC in the areas of leadership engagement, analytics and reporting, training, communications, strategic planning, and program enhancement.
A Culture of Workplace Excellence
Over the past several years, the FDIC has participated in annual employee surveys conducted by 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 get 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 workplace excellence. The WE Program is comprised 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 communications, 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 2014, the FDIC’s Corporate University will continue to offer innovative solutions to prepare both current and new employees for the challenges ahead. It will continue to implement several comprehensive multi-year curriculum development initiatives that move mission critical divisions beyond the financial crisis, offer a broad array of leadership development opportunities, and expand the use of simulations to enhance corporate readiness. 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 2014, the FDIC will continue to develop and implement the priority components of the approved Division of Depositor and Consumer Protection (DCP) learning and development framework. Based on a comprehensive needs assessment completed in 2012, the framework is designed as a multi-year initiative to enhance the dissemination of critical information, expand training programs at all levels, and facilitate the cross-organizational sharing of knowledge and expertise
The Division of Resolutions and Receiverships, will undertake a comprehensive curriculum to provide foundational knowledge, specialized skills, and cross-training opportunities across functions, to promote a flexible, cross-trained 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, tabletops, and focused simulations 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 new electives and enrichment opportunities will be added in 2014 to promote leadership throughout the organization.
Management of Information Technology Resources
The use of information technology (IT) is ever more important in providing innovative, timely, reliable, and secure information in support of the FDIC’s mission. As the inventory of digital information expands the importance of protecting it also continues to grow. In 2014, the FDIC will focus on managing its IT resources to improve information security, support its responsibilities under the DFA, and improve performance and efficiency in all three 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 at all times an accurate picture of the FDIC’s security risk posture, gives visibility into assets, and leverages the use of automated data feeds to quantify risk, ensure effectiveness of security controls, and implement prioritized remedies. In 2014, the FDIC will continue implementing enhanced strategies for ensuring the security of the FDIC’s systems and IT infrastructure against external intrusion. For example, incident response policies and procedures will be revised as necessary to address complex incidents, such as Advanced Persistent Threats. Additionally, both employee and contractor training on the security and privacy programs will be enhanced. The privacy program is primarily focused on ensuring that appropriate steps are taken to protect personally identifiable information (PII) from unauthorized use, access, disclosure, or sharing and to protect associated information systems and web sites from unauthorized access, modification, disruption, or destruction.
Continuity of Operations
In 2013, the FDIC developed and implemented a new Continuity of Operations Plan. It addresses the central priorities of reducing the potential for loss of life and safeguarding the FDIC workforce. It also seeks to minimize and mitigate disruptions to FDIC operations, thus enabling continuous performance of essential FDIC functions that promote stability and public confidence in the Nation’s financial systems.
In 2014, the FDIC will place into operation its first Sensitive Compartmented Information Facility to achieve continuity in communication capabilities, as established in National Communications Systems Directive 3-10. This will provide the FDIC with the ability to collaborate with the intelligence community, sharing highly classified continuity-related information and increasing the FDIC’s preparedness and response posture.
Support for FDIC Information Collection, Analysis, and Dissemination
The FDIC’s three program areas – Insurance, Supervision, and Receivership Management – all rely heavily on information collection, analysis, and dissemination processes. In 2014, the IT program will continue to focus on the provision of secure systems and tools to support the collection, analysis, and dissemination of this information, especially as it relates to its new responsibilities for the monitoring and oversight of large and systemically important institutions under DFA.
This will include the exploration of new technologies in collaboration with the Federal regulatory agencies to improve the secure collection and storage of the sensitive information contained in the resolution plans submitted by financial companies subject to the requirements of Section 165 (d) of DFA. It will also include efforts to enhance operational capabilities for the analysis of large data sets with both structured and unstructured data to facilitate the intake, securing, and mining of this data.
The FDIC disseminates information to bankers, other supervisors, the public, and other stakeholders on an ongoing basis. The FDIC’s web site (www.fdic.gov) is a centralized source of information. The FDIC’s web site includes multi-media resources and allows stakeholders to easily view, download, and request materials instantly. In 2014, we will continue to publish the public portions of resolution plans and consider ways to improve the usefulness of these publications to all stakeholders.
Performance and Operational Efficiencies
IT supports the effort to improve performance and efficiency in the execution of business process across the FDIC’s major business lines. In 2014, the FDIC will complete development of a modernized Examination Tools Suite (ETS) to support the risk management supervision program. ETS permits the FDIC to conduct all required risk management, CRA, and compliance examinations within the timeframes prescribed by statute and FDIC policy.
To support the insurance program, improvements will be made to the Claims Administration System (CAS) which is used to identify depositors’ insured and uninsured funds in failing and failed banks. The improvements will reduce claims agent exception processing time at bank closings.
To support the receivership management program, improvements will be completed on the user interface of the system used to manage the assets from failed banks to make it more secure and intuitive.
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. During 2014, the focus will be on continuous improvements to the FDIC’s core business functions, with particular emphasis on client-led development, system security management, revised system development processes, and the development of a failed bank database.
As the FDIC transitions back to normal operational status, the focus 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 and efficient and timely manner. During the next 12 months, the FDIC will work to address operational risks associated with client-let development. In furthering this initiative, the FDIC issued a directive that will require the implementation of more rigorous configuration management and software controls to better manage client-led development.
In 2014, the FDIC will continue to conduct transaction sampling and invoice reviews to validate management attestations regarding financial reporting and internal controls. In addition, the FDIC will evaluate the procurement card program to identify opportunities to reduce credit limits and or the number of cardholders. The FDIC will also monitor progress in implementing its revised system development processes as well as determining whether system security risks have been sufficiently mitigated.