2008 Annual Report
I. Management's Discussion and Analysis
Effective Management of Strategic Resources
The FDIC recognizes that it must effectively manage its human, financial, and technological resources in order to successfully carry out its mission and meet the performance goals and targets set forth in its annual performance plan. The Corporation must align these strategic resources with its mission and goals and deploy them where they are most needed in order to enhance its operational effectiveness and minimize potential financial risks to the Deposit Insurance Fund. Major accomplishments in improving the Corporation’s operational efficiency and effectiveness during 2008 follow.
Human Capital Management
The FDIC’s human capital management programs are designed to attract, develop, reward and retain a highly skilled, cross-trained, diverse and results-oriented workforce. In 2008, the FDIC continued to implement workforce planning and development initiatives that emphasized hiring the additional skill sets needed to address the increased number of financial institution failures and institutions in at-risk categories. The Corporation also deployed a number of strategies to more fully engage all employees in advancing the FDIC’s mission.
Baseline leadership competencies and gaps were identified in 2006 and 2007 through review of an Office of Personnel Management (OPM) competency assessment tool. To address the identified gaps and ensure that there are corporate managers who are prepared to advance to executive level positions as they become vacant, the Corporation implemented a pilot Corporate Executive Development Program at the beginning of 2008. The program provides for 18 months of intensive classroom and on-the-job training to high-potential supervisors and senior technical specialists.
Additionally, in 2008, the FDIC began drafting a knowledge management strategic plan focused on the full spectrum of knowledge management techniques for leadership’s review and consideration.
Strategic Workforce Planning and Readiness
Over the past few years, the FDIC has been preparing for an increase in retirements among its aging workforce through increasing its entry-level hiring into the Corporate Employee Program (CEP). The CEP is a multi-year program designed to cross-train new employees in several of the FDIC’s major business lines. As of the end of 2008, 166 employees (530 since program inception) entered the multi-year, multi-disciplined program. The CEP provides a foundation across the full spectrum of the Corporation’s business lines, allowing for greater flexibility to respond to changes in the financial services industry and in meeting the Corporation’s staffing needs. In 2008, the program successfully provided the FDIC those flexibilities, as program participants were called upon to assist with increased bank examination activities, bank closing activities and deposit insurance claims efforts. In support of the Corporation’s focus on consumer protection, the FDIC continued delivery of the Advanced Compliance Examination School (ACES) for commissioned compliance examiners, to address current and complex consumer compliance issues.
Also during 2008, the Corporation instituted an “over-hire” initiative to double encumber a number of critical positions. This program allows the FDIC to train replacements for a smooth transition before the incumbent retires. To address its more immediate staffing needs, the FDIC reemployed retired FDIC examiners, attorneys, and resolutions and receiverships specialists; hired employees of failed institutions in temporary positions; recruited mid-career examiners who had developed their skills in other agencies; recruited temporary loan review specialists from the private sector; and redeployed current FDIC employees with the requisite skills from other parts of the Corporation.
The FDIC continually evaluates its human capital programs and strategies to ensure that the Corporation remains an employer of choice and all of its employees are fully engaged and aligned with the mission. The FDIC’s annual employee survey incorporates and expands on the Federal Human Capital Survey mandated by Congress. The 2007 survey found that while FDIC employees enjoy their work, believe in the mission of the Corporation and its importance, and are satisfied with their pay, benefits, training and work environment, they perceived problems with internal communications, leadership, trust and employee empowerment.
|Chairman Bair discusses the Culture Change Initiative at an October 7th meeting (next to her are Acting COO Art Murton and Chief of Staff Jesse Villarreal).
To address these concerns, Chairman Bair announced a corporate culture change initiative to be driven by committees of employees, managers, and employee representatives. The initiative includes an overall steering committee that provides direction and three teams that are focusing on leadership, communications and employee empowerment. The council and teams are using input from employees and managers to determine where the problems lie and how to resolve them. In addition, the Chairman has held quarterly call-in question and answer sessions for all employees and maintains an anonymous e-mail box for questions of concern to employees. The 2008 employee survey results will be used to mark progress and further refine the goals of the culture change initiative.
The Corporation has also negotiated interim changes in its pay-for-performance (PFP) program with the National Treasury Employees Union for the 2008 performance period and is continuing to negotiate and develop PFP and performance management programs for 2009 and beyond.
Employee Learning and Growth
To further enhance readiness and flexibility, the FDIC led the development of strategic readiness simulation events that allowed the FDIC’s senior leadership the opportunity to test and refine policy and decision tools related to large and complex institution failures. These exercises proved valuable and timely as the FDIC faced and addressed real financial industry stresses during the year. Significant technical and just-in-time training was provided in areas such as financial loan review, legal functions, and contract oversight.
Information Technology Management
Information technology (IT) resources are one of the most valuable assets available to the FDIC in fulfilling its corporate mission. The FDIC continued to improve its IT administration and management practices in 2008.
The FDIC greatly enhanced its ability to effectively manage IT projects, programs, and portfolios by implementing the Enterprise Project Management Project Server (EPMPS) system. EPMPS stores and maintains IT project plans and associated project data in a central repository and has established a foundation for improving project and resource management practice. EPMPS provides a division-wide view of all portfolio project plans down to the task level, providing transparency and accountability to assist in identifying and isolating problem areas and resource bottlenecks.
During 2008, the IT program continued to build on the foundation that had been laid for a target enterprise architecture, which is both economical and supports effective portfolio management as well as security and privacy programs. The overall vision of the FDIC’s enterprise architecture is to “provide an efficient, agile, flexible and cost-effective environment that optimally supports the corporate strategic goals and objectives for all of FDIC and its customers.” In 2008, the logical design of the modernized infrastructure was completed and guidelines were developed to provide for a consistent look and feel for new applications.
Am I Insured? Web Site
In July 2008, the FDIC created an “Am I Insured?” Web application in response to the IndyMac bank closing. The “Am I Insured?” external Web site allowed customers of IndyMac, the first of several closed banks, to quickly check on whether or not their account with IndyMac was fully insured. This application simply informs the customers whether or not they are fully insured and provides a contact number to call for further information. No personal or sensitive data are stored or retrieved as a function of this new application and subsequent banks that closed after IndyMac have also had information added to allow customers to check on their accounts.
The FDIC’s public Web site, www.fdic.gov, is a key communication delivery method for the FDIC. Each of the three major business lines - insurance, supervision, and receivership management are supported by the Internet program. In 2008, the Brookings Institution ranked FDIC.gov 16th among government web sites. This was by far the most active year for FDIC.gov – 57 percent more user sessions than 2007 and 86 percent more than 2006. Internet traffic to FDIC.gov increased significantly since the IndyMac closing. The third quarter was the busiest in the web site’s history with over 377 million total hits.
FDIC’s Web presence has evolved during 2008. The “FDICchannel” was created on “Youtube” and hosts 16 videos. Youtube is the leading video sharing web site. Video topics range from deposit insurance to 75th anniversary events. The FDICchannel has received more than 58,000 views and potentially provides outreach to younger consumers. The 75th anniversary site and MyFDICinsurance.gov were launched in 2008. In addition, the FDIC implemented FDICSeguro.gov to provide a Spanish language alternative to the deposit insurance information provided on MyFDICinsurance.gov. E-mail subscriptions to various FDIC.gov products have increased 81 percent during 2008. At year-end, the FDIC had over 440,000 subscriptions to its products, including Financial Institution Letters, Special Alerts and Supervisory Insights.
Securing the FDIC
The FDIC continued to enhance and expand its Privacy Program in 2008 with an emphasis on protecting personally identifiable information (PII) from unauthorized collection, use, access, and disclosure. Additionally, efforts to strengthen controls over FDIC’s information systems and web sites were continued to ensure that PII was adequately safeguarded and that users of FDIC applications were provided with adequate notice, choice, and access. The FDIC Privacy Program also executed a successful Privacy Awareness Week that increased employee awareness of privacy responsibilities and issues, such as preventing identity theft and limiting the use and disclosure of PII whenever possible. Also, the FDIC Privacy Program coordinated and implemented FDIC’s first Corporate-wide Privacy Clean-Up Day, which resulted in FDIC Field Offices and Headquarters discarding a combined total of approximately 61⁄2 tons of paper. The FDIC Privacy Program also conducted several physical Privacy Assessments/Inspections of FDIC Regional and Area Offices which resulted in the issuance of detailed reports to management, identifying issues related to the security and protection of privacy information in public office spaces. Of special note this year, the OIG rated the agency’s privacy impact assessment process “excellent” in its 2008 FISMA Report on FDIC’s Information Security.
The FDIC’s Chief Information Security Officer received the 2008 Association for Federal Information Resources Management (AFFIRM) Outstanding Federal Executive Award for Leadership in Security and Privacy. AFFIRM recognizes outstanding leadership and management in Government. The FDIC is the first recipient of this new award, which recognizes the increasing importance of information security and privacy.