This report presents the highlights of GAO's fiscal year 2007 Performance and Accountability Report. In fiscal year 2007 we exceeded the targets for five of our six key performance measures--financial benefits, nonfinancial benefits, past recommendations implemented, new products with recommendations, and testimonies--that gauge how well we produced results and served our client, the Congress. With this level of performance we were able to achieve a return on investment for the American people of about $94 for every dollar the Congress gave us. We also met or exceeded five of the eight targets we set for our people measures--new hire rate, acceptance rate, retention rate with retirements, retention rate without retirements, and staff development. While these measures were largely similar to last year's results, we missed the performance targets for staff utilization, leadership, and organizational climate by 5, 1, and 2 percentage points, respectively, in spite of the challenges we faced internally. While supporting the Congress's oversight efforts with more than 1,200 reports and testimonies we issued during the fiscal year, in November 2006, we sent a letter to the incoming leadership of the new Congress suggesting three dozen areas for additional oversight. The challenge before us in serving the Congress and the nation is to help maintain a government that is effective, transparent, and relevant for this generation and generations to come. GAO will continue to "lead by example" in transforming government while providing the most professional, objective, fact-based, nonpartisan, nonideological, fair, and balanced information possible to the Congress and the American people.

Given the importance of the Office of Personnel Management's (OPM) role in managing the nation's federal workforce, GAO assessed OPM's internal capacity for human capital management. This report-the third in the series-extends prior work and (1) looks at the extent to which OPM has addressed key internal human capital management issues identified by examining employee responses to the 2004 and 2006 Federal Human Capital Survey (FHCS) and (2) has strategies in place to ensure it has the mission critical talent it needs to meet current and future strategic goals. To address our objectives, GAO analyzed 2004 and 2006 FHCS results, summaries of OPM employee focus groups, and analyzed OPM strategic and human capital planning documents.

To address the challenges that the nation faces, it will be important for fed. agencies to change their cultures and create the institutional capacity to become high-performing organizations. This includes recruiting and retaining a fed. workforce able to create, sustain, and thrive in organizations that are flatter, results-oriented, and externally focused. This testimony, based on a large body of completed work issued from Jan. 2001 through April 2008, focuses on: (1) challenges that fed. agencies have faced in recruiting and hiring talented employees; (2) progress in addressing these challenges; and (3) additional actions that are needed to strengthen recruiting and hiring efforts.