Reconstructing an Image

Corps opponents see these reports as evidence the agency has run amok, parlaying a cozy relationship with Congress into billions of dollars' worth of water projects, often at the expense of the environment. "The way the [Corps] system is set up promotes looking for projects," says Steve Ellis, director of water resources at the advocacy group Taxpayers for Common Sense. "The deck is stacked in favor of constructing some of these projects."

In December, the Army admonished the three Corps officials. But Ellis and other critics are not mollified. "What I want more [than disciplinary actions] is a 'mea culpa' from the Corps . . . They don't think they have done anything wrong," he says.

In August, before the Army IG's findings were released, Lt. Gen. Joe N. Ballard relinquished command of the Corps to Lt. Gen. Robert B. Flowers, who now is working to restore trust in the agency. "Are we a rogue agency? Are we too cozy with Congress? Absolutely not," said Flowers during a Senate Environmental and Public Works Subcommittee hearing in March.

Flowers said he plans to incorporate the recommendations of the National Academy of Sciences, including one that calls for an independent review of large-scale Corps projects. In March, Rep. Ron Kind, D-Wis., and Sen. Russ Feingold, D-Wis., introduced legislation requiring independent reviews of Corps projects costing more than $25 million.

With 500 military and 37,000 civilian employees and an annual budget exceeding $10 billion, the Corps conducts a vast range of missions, including constructing military facilities for the Army and Air Force, performing environmental restoration on defense installations and operating the Army's civil works program. The Corps also provides engineering assistance after natural disasters, regulates work in the nation's waterways and wetlands, conducts research and development and provides engineering services to 60 other federal agencies. However, the Corps' recent controversies may be catching up with it. In February, President Bush proposed slashing the Corps' civil works budget by 14 percent in fiscal 2002-from $4.5 billion to $3.9 billion. The budget outline mentioned doubts about the Corps' credibility.

Last year's Federal Performance Project awarded the Corps an overall grade of B, with an A for human resources management and Bs in the areas of information technology, financial management and managing for results. Since then, in the wake of harsh criticism over the past year, the Corps has redoubled its efforts to involve stakeholders in its projects, revamp its business practices and empower its workforce.

Collaboration

The Corps is starting by taking a more collaborative approach to customers. As Fred Caver, chief of programs management for civil works puts it, "We had a tendency to think we were the experts and that we knew best. We made decisions unilaterally. Now we keep stakeholders involved in the process."

Stephen Browning, the Corps' chief of programs management for military programs, says the new approach already is paying dividends in projects such as designing new hospitals. "Before, we would have applied the best engineers and scientists who would have designed a hospital with minimal input from stakeholders, such as base commanders and people maintaining the hospital," he says. "The new approach is based on teamwork. We are delivering a product that meets the user's needs rather than delivering a product that is a mistaken conception of our users' needs. We are moving from an expert culture to a collaborative culture, and that requires a different paradigm."

From June to September last year, the Corps held "listening sessions" across the country, giving citizens and organizations a chance to air their views about water- related issues and to discuss the agency's role in water resource management.

With four regional centers, eight divisions and 41 districts across the country, the Corps is working hard to use information technology as a management tool. The agency is ironing out the bugs in its online project management information system, which is designed to provide managers with status reports including information on costs, scheduling and manpower. The Corps is upgrading the system and the next generation will support the Corps' push toward establishing common business practices.

Stephen Coakley, chief of resource management for the Corps, believes the Corps of Engineers Financial Management System (CEFMS) is one of the best cost accounting and financial management systems in government. Indeed, CEFMS, created in 1998, is unique in its complexity, integrating the Corps' major business processes, including cost accounting, disbursing, and billing and financial management reporting for 63 Corps sites.

Coakley touts CEFMS' updated, user-friendly, point-and-click format that gives users greater control in navigating the system. According to Coakley, the Corps is expanding CEFMS' ability to handle electronic funds transfers. "In those areas, we have certainly improved both the accuracy and timeliness of payments," says Coakley.

However, protecting sensitive financial data may be a problem. The General Accounting Office concluded in an October report (GAO-01-89), that serious weaknesses in the Corps' computer security controls leave financial data vulnerable to hackers. A GAO-hired contractor successfully hacked into the Corps' computer system, gaining easy access to unauthorized areas and discovering that the Corps keeps no audit logs to monitor security violations. The Corps disagreed with GAO's report, saying it had already taken steps to correct a number of the problems mentioned.

Despite the success of CEFMS, the Corps failed to receive a clean financial audit from the inspector general and GAO for fiscal 1999-a feat that has so far eluded the agency. Coakley had hoped the Corps would fare better on its fiscal 2000 audit, but the agency received a disclaimer on its financial statement. (A disclaimer means the auditor cannot render an opinion on the financial information submitted because the data are unreliable.) According to Coakley, the Corps could not accurately account for its property, and GAO has not yet finished its audit on the security of the financial system.

Balancing Acts

The Corps has had a tough time achieving an unqualified audit opinion because it can't effectively document its assets, which include an array of hydropower plants, locks and dams, recreation sites, boats, construction equipment and buildings. "In seeking an unqualified opinion, we are dealing with 225 years of history," says Coakley. "Some structures are over 100 years old, and coming up with documentation is a challenge."

Not only does the Corps have trouble accounting for its assets, it has trouble keeping them in working order. The agency's maintenance backlog jumped from $329 million in fiscal 2000 to $453 million in fiscal 2001. The Corps complains that Congress doesn't provide enough funding to cover operations and maintenance costs. Charles Hess, the Corps' chief of operations for civil works, says the agency is working hard to streamline internally, while demonstrating its needs to appropriators. "We are investing in some software tools that will allow us to keep track of orders, watch trends in maintenance and management, and see how [that] relates to capital and infrastructure," he says. The Corps hopes to win more funds with a campaign to document maintenance needs by photographing rotting bulkheads, river wall damage from boats, and rust holes in harbor gates.

The huge environmental and water projects the Corps undertakes inevitably create controversy, so the Corps will continue contending with criticism from competing interests. For example, December saw the enactment of a $7.8 billion plan to restore the Florida Everglades. The Corps is quarterbacking the project, which will be jointly funded by the federal government and Florida and is slated to take 36 years. Both Florida sugar growers and environmentalists attacked the Everglades project, but the Corps managed to win support for the current plan from all parties. Some argue that the Corps itself created the need for the costly restoration when, in 1948, it attempted to control flooding by re-routing water flows through a maze of canals and levees.

Corps civil works chief Caver acknowledges that the criticism is troubling, but says it is the Corps' job to balance issues stemming from criticism. "There are competing interests about how water management is protected, and it is our job to facilitate agreement among those competing interests about how water management business is conducted."