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STATEMENT OF FRANKLIN D. RAINES DIRECTOR OFFICE OF MANAGEMENT AND BUDGET BEFORE THE SENATE APPROPRIATIONS AND GOVERNMENTAL AFFAIRS COMMITTEES JUNE 24, 1997
Chairman Stevens, Chairman Thompson, I am pleased to appear at this
joint hearing of the Senate
Appropriations and Governmental Affairs Committees this morning, and
to discuss the
importance to the Government and the American public of the Government
Performance and
Results Act of 1993 (GPRA). I am joined by John Koskinen, OMB's
Deputy Director for
Management, who has had a central role during the past three years in
OMB's GPRA
implementation effort.
My statement will be brief. To my statement, I have appended a
summary of the major provisions
of this Act, and recent actions to carry these out.
We are about one month away from the fourth anniversary of GPRA
enactment, and three months
away from when the Act takes effect government-wide. So this is a
timely opportunity to review
where we are and what further work needs to be done.
Let me start with an important principle. This Act was drafted and
enacted in a spirit of
bipartisanship. It is essential that this spirit continue, as it has
over these four years, to be a
featured aspect of implementation if we are to bring about the better
government that we all seek.
The potential impact on the public if this law is implemented
effectively should not be
underestimated. One reason for the deep disaffection with government
in this country at all levels
-- state, local, and national -- is that we poorly explain to the
American public why the
government does what it does.
Under this Act, we will be discussing with each other, and showing
the public, what the goals
should be for our major programs and activities. Once these goals are
defined, accountability will
be established for the progress made in achieving those goals. Being
able to answer the public's
questions about what they get for the money we spend should go a long
way toward restoring
their faith in the ability and interest of the government to do the
right thing.
This is an era of fiscal limits. Resources are scarce. Not every
priority can be met, nor all needs
satisfied. Every program must count. So we must ask: Which programs
are effective, and which
are not? Which programs are efficient, and which are not? GPRA is
intended to help all of us
obtain better answers to those questions.
Let me now briefly summarize those aspects of GPRA implementation
that are our most
immediate focus.
Strategic Plans
GPRA requires Federal agencies to submit a strategic plan to
Congress and OMB not later than
September 30, 1997. Further, when preparing their strategic plans,
agencies must consult with
Congress.
Strategic plans set the general course and direction for what
agencies will be doing over the next
five years, and longer. Strategic plans are built from a statutory
base of enacted legislation.
These laws state the purpose and intent of Congress and the President
when programs are
established and funded. The process of preparing these plans allows
both the Executive and
Congress to examine, in a fresh and comprehensive way, the whole
structure of programs,
projects, and initiatives put in place over decades.
The specifications for a strategic plan and the process for
developing those plans are defined in 42
lines of text in the United States Code. The specifications are
straightforward and uncomplicated.
But no one should be misled into thinking that preparing a strategic
plan is easy or simple. Only a
short period and a quick effort is needed to produce a superficial
plan, one reflecting little
participation by agency leadership. What we are now seeing, belatedly
in some instances to be
sure, are earnest endeavors across the agencies to produce substantive
plans and engaging, in a
serious way, agency leaders in the process.
For a plan to have meaning and consequence, it must be the product
of a deliberative
consideration of what can be realistically accomplished. Priorities
must be assigned, choices
made, and commitments given. As an OMB staffer recently reported
after attending a strategic
planning session at an agency, the underlying maxim for the session
was "If there is no pain, then
we aren't doing it right."
Agency Implementation to Date
As we near the September date when completed strategic plans are to
be sent to Congress, I share
the concern that much work is still to be done, and the time for doing
it is growing short. Let me
outline the scope of the task remaining. About half of the
departments and largest agencies are in
good shape or making real progress. The other half must make a
substantial effort if they are to
produce credible plans by September. Nine of these departments and
agencies have yet to submit
a sufficiently complete draft strategic plan to Congress to provide a
basis for substantive
consultation.
Many plans remain in a formative state. Required elements are
often still being developed. In
some plans, agencies are finding it easier to describe internal
management activities than to define
program goals. In other instances, we are reviewing whether the goals
in the plan realistically
match what can be achieved with the resources likely to be available.
For the past two years,
OMB has done intensive assessments of the agency strategic planning
effort, and looked at early
iterations of the plans. While most agencies have made substantial
progress, the assessments
revealed several areas where further work is needed. Many agencies
are having difficulty
describing the relationship between the long-term goals in the
strategic plan and their annual
performance goals. Also, agencies understandably have first focused
on their own programs, and
are only beginning to look at enhancing interagency coordination for
programs or activities that
are cross-cutting in nature.
When the plans are done, we should expect that not everyone will
agree with the completed
product. We also should not view these first plans as being perfect
expressions of what each
agency will do for the next five years. We are at the start, not the
end of a dialogue and an effort
to set our course for what we will do, how we will do it, and what we
will accomplish. These
plans -- and how they are prepared -- will evolve, be refined, and
improve. Over 75 years ago,
Congress first commissioned the annual submission of the President's
budget. The current budget
has changed significantly -- and not just in dollar amount -- from
that first submission. Similarly,
we should look to and work toward increasing the usefulness and value
of future strategic plans.
Annual Performance Plans
Strategic plans provide the framework for the annual performance
plans required by GPRA. The
first of the agency annual performance plans for fiscal year 1999 will
be sent to OMB this
September with the agency's budget request. The plans are then sent
to Congress early next year
when the President's budget for fiscal year 1999 is transmitted.
These annual plans are tied to the
budget, and set out specifically what we will get from the money that
we will spend. Strategic
plans describe the long-term course; the annual plans define what
will be accomplished in any one
year as we proceed on that course.
Agency budget justifications to both OMB and the Congress have
included information about
what the agency does. In many instances, this information is in the
form of descriptions and
enumerations that count workload or transactions, such as applications
received or grants
awarded. In other instances, the number of employees or facilities
operated, or the amount of
acreage managed, is used to illustrate how or on what the money will
be spent. Of course, in
most instances, simple workload and transaction counts doesn't tell us
enough.
That fact has led OMB, for years, to work with the agencies on
increasing the amount and value
of data on the effects and impact of programs, and whether programs
fulfilling their purpose. We
have sought to have this information incorporated into the submissions
of agency budget
proposals to the President, and subsequently in the budget
justifications to Congress. GPRA
echoes this effort, and by embedding the need for this information in
statute will add
immeasurably to the prospect of having much more and better
information on results and effects.
I am certain we will find that as we increasingly understand how
programs are doing, and their
effects and impact, we will increasingly use and rely on this
information as we make program and
funding decisions. Much of this will not happen overnight. In some
instances, the information
will be obtained quite quickly. In other cases, such as the impact of
educational innovation, it
may be some years before the impact can be determined. We must be
both patient and realistic
about when information will be forthcoming.
What Will Be Different Under GPRA?
The fiscal year 1999 budget transmittal will mark the first
appearance of the annual performance
plans as a part of the Federal budget process. The performance
measures that agencies expect to
include in these plans will be described in their strategic plans.
The consultations currently
underway with Congress on these strategic plans are an important
opportunity for you to help
define those measures that will be informative and useful to the
Appropriations Committees in
reaching decisions on an agency's budget request.
With GPRA, we have the opportunity to change the nature of the
conversation from one which
now focuses on how much money we are providing, or inputs, to one
oriented more toward what
the money will buy, or outcomes. Examples of such an outcome is
"lowering the number of
highway traffic deaths." Results from the GPRA performance
measurement pilot projects also
show how this can work. The Coast Guard rethought its approach to
safety, and began
emphasizing the human factor rather than vessel inspection. The new
approach resulted in a
substantial reduction in the number of job-related deaths in certain
maritime industries, -- and
saved resources as well.
Budgeting under the regimen of a long-term balanced budget
agreement can be seen as a
zero-sum game. Within the discretionary spending cap, choices about
which programs receive
funding increases, remain level funded, or shrink, should increasingly
be governed by
performance. While performance will never be the only element in the
process, analysis about
should become a major factor in decision making.
We are mindful that our use of performance information when making
budget decisions will never
be the only relevant factor. Policy judgments will continue to be a
factor; in some instances, the
prevailing factor.
We must avoid using GPRA only as a budgetary cleaver. One response
to poorly performing
programs may be to cut or eliminate resources -- but perhaps with more
money allocated
differently, or new managers, or a different management approach,
performance of these
programs would improve. When faced with poor performance, we must
first understand the
reasons for it and then apply the appropriate remedy. If the
automatic consequence of poor
performance is to end the program, then soon the only performance
reported will be good
performance. Not that every program will indeed be effective and
efficient, only that the reports
will indicate such. So it will be important for us to be discerning
and critical in our assessment of
program performance, and prudent in the courses that we take.
I urge you to get involved. Increasing the extent and value of
performance information in the
Executive Branch should be as important to your decisions as it is to
ours.
As we near the date when the major provisions of the Act take
effect government-wide, our
efforts, and those of the agencies, to meet successfully the
requirements of the Act are
intensifying. I have growing confidence that the initial products of
the Act will be of significant
value as we mutually work toward achieving a balanced budget and
explaining to the American
people what they are getting for their taxes.
This concludes my statement, Mr. Chairman. I'd be pleased to take
any questions you may have.
SUMMARY OF MAJOR PROVISIONS A. Strategic Plans
GPRA requires that Federal agencies to submit a strategic plan to
Congress and OMB not later
than September 30, 1997. The strategic plan covers the major
functions and operations of the
agency, and contains:
a comprehensive mission statement general goals and objectives a description of how the general goals and objectives will be achieved a description of the relationship between the performance goals in the annual performance plan and the general goals and objectives in the strategic plan an identification of those key factors, external to the agency and beyond its control, that could significantly affect achievement of the goals and objectives a description of program evaluations used in the strategic plan,
and a schedule for future program
evaluations.
The strategic plan spans a minimum six year period: the fiscal year
it is submitted, and at least five
fiscal years forward from that fiscal year. A strategic plan is to be
revised and updated at least
once every three years. There is no more important element in
performance-based management
than strategic plans. These plans set the agency's strategic course,
its overall programmatic and
policy goals, indicate how these goals will be achieved, and are the
foundation and framework for
implementing all other parts of GPRA.
GPRA requires agencies, when preparing their strategic plan, to
consult with Congress, and solicit
and consider the views and suggestions of stakeholders, customers, and
other potentially
interested or affected parties.
The Administration is currently undertaking a strategic assessment
of agency goals and
commitments. This assessment is being conducted jointly by the
agencies and OMB. A focus of
the strategic assessment is the agencies' implementation of GPRA, and
the preparation of the
strategic plans and the annual performance plans that are due in
September.
Generally, the agency plans reflect a serious effort and allow us
to conclude that agencies should
be able to produce useful and informative strategic plans by this
Fall.
B. Annual Performance Plans
An annual performance plan consists of three main elements: the performance goals and indicators for the fiscal year; a description of the processes, skills, and technologies, and the human, capital, and other resources that will be needed to meet the performance goals; and a description of the means that will be used to verify and validate measured values. The first of the agency annual performance plans will be sent to
OMB this September. These
plans will be for fiscal year 1999. The annual performance plans will
contain the specific
performance goals that the agency intends to achieve in the fiscal
year. GPRA provides that a
subsequent iteration of the annual performance plan be sent to
Congress concurrently with release
of the President's budget.
The agencies and OMB gained valuable experience in preparing annual
performance plans
through the pilot project phase of GPRA. GPRA required that at least
ten departments or
agencies be designated as pilot projects for performance plans and
program performance reports.
The pilot projects covered three fiscal years and tested the ability
of agencies to establish
performance goals, and subsequently measure and report actual
performance against these goals.
Pilot projects were designated in all 14 Cabinet departments and an
equal number of independent
agencies. The 28 designations included over 70 individual pilots in
the departments and agencies.
The performance measurement pilot projects became a substantial
initiative. Approximately a
quarter of the entire Federal civilian workforce were covered by the
pilots. The size of individual
pilots ranged from complete agencies to small component organizations.
The largest pilots
included the entirety of the Internal Revenue Service, Social Security
Administration, Defense
Logistics Agency, and the Forest Service. Several agencies covered a
large proportion of their
programs through individual pilots.
The most important conclusion reached on completion of the
performance measurement pilot
projects is that -- without these pilots and the time given agencies
across the government to gain
experience in performance-based management -- there would be little
prospect for a successful
implementation of GPRA government-wide. The scope and dimension of
these pilots confirmed
that virtually every activity done by government can be measured in
some manner, although not
perfectly.
Over the course of the three years, improvement was generally seen
in the pilot projects' ability to
set goals, and measure and report performance against these goals.
The improvement was
uneven, and not always immediate. Goals often were changed or refined
from year to year.
While this is to be expected in any pilot project process, it also
indicates that the first years of
full-scale implementation of GPRA will be the start of a dialogue
about performance and
performance measures, not the end of it. Measures will be modified,
better and more appropriate
goals will be defined, performance data will increase in both volume
and quality. Over time the
overall quality of agency plans and reports should improve
significantly.
OMB has initiated a review of the performance goals that agencies
proposed to include in their
annual performance plans for FY 1999. This review is still ongoing.
The agencies are providing
OMB with descriptions of their proposed performance goals,
illustrating what will be measured
and the nature and type of measurement. Gaining an early consensus on
these goals will not only
help assure that they are appropriate and relevant but will allow
agencies to measure current
performance, creating a baseline from which to set future performance
levels or targets.
In another joint collaboration with the agencies, OMB has prepared
guidance on the preparation
and submission of annual performance plans for FY 1999. This guidance
was issued May 23,
1997. We expect agencies to produce useful and informative annual
performance plans for FY
1999.
C. Government-wide performance plan
GPRA requires that a government-wide performance plan be annually
prepared and made part of
the President's budget. The government-wide performance plan will be
based on the agency
annual performance plans. The first government-wide plan will be sent
to Congress in February
1998, and cover FY 1999. In this regard, we would welcome your views
on those features that
you believe would make the plan informative and useful to the
Congress.
D. Program Performance Reports
The agency's program performance report is the annual concluding
element of GPRA. These
reports are required within six months of the end of a fiscal year,
and compare actual performance
with the performance goal target levels in the annual performance
plan. In cases of unmet goals,
agencies will explain why the goal was not achieved, and describe the
actions being taken to
achieve the goal in the future. The first program performance
reports, for FY 1999, are to be sent
to the President and Congress by March 31, 2000.
Some agencies are experimenting with different formats for
performance reporting in the
Accountability Report pilot program authorized by the Government
Management Reform Act.
For FY 1996, eight agencies are issuing Accountability Reports, and
are including various
information on the agency's performance as well as other statutorily-
required information, such as
the agency's audited financial statement and the Federal Managers'
Financial Integrity Act report.
For over a decade, a major effort has been underway to improve financial systems, standards, and reporting in the Executive branch. There has been much progress, but we are not yet done. Without good systems and reporting, we will be hard-pressed at precisely and completely describing where the money went. The meshing of program performance information with financial performance information is important if we are to give a full picture. We intend to bring about the integration of program and financial performance reporting, and to continue improving and enhancing the capability of agency financial and management systems to provide this information.
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