JOHN A. KOSKINEN
DEPUTY DIRECTOR FOR MANAGEMENT
OFFICE OF MANAGEMENT AND BUDGET
HOUSE COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
FEBRUARY 12, 1997
Mr. Chairman, I am pleased to appear before the Committee this morning to discuss the importance to the Government and the public of the Government Performance and Results Act of 1993 (GPRA) and to provide an assessment of our progress to date in meeting its major requirements. GPRA was enacted three and a half years ago as the result of a bipartisan effort in the Congress, with the support of the Administration, to increase our focus on the results from government programs and activities. This Committee was one of the leaders in the passage of the Act and we look forward to continuing to work with you and the Congress as we implement this significant legislation.
At its simplest, GPRA can be reduced to a single question: What are we getting for the money we are spending? To make GPRA more directly relevant for the thousands of Federal officials who manage programs and activities across the government, GPRA expands this one question into three: What is your program or organization trying to achieve? How will its effectiveness be determined? How is it actually doing? One measure of GPRA's success will be when any Federal manager anywhere can respond knowledgeably to all three questions.
But having answers to these questions is of great interest to the public as well. As a government, we face major challenges. This is a time of great fiscal constraint. Tight budget resources demand that every dollar count. During a period of much public skepticism about the government's ability to do things right, the government must not only work better, but be shown as working better, if we are to regain public confidence in this institution. We must chart a course that not only sustains our delivery of services to the public, but improves on that delivery while meeting the rightful expectations of its citizens to be treated fairly, responsively, and with good effect. GPRA, if successfully implemented, will support such a result.
Let me now briefly summarize those aspects of GPRA implementation that are our most immediate focus.
Basic Requirements and Timetable
The basic foundation for what agencies do under GPRA is the agency strategic plan. Agencies are required to send their strategic plans to Congress and OMB by this September 30th. When developing its strategic plan, an agency is to consult with Congress and solicit and consider the views of those parties interested in or potentially affected by a plan. OMB has encouraged agencies to begin this consultation soon.
Our guidance to the agencies on preparing and submitting strategic plans notes that the agency letter transmitting the plan to Congress and OMB should describe the consultation that was done, as well as summarizing any views of those outside the Executive branch that present a contrary view to the basic direction of the plan as completed.
The strategic plan spans a multi-year time frame, and is required to include a mission statement, a set of general goals and objectives, and a description of the linkage between these general goals and objectives and the performance goals that will appear in the annual performance plan. The mission statement sets forth the basic purpose for what an agency does programmatically and operationally. The long-term general goals and objectives define what the agency intends to achieve over the time period of the plan, to further its overall mission. The linkage between long-term goals and annual goals is important because the annual goals are commonly used to measure progress in achieving the general goals and objectives.
OMB issued guidance to the agencies in September 1995 on the preparation and submission of strategic plans. This guidance resulted from an OMB/agency collaboration during the Spring and Summer of 1995. In the Summer of 1996, OMB conducted a comprehensive review of the agency strategic planning efforts and the status of their plans. The review's objective was to gauge agency progress in preparing their strategic plans and to identify any concerns with the plans themselves or the process being followed. Agencies provided OMB with certain key parts of their plan for this review which were in a draft or developmental state.
Generally, the agency plans reflected a serious effort and allowed us to conclude that agencies should be able to produce useful and informative strategic plans by this Fall. The review also revealed several challenges. Last summer, most agencies were only beginning to link the general goals and objectives of their plans with the annual performance goals they would be including in their annual performance plan. Further inter-agency coordination on programs or activities that are cross-cutting in nature was necessary and the senior leadership in some agencies had yet to become fully involved in the planning process.
Since then, OMB staff have continued to interact with the agencies as these strategic plans have evolved and we will undertake another systematic review of the agency strategic plans this spring.
Annual Performance Plans
Pursuant to the statute, the first of the agency annual performance plans will be sent to OMB this September. These plans will be for fiscal year 1999, and will be submitted with the ageency's budget request for that year. The annual performance plans will contain the specific performance goals that the agency intends to achieve in the fiscal year. The statute provides that a subsequent iteration of the annual performance plan is to 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. The statute wisely provided an opportunity for all 14 Cabinet Departments and an equal number of independent agencies to experiment with the implementation of the statute. Over 70 individual pilot projects were established, ranging in size from the entire Internal Revenue Service to small offices and programs within a larger bureau. The performance measurement pilot project phase of GPRA concluded in FY 1996. OMB's May 1997 Report to Congress on GPRA will describe this pilot project phase in greater detail.
In September 1996, OMB initiated a special 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.
The timing and sequence of these two reviews, one in the summer of 1996 and the other in the fall, was by design. The Summer Review concentrated on strategic plans, which are the starting point for annual performance plans. A strategic plan is like a compass pointing to what an agency seeks to achieve over the long-term. Without such a compass, it is difficult to judge whether the annual performance goals are appropriate.
Our experience with the pilot projects and with Summer Review underscored the importance of having a review focused on the annual performance goals. 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 is preparing guidance on the preparation and submission of annual performance plans for FY 1999. The drafting of this guidance is largely complete and the guidance will be issued soon and we expect agencies to produce useful and informative annual performance plans for FY 1999. 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 is based on the agency annual performance plans. The first government-wide plan will be sent to Congress in February 1998, and cover FY 1999. We will soon begin an effort to design this document, determining what should be included and how it should be presented. In this regard, we would welcome your views on those features that you believe would make this document informative and useful to the Congress. 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. Where a goal was not met, the agency explains why and describes 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.
The performance measurement pilot projects are being used as a test of the program performance reports, and the ability of agencies to generate timely and accurate actual performance data. OMB is considering integrating the GPRA program performance report with each agency's audited financial statement and several other periodic reports to create a single agency accountability report. We expect that the OMB Report to Congress in May will further outline proposals for such a single report.
OMB's GPRA Effort
The OMB-led reviews I have previously outlined are part of the Administration's overall effort to ensure successful implementation of GPRA and indicate the great importance we attach to this effort. Two OMB-wide forums dedicated to performance and GPRA preceded the government-wide reviews begun last summer. These forums were used to familiarize all OMB staff with the statute and its requirements and to draw upon their experience and suggestions for how it might be successfully implemented. The magnitude of GPRA, its encompassing scope, and its integration with the budget dictate that every major organizational component within OMB have some role in its implementation. To advance the concept of OMB- wide responsibility for GPRA, OMB established a GPRA Implementation Group, whose members are from every OMB office and comprise nearly 10 percent of our total professional staff. The Implementation Group meets regularly to discuss and review GPRA implementation tasks and policies.
In many ways, the best training is having to do it yourself. OMB has been working on its own strategic plan for nearly a year, an effort that has involved all parts and levels of the organization. Later this month, OMB will have a day-long "standdown" in which all staff will focus on our strategic plan and the goals we propose to establish for our organization.
Valuable help for our government-wide implementation effort is also coming from several interagency councils which I chair. These are the President's Management Council, whose members are the agency Chief Operating Officers (generally the Deputy Secretary); the Chief Financial Officer's Council; and the President's Council on Integrity and Efficiency, comprised of the agency Inspectors General. Each of these councils has taken leadership for one or more aspects of GPRA implementation, and have developed and disseminated useful techniques and practices to assist the agencies. They are also helping us to develop a unifying framework for bringing together the various laws and initiatives that focus on performance. These include GPRA, the Government Management Reform Act, the Chief Financial Officers Act, the Federal Acquisition Simplification Act, the Federal Managers' Financial Integrity Act, the Inspector General Act, the Clinger-Cohen Act, as well as initiatives originating from the National Performance Review, such as development of customer service standards and performance-based organizations. There is consensus that this integration must be done, and, to the extent practicable, must be meshed into the processes supporting budget preparation, decisions, and execution.
To do this will be a formidable task. But we have no real choice. If managed separately, these various endeavors will lose the synergy and economy of effort that would result from their being fitted together. Failure to coordinate and integrate these laws and initiatives can undercut their effectiveness, create confusion, and introduce frustration and ultimately disinterest among all parties. Put starkly and simply, there are not enough resources within the Executive branch to even try carrying out these activities in a non-integrated way.
Sorting through the complexity of these varying performance initiatives has been difficult, but we are making progress in defining a framework for this integration.
As noted earlier, we expect agencies to provide useful and informative strategic and annual performance plans within the timeline specified by the Act. However, preparing a good GPRA plan is not an easy task. Indeed, a plan easily prepared is likely to be a superficial plan. Therefore, no one should expect the first plans to be perfect. We should view these first plans as the beginning of a process of improvement and refinement that will evolve over several years. Measures will be modified, better and more appropriate goals will be defined, performance data will increase in both volume and quality.
Even as performance measures become more refined, we should always bear in mind that using performance measures in the budgeting process will never be an exact science, or even a science at all. Often, an under-performing program will benefit from additional resources, not fewer. Comparing results across program lines will always require political judgments about the relative priorities, for example, of programs for highways and education. And we should not lose sight of the fact that performance information will often be used to adjust the way programs are managed rather than to change the resources provided. Accurate, timely performance information is important in all these situations and this is why the Administration is committed to the successful implementation of GPRA.
As I have said on other occasions, if we are successful, over time, GPRA should disappear. Some may think such a declaration flies in the face of the enthusiasm of this Administration for GPRA. However, if GPRA works as envisioned, government managers will absorb it into day-to-day agency administration and program management. For this to happen, we must guard against creating a separate GPRA bureaucracy in each agency that provides the documents and information required by the statute in an effort that is divorced from this day-to-day management of the agency. That's why I suggest that the true measure of the success of GPRA will be the extent to which the concepts of management and good business practices set out in this law become the accepted way that the government works without reference to any particular statutory framework or requirements.
This concludes my statement, Mr.
Chairman. I'd be pleased to take any questions you may