Partners work together to remove barriers to success.
Current Federal grant system.
A great deal of the current grant system has broken down in a tangle of good intentions gone
awry. There are too many funding categories, suffocating regulations and paperwork,
misdirected emphasis on remediating rather than preventing problems, and no clear focus on
measurable outcomes. The system stifles initiative and squanders resources without achieving
sufficient results. Performance partnerships offer improvements to the current system.
What is a performance partnership?
Performance partnerships provide increased flexibility on how a program is run in exchange for
increased accountability for results.
Where do performance partnerships make sense?
- Increased flexibility includes:
- consolidated funding streams
- elimination of micromanagement,
- devolved decision-making (national goals and objectives, with much more flexibility
for State and local partners to determine HOW these are achieved), and
- reduced wasteful paperwork.
- Increased accountability for results means the partners will:
- begin to treat outcomes and outputs as the basic measure of success (e.g., teenage
pregnancy rate rather than number of visits to a clinic), and
- create funding and other incentives to reward desirable results and performance
Performance partnerships work best:
- When the Federal Government intends to deliver services at State and local levels,
- Where there is shared agreement among Federal, State and local partners about
national goals and objectives, and
- Where progress toward the goals and objectives can be measured.
Checklist of Guiding Principles for Designing a Performance Partnership
A number of key characteristics should be considered designing and implementing performance
The checklist which follows contains principles which build upon the description of the
Administration's six proposed "performance partnerships" in the President's FY 1996 FY 1996
Budget (see pages 152-154). The guiding principles should be regarded as "rebuttable
- Program consolidations
- Increased Flexbility
- Improved Accountability
- Measuring Performance
- Performance Incentives
- Shift in the Locus of Decision-making
- Administrative Simplification
- Administrative Savings
- Entitlement Programs
1. Program consolidations
|(a)|| In any policy arena in which there is a strong national interest and a history of Federal
grants and other assistance to State and local governments, agencies should give strong
consideration to developing one or more performance partnerships.|
|(b)|| If a proposed performance partnership is not consistent with a particular principle, there
should be a compelling argument about how the program is otherwise addressing local
needs, stops micromanagement, and holds its partners accountable for results.|
- Proposals should structure current grant program authorizations to consolidate
programs and/or funding streams and eliminate overlapping authorities:
- Every effort should be made to merge funding streams which now force
recipients to wastefully isolate administration and delivery of one program
from another to avoid being penalized by auditors.
3. Increased Flexibility
- Federal, State and local partners should jointly design the partnership and the strategies to implement it.
- Performance partnerships should accommodate different program strategies with different state and local partners.
4. Improved Accountability
- Performance partnerships should:
- Promote multiple approaches to meeting national objectives,
- Allow federally-funded activities to be fully integrated with State, local
provider activities, and
- Allow flexibility so that State and local institutional forces and incentives
achieve the desired results.
- If State plans are necessary, multiple "State Plan" requirements should be replaced
with one "community-based strategic plan. "Such a plan would outline basic
strategies and tactics, and accommodate much more diversity from community-to-community and state-to-state than existing approaches.
- Partnerships should:
- Minimize "required" service requirements, and
- Provide multi-year funding.
5. Measuring Performance
- Federal agencies and State or local partners should develop, communicate, and monitor measurable program goals and report progress toward achieving them:
- Think in terms of shared accountability.
- Performance partnerships should focus on outputs and outcomes (real results) rather than detailed assessment of the inputs and process used by States and localities:
- An emphasis on results means, for example, concentrating on getting cleaner air (not the existence of State environmental regulations) or whether educational goals are being achieved (not the level of school expenditures).
- Notwithstanding increased flexibility, performance partnerships will maintain
Constitutional and critical, national public policy requirements:
- Non-discrimination requirements, for example, will apply.
6. Performance Incentives
- Performance partnerships should be structured, managed, and evaluated on the
basis of results (i.e., progress in terms of agreed upon measures of performance).
- Performance measures will typically include a mix of outcome and output
measures, including both measures of progress toward national goals and
measures of important negative consequences that are likely to result from
- Partnerships should focus on outcomes (not process) as the principal criteria by
which to measure success.
- Authorizing legislation should include a statement of:
- "National goals and objectives" that the partnership seeks to help achieve.
For example: "parental responsibility."
- Types of "performance information that would indicate what types of information would indicate progress toward the national goals and objectives.
For example: "paternities established"
- The Federal Agency should be authorized to develop National goals and objectives where the authorizing legislation does not specify them.
For example: "The Secretary shall, in conjunction with the states, local governments, providers and Consumers develop national goals and objectives."
- "Performance measures" and performance targets should not be incorporated in
For example: "The Secretary shall, in conjunction with States, local governments,
providers and consumers, develop and update measures for determining State or
local performance in achieving progress toward the national goals and objectives.
Accordingly, performance measures and targets should be:
Performance measures require specification of at least the following:
- Mutually developed by the partners, or
- In the case of certain core indicators, developed by the Federal Government in
consultation with grantees, and supplemented with indicators mutually agreed
to by the grantees.
- Refined over time in consultation with the grantees.
(1) Type of performance information.
(2) Data source (or sources).
(3) Acceptable levels of precision and accuracy.
(4) Domains of estimations (e.g., Sates, counties, etc.)
(5) Frequency of data collection.
(6) Time period covered.
|For example: for "paternities established"|
|(1.1)||Percentage of new welfare cases for which paternities have been established, for each fiscal year cohort of new welfare recipients.|
|(1.2)|| Percentage of the total welfare caseload for which paternities have
been established, as of the close of each fiscal year.|
|(2)||Selected welfare system case records and information obtained
through external quality control review.|
|(3)|| Total estimation error not to exceed 7% at the county level and/or
1% at the State level.|
|(4)||The sample design must support precision and accuracy
requirements for State (county) level estimates or for the
population generally (e.g., the entire sample may be allocated per
county, or even"n" cases per 1,000 per county).|
|(6)|| The last fiscal year.|
- Performance agreements:
- Federal agencies should develop individual performance agreements with each
State/locality receiving funds.
For example: "The Secretary shall, in conjunction with the States, local
governments,providers and consumers, develop individual performance
agreements which specify the program performance measures, performance
targets, and the timeframes for achieving the performance targets.
- Assessing progess:
- The authorizing legislation should include a requirement that the Federal
agency work with the partners to develop a system for assessing the extent of
progress toward national objectives.
For example: "The Secretary shall, in conjunction with the States, local
governments, providers and consumers, develop a system for assessing the
extent of progress toward the national objectives."
- At least annually, the partners should assess the level of performance achieved,
the extent to which performance meets or exceeds agreed-on performance
targets, and the extent to which performance has changed over time. These
reports should acknowledge the influence of important external factors that
may have affected the performance levels achieved.
- From time to time, annual performance r eports should be supplemented by
program evaluations that estimate the net program impacts caused by the
program. These program evaluations would use research designs to estimate
the difference that the program makes (i.e., the difference between (a) the
actual performance levels achieved, and (b) the performance levels that would
have been achieved in the absence of the program).
- Data collection:
- The partners will have to identify or develop data systems to define and assess "results" and "improvement in results.
For example: "The Secretary is authorized to withhold up to 5 percent of the
amount appropriated the program to support the development and updating of data
systems tied closely to the national goals; the development of performance
agreements with States; and data quality assurance and data quality improvement;
and research and development of performance measurement methodology."
- Partners should consider whether and how to get data that is generalizable, and
consistent among and within States overtime.
- Refining the measures over time:
- It is expected that the performance measurement process and indicators will evolve over time, as Federal agencies and grantees develop greater experience with this approach.
7. Shift in the Locus of Decision-making
- Agencies should consider whether funds should be allocated in part on
performance (but other factors such as need may also be determinants, including
population, poverty, disease incidence, morbidity, and morality, as appropriate).
- Partners should be recognized and rewarded for success -- both high performance
and improved performance.
- Recipients should be rewarded for achieving ambitious, rather than readily-attainable, performance targets.
- Some portion of the funding should be based on actual performance:
- Some portion of funding should be available to the Federal agency as an incentive States and localities that make improvement.
For example: "The Secretary is authorized to reserve up to 10 percent of the funds
to be used for performance incentive awards for recipients making process toward
meeting national goals."
- "Up to" is important, since it will first be necessary to get a sensible measurement system in place, before attempting to award performance incentives.
- Rewards should not be directed toward only "exceptional" performance, but allow the Secretary to reward high or improved performance (i.e., "progress toward achieving national goals").
- High-performing States and localities should be rewarded with additional
flexibility or reduced matching requirements.
- Similarly, disincentives should include reduced flexibility:
- A requirement to shift funds into practices successfully used by high performing States and localities, or
- Requirements for additional commitments of State or local resources, or
- Reduction or termination of Federal funding.
- Partners should avoid punishing innovation and experimentation:
- Keep in mind: no one is accountable for results now under the current system.
- Since there is shared accountability for results, Federal agencies should also
respond to problems by providing technical assistance about promising practices:
For example: "The Secretary shall provide technical assistance to the States to help them expand and improve ...."
- States and localities should be held harmless for cases where outcomes are not
achieved despite the use of best practices (given the current state of knowledge).
8. Administrative Simplification
- The partners should decide largely on the "What" and leave most of the "How" to
States and localities.
- Performance partnerships should seek to empower communities to make their
own decisions about how to address their needs, and to be held accountable for
- Front-line, local level providers should have greater flexibility and responsibility
for service design, delivery, and results.
- Partnerships should permit customers and beneficiaries to shape programs to
better match their individual needs -- by giving them voice, choice, and the means
to integrate services from multiple providers.
- Recipient jurisdictions should have flexibility to set local benchmarks that are
consistent with national program goals.
9. Administrative Savings
- Partners will seek to reduce barriers to success.
- Partnerships should resemble "performance contracts" (i.e., contract for
measurable results) rather than traditional cost-reimbursement, "level-of-effort"
- Performance partnerships should reduce Federal regulation of inputs, and avoid
micro-management, and wasteful paperwork:
- Rigid and costly program restrictions should be eliminated.
- Procedural, detailed application, financial management, auditing and expenditure
reporting requirements should be eliminated or simplified to permit
comprehensive service delivery:
- The focus should be "Is the community achieving measurable results that
indicate progress toward national goals?" -- rather than "Were the dollars
spent on the identified problem?
- Federal agencies should, to the extent feasible, establish or negotiate performance
targets, rather than specify the manner of compliance that States or localities must
- Reporting and monitoring should focus on performance (outcomes and outputs
that indicated progress toward strategic goals) rather than inputs.
- Think in terms of reporting results to the public, rather than reports on process
among levels of government.
- Administrative savings should be realized through consolidation and program and
- Consolidated planning requirements, for example, should enable more
integrated services with less overhead.
11. Entitlement Programs
- Proposals should consider:
- Phased-in implementation,
- Initially, shifting toward performance partnerships with self-selected or
"volunteer" tates/local partners that are ready.
- Partnership proposals should accommodate different degrees of devolution
between Federal, and various State and local governments.
- Performance partnerships for entitlement programs might:
- Initially allocate funds to States to match what they currently receive,
- Adjust over time for growth of poverty population and inflation,
- Authorize the Secretary to provide extra funds to States during economic
- As an incentive (since funding levels are fixed), permit high-performing
States to re-direct matching funds.
- Eligibility may need to be simplified, for example, to transform public assistance
offices from bureaucratic eligibility offices into family support and job
preparation centers linking a range of services.
- There may be need to set specific common measures, but allow for flexibility for
- Measures should be both population- and client-based.