Archive
Executive Guide: Effectively Implementing the Government Performance and
Results Act (Other Written Prod., 06/01/96, GAO/GGD-96-118).
GAO published an executive guide on implementing the Government
Performance and Results Act (GPRA). GAO noted that: (1) GPRA forces
federal agencies to focus on their missions and goals, how to achieve
them, and how to improve their structural organizations and business
processes; (2) agencies must define their missions and desired outcomes,
use strategic planning, involve stakeholders, assess their environments,
and align their activities, core processes, and resources to support
mission-related outcomes; (3) agencies need to measure their performance
to ensure that they are meeting their goals and making informed
decisions; (4) performance measures need to be based on program-related
characteristics and performance data must be sufficiently complete,
accurate, and consistent; (5) agencies must use performance data to
improve organizational processes, identify performance gaps, and set
improvement goals; and (6) GPRA success depends on strong leadership
practices that devolve decisionmaking authority with accountability,
create incentives, build expertise, and integrate management reforms.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: GGD-96-118
TITLE: Executive Guide: Effectively Implementing the Government
Performance and Results Act
DATE: 06/01/96
SUBJECT: Federal agency reorganization
Strategic planning
Agency missions
Data integrity
Management information systems
Information resources management
Reengineering (management)
Total quality management
Productivity
Accountability
IDENTIFIER: EPA National Environmental Goals Project
NHTSA Fatal Accident Reporting System
NHTSA General Estimates System
Coast Guard Marine Safety and Security Program
VA Robert W. Carey Quality Award
TQM
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Cover
================================================================ COVER
Comptroller General of the United States
June 1996
EXECUTIVE GUIDE - EFFECTIVELY
IMPLEMENTING THE GOVERNMENT
PERFORMANCE AND RESULTS ACT
GAO/GGD-96-118
Government Performance and Results Act
(246089)
Abbreviations
=============================================================== ABBREV
ARL - Army Research Laboratory
CFO - Chief Financial Officers Act
DOD - Department of Defense
EPA - Environmental Protection Agency
FEMA - Federal Emergency Management Agency
GMRA - Government Management Reform Act
GPRA - Government Performance and Results Act
NHTSA - National Highway Traffic Safety Administration
NOAA - National Oceanic and Atmospheric Administration
OMB - Office of Management and Budget
VA - Department of Veterans Affairs
VHA - Veterans Health Administration
PREFACE
============================================================ Chapter 0
In recent years, an understanding has emerged that the federal
government needs to be run in a more businesslike manner than in the
past. As companies are accountable to shareholders, the federal
government is accountable to taxpayers, and taxpayers are demanding
as never before that the dollars they invest in their government be
managed and spent responsibly.
As countless studies by GAO have long noted, federal agencies often
fail to appropriately manage their finances, identify clearly what
they intend to accomplish, or get the job done effectively and with a
minimum of waste. After decades of seeing these problems recur in
agency after agency, Congress moved to address this endemic situation
on a governmentwide basis. Major statutes now in their first years
of implementation hold substantial promise for creating a more
accountable and effective federal government.
The Chief Financial Officers (CFO) Act of 1990 provided for chief
financial officer positions in 24 major agencies and required annual
reports on the financial condition of government entities and the
status of management controls. Under the CFO Act, federal agencies
will be subject to the same kinds of financial reporting that have
long been required in the private sector and by state and local
governments.
The Information Technology Management Reform Act of 1996 requires,
among other things, that agencies set goals, measure performance, and
report on progress in improving the efficiency and effectiveness of
operations through the use of information technology.
And, most fundamentally, under the Government Performance and Results
Act of 1993 (GPRA), every major federal agency must now ask itself
some basic questions: What is our mission? What are our goals and
how will we achieve them? How can we measure our performance? How
will we use that information to make improvements? GPRA forces a
shift in the focus of federal agencies--away from such traditional
concerns as staffing and activity levels and toward a single
overriding issue: results. GPRA requires agencies to set goals,
measure performance, and report on their accomplishments.
This will not be an easy transition, nor will it be quick. And for
some agencies, GPRA will be difficult to apply. But GPRA has the
potential for adding greatly to government performance--a
particularly vital goal at a time when resources are limited and
public demands are high. To help Congress and federal managers put
GPRA into effect, we have identified key steps that agencies need to
take toward its implementation, along with a set of practices that
can help make that implementation a success. We learned of these
practices from organizations that successfully have taken initiatives
similar to the ones required by the act. Several federal agencies
that have already put these practices to use are represented in the
case illustrations that are part of this guide.
This guide is a companion to our Executive Guide: Improving Mission
Performance Through Strategic Information Management and Technology,
which outlined a number of information management approaches that
federal agencies can take to improve their overall performance.
Improving the management of federal agencies will require responsible
actions in several areas at once. Success will demand concerted
effort and long-term commitment, but the returns should be
considerable. And American taxpayers deserve no less for their
investment.
Charles A. Bowsher
Comptroller General of the United States
INTRODUCTION
============================================================ Chapter 1
A CHANGING ENVIRONMENT DEMANDS
FEDERAL MANAGEMENT REFORM
---------------------------------------------------------- Chapter 1:1
Over the past several years, Congress has taken steps to
fundamentally change the way federal agencies go about their work.
Congress took these steps in response to management problems so
common among federal agencies that they demanded governmentwide
solutions. In addition, two contemporary forces converged to spur
congressional action: year-in, year-out budget deficits that had to
be brought down and a public now demanding not only that federal
agencies do their jobs more effectively, but that they do so with
fewer people and at lower cost.
This was--and remains--an enormous challenge. For one thing, many of
the largest federal agencies find themselves encumbered with
structures and processes rooted in the past, aimed at the demands of
earlier times, and designed before modern information and
communications technology came into being. These agencies are poorly
positioned to meet the demands of the 1990s.\1 Moreover, many of
these agencies find themselves without a clear understanding of who
they are or where they are headed. Over the years, as new social or
economic problems emerged, Congress assigned many agencies new and
unanticipated program responsibilities. These additions may have
made sense when they were made, but their cumulative effect has been
to create a government in which many agencies cannot say just what
business they are in.
In some cases, agencies' legislative mandates have grown so muddled
that Congress, the executive branch, and other agency stakeholders
and customers cannot agree on program goals, worthwhile strategies,
or appropriate measures of success. Our work has shown that the
effectiveness of federal program areas as diverse as employment
assistance and training, rural development, early childhood
development, and food safety has been plagued by fragmented or
overlapping efforts.\2 A frequently cited example of overlap and
ineffectiveness is the federal food safety system, which took shape
under as many as 35 laws and was administered by 12 different
agencies yet had not effectively protected the public from major
foodborne illnesses.\3
Traditionally, federal agencies have used the amount of money
directed toward their programs, or the level of staff deployed, or
even the number of tasks completed as some of the measures of their
performance. But at a time when the value of many federal programs
is undergoing intense public scrutiny, an agency that reports only
these measures has not answered the defining question of whether
these programs have produced real results. Today's environment is
results-oriented. Congress, the executive branch, and the public are
beginning to hold agencies accountable less for inputs and outputs
than for outcomes, by which is meant the results of government
programs as measured by the differences they make, for example, in
the economy or program participants' lives. A federal employment
training program can report on the number of participants. That
number is an output. Or it can report on the changes in the real
wages of its graduates. That number is an outcome. The difference
between the two measures is the key to understanding government
performance in a results-oriented environment.
--------------------
\1 Improving Government: Need to Reexamine Organization and
Performance (GAO/T-GGD-93-9, Mar. 11, 1993).
\2 Government Reorganization: Issues and Principles
(GAO/T-GGD/AIMD-95-166, May 17, 1995).
\3 Food Safety: A Unified, Risk-Based Safety System Needed to
Enhance Food Safety (GAO/T-RCED-94-71, Nov. 4, 1993).
LEGISLATIVE REQUIREMENTS
SUPPORT MANAGING FOR RESULTS
---------------------------------------------------------- Chapter 1:2
Congress' determination to make agencies accountable for their
performance lay at the heart of two landmark reforms of the 1990s:
the Chief Financial Officers (CFO) Act of 1990 and the Government
Performance and Results Act of 1993 (GPRA). With these two laws,
Congress imposed on federal agencies a new and more businesslike
framework for management and accountability. In addition, GPRA
created requirements for agencies to generate the information
congressional and executive branch decisionmakers need in considering
measures to improve government performance and reduce costs.
The CFO Act was designed to remedy decades of serious neglect in
federal financial management operations and reporting. It provided
for chief financial officers in the 24 largest federal departments
and agencies, which together account for about 98 percent of the
government's gross budget authority. In 1994, Congress followed up
on the CFO Act with the Government Management Reform Act of 1994.
The latter extended to all 24 CFO Act agencies the requirement,
beginning with fiscal year 1996, to prepare and have audited
financial statements for their entire operations.
While the CFO Act established the foundation for improving management
and financial accountability among the agencies, GPRA is aimed more
directly at improving their program performance. GPRA requires first
that agencies consult with Congress and other stakeholders to clearly
define their missions. It requires that they establish long-term
strategic goals, as well as annual goals that are linked to them.
They must then measure their performance against the goals they have
set and report publicly on how well they are doing.\4 Federal
agencies also are to apply these principles--goal setting,
performance measurement, and reporting--to their information
technology efforts, under the Information Technology Management
Reform Act of 1996. For example, agencies are to establish
performance measures to gauge how well their information technology
supports their program efforts.
--------------------
\4 For a more detailed description of GPRA's requirements, see
appendix I.
EXPERIENCES OF LEADING
ORGANIZATIONS SHOW A WAY
---------------------------------------------------------- Chapter 1:3
At the request of Congress, we studied a number of leading public
sector organizations that were successfully pursuing management
reform initiatives and becoming more results-oriented.\5 We studied
state governments, such as Florida, Oregon, Minnesota, North
Carolina, Texas, and Virginia; and foreign governments, such as
Australia, Canada, New Zealand, and the United Kingdom. Many of
these organizations found themselves in an environment similar to the
one confronting federal managers today--one in which they were called
upon to improve performance while simultaneously reducing costs.
Congress asked whether the experiences of these organizations could
yield worthwhile lessons for federal agencies as they attempt to
implement GPRA.
Each of the organizations we studied set its agenda for management
reform according to its own environment, needs, and capabilities.
Yet despite their differing approaches to reform, all these
organizations were seeking to become more result-oriented, and they
commonly took three key steps. These were to (1) define clear
missions and desired outcomes, (2) measure performance to gauge
progress, and (3) use performance information as a basis for
decisionmaking. Although the organizations we studied were not
acting under GPRA, their three key steps were consistent with GPRA's
requirements. That is, the first step--define mission and desired
outcomes--corresponds to the requirement in GPRA for federal agencies
to develop strategic plans containing mission statements and
outcome-related strategic goals; the second step--measure
performance--corresponds to the GPRA requirement for federal agencies
to develop annual performance plans with annual performance goals and
indicators to measure performance; and the third step--use
performance information--although much broader, includes the
requirement in GPRA for federal agencies to prepare annual
performance reports with information on the extent to which the
agency has met its annual performance goals.
Along with each step, certain practices proved especially important
to the success of their efforts. In addition to these steps, these
organizations also found that certain top leadership practices were
central to making the changes needed for the organizations to become
more results-oriented.
Taken together, the key steps and practices drawn from the
organizations we studied provide a useful framework for federal
agencies working to implement GPRA. The key steps and practices are
shown in figure 1.
Figure 1: Implementing GPRA:
Key Steps and Critical
Practices
(See figure in printed
edition.)
In this executive guide, we discuss the three key steps and their
relationship to GPRA, along with the practices associated with each
step.\6 In the final section of this executive guide, we discuss the
role of top leadership and the practices it can follow if it hopes to
make GPRA a driving force in an organization. Accompanying the
discussion of each practice is a case illustration involving a
federal agency that has made progress in incorporating the practice
into its operations. The fact that an organization is profiled for a
particular practice is not meant to imply success or lack of success
in other dimensions. Moreover, underscoring the fact that
implementing management changes required by GPRA will not come
quickly, most of the agencies profiled began their results-oriented
management before GPRA was enacted.
The experiences of leading organizations suggest that the successful
implementation of GPRA may be as difficult as it is important. For
example, obtaining agreement among often competing stakeholders is
never easy, particularly in an environment where available resources
are declining. In addition, measuring the federal contribution to
outcomes that require the coordinated effort of numerous public and
private entities--such as improvements in education, employment, or
health--can require sophisticated and costly program evaluations.
To help ensure the success of GPRA, the CFO Council, which the CFO
Act created to provide the leadership foundation necessary to
effectively carry out the Chief Financial Officers' responsibilities,
established a GPRA Implementation Committee. The Committee is
providing guidance and information to Chief Financial Officers and
managers in the 24 agencies covered by the CFO Act. The Committee
recognized that uncertainty or fear of failure may immobilize an
agency's efforts to implement GPRA and that its implementation is
evolutionary in that proficiency comes with time and experience. To
assist federal managers, the Committee published guiding principles
and key issues for implementing GPRA.\7 Our guide is intended to
complement the Committee's work in assisting managers as they
implement GPRA. Our work has shown that although the steps and
practices discussed in this guide don't come quickly or easily, they
can serve as the fundamental building blocks to creating a
results-oriented organization.
--------------------
\5 See, for example, Transforming the Civil Service: Building the
Workforce of The Future, Results Of A GAO-Sponsored Symposium
(GAO/GGD-96-35, Dec. 26, 1995); Managing for Results: Experiences
Abroad Suggest Insights for Federal Management Reform
(GAO/GGD-95-120, May 2, 1995); Managing For Results: State
Experiences Provide Insights for Federal Management Reforms
(GAO/GGD-95-22, Dec. 21, 1994); Government Reform: Goal-Setting and
Performance (GAO/AIMD/GGD-95-130R, Mar. 27, 1995); Executive Guide:
Improving Mission Performance Through Strategic Information
Management and Technology (GAO/AIMD-94-115, May 1994). Also see our
reports and testimonies included as footnotes and the Related GAO
Products section of this guide.
\6 For a detailed discussion of our objectives, scope, and
methodology, see appendix II.
\7 Implementation of the Government Performance and Results Act
(GPRA), A Report on the Chief Financial Officer's Role and Other
Issues Critical to the Governmentwide Success of GPRA, Chief
Financial Officers Council, GPRA Implementation Committee, May 1995.
STEP 1: DEFINE MISSION AND
DESIRED OUTCOMES
============================================================ Chapter 2
Figure 2: Define Mission and
Desired Outcomes
(See figure in printed
edition.)
GPRA requires that federal agencies, no later than September 30,
1997, develop strategic plans covering a period of at least 5 years
and submit them to Congress and the Office of Management and Budget
(OMB). OMB provided guidance on the preparation and submission of
strategic plans as a new part of its Circular No. A-11--the basic
instructions for preparing the President's Budget--to underscore the
essential link between GPRA and the budget process. OMB required
agencies to submit major parts of their strategic plans by June 7,
1996.
Strategic plans are intended to be the starting point for each
agency's performance measurement efforts. Each plan must include a
comprehensive mission statement based on the agency's statutory
requirements, a set of outcome-related strategic goals, and a
description of how the agency intends to achieve these goals. The
mission statement brings the agency into focus. It explains why the
agency exists, tells what it does, and describes how it does it. The
strategic goals that follow are an outgrowth of this clearly stated
mission. The strategic goals explain the purposes of the agency's
programs and the results they are intended to achieve.
In crafting GPRA, Congress recognized that federal agencies do not
exist in a vacuum. As agencies develop their mission statements and
establish their strategic goals, they are required by the act to
consult with both Congress and their other stakeholders. Further,
agencies must be alert to the environment in which they operate; in
their strategic plans, they are required to identify the external
factors that could affect their ability to accomplish what they set
out to do.
We found that leading results-oriented organizations consistently
strive to ensure that their day-to-day activities support their
organizational missions and move them closer to accomplishing their
strategic goals. In practice, these organizations see the production
of a strategic plan--that is, a particular document issued on a
particular day--as one of the least important parts of the planning
process. This is because they believe strategic planning is not a
static or occasional event. It is, instead, a dynamic and inclusive
process. If done well, strategic planning is continuous and provides
the basis for everything the organization does each day.
For strategic planning to have this sort of impact, three practices
appear to be critical. Organizations must (1) involve their
stakeholders; (2) assess their internal and external environments;
and (3) align their activities, core processes, and resources to
support mission-related outcomes.
PRACTICE 1: INVOLVE
STAKEHOLDERS
---------------------------------------------------------- Chapter 2:1
Successful organizations we studied based their strategic planning,
to a large extent, on the interests and expectations of their
stakeholders. These organizations recognize that stakeholders will
have a lot to say in determining whether their programs succeed or
fail. Among the stakeholders of federal agencies are Congress and
the administration, state and local governments, third-party service
providers, interest groups, agency employees, and, of course, the
American public.
In the federal government, stakeholder involvement is particularly
important as federal agencies face a complex political environment in
which legislative mandates are often ambiguous. Thus, the basic
questions that must be answered in crafting a mission statement--what
is our purpose, what products and services must we deliver to meet
that purpose, and how will that be done--will present a significant
challenge for many agencies. While statutory requirements are to be
the starting point for agency mission statements, Congress, the
executive branch, and other interested parties may all disagree
strongly about a given agency's mission and goals. GPRA seeks to
address such situations by requiring agencies to consult with
Congress and other stakeholders to clarify their missions and reach
agreement on their goals. Full agreement among stakeholders on all
aspects of an agency's efforts is relatively uncommon because
stakeholders' interests can differ often and significantly.
Still, stakeholder involvement is important to help agencies ensure
that their efforts and resources are targeted at the highest
priorities. Just as important, involving stakeholders in strategic
planning efforts can help create a basic understanding among the
stakeholders of the competing demands that confront most agencies,
the limited resources available to them, and how those demands and
resources require careful and continuous balancing. Because of its
power to create and fund programs, the involvement of Congress is
indispensable to defining each agency's mission and establishing its
goals.\8 This may entail identifying legislative changes that are
needed to clarify or modify Congress' intent and expectations or to
address differing conditions and citizens' needs that have occurred
since the initial statutory requirements were established.
Congressional consultations also may include additional guidance on
Congress' priorities in those frequent cases where agencies have more
than one statutory mission.
Involving customers is important as well. An agency's customers are
the individuals or organizations that are served by its programs.
This is not to say that contact between a federal agency and its
customers is always direct. Many federally mandated or federally
funded services are dispensed through third parties, such as state
agencies, banks, or medical insurance providers. In such cases,
federal agencies face the particularly challenging task of balancing
the needs of customers, service providers, and other stakeholders,
who at times may have differing or even competing goals.
In our reviews of successful results-oriented organizations, we found
numerous examples of organizations that achieved positive results by
involving customers and other stakeholders in defining their missions
and desired outcomes.\9 Oregon, for one, developed consensus on its
statewide strategic plan by bringing together such diverse
stakeholders as legislators, state agency officials, county and local
government officials, and community group representatives. The
Minnesota Trade Office, for another, used surveys to obtain its
stakeholders' views on the degree to which the office was
contributing to its customers' export activities. On the basis of
the data it obtained, the Trade Office made program changes and
improved both its performance and its responsiveness.
--------------------
\8 Managing for Results: Achieving GPRA's Objectives Requires Strong
Congressional Role (GAO/T-GGD-96-79, Mar. 6, 1996).
\9 GAO/GGD-95-22, Dec. 21, 1994.
CASE ILLUSTRATION:
ENVIRONMENTAL PROTECTION AGENCY
---------------------------------------------------------- Chapter 2:2
The Environmental Protection Agency (EPA) was established in 1970
under a presidential reorganization plan in response to public
concerns over unhealthy air, polluted rivers, unsafe drinking water,
and haphazard waste disposal. Congress gave EPA responsibility for
implementing federal environmental laws. From the start, however,
EPA lacked an overarching legislative mission, and its environmental
responsibilities have yet to be integrated with one another. As a
result, EPA could not ensure that it was directing its efforts toward
the environmental problems that were of greatest concern to citizens
or posed the greatest risk to the health of the population or the
environment itself. Therefore, EPA decided in 1992 to launch the
National Environmental Goals Project, a long-range planning
initiative under which it would involve its stakeholders in
developing measurable goals for EPA to pursue in improving the
quality of the nation's environment.
EPA designed its National Environmental Goals Project to produce a
set of long-range environmental goals, including milestones to be
achieved by 2005. The agency recognized that while environmental
goals should be grounded in science and factual analysis, they should
be based, as well, on the needs and expectations of the nation's
citizens. In 1994, EPA initiated a series of nine public meetings to
hear their views. The meetings were held around the country and
included environmental organizations, businesses, state and local
governments, tribal governments, and other stakeholders. To provide
a basis for discussion, EPA drafted and distributed to participants a
set of goal statements and descriptive information on the 13 broad
environmental goal areas that its staff considered to be of the
greatest national importance.
EPA used the information it received at these public meetings to
revise and better define these goals. For example, the agency added
milestones for managing and cleaning up radioactive waste, restoring
contaminated sites to productive use, and slowing habitat losses.
Further, it added the goal of improving its dissemination of
environmental information and its other education efforts. EPA found
that its stakeholders' interests included how EPA does its core
processes--for example, the amount of flexibility it can offer to the
regulated community. EPA recognized these stakeholder interests in a
summary report of its revised goals that it sent to Congress and its
other stakeholders in February 1995.
EPA continued to involve stakeholders in the National Environmental
Goals Project by soliciting comments on the summary report. Many of
EPA's stakeholders are businesses or other regulated entities that
wanted the agency to address such matters as the procedural costs of
environmental regulations. EPA responded with a discussion of the
overall costs and benefits of controlling pollution. At its
stakeholders' request, it provided trend data and laid out strategies
for achieving its environmental milestones. EPA recognizes that
involving stakeholders is an ongoing effort that needs to be
continued. The proposed goals are to be sent again to federal,
state, local, and tribal government stakeholders for another round of
review later this year, and plans are being made for public review.
PRACTICE 2: ASSESS THE
ENVIRONMENT
---------------------------------------------------------- Chapter 2:3
Good managers have understood for a long time that many forces--both
inside and outside their organizations--can influence their ability
to achieve their goals. But even managers who try to stay alert to
these forces often gather their information anecdotally or
informally. In contrast, the successful organizations we studied
monitor their internal and external environments continuously and
systematically. Organizations that do this have shown an ability to
anticipate future challenges and to make adjustments so that
potential problems do not become crises.\10 By building environmental
assessment into the strategic planning process, they are able to stay
focused on their long-term goals even as they make changes in the way
they intend to achieve them.
Both the external and internal environments are important, and
neither can be viewed independently of the other. Assessing the
external environment is particularly important, in part because so
many external forces that fall beyond an organization's influence can
powerfully affect its chances for success. For organizations both
public and private, external forces can include newly emerging
economic, social, and technological trends and new statutory,
regulatory, and judicial requirements. An organization's internal
forces include its culture, its management practices, and its
business processes. Today, federal agencies find that monitoring
these internal forces is especially important, given the effects of
funding reductions and reorganizations. The tools available to
organizations assessing the internal environment include program
evaluations, employee surveys, independent audits, and reviews of
business processes.
--------------------
\10 For a discussion of environmental monitoring as a critical aspect
of strategic thinking, see Henry Mintzberg, The Fall and Rise of
Strategic Planning (New York: Free Press and Prentice Hall
International, 1994).
CASE ILLUSTRATION: UNITED
STATES CUSTOMS SERVICE
---------------------------------------------------------- Chapter 2:4
The missions of the Customs Service--the oldest federal agency--are
to ensure that goods and persons entering and exiting the United
States comply with all U.S. laws and regulations, while also
facilitating the legitimate movement of goods and persons through
U.S. ports. But long-standing management problems, including
weaknesses in strategic planning, had threatened the agency's ability
to adapt to changing demands. Customs' strategic planning efforts
now focus on the dramatic changes occurring in its external and
internal environments and on the equally dramatic changes the agency
will need to make in response.
Recognizing that the international trade environment has undergone
many changes in recent years, the Customs Service identified the new
challenges these changes brought it in its 1993 strategic plan. The
clearest challenge for Customs would be to manage a workload that was
growing rapidly and that could not be expected to taper off. From
fiscal year 1986 to 1995, for example, total import entries increased
by 242 percent, from 11.1 million to 38.0 million. During the same
period, passenger arrivals increased by 42 percent, from 304 million
to 431 million. Customs anticipated that world trade would also
continue to accelerate. During 1995 alone, approximately $761
billion in merchandise was imported into the United States. For the
rest of the decade, Customs expects that figure to grow by more than
10 percent each year.
Customs anticipated that trade issues would assume greater prominence
in the coming years as developing countries continue to
industrialize, corporations continue to expand internationally, and
trade barriers continue to fall. Further, the proliferation of
international trade agreements, such as the U.S.-Canada Free Trade
Agreement of 1989, the North American Free Trade Agreement, and the
General Agreement on Tariffs and Trade, should lead to further
increases in trade and travel volume.
Internally, Customs anticipated that as public pressures to reduce
the federal deficit continued, no real growth would occur in the
agency's funding. Customs also anticipated attrition among its staff
and a loss of valuable expertise due to that attrition. It
determined that by 1998 about 10 percent, or about 2,000 employees,
would be eligible to retire.
All of these forces--external and internal--have caused the Customs
Service to begin to reengineer its core processes, including those
related to the movement of people and cargo into the United States
and the movement of cargo out of the United States. For example, the
agency is undertaking a major reorganization structured from the
ground up, using its 301 ports as its foundation. While headquarters
staffing is to be streamlined, the staffing levels at the ports are
to be maintained or increased. Under the reorganization, port
directors are to be given some of the authority previously exercised
at the district or regional levels.
It is too soon to tell how effective Customs' reorganization will be
in responding to the pressures it faces. But by assessing its
external and internal environments, the agency came to see that its
traditional ways of pursuing its mission were no longer viable and
that major changes would be needed.
PRACTICE 3: ALIGN ACTIVITIES,
CORE PROCESSES, AND RESOURCES
---------------------------------------------------------- Chapter 2:5
Leading organizations recognize that sound planning is not enough to
ensure their success. An organization's activities, core processes,
and resources must be aligned to support its mission and help it
achieve its goals. Such organizations start by assessing the extent
to which their programs and activities contribute to meeting their
mission and desired outcomes. As the organizations became more
results-oriented, they often found it necessary to fundamentally
alter activities and programs so that they more effectively and
efficiently produced the services to meet customers' needs and
stakeholders' interests. For example, we have traced the management
problems of many federal agencies to organizational structures that
are obsolete and inadequate to modern demands.\11 As federal agencies
become more outcome-oriented, they will find that outmoded
organizational structures must be changed to better meet customer
needs and address the interests of stakeholders.
As agencies align their activities to support mission-related goals,
they should also make better linkages between levels of funding and
their anticipated results. Under a series of initiatives called
Connecting Resources to Results, OMB is seeking to adopt a greater
focus on agencies' goals and performance in making funding decisions.
For example, OMB fiscal year 1996 budget preparation guidance said
agencies were to identify key features of their streamlining plans
(e.g., increased span of control, reduced organizational layers,
and/or milestones for full-time equivalents) and encouraged agencies
to include performance goals and indicators in their budget
justifications.\12 Whereas the agencies' fiscal year 1995 documents
discussed streamlining primarily in terms of the number of positions
to be eliminated, the fiscal year 1996 budget documents included
discussions about how proposed staff reductions could affect the
agencies' performance. Under OMB's guidance, agencies' fiscal year
1997 budget requests were to contain a significantly greater amount
of performance information to help define funding levels and
projected program results. For the fiscal year 1998 budget, OMB
plans to continue to increase the role of performance goals and
information in guiding funding decisions.
We also have found that leading organizations strive to ensure that
their core processes efficiently and effectively support
mission-related outcomes. These organizations rely increasingly on a
well-defined mission to form the foundation for the key business
systems and processes they use to ensure the successful outcome of
their operations. For example, many successful public and private
organizations integrate their human resource management activities
into their organizational missions, rather than treating them as an
isolated support function.\13 This sort of integrated approach may
include tying individual performance management, career development
programs, and pay and promotion standards to organizational mission,
vision, and culture.
Information management is another activity that organizations must
address in aligning their activities and processes.\14 Modern
information management approaches, coupled with new information
technology, can make success more or less likely--depending on the
way they are handled. We found that successful organizations pursue
something called strategic information management--that is,
comprehensive management of information and information technology to
maximize improvements in mission performance. Strategic information
management will be an important part of any federal agency's attempt
to implement GPRA successfully. Managing better requires that
agencies have, and rely upon, sound financial and program
information. Strategic information management would lead to systems
that would better provide federal agencies the data they need in
considering ways to realign their processes, reduce costs, improve
program effectiveness, and ensure consistent results with a less
bureaucratic organization. Lacking these data, the agencies would be
missing one of the indispensable ingredients of successful
management.
--------------------
\11 Government Management Issues (GAO/OCG-93-3TR, Dec. 1992).
\12 Office of Management and Budget: Changes Resulting From the OMB
2000 Reorganization (GAO/GGD/AIMD-96-50, Dec. 29, 1995).
\13 GAO/GGD-96-35, Dec. 26, 1995.
\14 GAO/AIMD-94-115, May 1994.
CASE ILLUSTRATION: FEDERAL
EMERGENCY MANAGEMENT AGENCY
---------------------------------------------------------- Chapter 2:6
Established in 1979, the Federal Emergency Management Agency (FEMA)
is responsible for the coordination of civil emergency planning and
mitigation as well as the coordination of federal disaster relief.
FEMA is responsible for responding to floods, hurricanes,
earthquakes, and other natural disasters. Hurricane Hugo and the
Loma Prieta earthquake in 1989 generated intense criticism of the
federal response effort. Hurricane Andrew, which leveled much of
South Florida in 1992, raised further doubts as to whether FEMA was
capable of responding to disasters. In 1993, FEMA's new Director
refocused the agency on meeting its mission and aligning its
activities to better serve the public.
Since FEMA issued its mission statement in April 1993, it has been
reexamining its approach to limiting deaths and property losses from
disasters. Traditionally, FEMA had concentrated its efforts on
post-disaster assistance. But after taking a hard look at its
performance, FEMA concluded that it could better fulfill its mission
by addressing the range of activities available before, during, and
after disaster strikes.
As part of its first agencywide strategic planning effort, FEMA
comprehensively reviewed its programs and structures and initiated a
major reorganization in November 1993. FEMA concluded that all
emergencies share certain common traits, pose some common demands,
and ought to be approached functionally. FEMA's new, "all-hazard"
mission takes a multifaceted, sequential approach to managing
disasters: mitigation, preparedness, response, and recovery.
FEMA now focuses its disaster planning and response processes on
steps that need to be taken, not just during and after the event, but
in advance. To build preparedness, FEMA now seeks to build
partnerships with other federal, state, and local organizations. For
example, the agency is working with local governments and the
building industry to strengthen building codes so that structures
will be better able to withstand disasters. It has also launched an
effort to increase the number of flood insurance
policyholders--something that had not been a traditional focus of the
agency but that is now understood as being critical to helping
individuals recover from disasters. By more closely aligning its
activities, processes, and resources with its mission, FEMA appears
today to be better positioned to accomplish that mission.
STEP 2: MEASURE PERFORMANCE
============================================================ Chapter 3
Figure 3: Measure Performance
(See figure in printed
edition.)
The second key step that successful results-oriented organizations we
studied take--after defining their missions and desired outcomes--is
to measure their performance. Measuring performance allows these
organizations to track the progress they are making toward their
goals and gives managers crucial information on which to base their
organizational and management decisions. Leading organizations
recognize, as well, that performance measures can create powerful
incentives to influence organizational and individual behavior.
GPRA incorporates performance measurement as one of its most
important features. Under the act, executive branch agencies are
required to develop annual performance plans that use performance
measurement to reinforce the connection between the long-term
strategic goals outlined in their strategic plans and the day-to-day
activities of their managers and staff. The annual performance plans
are to include performance goals for an agency's program activities
as listed in the budget, a summary of the necessary resources to
conduct these activities, the performance indicators that will be
used to measure performance, and a discussion of how the performance
information will be verified. For the first time, GPRA requires that
agencies' annual program performance planning efforts be linked
directly to their budget estimates and obligations. This linkage is
achieved by requiring performance goals and measures for agencies'
program activities that are included in their budget requests.
Congress recognized that the activity structure in the budget of the
United States government is not consistent across various programs.
As a result, Congress expects agencies to consolidate, aggregate, or
disaggregate the lists of program activities appearing in the budget
accounts.
The first of these annual performance plans is to cover fiscal year
1999; each agency is to submit its plan to OMB in the fall of 1997.
However, OMB is requiring descriptions of the proposed performance
goals and indicators for fiscal year 1999 with the agency's fiscal
year 1998 budget request.
In developing GPRA, Congress recognized that federal
agencies--unaccustomed as they are to the practice--may find that
developing performance measures is a difficult and time-consuming
task. As a result, it provided for selected agencies and programs to
pilot GPRA's goal-setting and performance measurement requirements
before these are applied governmentwide. Our work with leading
results-oriented organizations confirmed that many agencies may need
years to develop a sound set of performance measures.
We learned, as well, that agencies that were successful in measuring
their performance generally had applied two practices. First, they
developed performance measures based on four characteristics. These
measures were (1) tied to program goals and demonstrated the degree
to which the desired results were achieved, (2) limited to a vital
few that were considered essential for producing data for
decisionmaking, (3) responsive to multiple priorities, and (4)
responsibility-linked to establish accountability for results.
Second, recognizing that they must balance their ideal performance
measurement systems against real-world considerations, such as the
cost and effort involved in gathering and analyzing data, the
organizations we studied made sure that the data they did collect
were sufficiently complete, accurate, and consistent to be useful in
decisionmaking.
PRACTICE 4: PRODUCE A SET OF
PERFORMANCE MEASURES AT EACH
ORGANIZATIONAL LEVEL THAT
DEMONSTRATE RESULTS, ARE
LIMITED TO THE VITAL FEW,
RESPOND TO MULTIPLE PRIORITIES,
AND LINK TO RESPONSIBLE
PROGRAMS
---------------------------------------------------------- Chapter 3:1
As the leading organizations we studied strive to align their
activities and resources to achieve mission-related goals, they also
seek to establish clear hierarchies of performance goals and
measures. Under these hierarchies, the organizations try to link the
goals and performance measures for each organizational level to
successive levels and ultimately to the organization's strategic
goals. They have recognized that without clear, hierarchically
linked performance measures, managers and staff throughout the
organization will lack straightforward roadmaps showing how their
daily activities can contribute to attaining organizationwide
strategic goals and mission. Federal agencies that are developing
such hierarchies for their organizations are finding that
organizationwide performance measurement efforts take time and
require the active involvement of staff at all organizational levels.
The experiences of leading state, foreign, and federal governments
show that at least four characteristics are common to successful
hierarchies of performance measures.\15
These characteristics include the following:
Demonstrate results: Performance measures should tell each
organizational level how well it is achieving its goals. Yet, simple
as this principle may appear, it poses an especially difficult
challenge for federal managers, for whom the link between federal
efforts and desired outcomes is often difficult to establish and may
not, in fact, be apparent for years. Research programs provide one
example. So do many health and welfare programs that are delivered
jointly with state and local governments and third-party service
deliverers.
Limited to the vital few: The number of measures for each goal at a
given organizational level should be limited to the vital few. Those
vital few measures should cover the key performance dimensions that
will enable an organization to assess accomplishments, make
decisions, realign processes, and assign accountability.
Organizations that seek to manage an excessive number of performance
measures may risk creating a confusing excess of data that will
obscure rather than clarify performance issues. Limiting the number
of performance measures to the vital few at each organizational level
will not only keep the focus where it belongs, it will help ensure
that the costs involved in collecting and analyzing the data do not
become prohibitive. As a result, lower organizational levels may use
different measures and goals from those meaningfully or appropriately
included in the organization's annual performance plan. Likewise,
agencies will have more goals and measures than can be meaningfully
or appropriately included in the governmentwide performance plan OMB
will develop under GPRA. However, as performance plans are compiled
for higher organizational levels, the consolidation and possible
exclusion of some goals and measures does not mean that those goals
and measures are not important to guide the efforts of the lower
levels and should still be monitored.
Respond to multiple priorities: Government agencies often face a
variety of interests whose competing demands continually force
policymakers and managers to balance quality, cost, customer
satisfaction, stakeholder concerns, and other factors. Performance
measurement systems must take these competing interests into account
and create incentives for managers to strike the difficult balance
among competing demands. Performance measurement efforts that
overemphasize one or two priorities at the expense of the others may
skew the agency's performance and keep its managers from seeing the
whole picture.
Link to responsible programs: Performance measures should be linked
directly to the offices that have responsibility for making programs
work. A clear connection between performance measures and program
offices helps to both reinforce accountability and ensure that, in
their day-to-day activities, managers keep in mind the outcomes their
organization is striving to achieve. This connection at the program
office helps to lay the groundwork for accountability as measures
advance through the agency. By helping to lay the groundwork for
accountability, a connection between performance measures and program
offices also provides a basis for determining the appropriate degree
of operational authority for various organizational levels. Managers
must have the authority and flexibility for achieving the results for
which they are to be held accountable.
--------------------
\15 Managing for Results: Critical Actions for Measuring Performance
(GAO/T-GGD/AIMD-95-187, June 20, 1995).
CASE ILLUSTRATION: NATIONAL
OCEANIC AND ATMOSPHERIC
ADMINISTRATION
---------------------------------------------------------- Chapter 3:2
The mission of the National Oceanic and Atmospheric Administration
(NOAA) is to describe and predict changes in the earth's environment,
as well as to conserve and manage the nation's coastal and marine
resources to ensure sustainable economic opportunities. NOAA
concluded in its 1995 strategic plan that the nation's ability to
prepare for severe weather events, including tornadoes,
thunderstorms, hurricanes, and flash flooding, depends on the quality
and timeliness of the agency's observations, assessments, and
information delivery. Through strategic planning, NOAA evaluated how
best to accomplish its mission and then put into place those
performance measures essential to demonstrating the extent to which
it was attaining its desired outcomes.
NOAA determined that the most important business of its short-term
warning and forecast weather services was to predict the time and
location of weather events and to do so with accuracy. Rather than
simply count the number of forecasts it made--that is, to simply
gather data on its activity level--NOAA began to measure the extent
to which it could increase the lead time or advance notice it gave
the public prior to severe weather events. It decided, in other
words, to measure what counts.
NOAA reported that from fiscal year 1993 to fiscal year 1995, its
lead time for predicting tornadoes increased from 7 minutes to 9
minutes, and the accuracy of its predictions increased from 47
percent of the time to 60 percent of the time. For fiscal year 1996,
NOAA has set targets of 10 minutes and 64 percent, respectively.
NOAA also measured how accurately it could predict the range where
hurricanes would reach land, given a 24-hour lead time. From fiscal
year 1993 to fiscal year 1995, its accuracy improved from 185
kilometers (115 miles) to 134 kilometers (83 miles). It credited the
improvement to its installation in June 1995 of a new hurricane
tracking model. On the basis of fiscal year 1995 performance, NOAA
revised its fiscal year 1996 target from 155 kilometers (96 miles) to
150 kilometers (93 miles). Although the new fiscal year 1996 target
of 150 kilometers is higher than the fiscal year 1995 actual
performance of 134 kilometers, NOAA wants to test the new model
through at least another hurricane season before radically revising
its targets for future years.
The significance of earlier and more accurate hurricane warnings is
enormous. Most importantly, they help prevent deaths and injuries.
But they also save money, because earlier and more accurate
predictions of hurricane tracks and intensities can reduce the size
of the warning areas in which people are advised to prepare for the
event. NOAA calculated that for each hurricane, the public's
preparation and evacuation costs exceed $50 million, but improved
predictions can cut that cost by $5 million. In addition, NOAA
officials believe that the public takes more accurate forecasts more
seriously--which helps lessen loss of life and property.
PRACTICE 5: COLLECT
SUFFICIENTLY COMPLETE,
ACCURATE, AND CONSISTENT DATA
---------------------------------------------------------- Chapter 3:3
As the organizations we examined developed their performance
measures, they paid special attention to issues relating to data
collection. Although they recognized that adequate and reliable
performance data are indispensable to decisionmaking, they were also
aware that collecting the data can be costly and difficult. As a
result, as agencies implement GPRA, they will have to balance the
cost of data collection efforts against the need to ensure that the
collected data are complete, accurate, and consistent enough to
document performance and support decisionmaking at various
organizational levels.
As the experiences of these organizations demonstrated, managers
striving to reach organizational goals must have information systems
in place to provide them with needed information.\16 In Texas, for
example, officials said that the state restructured its statewide
information systems to include the missions and goals of its
agencies, specific strategies for achieving objectives, and measures
of progress. The system also linked budgeted expenditures,
accounting information, and performance data.
Our work has shown consistently that the federal government's basic
financial and information management systems are woefully out of date
and incapable of meeting modern needs for fast, reliable, and
accurate information--particularly as these needs relate to financial
reporting and program costs. As the leading organizations we studied
became more results-oriented, many of them made significant
investments in their information management systems. Many federal
agencies will need to do the same. But agencies can keep costs down
by applying the performance measurement principles these leading
organizations have employed and also--where they can--by building
performance data collection into the processes that govern daily
operations, rather than creating entirely new and separate data
collection systems.
--------------------
\16 GAO/GGD-95-22, Dec. 21, 1994.
CASE ILLUSTRATION: NATIONAL
HIGHWAY TRAFFIC SAFETY
ADMINISTRATION
---------------------------------------------------------- Chapter 3:4
The National Highway Traffic Safety Administration's (NHTSA) mission
is to reduce casualties and economic losses resulting from motor
vehicle crashes. To accomplish its mission, NHTSA pursues two main
strategies: setting and enforcing safety performance standards for
motor vehicles and promoting safe driving behavior. After it was
established in 1970, NHTSA concluded that reliable crash statistics
databases were needed. The need was twofold: to help in identifying
and analyzing traffic safety problems and for evaluating the
effectiveness of motor vehicle safety standards and highway safety
initiatives. To fill this need, NHTSA developed data collection
systems derived from existing data sources and has taken steps to
ensure the completeness, accuracy, and consistency of these data.
NHTSA has developed two data systems that, taken together, serve as a
single source of motor vehicle crash statistics. The Fatal Accident
Reporting System has enabled NHTSA to document that the rate for one
of its desired outcomes--reduction in the fatality rate--decreased
from 2.3 to an estimated 1.7 per 100 million vehicle miles of travel
from 1988 to 1995.\17 Also, NHTSA has used data from the General
Estimates System to document another one of its desired outcomes--a
reduction in injury rates--from 169 to an estimated 138 injuries per
100 million vehicle miles of travel from 1988 to 1995.
The Fatal Accident Reporting System contains accident data provided
by the 50 states, Puerto Rico, and the District of Columbia.
According to NHTSA documents, throughout the states, Puerto Rico, and
the District of Columbia, trained state employees gather and transmit
these data to NHTSA's central computer database in a standard format.
State employees obtain data solely from each state's existing
documents--including police accident reports, vehicle registration
files, and vital statistics records--and then enter them into a
central computer database. NHTSA analysts periodically review a
sample of the cases.
The General Estimates System contains data from a nationally
representative sample of police-reported accidents. To compile the
database, NHTSA data collectors randomly sample about 48,000 reports
each year from approximately 400 police jurisdictions in 60 sites
across the country, according to NHTSA documents. NHTSA staff then
interpret and code the data directly from the reports into a central
electronic data file. The data are checked for consistency during
both coding and subsequent processing.
NHTSA has recognized that its data have limitations. For example,
the General Estimates System is based on police reports, but various
sources suggest that about half of the motor vehicle crashes in the
country are not reported to police, and the majority of these
unreported crashes involve only minor property damage and no
significant injury. A NHTSA study of the costs of motor vehicle
injuries estimated the total count of nonfatal injuries at over 5
million compared to the General Estimates System estimate for that
year of 3.2 million. NHTSA intends to study the unreported injury
problem.
--------------------
\17 Vehicle miles of travel is published by the Federal Highway
Administration, as reported by state highway agencies, and is based
on formal guidance provided by the Administration.
STEP 3: USE PERFORMANCE
INFORMATION
============================================================ Chapter 4
Figure 4: Use Performance
Information
(See figure in printed
edition.)
The third key step in building successful results-oriented
organizations--
after establishing an organizational mission and goals and building a
performance measurement system--is to put performance data to work.
Managers should use performance information to continuously improve
organizational processes, identify performance gaps, and set
improvement goals.\18
When the CFO Act and GPRA are fully implemented, decisionmakers are
to routinely receive the performance and cost information they need
to assess their programs and make informed decisions. Congressional
decisionmaking should also benefit. GPRA was intended, in part, to
improve congressional decisionmaking by giving Congress comprehensive
and reliable information on the extent to which federal programs are
fulfilling their statutory intent. The act requires that each agency
report annually to the President and to Congress on its
performance--specifically, on the extent to which it is meeting its
annual performance goals and the actions needed to achieve or modify
those goals that have not been met. Annual performance reports are
intended to provide important information to agency managers,
policymakers, and the public on what each agency accomplished with
the resources it was given. The first of these reports, covering
fiscal year 1999, is due by March 31, 2000.
In crafting GPRA, Congress recognized that different information
users would have differing information needs. Federal agencies must
determine what information is both relevant and essential to
different internal and external information users and include only
the information the users require.\19 Most important, agency managers
need performance information to ensure that programs meet intended
goals, assess the efficiency of processes, and promote continuous
improvement. Congress needs information on whether and in what
respects a program is working well or poorly to support its oversight
of agencies and their budgets.\20 Agencies' stakeholders need
performance information to accurately judge program effectiveness.
In short, we have found that leading organizations that progressed
the farthest to results-oriented management did not stop after
strategic planning and performance measurement. They applied their
acquired knowledge and data to identify gaps in their performance,
report on that performance, and finally use that information to
improve their performance to better support their missions.
--------------------
\18 GAO/T-GGD/AIMD-95-187, June 20, 1995.
\19 Chief Financial Officers Council, Streamlining Governmentwide
Statutory Reports (Jan. 17, 1995).
\20 Managing for Results: Status of the Government Performance and
Results Act (GAO/T-GGD-95-193, June 27, 1995); and Program
Evaluation: Improving the Information Flow to the Congress
(GAO/PEMD-95-1, Jan. 30, 1995).
PRACTICE 6: IDENTIFY
PERFORMANCE GAPS
---------------------------------------------------------- Chapter 4:1
Performance data can have real value only if they are used to
identify the gap between an organization's actual performance level
and the performance level it has identified as its goal. Once the
performance gaps are identified for different program areas, managers
can determine where to target their resources to improve overall
mission accomplishment. When managers are forced to reduce their
resources, the same analysis can help them target reductions to keep
to a minimum the threat to their organization's overall mission.
The leading organizations we studied recognized that improvement
goals should flow from a fact-based performance analysis and be
rooted in organizational missions.\21
Such organizations typically assess which of their processes are in
greatest need of improvement in terms of cost, quality, and
timeliness. By analyzing the gap between where they are and where
they need to be to achieve desired outcomes, management can target
those processes that are in most need of improvement, set realistic
improvement goals, and select an appropriate process improvement
technique.\22 One technique these organizations used is
benchmarking--comparing their processes with those of private and
public organizations that are thought to be the best in their fields.
By benchmarking its own processes against those of the best in the
business, an organization can learn how much change it needs to make
and what changes might be the right ones.
--------------------
\21 Government Reform: Using Reengineering and Technology to Improve
Government Performance (GAO/T-OCG-95-2, Feb. 2, 1995).
\22 GAO/T-GGD/AIMD-95-187, June 20, 1995.
CASE ILLUSTRATION: VETERANS
HEALTH ADMINISTRATION
---------------------------------------------------------- Chapter 4:2
The Veterans Health Administration (VHA) in the Department of
Veterans Affairs runs one of the nation's largest medical care
delivery systems, consisting of a network of medical centers, nursing
homes, domiciliaries, and outpatient clinics that provide health care
services to nearly 2.8 million patients each year. VHA recognizes
that its ability to survive growing market pressures, answer
criticisms of health care quality, and sustain and improve services
to an aging veteran population depends on its ability to analyze data
to pinpoint areas needing change and improvement. VHA has initiated
numerous studies to identify performance gaps. With better data in
hand, VHA is taking actions to improve its products and services.
VHA has provided medical care to veterans for over 60 years.
Traditionally, however, the agency has lacked the sort of data needed
to assess the quality, cost, and effectiveness of its care. VHA's
current data analysis efforts are structured to provide caregivers
with improved data on medical outcomes. It has begun to use this
performance information to improve service to veterans.
An example is VHA's effort to benchmark the success of cardiac
surgeries in VHA facilities. VHA's database, which contains over
51,000 records on cardiac surgical outcomes, is risk-adjusted for
severity of illness on the basis of 54 variables, including age and
previous medical history, collected prior to surgery. VHA was able
to identify the differences in surgical outcomes among the 43 VHA
medical centers performing cardiac surgery. On the basis of these
analyses, VHA recommended a number of techniques and processes for
shortening the postoperative hospital stay, decreasing excessive
diagnostic testing, and reducing the risk of postoperative infections
or complications. According to VHA, because it adopted these and
other techniques, the performance data show that cardiac teams
lowered their mortality rates for all cardiac procedures over the
last 8 years by an average of 13 percent.
Another VHA data analysis effort is the External Peer Review Program.
The program compares VHA medical centers' performances against
established community standards. As part of the effort, panels
composed of physicians not affiliated with VHA review medical records
to determine if community standards have been met. One performance
gap VHA identified through this benchmarking was the low vaccination
rate of elderly and chronically ill VHA patients who are at high risk
for contracting one type of potentially fatal pneumonia. VHA has
worked with the National Institute on Aging in the Department of
Health and Human Services and the American Lung Association to raise
its pneumonia immunization rate for these patients from 19 percent to
29 percent over the past 2 years.
VHA also is analyzing performance data to switch some of its focus
from inpatient to ambulatory care. For example, according to VHA,
after careful data analysis, its medical center in Little Rock,
Arkansas, determined that only a small percentage of the patients
admitted to its 28-day inpatient detoxification program needed acute
medical attention. As a result, the program was converted in fiscal
year 1995 to an outpatient program with only a small inpatient
capacity. The center reportedly now serves more patients with eight
fewer full-time staff members and anticipates that savings from the
first year of the new outpatient program will be $600,000--with no
lessening in the quality of patient care.
PRACTICE 7: REPORT PERFORMANCE
INFORMATION
---------------------------------------------------------- Chapter 4:3
No picture of what the government is accomplishing with the
taxpayers' money can be complete without adequate program cost and
performance information. But this information must be presented in a
way that is useful to the many audiences who rely on it to help them
assess and manage federal programs.\23 Viewing program performance in
light of program costs--for instance, by establishing the unit cost
per output or outcome achieved--can be important on at least two
levels. First, it can help Congress make informed decisions.
Second, it can give the taxpayers a better understanding of what the
government is providing in return for their tax dollars.
Consistent with GPRA's requirement that annual performance plans be
tied to budget requests, the annual performance reports, which are to
report progress toward achieving the goals established in the plans,
are to link levels of performance to the budget expenditures.
Directly calculating unit cost information will likely become more
widespread when the Government Management Reform Act of 1994 (GMRA)
is implemented. GMRA authorized OMB, upon proper notification to
Congress, to consolidate and simplify management reports. The CFO
Council has proposed that agencies prepare two annual reports: a
Planning and Budgeting Report and an Accountability Report. The two
consolidated reports would be used to present each agency's past
financial and program performance and provide a roadmap for its
future planning and budgeting actions. At present, OMB is having six
agencies produce Accountability Reports on a pilot basis. The
Accountability Report would eliminate the separate requirements under
various laws--such as GPRA, the Federal Managers' Financial Integrity
Act, the CFO Act, and the Prompt Payment Act.
--------------------
\23 Financial Management: Continued Momentum Essential to Achieve
CFO Act Goals (GAO/T-AIMD-96-10, Dec. 14, 1995).
CASE ILLUSTRATION: GPRA PILOT
PROJECTS' FISCAL YEAR 1994
PERFORMANCE REPORTS
---------------------------------------------------------- Chapter 4:4
GPRA requires that each federal agency report annually on its
performance-- specifically, on the degree to which the agency is
meeting its annual performance goals and on the actions needed to
achieve those goals that have not been met. Under GPRA, OMB was
required to select agencies to pilot GPRA performance planning and
reporting requirements. Forty-four pilot projects submitted reports
for the first round of performance reporting in 1995. We identified
some individual features that when viewed as a whole, appear to have
the potential for enhancing the general usefulness of future
performance reports in providing decisionmakers and the public with
the information needed to assess progress.\24 These features would
also be appropriate for GMRA accountability reports.
Our initial observations suggest that GPRA performance reports are
likely to be more useful if they
-- describe the relationship between the agency's annual
performance and its strategic goals and mission,
-- include cost information,
-- provide baseline and trend data,
-- explain the uses of performance information,
-- incorporate other relevant information, and
-- present performance information in a user-friendly manner.
By describing how the annual performance information it has reported
relates to its strategic goals and mission, an agency can help its
customers and stakeholders understand the relationship between the
year's accomplishments and the agency's long-range goals and reason
for existence. By including cost information--ideally, unit cost per
output or outcome--the agency can demonstrate the cost-effectiveness
and productivity of its program efforts. In addition, by providing
baseline and trend data--which show the agency's progress over
time--the agency can give decisionmakers a more historical
perspective within which to compare the year's performance with
performance in past years. Similarly, by explaining the uses of the
performance information--such as the actions the agency has taken or
identified as needed, based on the data--the agency can help
decisionmakers judge the reasonableness of its performance goals and
decide upon actions they may need to take to improve the agency's
performance. The report should include any other information that is
relevant--such as the limitations in the quality of the reported
data--that users of the report may need to help them better
understand the performance data and its context. It is important, as
well, that the text be understandable to the nontechnical
reader--that it use clearly defined terms and appropriate,
user-friendly tables and graphs to convey information as readily as
possible.
--------------------
\24 GPRA Performance Reports (GAO/GGD-96-66R, Feb. 14, 1996).
PRACTICE 8: USE PERFORMANCE
INFORMATION TO SUPPORT MISSION
---------------------------------------------------------- Chapter 4:5
As efforts continue to reduce federal spending, policymakers and the
public alike are reexamining the federal government's spending
priorities. Federal agencies are feeling the pressure to demonstrate
that they are putting the taxpayers' money to sound use. They are
expected to demonstrate improved performance even as they cut
costs--two simultaneous demands that are driving the trend toward
results-oriented government.
As they focus on the outcomes they hope to achieve, federal managers
increasingly are finding that the traditional ways they measured
their success--and thus the traditional ways they did business and
provided services--are no longer appropriate or practical. For
example, the new focus on outcomes is prompting some federal agencies
to alter the approach of their programs, including working more
closely with states and local governments and businesses. As
agencies create information systems to provide them with cost and
performance data, they discover that having the facts gives them a
basis for focusing their efforts and improving their performance.
CASE ILLUSTRATION: COAST GUARD
---------------------------------------------------------- Chapter 4:6
The mission of the Coast Guard's Office of Marine Safety, Security
and Environmental Protection is to protect the public, the
environment, and U.S. economic interests through the prevention and
mitigation of marine incidents. In the past, the Coast Guard's
marine safety program concentrated on the physical condition of
vessels, through activities such as inspections and certifications.
The program focused less attention on the human factors that
contribute to marine safety. But as the office became more
outcome-oriented and made more extensive use of performance
information, it began to redirect its safety efforts. Coast Guard
data indicate that its mission-effectiveness is now dramatically
improved.
Traditionally, the Coast Guard based its marine safety efforts on
inspections and certifications of vessels. It measured its
performance by counting outputs, such as the number of prior
inspections and outstanding inspection results. But the data on
marine casualties indicated that accidents were often caused, not by
deficiencies in the vessels or other factors, but by human error.
For example, towing industry data for 1982 through 1991 showed that
18 percent of reported casualties were caused by equipment and
material failures, 20 percent by environmental and other factors, and
62 percent by human factors.
Putting this information to use, the Coast Guard changed the focus of
its marine safety program from outputs to outcomes in its first
business plan, dated January 1994. After all, it came to recognize,
the mission of the marine safety program was not to do more and
better inspections of vessels, but to save lives. As a result, the
Coast Guard shifted its resources and realigned its processes away
from inspections and toward other efforts to reduce marine
casualties. In addition, it identified a significant role for the
towing industry in the marine safety program and looked for
opportunities to work with its stakeholders in the towing industry to
reduce casualties in their field.
The Coast Guard and the towing industry worked to build the knowledge
and skills of entry-level crew members in the industry. The Coast
Guard and the towing industry jointly developed training and
voluntary guidelines to reduce the causes of fatalities. This joint
effort contributed to a significant decline in the reported towing
industry fatality rate: from 91 per 100,000 industry employees in
1990 to 27 per 100,000 in 1995.
The marine safety program apparently not only improved its mission
effectiveness, but did so with fewer people and at lower cost. Since
the Coast Guard's marine safety program became a GPRA pilot program
in fiscal year 1994, the number of direct program personnel declined
and its budget was reduced by 2 percent. According to the Coast
Guard, the program achieved its results by giving field commanders
greater authority and by investing in activities and processes that
went most directly to the goal of reducing risks on the water.
LEADERSHIP PRACTICES REINFORCE
GPRA IMPLEMENTATION
============================================================ Chapter 5
Figure 5: Leadership Practices
Reinforce GPRA Implementation
(See figure in printed
edition.)
GPRA will not succeed without the strong commitment of the federal
government's political and senior career leadership. Only they can
ensure that each agency's strategic planning and performance
measurement efforts will become the basis for its day-to-day
operations. Moreover, only they can ensure that results-oriented
management will endure despite the customarily high rate of turnover
among political appointees.\25 Some of the practices they can take to
reinforce results-oriented management are to
-- devolve decisionmaking authority within a framework of
mission-oriented processes in exchange for accountability for
results,
-- create incentives to encourage a focus on outcomes,
-- build expertise in the necessary skills, and
-- integrate management reforms.
If GPRA is to thrive over the long run, its concepts need to be made
a part of organizational culture. For that to happen, the top
leadership in each agency has to initiate results-oriented
management, keep the agency focused on it, and embed its principles
in the organization's basic approach to doing business.\26
--------------------
\25 Political Appointees: Turnover Rates in Executive Schedule
Positions Requiring Senate Confirmation (GAO/GGD-94-115FS, Apr. 21,
1994).
\26 Organizational Culture: Techniques Companies Use to Perpetuate
or Change Beliefs and Values (GAO/NSIAD-92-105, Feb. 27, 1992).
PRACTICE 9: DEVOLVE
DECISIONMAKING WITH
ACCOUNTABILITY
---------------------------------------------------------- Chapter 5:1
Leading organizations we studied create a set of mission-related
processes and systems within which to operate, but they then give
their managers extensive authority to pursue organizational goals
while using those processes and systems. These organizations invest
the time and effort to understand their processes and how those
processes contribute to or hamper mission accomplishment. They then
seek to ensure their processes provide managers at each
organizational level with the authority and flexibility they need to
contribute to the organization's mission. Allowing managers to bring
their judgment to bear in meeting their responsibilities, rather than
having them merely comply with overly rigid rules and standards, can
help them make the most of their talents and lead to more effective
and efficient operations.
In our work with foreign countries that have adopted results-oriented
management, we found that two reforms in particular were aimed at
enhancing accountability among line managers: simplifying the rules
for such things as budgeting and human resource management while
devolving decisionmaking authority.\27 These two reforms were
undertaken in exchange for managers assuming greater accountability
for the results of their programs. Managers generally welcomed their
new authority to make spending, personnel, and operational decisions
that had formerly been made by central authorities. But although
these countries were generally satisfied with the progress they had
made, they continued to struggle with a number of important issues,
such as the acceptable level of risk and the extent to which
decisionmaking authority should be devolved to a given organizational
level.
--------------------
\27 GAO/GGD-95-120, May 2, 1995.
CASE ILLUSTRATION: ARMY CORPS
OF ENGINEERS
---------------------------------------------------------- Chapter 5:2
The U.S. Army Corps of Engineers' Civil Works Directorate's
Operation and Maintenance Program is responsible for the stewardship
of dams, levees, and other parts of the water resources
infrastructure constructed by the Corps. Operation and maintenance
expenditures had become by fiscal year 1990 the single largest
individual program item in the Corps' budget. In 1991, faced with
rising budget pressures, a growing project inventory, and the need to
become more results-oriented, the Corps initiated a comprehensive
review of its civil operation and maintenance program.
One major finding of the Corps' 1993 plan of improvement was the
burdensome number of internal levels of review. At the majority of
project sites, for example, procurement of items costing less than
$25,000 required between one and five signatures; each approval
beyond the first one added to the time required for the procurement
and created inefficiency, revenue loss, and a potential danger to the
staff and public when safety corrections were delayed.
To remedy this situation, the Corps changed its processes by
decentralizing its organizational structure and giving project
managers new decisionmaking authority to help them achieve the
desired outcomes. The intent of these changes was to put key
operational decisions in the hands of the managers who were closest
to the point of customer service. These managers could now focus on,
and be held accountable for, achieving goals instead of merely
complying with rules. Now procurements of up to $25,000 can be
approved by a single individual.
As part of this new approach, the Corps reformed its processes,
revising its policies and procedures to ensure that only those that
were necessary remained. It achieved this reduction, by and large,
by indicating "what" was to be accomplished and leaving the "how" to
the initiative of project staff. Eighty-nine engineering regulations
were thereby consolidated into 7, and the number of pages of Corps'
regulations was reduced from 1,596 to 306.
This streamlining of its organization and processes allowed the Corps
to reduce the number of its management levels. By the Corps'
estimate, the savings created amounted to about $6 million annually
and a reduction of 175 full-time equivalent staff years.
PRACTICE 10: CREATE INCENTIVES
---------------------------------------------------------- Chapter 5:3
Across government, the best incentive Congress and the executive
branch can apply to foster results-oriented management is to use
performance measurement data in their policy, program, and resource
allocation decisions and to provide agencies with the authority and
flexibility to achieve results. Like Congress and the executive
branch, an agency's top political and career leadership can encourage
a greater accountability for results by providing managers at each
level in the organization with the appropriate authority and
flexibility to obtain those results.
Successful organizations we studied defined their missions clearly
and communicated them to their employees--particularly to their
managers--so that each one would understand his or her contribution.
At both the organizational and managerial levels, accountability
requires results-oriented goals and appropriate performance measures
through which to gauge progress. Our study of several leading
foreign governments, however, showed that although there was general
agreement on how to hold organizations accountable for results, there
was as yet no such agreement on how best to hold individual managers
accountable.\28 New Zealand and the United Kingdom held their program
managers accountable for efficiently providing specific goods and
services. Australia and Canada, on the other hand, hold their
program managers accountable for evaluating the overall effectiveness
of their programs.
Congress and the executive branch continue to explore formal ways to
hold individual managers accountable for results. At the agency
level, however, informal incentives are available to leaders to
encourage results-oriented management. Through meetings and personal
contacts, for example, leaders can let managers and staff know of
their commitment to achieving the agency's goals and to keeping these
goals in mind as they pursue their day-to-day activities.
--------------------
\28 GAO/GGD-95-120, May 2, 1995.
CASE ILLUSTRATION: DEPARTMENT
OF VETERANS AFFAIRS
---------------------------------------------------------- Chapter 5:4
The Department of Veterans Affairs (VA) comprises three agencies that
provide services and benefits to veterans. The elevation of VA to
cabinet-level status in 1989 spurred the department to make internal
management improvements. To recognize and reinforce results-oriented
management, VA instituted in 1992 a formal recognition program for
quality achievement.
The Robert W. Carey Quality Award is VA's most prestigious award for
quality achievement. It is named for Robert W. Carey, who, as the
Director of VA's Philadelphia Regional Office, was a "Quality Leader"
and champion of excellence in the federal government. The Carey
Award helps promote quality management within VA by giving the
department a prominent means of recognizing high-performing offices,
encouraging outcome-oriented practices, and educating VA employees
about the benefits of results-oriented management and customer
service. According to a VA official, the Carey Award is valuable, in
part, because VA offices that want it must apply for it and the
application itself becomes a useful self-assessment tool.
VA announced its first Carey Award in 1992. There is one overall
trophy winner annually along with several category winners. There
have been 20 winners to date.
PRACTICE 11: BUILD EXPERTISE
---------------------------------------------------------- Chapter 5:5
To make the most of results-oriented management, staff at all levels
of the organization must be skilled in strategic planning,
performance measurement, and the use of performance information in
decisionmaking. Training has proven to be an important tool for
agencies that want to change their cultures.\29 Australian government
employees, for example, cited training as one of the factors that
contributed the most to making reforms succeed in their areas.\30
Results-oriented managers view training as an investment rather than
an expense. And as human resource management experts at leading
private and public organizations have pointed out, organizational
learning must be continuous in order to meet changing customer needs,
keep skills up to date, and develop new personal and organizational
competencies.\31 But at a time when overall agency budgets are under
pressure, training budgets are unlikely to increase. Therefore, it
is important that agencies develop innovative and less costly ways to
train their staffs--remembering as well that the level of return for
investing in the skills needed for results-oriented management will
depend largely on how well employees are encouraged to put those
skills to use.
Recognizing the value of training, especially for the people at the
top of the organization, the CFO Council's GPRA Implementation
Committee has begun an outreach effort directed toward senior
managers in the 24 CFO Act agencies. The council's goals are to
familiarize these leaders with GPRA's fundamentals and with the
importance of these fundamentals for the future of federal
management.
In addition, in response to an initiative of the American Society for
Public Administration and with the encouragement of OMB, over 30 case
studies are being developed on the agencies' use of strategic
planning or performance measurement. These case studies, to be
completed in the summer of 1996, are to be made publicly available.
--------------------
\29 Organizational Culture: Use of Training to Help Change DOD
Inventory Management Culture (GAO/NSIAD-94-193, Aug. 30, 1994).
\30 GAO/GGD-95-120, May 2, 1995.
\31 GAO/GGD-96-35, Dec. 26, 1995.
CASE ILLUSTRATION: DEPARTMENT
OF DEFENSE
---------------------------------------------------------- Chapter 5:6
The Department of Defense (DOD) is responsible for the military
forces needed to deter war and protect the security of our country.
DOD's major service branches--the Army, Navy, Marine Corps, and Air
Force--consist of about 1.5 million men and women on active duty, 1
million members of the reserve components, and about 900,000 civilian
employees. As with other federal agencies, performance information
is becoming an increasingly important part of DOD's budget process.
DOD's leadership has come to recognize that if the Department is to
make results-oriented management a success, it must train its
employees in strategic planning, performance measurement, and the use
of performance information.
DOD officials recognized when they were considering various methods
to deliver GPRA training that the costs--in both money and time--of
providing training through traditional, live classroom instruction
would be prohibitive. As an alternative, DOD is now testing the
feasibility of training staff at its GPRA pilot agencies via
satellite. This interactive approach can reach widely dispersed
audiences less expensively than traditional methods. The GPRA course
originates out of a studio and has been broadcast simultaneously to
up to 20 sites around the country. Since the first class in
September 1995, the GPRA training has been delivered 3 times via
satellite to 38 sites and has reached 760 people.
In developing its GPRA training, DOD decided to go beyond the
traditional lecture approach to instruction. GPRA training has
included exercises and panel discussions designed to make trainees
think the way they will need to when the training is over and the
real work of implementing GPRA begins. Participants have been asked,
for instance, to develop mission statements for their home
organizations and to develop strategic goals and performance
measures. According to a DOD official, the classes have been well
received.
DOD is also developing a self-paced GPRA course accessible on the
Internet and is considering the use of CD-ROM technology.
PRACTICE 12: INTEGRATE
MANAGEMENT REFORMS
---------------------------------------------------------- Chapter 5:7
Within a given federal agency, the management reforms now under way
may spring from various sources. Some of these reforms may be
self-initiated, others may have been mandated by legislation, still
others may be the result of administration initiatives such as the
National Performance Review. All of this reform activity needs to be
integrated, as the CFO Council urged in May 1995:
Existing planning, budgeting, program evaluation and fiscal
accountability processes should be integrated with GPRA
requirements to ensure consistency and reduce duplication of
effort. In addition, other management improvement efforts, such
as implementation of the CFO Act, and FMFIA [Federal Managers'
Financial Integrity Act], customer service initiatives,
reengineering, and Total Quality Management, etc., should be
incorporated into the GPRA framework to capitalize on the
synergy and availability of key information and to improve
responsiveness to customers and other stakeholders.\32
Another management reform initiative that provides a legislative
basis for measuring performance is the Information Technology
Management Reform Act of 1996, which requires each federal agency to
ensure that performance measures are prescribed for information
technology that it will use or acquire and that the performance
measures assess how well the information technology supports agency
programs. In addition, the Federal Acquisition Streamlining Act of
1994 requires the head of each executive agency to approve or define
the cost, performance, and schedule goals for major agency
acquisition programs.
Taken together, these reforms can help redirect an organization's
culture from the traditional focus on inputs and activities to a new
focus on defining missions and achieving results.\33 Our work has
shown, however, that the top leadership of each federal agency needs
to meld these various reforms into a coherent, unified effort.\34
Top leadership--both political and career--needs to make clear its
commitment to the fundamental principles of results-oriented
management and ensure that managers and staff at all levels recognize
that they must do the same. Traditionally, the danger to any
management reform is that it can become a hollow, paper-driven
exercise. Leaders who integrate results-oriented management into the
culture and day-to-day activities of their organizations will help
avoid that danger.
--------------------
\32 Implementation of the Government Performance and Results Act
(GPRA), Chief Financial Officers Council, May 1995.
\33 Improving Government: Actions Needed to Sustain and Enhance
Management Reforms (GAO/T-OCG-94-1, Jan. 27, 1994).
\34 See, for example, Managing IRS: Important Strides Forward Since
1988 but More Needs to Be Done (GAO/GGD-91-74, Apr. 29, 1991);
General Services Administration: Status of Management Improvement
Efforts (GAO/GGD-91-59, Apr. 3, 1991); and Management of VA:
Implementing Strategic Management Process Would Improve Service to
Veterans (GAO/HRD-90-109, Aug. 31, 1990).
CASE ILLUSTRATION: ARMY
RESEARCH LABORATORY
---------------------------------------------------------- Chapter 5:8
The Army Research Laboratory (ARL) was established in October 1992 as
a result of a realignment of a number of Army research and
development organizations. It is now the central laboratory of the
Army Materiel Command. At a time when both staffing levels and
funding had been in decline since fiscal year 1989, ARL was given a
major technological challenge--digitizing the battlefield for the
U.S. Army. ARL concluded that to ensure that it had the capability
to meet the new challenge and continue to conduct its mission of
basic and applied research, it had to work in partnership with
universities and the private sector, as well as operate more
effectively and efficiently. This "Federated Laboratory" concept
guided ARL as it integrated the various management reforms.
As a GPRA pilot program, ARL developed a strategic plan that included
a mission statement and long-range goals. In addition, it has
produced two yearly products: a performance plan with key measures
and a report detailing its progress in meeting its goals. The annual
reports have been integrated into ARL's planning and budgeting
processes and are discussed by agency leadership at the Director's
quarterly meetings. In addition, the reports have been tied into
DOD's Planning, Programming, Budget, and Execution System. ARL's
performance measures gauge the relevance of ARL's current work to the
agency's long-term goals and give ARL's leaders indicators of
productivity and quality. As part of its performance measurement
efforts, ARL established customer service standards and sent surveys
to its customers to obtain feedback on the quality of its work.
As a National Performance Review "reinvention laboratory," ARL has
been granted waivers by DOD and the Army from internal regulations in
order to streamline its processes. For example, one such waiver
allowed ARL to eliminate redundant reviews of certain procurements,
thereby saving 5 workdays on each procurement. Saving time on
administrative processes frees staff to perform the principal mission
of the laboratory.
-------------------------------------------------------- Chapter 5:8.1
Facing pressures similar to those confronting federal managers to
reduce costs and improve performance, leading state and foreign
governments have responded by implementing management reform efforts
consistent with GPRA. The experiences of these governments--and
those of the federal GPRA pilots--demonstrate that each federal
agency will need to chart its own course in response to its specific
environment as it seeks to implement GPRA and become more
results-oriented. Nonetheless, the experiences of the leading
organizations suggest that the steps and practices discussed in this
guide can assist agencies in successfully implementing GPRA. Federal
agencies that apply the practices may find that their transition to a
results orientation is quicker, smoother, and, most important, more
successful in providing the effective and efficient government the
American people deserve.
OVERVIEW OF THE GOVERNMENT
PERFORMANCE AND RESULTS ACT
=========================================================== Appendix I
The Government Performance and Results Act (GPRA) is the primary
legislative framework through which agencies will be required to set
strategic goals, measure performance, and report on the degree to
which goals were met. It requires each federal agency to develop, no
later than by the end of fiscal year 1997, strategic plans that cover
a period of at least 5 years and include the agency's mission
statement; identify the agency's long-term strategic goals; and
describe how the agency intends to achieve those goals through its
activities and through its human, capital, information, and other
resources. Under GPRA, agency strategic plans are the starting point
for agencies to set annual goals for programs and to measure the
performance of the programs in achieving those goals.
Also, GPRA requires each agency to submit to the Office of Management
and Budget (OMB), beginning for fiscal year 1999, an annual
performance plan. The first annual performance plans are to be
submitted in the fall of 1997. The annual performance plan is to
provide the direct linkage between the strategic goals outlined in
the agency's strategic plan and what managers and employees do
day-to-day. In essence, this plan is to contain the annual
performance goals the agency will use to gauge its progress toward
accomplishing its strategic goals and identify the performance
measures the agency will use to assess its progress. Also, OMB will
use individual agencies' performance plans to develop an overall
federal government performance plan that OMB is to submit annually to
Congress with the president's budget, beginning for fiscal year 1999.
GPRA requires that each agency submit to the President and to the
appropriate authorization and appropriations committees of Congress
an annual report on program performance for the previous fiscal year
(copies are to be provided to other congressional committees and to
the public upon request). The first of these reports, on program
performance for fiscal year 1999, is due by March 31, 2000, and
subsequent reports are due by March 31 for the years that follow.
However, for fiscal years 2000 and 2001, agencies' reports are to
include performance data beginning with fiscal year 1999. For each
subsequent year, agencies are to include performance data for the
year covered by the report and 3 prior years.
In each report, an agency is to review and discuss its performance
compared with the performance goals it established in its annual
performance plan. When a goal is not met, the agency's report is to
explain the reasons the goal was not met; plans and schedules for
meeting the goal; and, if the goal was impractical or not feasible,
the reasons for that and the actions recommended. Actions needed to
accomplish a goal could include legislative, regulatory, or other
actions or, when the agency found a goal to be impractical or
infeasible, a discussion of whether the goal ought to be modified.
In addition to evaluating the progress made toward achieving annual
goals established in the performance plan for the fiscal year covered
by the report, an agency's program performance report is to evaluate
the agency's performance plan for the fiscal year in which the
performance report was submitted (for example, in their fiscal year
1999 performance reports, due by March 31, 2000, agencies are
required to evaluate their performance plans for fiscal year 2000 on
the basis of their reported performance in fiscal year 1999). This
evaluation will help to show how an agency's actual performance is
influencing its plans. Finally, the report is to include the summary
findings of program evaluations completed during the fiscal year
covered by the report.
Congress recognized that in some cases not all of the performance
data will be available in time for the March 31 reporting date. In
such cases, agencies are to provide whatever data are available, with
a notation as to their incomplete status. Subsequent annual reports
are to include the complete data as part of the trend information.
In crafting GPRA, Congress also recognized that managerial
accountability for results is linked to managers having sufficient
flexibility, discretion, and authority to accomplish desired results.
GPRA authorizes agencies to apply for managerial flexibility waivers
in their annual performance plans beginning with fiscal year 1999.
The authority of agencies to request waivers of administrative
procedural requirements and controls is intended to provide federal
managers with more flexibility to structure agency systems to better
support program goals. The nonstatutory requirements that OMB can
waive under GPRA generally involve the allocation and use of
resources, such as restrictions on shifting funds among items within
a budget account. Agencies must report in their annual performance
reports on the use and effectiveness of any GPRA managerial
flexibility waivers that they receive.
GPRA calls for phased implementation so that selected pilot projects
in the agencies can develop experience from implementing GPRA
requirements in fiscal years 1994 through 1996 before implementation
is required for all agencies. As of June 1996, 68 pilot projects for
performance planning and performance reporting were under way in 24
agencies. OMB also is required to select at least five agencies from
among the initial pilot agencies to pilot managerial accountability
and flexibility for fiscal years 1995 and 1996; however, as of June
1996 it had not done so.
Finally, GPRA requires OMB to select at least five agencies, at least
three of which have had experience developing performance plans
during the initial GPRA pilot phase, to test performance budgeting
for fiscal years 1998 and 1999. Performance budgets to be prepared
by pilot projects for performance budgeting are intended to provide
Congress with information on the direct relationship between proposed
program spending and expected program results and the anticipated
effects of varying spending levels on results.
OBJECTIVES, SCOPE, AND METHODOLOGY
========================================================== Appendix II
Our objectives were to (1) identify and describe the practices most
helpful to successfully implementing GPRA and related
results-oriented management initiatives and (2) provide case
illustrations of federal organizations that have made progress in
implementing each practice. This report builds on (1) our 1994
report profiling leading private and public sector organizations that
have successfully improved mission performance and program outcomes
through the innovative use of information management and technology
and (2) our 1995 report on the human resource management principles
employed by selected public and private organizations to build and
sustain high levels of organizational performance.\35 Together, these
reports are intended to suggest frameworks for Congress and federal
agencies to use in implementing GPRA and related results-oriented
management initiatives.
To meet our first objective, we reviewed the experiences of leading
public sector organizations that were successfully changing their
management and accountability practices to be more results-oriented.
As part of that effort, we issued separate reports on the experiences
of six leading U.S. state and four foreign governments.\36 We also
reviewed the management studies of 23 large federal departments and
agencies that we did during the last decade as well as a broad array
of our other management and program work. To supplement our work
looking at leading organizations, we identified and reviewed a large
body of literature on management reform, strategic planning, and
performance measurement. From our work, we identified a number of
practices common to successful efforts to become more
results-oriented. We obtained input from a wide range of federal
executives and managers and experts in public sector strategic
planning, performance measurement, and program and policy evaluation,
including those from the Departments of Defense, Commerce,
Transportation, and the Treasury; OMB; the Office of Personnel
Management; the National Academy of Public Administration; the Urban
Institute; and the University of Southern California. On the basis
of their comments and our continuing reviews of leading
organizations, we consolidated and refined the list of practices to
those presented in this guide.
To meet our second objective, we identified those federal agencies
that were instituting results-oriented management from our ongoing
work on the implementation of GPRA at 24 departments and large
agencies (covering about 98 percent of the federal government's
fiscal year 1994 outlays) and OMB's identification of agencies making
early progress in implementing selected aspects of GPRA. In this
way, we targeted our work toward agencies that would provide examples
illustrating each of the practices. The fact that an organization is
profiled for a particular practice is not meant to imply the
organization's success or lack of success in meeting other practices.
Moreover, underscoring the fact that implementing management changes
required by GPRA will not come quickly, most of the agencies profiled
began their results-oriented management before GPRA was enacted. We
interviewed agency officials in program offices, strategic planning
and quality management offices, and planning and evaluation offices.
We also reviewed agency documents, such as strategic plans,
performance plans, performance reports, program descriptions and
documentation, and other related documents.
We did our work on this guide from January 1995 to March 1996 in
Washington, D.C., in accordance with generally accepted government
auditing standards. The steps and practices presented in this
executive guide are largely a synthesis of previously published
information and analysis.
We provided a draft of this guide to OMB, the CFO Council's GPRA
Implementation Committee, and to the individual agencies profiled in
the case illustrations for their review and comment. OMB noted that
the guide and the practices suggested in it will help federal
agencies as they implement GPRA. OMB also expressed support for the
guide's focus on agency use of performance information to improve
management and program performance and to demonstrate that federal
agencies are using taxpayers' money effectively. OMB concurred with
our observation that the federal government is at the beginning,
rather than the end, of the process of turning itself into a more
accountable, better managed, more effective organization. Finally,
OMB noted that the development and refinement of performance measures
will be an ongoing process.
We also provided copies of a draft of this guide for comment to the
agency representatives on the CFO Council's GPRA Implementation
Committee and incorporated their individual comments as appropriate.
Generally, their comments suggested that the steps and practices we
identified from the leading organizations studied were valid and
complete, and that the case illustrations were accurate to the best
of their knowledge. We also asked officials in each of the agencies
profiled as case illustrations to verify the accuracy of the
information presented on their respective agencies; however, we did
not independently verify the accuracy of that information.
--------------------
\35 GAO/AIMD-94-115, May 1994; and GAO/GGD-96-35, Dec. 26, 1995,
respectively.
\36 GAO/GGD-95-22, Dec. 21, 1994; and GAO/GGD-95-120, May 2, 1995.
The methodologies for selecting these leading governments are
detailed in the respective reports.
MAJOR CONTRIBUTORS TO THIS
EXECUTIVE GUIDE
========================================================= Appendix III
L. Nye Stevens, Director, Federal Management and Workforce Issues,
(202) 512-8676
Michael Brostek, Associate Director, (202) 512-9039
J. Christopher Mihm, Assistant Director, (202) 512-3236
Lisa R. Shames, Project Manager, (202) 512-2649
Stephen Altman
Thomas M. Beall
Barbara H. Bordelon
Janet C. Eackloff
Carolyn J. Hill
Donna M. Leiss
Victoria M. O'Dea
Dorothy L. Self
Katherine M. Wheeler
RELATED GAO PRODUCTS
============================================================ Chapter 6
Managing for Results: Achieving GPRA's Objectives Requires Strong
Congressional Role (GAO/T-GGD-96-79, Mar. 6, 1996).
GPRA Performance Reports (GAO/GGD-96-66R, Feb. 14, 1996).
Office of Management and Budget: Changes Resulting From the OMB 2000
Reorganization (GAO/GGD/AIMD-96-50, Dec. 29, 1995).
Transforming the Civil Service: Building the Workforce of the
Future, Results of a GAO-Sponsored Symposium (GAO/GGD-96-35, Dec.
26, 1995).
Financial Management: Continued Momentum Essential to Achieve CFO
Act Goals (GAO/T-AIMD-96-10, Dec. 14, 1995).
Block Grants: Issues in Designing Accountability Provisions
(GAO/AIMD-95-226, Sept. 1, 1995).
Managing for Results: Status of the Government Performance and
Results Act (GAO/T-GGD-95-193, June 27, 1995).
Managing for Results: Critical Actions for Measuring Performance
(GAO/T-GGD/AIMD-95-187, June 20, 1995).
Managing for Results: The Department of Justice's Initial Efforts to
Implement GPRA (GAO/GGD-95-167FS, June 20, 1995).
Government Reorganization: Issues and Principles
(GAO/T-GGD/AIMD-95-166, May 17, 1995).
Managing for Results: Steps for Strengthening Federal Management
(GAO/T-GGD/AIMD-95-158, May 9, 1995).
Managing for Results: Experiences Abroad Suggest Insights for
Federal Management Reforms (GAO/GGD-95-120, May 2, 1995).
Government Reform: Goal-Setting and Performance
(GAO/AIMD/GGD-95-130R, Mar. 27, 1995).
Block Grants: Characteristics, Experience, and Lessons Learned
(GAO/HEHS-95-74, Feb. 9, 1995).
Program Evaluation: Improving the Flow of Information to the
Congress (GAO/PEMD-95-1, Jan. 30, 1995).
Managing for Results: State Experiences Provide Insights for Federal
Management Reforms (GAO/GGD-95-22, Dec. 21, 1994).
Management Reforms: Examples of Public and Private Innovations to
Improve Service Delivery (GAO/AIMD/GGD-94-90BR, Feb. 11, 1994).
Performance Budgeting: State Experiences and Implications for the
Federal Government (GAO/AFMD-93-41, Feb. 17, 1993).
*** End of document. ***
