[Budget of the United States Government]
[IV. Improving Performance Through Better Management]
[From the U.S. Government Publishing Office, www.gpo.gov]


 
          IV.  IMPROVING PERFORMANCE THROUGH BETTER MANAGEMENT

[[Page 33]]

          IV.  IMPROVING PERFORMANCE THROUGH BETTER MANAGEMENT

  ----------------------------------------------------------------------

  We had to reject the idea of those who say we should do nothing with 
Government and reject those who say we should try to do everything. 
Instead, we gave the American people a Government that is very much smaller, 
more focused, but more committed to giving people the tools and conditions 
they need to make the most of their lives.

                                      President Clinton                                                        
                                      October 1997                                                            

  ----------------------------------------------------------------------

  The President has challenged the Federal Government to do more with 
less--and with good reason.
  Departments and agencies, which once could count on more funds from 
year to year, no longer can; indeed, with the Administration committed 
to balancing the budget, some agencies will get less.
  Public demands for more and better services have not shrunk, however. 
Americans continue to want good schools, a clean environment, high-
quality health care, and secure retirement benefits. Thus, the 
Government must satisfy these demands by managing better and improving 
the performance of programs.
  The Administration has answered the call. Vice President Gore, working 
with the departments, agencies, and inter-agency working groups, and 
drawing on the expertise of the private sector, has led an unprecedented 
effort to cut the size of the Federal Government and make it more 
efficient and effective. Through these reinvention efforts, the 
Administration has saved $137 billion over the last five years.
  The Administration has cut the civilian Federal work force by over 
316,000 \1\ employees, creating the smallest work force in 35 years and, 
as a share of total civilian employment, the smallest work force since 
1931. Almost all of the 14 Cabinet Departments have cut their work 
forces; only the Justice Department's work force is growing due to the 
Administration's expanded war on crime and drugs, while the Commerce 
Department's work force is growing due to the decennial census (see 
Charts IV-1 and IV-2).
---------------------------------------------------------------------------
  \1\ As of September 30, 1997.
---------------------------------------------------------------------------
  But the work is not done, and the Administration has an ambitious 
agenda to continue reinventing Government so that it is more effective, 
more efficient, and more responsive to the American people. This section 
highlights the key parts of this ``Management Agenda'' \2\:
---------------------------------------------------------------------------
  \2\ For more information on the issues discussed in Section IV, see 
the footnotes that list websites on the Internet.
---------------------------------------------------------------------------
  The National Performance Review's (NPR) efforts to reinvent 
          entire agencies;
  The Administration's top management objectives;
  The Administration's management support initiatives; and
  The activities of inter-agency working groups.

The NPR: Reinventing Agencies to Serve Americans

  The NPR has introduced important changes across the Government that 
have improved services and cut costs--from streamlined drug approvals at 
the Food and Drug Administration to better customer service at the 
Social Security Administration; from procurement reforms that have saved 
$12.3 billion to the pending sale of the Naval Academy's 800-acre dairy 
farm in Annapolis, Md. Now, the NPR is moving from reinventing processes

[[Page 34]]



within agencies to reinventing agencies in their entirety in order to 
create customer-oriented, results-driven organizations that focus on 
performance.
  Over the next three years, the NPR will work with the agencies that 
interact most with individuals and businesses to improve performance and 
enable the American people to more quickly enjoy better service and 
regain their confidence in Government. Following the examples of 
America's best-run companies, the NPR will help these agencies align 
their management systems to better serve their customers. These agencies 
already have the key building blocks in place: strategic plans, annual 
performance plans, and budgetary resources. The next step is to better 
integrate their information technology, human resource systems, and 
service processes so that they better focus on customers.
  In addition, the Vice President has challenged the leaders of 32 
agencies, with over 1.4 million full-time equivalent (FTE) positions, to 
commit to achieving significant, concrete, measurable goals over the 
next three years. These ``High Impact Agencies'' include the Immigration 
and Naturalization Service, National Park Service, and Social Security 
Administration (see Table IV-1).
  ``You should focus your efforts in three areas--partnerships, the use 
of information technology, and customer service,'' the Vice President 
instructed the heads of these agencies last summer. ``Yours are the 
agencies that shape the public's opinion of Government and can redeem 
the promise of self-government. Public cynicism about Government is a 
cancer on democracy. Reinvention isn't just about fixing processes, it's 
about redefining priorities and focusing on the things that matter.''
  Working with the NPR, these agencies have developed over 200 specific, 
measurable commitments that they will complete by the year 2000. They 
involve improving services

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in areas that Americans care about.\3\ Major performance goals include:
---------------------------------------------------------------------------
  \3\ The NPR's home page, at www.npr.gov, links to the performance 
commitments of each agency.
---------------------------------------------------------------------------
  Improving student aid delivery: The Education Department will 
          determine, within four days, the eligibility of students and 
          families who apply for student aid electronically, cutting the 
          processing time in half.
  Speeding aid to disaster victims: Through partnerships with 
          Federal, State, local, and voluntary agencies, the Federal 
          Emergency Management Agency will act on all requests to meet 
          victims' needs for water, food, and shelter within 12 hours of 
          a disaster event, with the intent to coordinate services 
          within 72 hours of a Presidential declaration of disaster.
   Finding the right agency on the first try: The General 
          Services Administration will restructure Federal listings in 
          the blue pages of local telephone books, ensuring that 
          Americans can find the Government service they need the first 
          time they look.
   Reducing time for clearance at U.S. airports: Working with 
          the Agriculture Department and the Customs Service, the 
          Justice Department's Immigration and Naturalization Service 
          will clear international passengers at airports in 30 minutes 
          or less while improving enforcement and regulatory processing.
   Reducing injury and illnesses in the workplace: The Labor 
          Department's Occupational Safety and Health Administration 
          will cut injury and illness rates by a fifth in at least 
          50,000 of the most hazardous workplaces.
  Increasing access to Federal recreation opportunities: The 
          National Park Service will create, with other Federal natural 
          resource agencies, an integrated Nation-wide outdoor 
          recreation information system that gives all Americans 
          electronic access to information about recreation on Federal

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  ----------------------------------------------------------------------

                                                            Table IV-1.  High Impact Agencies                                                           
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                        
Agriculture:                                                                                                                                            
  Animal and Plant Health Inspection                                                                                                                    
    Service                                                                                                                                             
  Food Safety and Inspection Service                                                                                                                    
  Food and Consumer Service                                                                                                                             
  Forest Service                                                                                                                                        
                                                                                                                                                        
Commerce:                                                                                                                                               
  Bureau of the Census                                                                                                                                  
  U.S. and Foreign Commercial Service/Inter-                                                                                                            
    national Trade Administration                                                                                                                       
  Patent and Trademark Office                                                                                                                           
  National Weather Service                                                                                                                              
                                                                                                                                                        
Defense:                                                                                                                                                
  Acquisition Reform                                                                                                                                    
                                                                                                                                                        
Education:                                                                                                                                              
  Student Financial Assistance                                                                                                                          
                                                                                                                                                        
Environmental Protection Agency                                                                                                                         
                                                                                                                                                        
Federal Emergency Management Agency                                                                                                                     
                                                                                                                                                        
General Services Administration                                                                                                                         
                                                                                                                                                        
Health and Human Services:                                                                                                                              
  Food and Drug Administration                                                                                                                          
  Administration for Children and Families                                                                                                              
  Health Care Financing Administration                                                                                                                  
                                                                                                                                                        
Interior:                                                                                                                                               
  National Park Service                                                                                                                                 
  Bureau of Land Management                                                                                                                             
                                                                                       Justice:                                                         
                                                                                                                                                        
  ----------------------------------------------------------------------
lands, recreation use permits, and reservations.

  Speeding Social Security information: The Social Security 
          Administration will provide overnight electronic Social 
          Security number verification for employers. Today, 
          verification can take up to two weeks.

Priority Management Objectives

  The Administration plans to ``provide management leadership to ensure 
the faithful execution of the enacted budget, programs, regulations, and 
policies,'' and to ``work within and across agencies to identify 
solutions to mission critical problems.'' \4\ For 1999, the 
Administration will focus on 22 key management objectives (see Table IV-
2).
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  \4\ See OMB's Strategic Plan, at www.whitehouse.gov/WH/EOP/OMB/
Special----Emphasis/stratplan.html.

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                                   Table IV-2.  PRIORITY MANAGEMENT OBJECTIVES                                  
                                                                                                                
                                                                                                                
                                                                                                                
---------------------------------------------Inter-agency Objectives--------------------------------------------
                                                                                                                
----------------------------------------------------------------------------------------------------------------
Year 2000...................................................  Manage the year 2000 computer problem in a timely 
                                                               and cost-effective manner to ensure that no      
                                                               critical Federal programs fail as a result of    
                                                               this problem.                                    
                                                                                                                
GPRA........................................................  Implement the Government Performance and Results  
                                                               Act in a timely and compliant manner to improve  
                                                               agency program performance.                      
                                                                                                                
Financial Management........................................  Present performance and cost information in a     
                                                               timely, informative and accurate way, consistent 
                                                               with Federal accounting standards. Assure the    
                                                               integrity of Federal financial information by    
                                                               completing audits and gaining unqualified        
                                                               opinions for all Chief Financial Officer Act     
                                                               agencies and on the Federal Government as a      
                                                               whole.                                           
                                                                                                                
Information Technology......................................  Improve the use of information technology and     
                                                               decrease the number of troubled investments in   
                                                               technology.                                      
                                                                                                                
Selected Inter-Agency Systems...............................  Improve the use of information technology and     
                                                               eliminate unnecessary duplication by developing a
                                                               Simplified Tax and Wage Reporting System (STAWRS)
                                                               and the International Trade Data System (ITDS).  
                                                                                                                
                                                                                                                
Acquisition Reform..........................................  Provide greater customer satisfaction through     
                                                               acquisition reform in terms of price, timeliness,
                                                               quality, and productivity; increase use of       
                                                               performance-based service contracting.           
                                                                                                                
Loan Portfolio Management...................................  Improve loan portfolio management by encouraging  
                                                               the use of electronic loan origination, loan     
                                                               underwriting, and reporting on the status of     
                                                               major loan portfolios that will provide faster   
                                                               and more economical loan processing.             
                                                                                                                
Debt Collection.............................................  Improve debt collection for major receivable      
                                                               accounts by effectively using the tools provided 
                                                               by the Debt Collection Improvement Act of 1996   
                                                               (referral to private collection agencies,        
                                                               referral to Treasury for offset, and asset       
                                                               sales).                                          
                                                                                                                
International Credit Programs...............................  Improve agency loan management servicing,         
                                                               portfolio tracking and credit budgeting policies 
                                                               and procedures. More accurate financial records, 
                                                               which use consistent accounting standards, will  
                                                               result in improved repayment practices and       
                                                               increased collections. (The Agency for           
                                                               International Development, Overseas Private      
                                                               Investment Corporation, Export Import Bank,      
                                                               Defense Security Assistance Agency, Defense      
                                                               Export Loan Guarantee Program, and Agriculture   
                                                               have about $130 billion in outstanding loans and 
                                                               guarantees to foreign obligors.)                 
                                                                                                                
Statistical Programs........................................  Strengthen the quality, utility, accessibility and
                                                               cost-effectiveness of Federal statistical        
                                                               programs.                                        
                                                                                                                
Regulation..................................................  Maximize the social benefits of regulation while  
                                                               minimizing the costs and burdens of regulation.  


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                             Table IV-2.  PRIORITY MANAGEMENT OBJECTIVES--Continued                             
                                                                                                                
                                                                                                                
                                                                                                                
-------------------------------------------Agency-Specific Objectives-------------------------------------------
                                                                                                                
----------------------------------------------------------------------------------------------------------------
Defense.....................................................  Develop a plan with specific milestones to obtain 
                                                               an unqualified audit opinion on Defense's        
                                                               financial statement.                             
                                                                                                                
Defense.....................................................  Increase outsourcing and privatization of military
                                                               department infrastructure functions closely      
                                                               related to commercial enterprises, and of Defense
                                                               Logistics Agency, Defense Finance and Accounting 
                                                               Service, and Defense Health Program functions.   
                                                                                                                
Education...................................................  Modernize the management of student aid benefit   
                                                               delivery by reforming contracting, system        
                                                               development, and program oversight practices.    
                                                                                                                
Energy......................................................  Use prudent contracting and business management   
                                                               approaches that emphasize results,               
                                                               accountability, and competition; improve         
                                                               timeliness; minimize costs; and ensure customer  
                                                               satisfaction.                                    
                                                                                                                
Housing and Urban Development...............................  Implement HUD's 2020 Management Reform Plan to:   
                                                               (a) restore public trust by achieving and        
                                                               demonstrating competence in implementing HUD's   
                                                               programs, and (b) restructure the way HUD        
                                                               operates to empower people and communities.      
                                                               Implementation of HUD's management reform plan   
                                                               began in June 1997 and will extend to 2002. HUD  
                                                               will periodically measure changes in its         
                                                               performance to assess the impact of reform.      
                                                                                                                
Interior: Bureau of Indian Affairs..........................  Seek to settle disputed tribal trust fund         
                                                               balances, make comprehensive reforms to the      
                                                               operation of tribal and individual Indian trust  
                                                               asset and trust funds management, and implement a
                                                               recently introduced legislative proposal to      
                                                               consolidate ownership of highly fractionated     
                                                               Indian lands.                                    
                                                                                                                
Transportation: Federal Aviation Administration (FAA).......  FAA Reform:                                       
                                                                Implement a personnel system that, without      
                                                              increasing costs, empowers managers to effectively
                                                              hire, reward, promote, discipline, and remove     
                                                              employees, while at the same time protecting      
                                                              employee rights.                                  
                                                                                                                
                                                                                                                
                                                                                                                
Treasury: Financial Management Service (FMS)................  Implement a number of changes at FMS to increase  
                                                               electronic payments, collections, and debt       
                                                               collection; and improve the accuracy and         
                                                               timeliness of Government-wide accounting and     
                                                               reporting.                                       
                                                                                                                
Treasury: Internal Revenue Service (IRS)....................  Position the IRS to move forward with the         
                                                               Modernization Blueprint and undertake an         
                                                               incremental modernization, including year 2000   
                                                               conversion, resulting in centralized data bases  
                                                               that would stimulate significant improvements in 
                                                               customer service, compliance and financial       
                                                               reporting.                                       
                                                                                                                
Veterans Affairs............................................  Work to consolidate infrastructure (hospitals,    
                                                               regional offices, data centers) where service    
                                                               improvements and efficiencies can be achieved.   
                                                                                                                
Social Security Administration..............................  Reduce the processing time for disability claims  
                                                               and appeals in the Disability Insurance and      
                                                               Supplemental Security Income programs at lower   
                                                               administrative cost with neutral impact on       
                                                               program costs.                                   
----------------------------------------------------------------------------------------------------------------


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  Agency managers have the primary responsibility to achieve these 
performance goals; they must actively and effectively carry out both 
inter-agency and agency-specific initiatives. OMB will help agencies 
develop specific measures \5\ and implement detailed action plans to 
ensure that they make progress toward meeting these commitments.
---------------------------------------------------------------------------
  \5\ For information on performance measures for priority management 
objectives, see OMB's home page, at www.whitehouse.gov/WH/EOP/OMB/
Special----Emphasis.
---------------------------------------------------------------------------
  The Government-wide management initiatives described below will help 
achieve several of these inter-agency objectives.

  Year 2000 Computer Problem: The Administration is committed to 
ensuring that agency computer systems correctly process the year 2000. 
The report, ``Getting Federal Computers Ready for 2000,'' which the 
Administration sent to Congress with last year's budget, outlines the 
Administration's strategy.\6\ Agencies report quarterly on their 
progress, as does the Administration as a whole. The Administration's 
most recent report states that the estimated cost of addressing the 
problem stands at $3.9 billion; agencies have identified 8,589 mission-
critical systems, 26 percent of which are compliant; and all agencies 
are renovating their systems. That report also establishes a Government-
wide goal of completing the implementation of all mission-critical 
systems by March 1999. The budget proposes adequate funding to address 
the problem. For example, the Defense Department will spend $275 million 
and the Treasury Department will spend $312 million.
---------------------------------------------------------------------------
  \6\ For more information on the year 2000 issue and other information 
technology issues, see the Chief Information Officers Council web site 
(www.cio.fed.gov).
---------------------------------------------------------------------------

  Government Performance and Results Act (GPRA): All agencies have sent 
Congress their strategic plans under the Results Act, and will be 
sending their annual performance plans as well after the budget is 
transmitted. Nearly 100 departments and agencies have prepared strategic 
plans and are preparing annual performance plans. By March 2000, these 
agencies will submit clear, concise annual performance reports on their 
progress toward the goals they set in their annual plans.
  Agency Audited Financial Statements: For 1996, 22 of the 24 largest 
agencies have produced audited financial statements, as required by the 
Government Management and Reform Act (GMRA). On these statements, six 
agencies already have received unqualified opinions: the Energy 
Department, General Services Administration, National Aeronautics and 
Space Administration, Nuclear Regulatory Commission, Small Business 
Administration, and Social Security Administration. The Chief Financial 
Officers (CFOs) have projected when their agencies will issue 
unqualified and timely audited financial statements (see Table IV-3).
  As part of a GMRA-authorized pilot program, 12 agencies are issuing 
Accountability Reports for 1997, enabling them to provide, in one place, 
reader-friendly information about their programs and operations, 
including their audited financial statements. In 1998, OMB and the CFO 
Council will conduct a final assessment of the pilot program and, based 
on the results, will work with Congress on legislation to turn the pilot 
into a permanent, Government-wide program. Twenty-one of the 24 agencies 
have committed to producing an Accountability Report for 1999.
  ----------------------------------------------------------------------

                               Table IV-3.  Financial Statement Performance Goals                               
----------------------------------------------------------------------------------------------------------------
                                                                                               Estimate         
                            Financial Statements                               1996  ---------------------------
                                                                              Actual   1997   1998   1999   2000
----------------------------------------------------------------------------------------------------------------
Audits Completed............................................................      22     23     24     24     24
Agencies with Unqualified Opinion...........................................       6     12     16     21     23
Agencies with Unqualified and Timely Opinion................................       4      9     16     21     23
----------------------------------------------------------------------------------------------------------------

  ----------------------------------------------------------------------

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  Government-Wide Audited Financial Statements: GMRA also requires the 
first Government-wide audited financial statements for 1997. The 
Government's ability to obtain an unqualified opinion on its Government-
wide statements is hampered, however, by the lack of adequate financial 
management systems to capture the data that would satisfy Federal 
accounting standards requirements. OMB plans to work with the agencies 
to resolve these problems in time for the Government to receive such an 
opinion on its 1999 statements.\7\
---------------------------------------------------------------------------
  \7\ For more information on financial management performance 
commitments, see the CFO Status Report and Five-Year Plan at the OMB web 
site (www.whitehouse.gov/WH/EOP/OMB/Finance/).
---------------------------------------------------------------------------

  Information Technology Investments: Investments in information 
technology can help Government to work better and cost less. For the 
best return on investment, agencies are following the successful 
practices of private firms--reengineering, creating disciplined capital 
programming processes, and developing information technology 
architectures--to ensure that the investments provide workable solutions 
to problems at a reasonable cost. (For performance information with 
regard to information technology investments for 1999 and beyond, see 
Table IV-4.)

          

             Table IV-4.  Program Performance Benefits From Major Information Technology Investments            
                                   (Budget authority, in millions of dollars)                                   
----------------------------------------------------------------------------------------------------------------
                                      1997     1998      1999                                                   
          Program/Project            Actual  Estimate  Proposed          Program Performance Benefits \1\       
----------------------------------------------------------------------------------------------------------------
Agriculture: Common Computing            21       41        45   Allows ``one-stop service'' for farmers at     
 Environment.\2\                                                  local Agriculture Department offices.         
                                                                                                                
Commerce: Advanced Weather              100      117        69   Improves the accuracy of forecasts. Lowers the 
 Interactive Processing System.                                   costs of generating forecasts through reduced 
                                                                  staffing requirements. A component ``The      
                                                                  Advance Hydrological Prediction System'' will 
                                                                  provide 60-day flood warnings with 90-percent 
                                                                  accuracy.                                     
                                                                                                                
Commerce: Census 2000.                   26       80       199   Reduces errors, the number of temporary        
                                                                  employees needed, and publication costs.      
                                                                                                                
Defense: Defense Message System.        154      197       207   Provides timely, reliable, accountable, and    
                                                                  secure messaging and electronic mail directory
                                                                  services to tactical, organizational and      
                                                                  individual users. Defense estimates lifecycle 
                                                                  cost savings of over $600 million.            
                                                                                                                
Education: Direct Student Lending.      141      187       220   Supports loan origination and servicing of a   
                                                                  portfolio that will grow to more than $55     
                                                                  billion in 1999.                              
                                                                                                                
Education: National Student Loan         27       21        27   Improves the Government's collection of        
 Data System.                                                     defaulted loans and integrity of participating
                                                                  institutions.                                 
                                                                                                                
Education: PELL Grant Systems.            7        7         7   Distributes grant funds to institutions and    
                                                                  supports sound financial management.          
                                                                                                                
Education: Guaranteed Student Loan       23       24        30   Improves the Government's collection of        
 Data System.                                                     defaulted loans.                              
                                                                                                                
Education: Student Aid Application       49       51        63   Assists institutions and students by providing 
 System.                                                          a standardized way to determine financial aid 
                                                                  eligibility.                                  
                                                                                                                
Energy (DOE): Telecommunications          2      100       123   Lowers operating and maintenance costs and     
 Integrator Services (TELIS)                                      improves sharing of information by promoting  
 contract.\3\                                                     interoperability of telecommunications        
                                                                  systems.                                      
                                                                                                                
Health and Human Services: Medicare      75       40        45   Simplifies and streamlines claims processing,  
 Information Technology System.\4\                                eligibility, and managed care information     
                                                                  systems while improving service to Medicare   
                                                                  customers.                                    
                                                                                                                

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Health and Human Services: Federal       25       28        29   Assists States in locating out-of-State, non-  
 Parent Locator Service, including                                custodial parents who owe child support by    
 the National Directory of New                                    matching quarterly wage, new hire, and        
 Hires and the Federal Case                                       unemployment insurance data with national     
 Registry.                                                        registry of child support cases. This system  
                                                                  will increase interstate collections by $3    
                                                                  billion over ten years.                       
                                                                                                                
Housing and Urban Development:           48       90        90   Provides better internal controls and oversight
 Information Technology                                           of federal grants, verification of the        
 Investments.                                                     eligibility of recipients, timely and accurate
                                                                  payment of funds, and oversight and servicing 
                                                                  of FHA mortgages.                             
                                                                                                                
Interior: Automated Land Management      42       33        35   Improves the quality of, and access to, land,  
 Records System.                                                  resources, and title information for public   
                                                                  land managers and adjacent land owners.       
                                                                                                                
Interior: American Indian Trust           3        4        10   Ensures that trust income is allocated based   
 System.                                                          upon accurate land ownership information.     
                                                                                                                
Justice: Integrated Automated            84       84        48   Allows the FBI to process routine              
 Fingerprinting Identification                                    identification requests in 24 hours and urgent
 System.                                                          requests in two hours.                        
                                                                                                                
Justice: National Criminal                8  ........  ........  Provides law enforcement agencies across the   
 Information Center 2000.                                         country real-time access to sophisticated     
                                                                  databases on criminals and criminal activity. 
                                                                                                                
Justice: Information Sharing.        ......  ........       50   Promotes sharing of investigative data         
                                                                  bureauwide.                                   
                                                                                                                
Labor: ERISA Filing Acceptance            6        3     (\5\)   Increases the speed, accuracy, and integrity of
 System.                                                          information that three agencies use to        
                                                                  safeguard private pensions.                   
                                                                                                                
State: Diplomatic and Consular          146      260       283   Improves delivery and management of information
 Systems Modernization.\6\                                        required by diplomatic and consular officers  
                                                                  overseas to support the Nation's foreign      
                                                                  policy goals and ensure U.S. border security. 
                                                                                                                
Transportation: Federal Aviation      1,233    1,306     1,410   Maintains and improves capability to promote   
 Administration Air Traffic Control                               the safe, orderly, and expeditious flow of air
 System Modernization.                                            traffic. Reduces the accident rate by 80      
                                                                  percent of baseline levels by 2007.           
                                                                                                                
Treasury: Information Technology     ......      325       323   Provides advanced funding for redesign of tax  
 Investments.                                                     administration systems and operations,        
                                                                  improving the timeliness and quality of       
                                                                  taxpayer data, and thereby significantly      
                                                                  enhancing customer service and collection     
                                                                  activities. Increases automated calls answered
                                                                  from 16 million to 30 million.                
                                                                                                                
Treasury: Treasury Communications       129      187       200   Provides secure data transmission and          
 System.\7\                                                       information services worldwide for Treasury   
                                                                  bureaus.                                      
                                                                                                                
Treasury: Automated Commercial           12       11        56   Supports business process redesign, systems    
 Environment.                                                     architecture, development, and implementation 
                                                                  for systems to replace Customs' Automated     
                                                                  Commercial System.                            
                                                                                                                
Veterans Affairs: VA Medical              1       80        73   Allows automation of veterans' eligibility     
 Enrollment System.                                               status and tracking of veteran demographics.  
                                                                                                                
Environmental Protection Agency:          8        7         8   Helps to improve the environment by maintaining
 Toxic Release Inventory System.                                  data related to certain toxic chemical uses.  
                                                                  The data are available to EPA staff, State and
                                                                  local governments, educational institutions,  
                                                                  industry, environmental and public interest   
                                                                  groups, and the general public. This allows   
                                                                  for search requests to be fulfilled within 48 
                                                                  hours 95 percent of the time.                 
                                                                                                                
National Aeronautics and Space          235      210       257   Supports spacecraft control, science data      
 Administration: Earth Observing                                  processing, and Earth science data management,
 System Data Information System.                                  archiving, and distribution. Will archive 560 
                                                                  terabytes and deliver 3.4 million data        
                                                                  products by end of 1999.                      
                                                                                                                

[[Page 42]]

                                                                                                                
Social Security: Automation             235      190   ........  Provides more than 2,400 workyears in          
 Investment Fund.                                                 productivity gains for SSA and State          
                                                                  Disability Determination Services.            
                                                                                                                
General Services Administration:         10       13        11   Beginning in 1999, will offer the Federal      
 FTS2001 Program.\8\                                              Government low- cost, state-of-the-art,       
                                                                  integrated voice, data, and long-distance     
                                                                  telecommunications. Replaces the FTS2000      
                                                                  contracts for similar services that expire in 
                                                                  1998.                                         
                                                                                                                
Nuclear Regulatory Commission:            2        7         4   Implements workprocess improvement review and  
 Agency Document Access and                                       increases staff efficiency through improved   
 Management System.                                               information access and elimination of         
                                                                  redundant data entry. Reduces maintenance     
                                                                  costs by replacing aging legacy hardware and  
                                                                  minimizing custom software.                   
                                                                                                                
Office of Personnel Management:      ......        2         5   Completes development of agency-wide           
 Retirement System Modernization.                                 information technology architecture and       
                                                                  development of retirement system modernization
                                                                  program requirements.                         
                                                                                                                
Interagency: Simplified Tax and           1  ........        2   Reduces employers' tax and wage reporting      
 Wage Reporting System.                                           burden.                                       
                                                                                                                
Interagency: International Trade          6        6         5   Reduces burden on exports and imports, speeds  
 Data System.                                                     up shipments, and improves the quality of     
                                                                  trade statistics.                             
                                                                                                                
Interagency: Data Center             ......      100       100   Saves money by requiring all Federal agencies  
 Consolidation.                                                   to consolidate or collocate their data        
                                                                  processing centers to fewer larger, more      
                                                                  efficient, and cost effective locations,      
                                                                  either within the Government or with a private
                                                                  sector provider.                              
                                                                                                                
Interagency: Land Mobile Radio       ......  ........      130   Allows a 50-percent increase in number of      
 Narrowbanding.\9\                                                radios that can operate in current spectrum,  
                                                                  promoting interoperability among users.       
----------------------------------------------------------------------------------------------------------------
\1\ Required under the Clinger-Cohen Information Technology Management Reform Act.                              
\2\ Previously called the Field Service Center Initiative                                                       
\3\ Budget authority for non-DOE agencies using the TELIS contract vehicle is $1.5 million, $77 million, and $99
  million in 1997, 1998, and 1999, respectively.                                                                
\4\ Succeeds the Medicare Transaction System.                                                                   
\5\ 1997 and 1998 figures represent capital investment to set up the system. 1999 numbers are operational costs.
  For consistency, 1999 is zero for capital costs and $4.5 million in operational costs.                        
\6\ Includes user fees and budget authority                                                                     
\7\ Funded through Treasury's working capital fund, not annual appropriations.                                  
\8\ Cost numbers are not budget authority, but agency contributions to the Information Technology Fund for      
  expenses associated with the FTS2001 Program. These numbers do not include the cost of transitioning to the   
  new contracts.                                                                                                
\9\ Total of Departments of Justice, the Treasury, Agriculture, and Transportation investments.                 

  Procurement: Changes in law and regulatory policy continue to help 
agencies get more value from what they buy, improving Government's 
performance along the way. With fewer Government-specific requirements 
to meet and with more flexibility, contracting officials can 
increasingly buy commercial items and, in the process, pay less while 
they gain access to the most current technology. Agencies can 
communicate more with industry and more directly link Government's needs 
to the market's capabilities. The Administration will build on these 
improvements so that Federal acquisition practices can match those of 
the most successful companies. For instance, by the end of 1999: 15 
agencies will have a system in place to evaluate contractor performance 
on all non-exempt contracts over $100,000; agencies will make 60 percent 
of all transactions under $2,500 with the Government charge card; and 
OMB will work with agencies to increase, by 30 percent, the number of 
model performance-based service statements of work available for agency 
use.
  Performance Based Service Contracting (PBSC): PBSC requires that, in 
procuring a service, the Government outline its needs in measurable, 
mission-related terms--not prescribe precisely how contractors do the 
work, and not describe its needs too vaguely. With PBSC, agencies pay 
for results, not effort or process, enabling contractors to determine 
the

[[Page 43]]

best, most cost-effective ways to do the job. Preliminary results of a 
Government-wide PBSC pilot project show that it cut prices 15 to 20 
percent while increasing Government's satisfaction with contractor 
performance. The Administration believes that PBSC offers great 
potential to reap savings and other benefits in the roughly $100 billion 
that the Government spends a year on service contracts. Agencies plan to 
convert about 1,000 contracts, valued at $20 billion, to PBSC over 
several years. In 1999, agencies project that they will convert at least 
700 contracts, worth $9 billion, to PBSC.
  Loan Portfolio Management: Because the Federal Government is the 
Nation's single largest source of credit, agency credit programs and 
performance measures should address each major phase of credit 
management--credit extension, account servicing, and special collection. 
For each phase of this new initiative, agencies will more widely use 
modern electronic business processes to improve customer service, cut 
costs, and improve collection. For credit extension, agencies will 
ensure that individuals and entities applying for credit are eligible in 
terms of income and are not delinquent on a Federal claim. For account 
servicing, agencies will work together to ensure that accurate monthly 
information is available on the status of loans. A consortium of single 
family loan programs run by the Departments of Housing and Urban 
Development, Agriculture, and Veterans Affairs will provide a forum for 
its program delivery partners to speed their use of electronic reporting 
on the status of accounts.
  Debt Collection Management: The 1996 Debt Collection Improvement Act 
(DCIA) created more tools for the Treasury Department and individual 
agencies to reduce losses and increase collections. In the special 
collection phase, when a loan becomes seriously delinquent--over 180 
days overdue--Treasury will help the agency by intercepting other 
Federal payments to the delinquent borrower and applying them to the 
delinquent account. Treasury can also cross-service debts that are over 
180 days overdue by referring them to private collection agencies. A 
principle of sound credit management for most Federal loan programs is 
that once a loan is delinquent for over one year, the agency should sell 
the debt or write it off as uncollectible, as appropriate. The Federal 
Credit Policy Working Group will review write-off practices and redesign 
loan sales policy in order to cut the growth of delinquencies and boost 
Federal collections of delinquent debt. By January 1999, the Federal 
Credit Policy Working Group, in cooperation with the CFO Council, will 
work to reduce delinquencies by 10 percent and increase collections by 
$95 million from the 1997 level.

Management Support Initiatives

  The activities described above do not encompass all of the 
Administration's management efforts. Indeed, the Administration 
continues to work on a host of other initiatives--from providing more 
Federal services electronically to improving the management of credit 
programs--that will help reach the goal of creating a Government that 
``works better and costs less.''

  Access America: This plan, which the Vice President is spearheading, 
is designed to make Government services available electronically to all 
Americans who seek them. More specifically, the plan calls for, among 
other things, conducting electronically those transactions that 
individuals, States, localities, businesses, law enforcement agencies, 
and others most often request; ensuring high standards of privacy and 
security for these transactions; and providing the necessary 
infrastructure and skills in Government to support the vision. A 
Government-wide task force is leading implementation efforts.\8\
---------------------------------------------------------------------------
  \8\ For further details, see www.gits.fed.gov.
---------------------------------------------------------------------------

  Electronic Commerce Security: Electronic commerce is the use of 
computers and networks to buy and pay for goods and services, accept 
regulatory filings, and provide public services--making Government more 
convenient and cost-effective. For agencies and the public to enjoy 
those benefits, however, they must be sure that their information is 
going to whom it should--and to no one else. An important tool for 
providing that security is the digital signature, but the private 
institutions and the rules for managing those signatures are just 
emerging. Through efforts of the Government Information Technology 
Services Board and others, the Federal Government is aligning Federal 
electronic commerce security

[[Page 44]]

practices with this emerging private infrastructure.
  Data Center Consolidation: The Government can save money by 
consolidating large computer centers, thereby eliminating duplication in 
facilities, staff, computer hardware and software, and related services. 
Large-scale data processing service contracts, such as GSA's Virtual 
Data Center contract, make outsourcing for the related services sensible 
and cost-effective. OMB has directed agencies to significantly reduce 
the number of agency data centers to save substantial sums of money for 
the Government.
  Budgeting for Results: In preparing the budget, the Administration 
had, for the first time, agency strategic plans, annual performance 
plans, and performance measures to help decide how to allocate 
resources. In general, however, the budget structure and charging 
practices do not make it easy to match costs with a specific program. 
First, the budget does not charge all of a program's resources to that 
program; instead, the budget subsidizes programs by paying for certain 
activities centrally. Second, not all budget accounts are as well-
aligned as they might be with the programs they finance. As a result, in 
some cases, the quality of budgeting, management, and resource 
acquisition all suffer.
  Good budgeting is predicated on the ability to compare costs and 
benefits, at least roughly, across all programs every year. In some 
cases, current practices distort such comparisons. Good management 
requires that managers focus on, and are held accountable for, getting 
the best results for the resources they have. Managers should be free to 
allocate resources as they see fit, and to obtain competitive, 
performance-oriented procurement.
  To better integrate budgeting with performance planning and reporting, 
as GPRA envisions, OMB will work with agencies to review their budget 
account structures and, in consultation with the Budget Officers 
Advisory Council and the CFO Council, develop legislation to enable 
agencies to charge programs' accounts uniformly and comprehensively for 
the resources they use. As these proposals take shape, OMB will consult 
with the Congressional Budget Office, the General Accounting Office, and 
congressional committees on next steps.

  Competition: Competition spurs efficiency. Federal agencies that 
provide administrative and other support services need the stimulus of 
competition to sharpen their skills, improve their performance, and cut 
their costs. As a result, for buying commercial goods and services, the 
Administration is encouraging agencies to consolidate common 
administrative services, and to compete those and other services with 
one another and with the private sector on a level playing field to 
provide the best deal for the taxpayer, in accordance with the March 
1996 revised OMB Circular A-76 Supplemental Handbook. More competition 
will spur new technologies, new capital, and new management techniques 
to help improve performance, while creating greater opportunities for 
Federal and private employees and their customers. The Secretary of 
Defense, for instance, has announced that the department will evaluate 
over 41,000 FTE positions for their possible conversion to the private 
sector or other agencies in 1999, and evaluate over 150,000 FTE through 
2001.
  Error Reduction: The Administration is launching an effort to reduce 
errors in Federal programs that lead to waste, fraud, or abuse. Federal 
agencies will work together to identify common sources of error and 
enable the Government to develop more integrated solutions, thus saving 
money for the taxpayers. For 1999, the Administration will focus on 
increasing accuracy and efficiency in three areas: program eligibility 
verification; financial and program management; and debt collection.
  Eligibility verification: Many agencies run benefit and credit 
          programs in which eligibility depends, at least in part, on an 
          applicant's income or other financial resources, and other 
          criteria, such as marital status and number of dependents. 
          These programs include small business loans, student loans and 
          grants, veterans pensions, rental housing assistance, income 
          maintenance, nutrition support, and others. Generally, 
          applicants must submit financial and other data on forms that 
          agencies use to determine eligibility. When applicants provide 
          false or erroneous information about their income or personal 
          sta

[[Page 45]]

          tus, they may receive benefits for which they are ineligible, 
          and may deprive eligible applicants from the assistance they 
          deserve. A better verification process for credit and benefit 
          programs can reduce errors significantly and allocate 
          resources more fairly.
  Financial and program management: Agencies often can address 
          the sources of errors within programs by changing their 
          financial or management practices. For example, transaction 
          analysis software can help agencies identify improper billing 
          trends or high-risk operations. In addition, agencies could 
          recoup the interest lost due to overpayments to vendors by 
          charging the vendors for those funds, and the Administration 
          is drafting legislation to enable the Treasury Department to 
          assess those charges. Also, more audits and other integrity 
          initiatives will help agencies identify errors earlier. The 
          biggest payoffs come when agencies prevent errors up front or 
          quickly identify them before losses mount.
  Debt collection: Although most efforts to improve accuracy 
          focus on prevention, some bad debt is inevitable. In trying to 
          collect, agencies face the major obstacle of finding both the 
          debtor and his or her employer. For example, the Education 
          Department devotes about 70 percent of its collection efforts 
          to locating debtors. Agencies could collect debt more 
          effectively by better using data, subject to appropriate 
          privacy protections, that's already in Government databases 
          such as the National Directory for New Hires, which should be 
          fully on line in early 1998 and which provides some of the 
          Federal Government's most timely information for debt 
          collection purposes.

Inter-Agency Working Groups: Using Network Management for Better 
Performance

  The Administration relies on inter-agency groups to develop certain 
policies, and to identify and implement ways to better manage Federal 
resources. The groups meet regularly to initiate action, undertake 
projects, exchange information, set priorities, and recommend policy 
direction.
  In 1993, President Clinton established the President's Management 
Council (PMC), comprising the Chief Operating Officers of the largest 
Federal departments and agencies, to improve management of the Executive 
Branch. The PMC has undertaken a number of initiatives, including:
  Rightsizing: Leading efforts to reduce the number of Federal 
          civilian employees without unnecessarily disrupting the work 
          force.
  Procurement reforms: Identifying performance measures to help 
          agencies assess improvements in the procurement process, and 
          supporting implementation of Electronic Commerce and 
          Performance-Based Service Contracting initiatives.
  Field office restructuring: Identifying appropriate criteria 
          for restructuring activities within agencies; and recommending 
          various approaches to restructuring.
  Overseas missions: Implementing a cost-sharing process for 
          foreign missions.
  Labor-Management partnerships: Supporting partnerships through 
          continuous communication with union leaders; and fostering 
          culture change at all organizational levels.
  Customer service: Facilitating the development of customer 
          service standards in agencies and the delivery of Customer 
          Service Reports.
  The President's Council on Integrity and Efficiency (PCIE), comprising 
27 Presidentially-appointed Inspectors General (IGs) and other key 
integrity officials, focuses on two main objectives:
  mounting collaborative efforts to address integrity, economy, 
          and effectiveness issues that transcend individual agencies; 
          and
  increasing the professionalism and effectiveness of IG 
          personnel across the Government.
  The PCIE, for example, has recommended controls for Federal electronic 
benefits pro

[[Page 46]]

grams and reviewed the next generation of Federal Government credit card 
programs. In addition to setting basic standards for IG investigations, 
audits, and inspections, the PCIE has confronted new challenges, from 
implementing the 1993 Government Performance and Results Act to 
developing the Federal Financial Statement Audit Manual.\9\
---------------------------------------------------------------------------
  \9\ For more on PCIE activities, see IGnet (www.ignet.gov).
---------------------------------------------------------------------------
  A reinvigorated Joint Financial Management Improvement Program (JFMIP) 
will use added resources to help agencies in financial systems 
improvement efforts. In 1999, JFMIP will revise the Federal Supply 
Schedule for Federal financial systems, and continue to develop systems 
standards and other guidance documents.
  Table IV-5 lists the priorities of several other inter-agency working 
groups: the National Partnership Council, the CFO Council, the Chief 
Information Officer (CIO) Council, the Electronic Processes Initiative 
Committee, the Federal Credit Policy Working Group, and the Federal 
Procurement Council.

                             Table IV-5.  PRIORITIES OF INTER-AGENCY WORKING GROUPS                             
----------------------------------------------------------------------------------------------------------------
                                                                                                                
                                          National Partnership Council                                          
                                                                                                                
President Clinton established the National Partnership Council in October 1993 to enlist the Federal labor      
 relations program as an ally in reinvention, and to refocus Federal labor relations from adversarial litigation
 to cooperative problem solving. Among the NPC's key objectives for 1998 are the following:                     
                                  Bring high-level attention to partnership issues to ensure that       
                                  partnerships are established and working effectively throughout the Federal   
                                  Government.                                                                   
                                  Continue to focus on partnerships experiencing problems and help them 
                                  overcome barriers.                                                            
                                  Encourage partnerships to address major NPR objectives, such as       
                                  increasing efficiency, improving service, and reducing cost.                  
                                                                                                                
                                        Chief Financial Officers Council                                        
                                                                                                                
Authorized by the CFOs Act, the CFO Council is a Government-wide body that addresses critical cross-cutting     
 financial issues by working collaboratively. The Council consists of the CFOs and Deputy CFOs of the 24 largest
 Federal agencies and senior officials of OMB and Treasury. The CFO Council's priorities are:                   
                                  Improve financial management systems.                                 
                                  Effectively implement the Government Performance and Results Act.     
                                  Issue accounting standards and financial statements.                  
                                  Develop human resources and CFO organizations.                        
                                  Improve the management of receivables.                                
                                  Ensure management accountability and control.                         
                                  Modernize payments and business methods.                              
                                  Improve the administration of Federal assistance programs.            
                                                                                                                
                                       Chief Information Officers Council                                       
                                                                                                                
The CIO Council's role includes: developing recommendations for information technology management policy,       
 procedures, and standards; identifying opportunities to share information resources; and assessing and         
 addressing the Federal Government's needs for an information technology work force. The Council consists of    
 CIOs and Deputy CIOs from 28 large Federal agencies, two CIOs from small Federal agencies, and representatives 
 from OMB and two information technology boards. The CIO Council's priorities are:                              
                                  Define an interoperable Federal information technology architecture.  
                                  Ensure information security practices that protect Government         
                                  services.                                                                     
                                  Lead the Federal year 2000 conversion effort.                         
                                  Establish sound capital planning and investment practices.            
                                  Improve the information technology skills of the Federal work force.  
                                  Build relationships through outreach programs with Federal            
                                  organizations, Congress, industry, and the public.                            

[[Page 47]]

                                                                                                                
                                Electronic Processes Initiative Committee (EPIC)                                
                                                                                                                
The President's Management Council established EPIC to integrate end-to-end business processes electronically,  
 with an emphasis on procurement and finance. EPIC consists of senior officials from DOD, the General Services  
 Administration, Treasury, and OMB. The EPIC priorities are:                                                    
                                  Use a multi-purpose smart card to support reengineering of business   
                                  and administrative processes.                                                 
                                  Integrate electronic buying and paying processes.                     
                                  Efficiently and effectively process intra-governmental transfers that 
                                  contribute to unqualfied financial statements.                                
                                                                                                                
                                       Federal Credit Policy Working Group                                      
                                                                                                                
This inter-agency forum provides advice and assistance to OMB, Treasury, and Justice in formulating and         
 implementing Government-wide credit management policy. Membership consists of representatives from the major   
 credit and debt collection agencies and OMB. The Federal Credit Policy Working Group's priorities are:         
                                  Effective implementation of the Debt Collection Improvement Act.      
                                  Use of the Internet for credit management, especially for lending,    
                                  underwriting, and portfolio status reporting.                                 
                                  Sale of loan assets that are over a year delinquent.                  
                                  Review agency write-off practices and Government-wide policy.         
                                  Improve prescreening of loan applications to validate eligibility and 
                                  application data.                                                             
                                                                                                                
                                           Federal Procurement Council                                          
                                                                                                                
The Federal Procurement Council, which consists of the Senior Procurement Executives from major Federal         
 agencies, meets regularly with OMB to discuss ways to improve the procurement process. The Federal Procurement 
 Council's priorities are:                                                                                      
                                  Promote agency use of commercial buying practices by increasing the   
                                  use of performance-based service contracting, past performance in             
                                  administering current contracts and selecting new contractors, electronic     
                                  commerce as an enabler, and other innovative buying strategies.               
                                  Promote the Federal procurement work force's use of good business     
                                  judgment within an adaptable system of flexible rules and procedures that     
                                  allow professionals, working in a continuous learning environment, to use     
                                  discretion.                                                                   
                                  Collaborate with budget, financial, and information technology        
                                  management offices to improve agency planning and management of capital asset 
                                  procurement.                                                                  
                                  Promote national socioeconomic procurement policies consistent with   
                                  fostering the efficiency and effectiveness of the procurement system.         
                                  Promote the use of a globally competitive industrial base, integrating
                                  facilities and operations serving the Government market with those serving the
                                  commercial market by reducing Government-unique requirements that restrict    
                                  full integration.                                                             
                                  Increase customer satisfaction by routinely providing quality products
                                  and services, on time, and within budget.                                     
----------------------------------------------------------------------------------------------------------------