    [Budget of the United States Government]
    [V. Investing in the Common Good: Program Performance in Federal Functions]
    [31. Improving Performance through Better Management]
    [From the U.S. Government Publishing Office, www.gpo.gov]

    [[Page 293]]

              31.  IMPROVING PERFORMANCE THROUGH BETTER MANAGEMENT

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

      We made a decision that was profoundly important, that the way Government works matters, that we could not
    maintain the confidence of the American people and we could not have ideas that delivered unless the Government
    was functioning in a sensible, modern, and prudent way.

                                          President Clinton
                                          December 1998

      ----------------------------------------------------------------------
       In the past two years, the Administration has tackled the
    Government's biggest management challenges, which are designated
    Priority Management Objectives (PMOs), through a coordinated, sustained
    and intensive effort with the agencies to achieve significant
    improvements in these areas. This year, the Administration is targeting
    24 Government-wide and agency-specific management issues for heightened
    attention (see Table 31-1). Four are new: ``Use capital planning and
    investment control to better manage information technology;''
    ``Streamline and simplify Federal grants management;'' ``Align human
    resources to support agency goals;'' and, ``Capitalize on Federal energy
    efficiency.''
       Last year, the Administration successfully advanced several of our
    management goals (which therefore are no longer on the PMO list). In
    particular, the Administration resolved its first and foremost
    management objective, ``Manage the year 2000 (Y2K) computer problem''
    with impressive results. Y2K posed the single largest technology
    management challenge in history. The Federal Government's acknowledged
    success through the date change was the direct result of the commitment,
    long hours, and exceptional efforts of Federal employees in every
    agency. Due largely to the efforts of these employees and the leadership
    provided by the President's Council on Year 2000 Conversion, the Federal
    Government's Y2K efforts were, beyond all expectation, remarkably
    trouble-free. Under the direction of the President's Council, the
    Federal Government also worked with the private sector, State, and local
    governments, and international organizations to raise awareness and
    encourage work on the problem. Again, the results were uniformly
    acclaimed. In the Spring of 2000, the Conversion Council will prepare a
    final report which will include lessons learned from this challenge.
       Two other objectives were successfully accomplished in 1999. First,
    to meet the goal ``Better manage real property,'' the General Services
    Administration developed a draft legislative proposal to increase agency
    incentives to dispose of unneeded real property--making it available for
    more productive public or private use, in turn providing resources for
    agencies to fund needed capital investments. Second, to ``Improve
    management of the decennial census,'' the Bureau of the Census in the
    Department of Commerce established and tested the necessary support
    structure--which includes opening data capture centers, regional census
    offices, and local census offices, printing forms, establishing a
    telephone questionnaire assistance program, printing language assistance
    guides, and recruiting and training temporary census workers--and it is
    now ready for operation. Finally, in 1999, all agencies identified
    activities performed by Federal employees that could be opened to
    competition potentially resulting in contracts with either private firms
    or with a more efficient public sector operation. Since such competitive
    reviews are an important element of the effort to ``Revolutionize DOD
    business affairs,'' the objective ``Use competition to improve
    operations'' has been incorporated into the Department of Defense (DOD)
    objective.
      ----------------------------------------------------------------------

                                       Table 31-1.  Priority Management Objectives
    ----------------------------------------------------------------------------------------------------------------

    -----------------------------------------------------------------------------------------------------------------
    Strengthening Government-Wide Management

     1.  Use performance information to improve program management and budget decision-    making.
     2.  Improve financial management information.
     3.  Use capital planning and investment control to better manage information technology.
     4.  Provide for computer security and protect critical information infrastructure.
     5.  Strengthen statistical programs.
     6.  Implement acquisition reforms.
     7.  Implement electronic Government initiatives.
     8.  Better manage Federal financial portfolios.
     9.  Align Federal human resources to support agency goals.
    10.  Verify that the right person is getting the right benefit.
    11.  Streamline and simplify Federal grants management.
    12.  Capitalize on Federal energy efficiency.

    Improving Program Implementation

    13.  Modernize student aid delivery.
    14.  Improve DOE program and contract management.
    15.  Strengthen HCFA's management capacity.
    16.  Implement HUD reform.
    17.  Reform management of Indian trust funds.
    18.  Implement FAA management reforms.
    19.  Implement IRS reforms.
    20.  Streamline SSA's disability claims process.
    21.  Revolutionize DOD business affairs.
    22.  Manage risks in building the International Space Station.
    23.  Improve security and management of overseas presence.
    24.  Reengineer the naturalization process and reduce the citizenship application backlog.

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

    [[Page 294]]

       The PMOs are coordinated by OMB with assistance from the National
    Partnership for Reinventing Government (NPR) and the inter-agency
    working groups, thus assuring senior management attention. Managers in
    the agencies have the primary responsibility to achieve the agreed-upon
    objectives--they must effectively implement detailed action plans to
    ensure that they make progress toward meeting their goals. Periodic
    reporting and review provide an opportunity for corrective action as
    necessary throughout the year.

    Strengthening Government-wide Management

      1. Use performance information to improve program management and
    budget decision-making: The Government Performance and Results Act
    (GPRA) requires agencies to measure performance and results--not just
    funding levels--so that we can better track what taxpayers are getting
    for their dollars. Agencies are not only working to develop and use
    performance measures in program management but also are working to
    integrate this information into budget and resource allocations, so that
    we can better determine the cost of achieving goals. The task is not
    simple. The agencies must define their specific goals, determine the
    proper level of resources, assess which programs are working, and fix
    those that are not. Progress will depend on GPRA becoming more than a
    paper exercise. Over the next year, OMB will work with all agencies to
    better integrate planning and budgeting and systematically associate
    costs with programs.

    [[Page 295]]

      2. Improve financial management information: Just a decade ago, the
    Federal Government lagged far behind private industry in its ability to
    offer assurances of financial integrity. The Administration recognized
    and immediately began to address this weakness. Today, Government
    agencies have a strong financial management infrastructure supported by
    a comprehensive set of Federal financial accounting standards. Chief
    Financial Officers (CFOs) in the 24 largest Federal agencies integrate
    financial management agency-wide and produce annual audited financial
    statements. As validation of our progress, in October 1999, the American
    Institute of Certified Public Accountants recognized Federal Accounting
    Standards Advisory Board statements as ``generally accepted accounting
    principles'' (GAAP). This independent acknowledgment by the
    internationally recognized organization that designates GAAP standard-
    setting bodies marks a significant milestone in improving public
    confidence in Federal financial management. Also, in 1999, 12 of 24 CFO
    agencies received clean opinions on their 1998 statements, double the
    number of clean opinions received in 1996 and in sharp contrast to 1993
    when agencies did not routinely issue financial statements. In 1999, the
    Federal Government also issued its second audited Government-wide
    financial statement. Auditors noted specific accounting difficulties at
    DOD, and the complexity of identifying and reporting transactions
    between Federal Government entities (intra-Governmental transactions).
    DOD has invested significant contractor support resources to address its
    problems, and OMB, the Treasury Department, and the General Accounting
    Office are working with the CFOs to develop short-and long-term
    solutions to the intra-Governmental transactions issue. Almost all
    agencies also face the daunting task of upgrading or replacing financial
    management systems to provide the accurate, timely, and useful
    information that is the cornerstone of both financial integrity and
    performance measurement.
      ----------------------------------------------------------------------

                              Table 31-2.  CFO Agency Financial Statement Performance Goals
    ----------------------------------------------------------------------------------------------------------------
                                                                                                        Estimate
                                     Financial Statements                                    1998  -----------------
                                                                                            Actual  1999  2000  2001
    ----------------------------------------------------------------------------------------------------------------
    Audits Completed......................................................................  24      24    24    24

    Agencies with Unqualified Opinion.....................................................  12      18    21    22

    Agencies with Unqualified and Timely Opinion..........................................  7       16    21    22

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

      ----------------------------------------------------------------------
      3. Use capital planning and investment control to better manage
    information technology: The Government spends in excess of $38 billion
    each year on information technology, and this number will continue to
    grow as virtually all functions of Government take advantage of
    efficiencies provided by information technology (IT). Well selected,
    controlled, and managed IT projects can ensure that agencies fulfill
    their missions with the lowest costs and greatest benefit to the
    American people. The Administration will issue general guidance and will
    work with agencies on specific systems to ensure that IT capital
    planning is integrated with agency budget, acquisition, financial
    management, and strategic planning processes, and that agencies properly
    assess benefits, risks, performance goals and accomplishments of their
    IT portfolios. Chapter 22 of Analytical Perspectives  highlights program
    performance benefits from major IT investments throughout the Federal
    Government.
      4. Provide for computer security and protect critical information
    infrastructure: Protecting information systems that the Federal
    Government depends on and that are critical to the economy is growing in
    importance as society's use of technology and reliance on interconnected
    computer systems increases. The Y2K remediation underscores the fact
    that, along with increased productivity and efficiency of system
    interconnections, there comes increased risk. However, if the risks are
    identified and addressed in light of secu

    [[Page 296]]

    rity issues, they are manageable. Such risk management requires that we
    incorporate security into the architecture of each system, promote
    security controls that support agency business operations, and ensure
    that security funding is built into life-cycle budgets for information
    systems. Protecting Government information systems is a key component of
    the broader imperative to protect the Nation's critical infrastructure--
    namely such vital assets as banking and finance, transportation, energy,
    or water, whose incapacity would have a debilitating effect on national
    security, national economic security, or national public health and
    safety. Each Federal agency has the responsibility to protect its own
    critical infrastructures and ensure its ability to provide essential
    services to the public. In addition, because most of the Nation's
    critical infrastructures are owned and operated by the private sector,
    Government agencies must follow the Y2K example in reaching out to
    private industry to assist and encourage sensible infrastructure
    protection efforts.
      ----------------------------------------------------------------------

                                                                   Protecting Personal Privacy

     As information technology transforms our Government and our economy, a growing challenge is how to gain the benefits from the new technology while
     preserving one of our oldest values--privacy. In the online world, the Administration has encouraged self-regulatory efforts by industry. For
     especially sensitive information--such as medical, financial, and children's online records--legal protections are required. To coordinate privacy
     policy, the Administration created the position of Chief Counselor for Privacy within OMB's Office of Information and Regulatory Affairs.

    This year has seen historic progress:

                          In the online world, under steady prodding by the Administration, the portion of commercial websites with privacy policies
                          rose from 15 percent to over 65 percent from 1998 to 1999. A public workshop last fall challenged industry to address concerns
                          about ``online profiling,'' in which companies collect data, in ways few people would suspect, about individuals surfing the
                          Internet.

                          When children go online, parents should give their consent before companies gather personal information. Websites aimed at
                          children must get such consent under the Children's Online Privacy Protection Act of 1998 and rules issued last year.

                          In new regulations, the Administration has emphasized its full support for the use of strong encryption to provide privacy
                          and security to law-abiding citizens in the digital age. Continuing programs to strengthen Government computer security also
                          provide new privacy safeguards for personal information held by the Government.

     Progress on privacy will continue:

                          For medical records, this year will see historic, final rules that will legally guarantee key privacy protections: notice
                          of data uses; consent before records are used for non-medical purposes; patient access to records; proper security; and, effective
                          enforcement. The Administration will continue to support legislation that would include broader scope and enforcement authority.

                          The financial modernization bill signed by the President in November 1999 included important privacy protections. Notably,
                          consumers will have an absolute right to know if their financial institution intends to share or sell their personal financial
                          data, as well as the right to block sharing or sale outside the institution's corporate family. Last year, the Administration will
                          seek further protections for consumers in financial information, including choice about sharing within a corporate family.

                          The Federal Government will continue to build privacy protections into its own activities. Last year, for instance, all
                          Federal agencies successfully posted clear privacy policies on their websites. This year, among other initiatives, the
                          Administration plans to make ``privacy impact assessments'' a regular part of the development of new Government computer systems.

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

    [[Page 297]]

      5. Strengthen Statistical Programs: The Government spends more than $3
    billion each year to produce statistical measures for decision makers in
    both the public and private sectors. These data are used for everything
    from monitoring the Nation's progress in the dynamic global economy, to
    spotting important trends in public health, to projecting the impact of
    future demographic shifts on the Social Security System. In 1999, the
    Administration: (1) actively supported House passage of a bill to permit
    limited sharing of confidential data among selected agencies solely for
    statistical purposes; (2) significantly enhanced FedStats
    (www.fedstats.gov) services; and (3) published innovative inter-agency
    thematic reports, including America's Children: Key National Indicators
    of Well-Being and Health, United States. The Administration will now
    seek Senate passage of the legislation for statistical data sharing,
    begin use of the recently revised Standard Occupational Classification,
    publish a new thematic report on statistics related to the aging
    population, and continue the phased implementation of the American
    Community Survey to provide comparable demographic, economic, and
    housing data for small geographic areas for use in distributing nearly
    $200 billion annually. In 2001, the Administration will work to improve
    the measurement of income and poverty; address key education, health,
    and welfare data needs; and, strengthen measures of capital equipment,
    services expenditures, and E-business.
      6. Implement acquisition reforms: The Federal Government is the
    Nation's largest buyer of goods and services, purchasing roughly $200
    billion each year. In the past seven years, the Congress and the
    Administration have implemented numerous acquisition reforms to
    streamline the buying process and maximize the Government's buying
    power. For example, agencies are using credit cards for small dollar
    purchases instead of processing paper purchase orders to save
    administrative expense and time. In 1999, the Government met its goal of
    using credit cards for 60 percent of all purchases below $2,500. For
    2000, the goal was increased to 80 percent, and all agencies are on
    track to meet this goal. Agencies are also selecting contractors based
    on past performance to save money and get better results. In 1999, 15
    agencies established and are using contractor performance evaluation
    systems to select high-performing contractors. In 2000, all major
    agencies will have evaluation systems in place. Further, to obtain
    desired performance and reduce cost overruns and schedule slippages on
    the annual expenditure of $70 billion for capital assets (e.g.,
    buildings, satellites, information technology), agencies are
    implementing a rigorous capital programming process. Finally, agencies
    are being encouraged to use performance-based service contracts which
    improve performance and reduce price by describing desired outcomes in
    measurable terms while leaving the ``how'' to the contractors'
    ingenuity.
      7. Implement electronic Government initiatives: New information
    technologies can make Government easier to use. In December 1999, the
    President articulated a vision for electronic Government. The
    Administration will pursue three related strategies to increase access
    to Government information, ensure privacy and security, increase agency
    use of automation to transact services, and adopt crosscutting
    electronic Government initiatives. First, citizens, businesses, and
    governments need to trust that when they communicate electronically as
    part of a Federal activity, their messages will be safe from
    interference and fraud. By December 2000, agencies will issue at least
    100,000 secure digital signatures to individuals to enable them to
    exchange information with the Government in a private and tamper-proof
    manner. Second, the Federal Government will develop a new clearinghouse
    for Government information on the Web to demonstrate how common
    standards can dramatically improve access to government information at
    far less cost than current approaches. And third, agencies will create
    new computer applications to allow citizens to transact more government
    services electronically, beginning with the 500 most common Government
    services and forms.
      8. Better manage Federal financial portfolios: The Federal Government
    currently underwrites more than $1 trillion in loans, primarily to
    students, homebuyers, and small businesses. The Government can better
    serve these customers and at the same time protect its interest in
    obtaining efficient and timely

    [[Page 298]]

    repayment. At the end of 1998, $60 billion of this Federal portfolio was
    delinquent--an increase of $8 billion from 1997. However, as the
    Department of the Treasury implements its new statutory authorities
    under the Debt Collection Improvement Act, collections are beginning to
    increase. For example, in 1999, Treasury collected $2 billion through
    ``offsets'' of tax refunds and other payments--with more than $1 billion
    representing delinquent child support obligations. In addition, the
    Department of Justice collected more than $1 billion of delinquent debt
    through its litigation program. In 2000, agencies should increase
    collections and further reduce delinquencies by full implementation of
    the Treasury debt collection offset and cross-servicing tools, by
    increasing loan sales for delinquent debt, and by writing-off
    uncollectible debt.
      9. Align Federal human resources to support agency goals:  Recognizing
    that people are critical to achieving results Americans care about, the
    Administration will undertake a strategic approach to human resources
    management. First, the Office of Personnel Management (OPM) will help
    agencies strategically assess their human resources to ensure a quality
    Federal work force in the 21st Century. Among other things, in 2000, OPM
    will complete the design of a prototype work force planning model that
    will allow line managers to analyze their current work force and prepare
    ``what-if'' scenarios under a variety of recruitment, restructuring, or
    mission change models. Second, OPM will work with agencies to ensure
    labor-management initiatives to empower executives, line managers, and
    especially employees to improve customer service and get mission
    results. Third, OPM will encourage agencies to make better use of
    flexibilities in existing human resource policies, systems, and
    available tools. OPM will also submit legislative proposals, where
    necessary, consistent with these human resource management strategies.
      10. Verify that the right person is getting the right benefit: The
    Administration will expand its focus on ensuring that administrative and
    program payments are made correctly and on time. The Government-wide
    strategy is first and foremost to make payments correctly up-front and,
    secondly, to measure the extent of improper payments through the annual
    financial and performance reporting process. The strategy also calls for
    strong privacy and security protections in carrying out these goals. In
    2000, OMB will issue guidance to agencies to ensure that the right
    person is getting the right benefit, including, for example, principles
    for authenticating identity, keeping address information up-to-date, and
    verifying eligibility criteria. The Administration will also assist
    Federal agencies in estimating the extent of, and addressing the
    underlying causes of, improper payments. The Administration will work
    with the Congress where legislation is needed to provide agencies the
    ability to share information within the framework of the Privacy Act and
    Computer Security Act.
      11. Streamline and simplify Federal grants management: The
    Administration will work to make it easier for State, local, and tribal
    governments and nonprofit organizations to apply for and, as recipients,
    report their progress on Federal grants. The inter-agency Electronic
    Grants Committee and their Federal Commons initiative will be central to
    a Government-wide effort to use electronic processing in the
    administration of agencies' grant programs. OMB and the agencies are
    also working to develop common applications and reporting systems for
    grant programs, including consolidation of payment systems. We will also
    identify statutory impediments to grants simplification and encourage
    flexible legislation, like the Workforce Investment Act, which allows
    Federal agencies to streamline the delivery of grants.
      12. Capitalize on Federal energy efficiency: The Federal Government is
    the largest single consumer of energy in the world. Every year, the
    Government spends more than $4 billion to heat, cool, and power 500,000
    Federal buildings. With this distinction comes the opportunity to save
    energy, save taxpayers dollars, and protect the environment from harmful
    greenhouse gases. Under the leadership of this Administration, the
    agencies have already cut their energy use 17 percent from 1985 levels.
    In 1999, the President issued E.O. 13123, Greening the Government
    through Energy Efficient Management, setting tough new goals for energy
    efficiency and giving agencies the tools they need to achieve those
    goals. In 2000, agencies will take

    [[Page 299]]

    steps to markedly improve energy efficiency by maximizing use of
    contracting tools, such as energy savings performance contracting;
    purchasing energy efficient office products; taking advantage of cost-
    effective renewable technologies and power from clean (or ``green'')
    sources; and, using sustainable designs for new Federal construction. By
    2010, agencies will cut energy use by 35 percent and reduce greenhouse
    gas emissions by 30 percent--saving taxpayers over $750 million a year.

    Improving program implementation

      13. Modernize student financial aid delivery: The Higher Education
    Amendments of 1998 created the Government's first performance-based
    organization in the Department of Education's Office of Student
    Financial Assistance (OSFA) to significantly improve the annual delivery
    of $50 billion in financial assistance to nearly nine million students.
    In 1999, the new results-oriented organization hired a chief operating
    officer, assessed customer needs, developed a systems modernization
    blueprint, issued a five-year performance plan, and reorganized the
    staff into three service-oriented channels for students, schools and
    financial institutions. It successfully field tested its application
    software with ten schools and multiple Federal agencies in the first
    phase of its pilot program. In 2000 and 2001, working with other
    agencies, schools, students, and the commercial banking industry, OSFA
    will focus on implementing critical areas of the systems modernization
    plan, completing the personnel reorganization, expanding electronic
    access to benefits and services, and simplifying data exchanges with
    partners and customers.
      14. Improve Department of Energy (DOE) program and contract
    management: Because more than 90 percent of DOE's budget is spent
    through large, long-term management contacts, good acquisition planning
    and better project management after contract award are essential. For
    example, DOE contracts with universities and other organizations to
    operate and maintain facilities to clean up nuclear material and waste
    sites, and with private sector firms to design, build, and operate
    treatment, storage, and disposal facilities. The Administration is
    emphasizing more cost-efficient, performance-based, fixed-price
    contracts over reliance on cost reimbursement contracts, which have few
    incentives for contractors to adhere to cost, schedule, and performance
    goals. In 1999, DOE increased the number of contracts it competed and
    added performance measures and incentives to others. It also created a
    high-level project management office to track and review all projects
    valued at $20 million or more; those that cannot meet cost, schedule or
    performance goals will be placed on a ``Watch List'' to be monitored
    more closely by the Deputy Secretary. In 2001, DOE will award 70 percent
    of its support service requirements as performance based service
    contracts. By 2003, two-thirds of DOE's facility maintenance contracts
    will have been awarded competitively.
      15. Strengthen the Health Care Financing Administration's (HCFA's)
    management capacity: HCFA faces the formidable challenge to modernize
    and operate as a prudent purchaser of health care in the fast-changing
    health care marketplace, while also, and perhaps most important,
    increasing accountability to its customers. The initiative has five
    components: (1) management flexibilities (e.g., evaluation of personnel
    needs and flexibilities); (2) increased accountability to constituencies
    (e.g., creation of an outside advisory committee); (3) program
    flexibilities (e.g., new authorities and greater use of existing
    authorities to pay for services at market rates, enter into selective
    contracts, and engage in competitive bidding); (4) structural reforms
    (e.g., reengineering relationship between HCFA's central and regional
    offices and between HCFA and HHS); and, (5) contracting reform (e.g.,
    promoting competition in Medicare claims processing, improving
    contractor oversight). In 1999, HCFA established a Management Advisory
    Committee, which will include individuals with a wide range of private
    sector, public sector, and academic experience. The bipartisan committee
    will begin meeting in 2000 to provide guidance on ways to improve HCFA's
    management, performance, and accountability. HCFA is also in the process
    of assessing its current and ideal workforce skills mix, and developing
    and validating a long-term human resources strategic plan. HCFA drafted
    and sent to

    [[Page 300]]

    Congress its contracting reform legislative proposal, which is designed
    to introduce competition into the Medicare contracting environment and
    allow HCFA to select contractors from a wider pool. The President's 2001
    Budget includes a new contractor oversight initiative to ensure that
    contractors have appropriate controls in place. Other areas of focus for
    2000 and 2001 include improving communications and coordination between
    HCFA central and regional offices and HHS, and developing strategies for
    making better use of HCFA's vast data resources.
      16. Implement Department of Housing and Urban Development (HUD)
    reform: In the mid-1990s, chronic problems at HUD led some to consider
    abolishing the Department. Congress, the General Accounting Office, and
    private agencies criticized the agency as unresponsive, having too much
    red tape and little accountability, and plagued with unreliable data and
    various systems that could not communicate with one another. HUD's
    comprehensive reforms, begun in June 1997, are designed to realign
    agency operations for results, including assuring that HUD-subsidized
    tenants live in safe and well-managed housing. To date, HUD has
    downsized staff to 60 percent of 1980 levels, and clarified the mission
    of each employee; surveyed every public and HUD-assisted multifamily
    project and advised owners of any documented deficiencies; cleaned up
    much of the data in existing management and financial systems,
    integrating many of the disparate systems where possible; and begun to
    monitor subsidized tenants' eligibility and the correct amount of tenant
    rental payments through cross checks with Social Security and other data
    bases. By the end of 2001, HUD will reduce the share of public and
    assisted housing with severe physical deficiencies by 10 percentage
    points, reduce the share of units managed by poorly performing public
    housing agencies by five percentage points, and will promptly complete
    most enforcement actions on troubled privately owned subsidized housing
    within 120 days of referral. HUD will begin surveying its customers
    (e.g., Mayors, local HUD partners, public housing residents and other
    customers) to determine how well HUD is doing and advise HUD on where to
    improve. In 2000, HUD will save $200 million in overpayments of HUD
    rental and operating subsidies by cross checking with Social Security
    and other data bases for tenant income levels which determine both
    eligibility and tenants' rent levels.
      17. Reform management of Indian trust funds: The Department of the
    Interior (DOI) is responsible for managing about $3 billion of funds
    that the Federal Government holds in trust for Indian tribes and
    individual American Indians, as well as the underlying land, timber, and
    mineral assets from which these funds are derived. At the end of 1999,
    nearly all of the roughly 300,000 financial account jacket files managed
    by DOI for individual Indians had been cleaned up and 45 percent of
    these were successfully converted to a commercial grade accounting
    system. This effort is on track to meet the goal of converting all
    remaining accounts by May 2000. All Tribal accounts have been managed in
    a commercial grade system since 1995. In June 1999, DOI began piloting
    its Trust Asset and Accounting Management System in Billings, Montana,
    which will provide DOI field staff with the tools needed to properly
    manage tribal and individual Indians' land and natural resources. At
    this pilot site, trust asset data has been converted to the new system
    and the results are being evaluated. The current goal is to convert the
    remaining 213 sites to the new commercial system by December 2001. While
    initial success in DOI's Indian Land Consolidation pilot program will
    help sustain these management improvements by easing the paperwork
    burden of administering trust fund accounts, enactment of legislation to
    make this consolidation effort permanent is vitally important.
      18. Implement Federal Aviation Administration (FAA) management
    reforms: The safety of the flying public depends upon the FAA--its air
    traffic controllers, safety and security inspectors, and information
    technology. There are three major management reform initiatives which
    will help the FAA improve its use of technology and prepare for future
    challenges: acquisition; financial; and, personnel reform. With respect
    to acquisition reform, FAA is in the process of implementing an
    effective, systematic process for selecting, controlling, and managing
    capital investments. On the financial reform side, the FAA con

    [[Page 301]]

    tinues to implement phases of a cost-accounting system which, when fully
    utilized, will provide information to both itself and its users about
    the value of the FAA's services and allow the agency to operate more
    like a business. Finally, the FAA continues to evaluate the success of
    its personnel reform efforts. In 2000, the FAA will link pay scales to
    market rates and implement a system which ties pay to the achievement of
    individual and agency performance targets. The agency will use its
    existing legislative authority to create a performance-based
    organization for Air Traffic Control (ATC) services; while the
    Administration calls upon Congress to provide the additional authority
    it needs to operate ATC as a business.
      19. Implement IRS reforms: The IRS is modernizing its technology and
    organizational structure, in part as mandated by the IRS Restructuring
    and Reform Act of 1998, in order to ensure the fairness of tax
    administration and improve the IRS's customer service, productivity, and
    financial management. By the end of 2001, the IRS will be restructured
    around four major customer groups with similar filing and compliance
    characteristics (i.e., those with only wage and investment income, small
    businesses and self employed, large and mid-sized businesses, and tax
    exempt and government entities). Over time, this will enable the IRS to
    tailor staff expertise, services, and enforcement techniques to specific
    taxpayer groups. This will be the most significant restructuring of the
    IRS's organization and work practices since 1952. The IRS is also
    undertaking a technology modernization program which is designed to
    replace the IRS's 1960s era core databases with modern systems. This
    will enable significant improvements in technology support to customer
    service and compliance employees. It will also prepare the IRS for the
    wholesale transition to electronic filing and data exchange. The IRS is
    also implementing a series of initiatives to provide immediate customer
    service improvements. For example, it has expanded the hours when toll-
    free assistance is offered, set up four local citizen advocacy panels to
    ensure taxpayer input to local IRS officials, offered new electronic
    filing and payment options, and strengthened its taxpayer advocate
    service (which gives taxpayers an option outside of normal IRS processes
    to resolve difficult issues). Its electronic filing system earned a 74
    American Consumer Satisfaction Index (ACSI) score, placing it above the
    average customer satisfaction score for private sector services. During
    2000, the IRS will build on these efforts with new initiatives directed
    at improving the responsiveness of customer service representatives,
    expanding Spanish language toll-free assistance, and enhancing outreach
    to new small businesses to help them better understand and meet their
    tax obligations.
      20. Streamline the Social Security Administration's (SSA's) disability
    claims process: SSA is in the midst of a multi-year project to improve
    service delivery for the millions of individuals filing for, or
    appealing decisions on, claims for disability benefits. To increase
    accuracy and consistency in decision-making, the agency has provided all
    of its adjudicators uniform training and instructions clarifying complex
    policy areas, as well as instituting an improved quality assurance
    process. SSA is also testing a redesigned disability claims process on a
    prototype basis in 10 States. The new process will eliminate repetitive
    steps and increase claimant interaction with SSA at both the initial
    claim and hearing levels. If the prototype proves successful at
    providing claimants with the correct decision earlier in the process,
    nationwide implementation will occur beginning in 2002. Finally,
    management improvements scheduled to be fully implemented at the Office
    of Hearings and Appeals in 2001 are expected to reduce hearing
    processing times from an average of 316 days in 1999 to 208 days in
    2002. The combined effect of all of these changes will be to improve the
    accuracy of initial decisions and provide a quicker and more user-
    friendly process for those claimants who pursue appeals.
      21. Revolutionize DOD business affairs: Following the end of the Cold
    War, the United States began a major reduction in military forces. DOD's
    cuts in infrastructure costs, however, have not kept pace. To make
    further cuts, DOD plans to change the way it does business. The 1997
    Defense Reform Initiative provided a strategic blueprint of how to adopt
    better business processes, pursue commercial alternatives, consolidate
    redundant

    [[Page 302]]

    functions, and streamline organizations. Since the Defense Reform
    Initiative report, significant effort and progress has been made.
    Examples include:
       Competition forces organizations to improve quality, reduce
              costs, and focus on customers' needs. DOD employees perform
              many commercial activities which could benefit from
              competitive bidding. DOD expects its competitive sourcing
              process will save approximately $11.2 billion from 1997 to
              2005. These savings are reallocated to other defense
              priorities, including force modernization throughout the 2001-
              2005 period.
       The vast majority of official purchases are made with a
              special credit card--rather than wasting time and money
              writing a paper contract. From just less than 800,000
              purchases made with the purchase card in 1994 to 7.5 million
              during 1998, the card truly has become the preferred method of
              obtaining goods and services costing less than $2,500.
       Today, paper is still part of DOD's business systems and
              culture. The Department's goal is to make all contracting
              (i.e., weapons systems, spare parts, and installation level
              maintenance) paperless by 2001. Sixty-seven percent of the
              Department's transactions are currently paperless and the
              Department is well on its way to achieving its goal of 90
              percent in the year 2000.
       In 1991, DOD was operating 324 separate finance and
              accounting systems. Through the summer of 1999, that number
              dropped to 102 systems; a 69-percent decrease. By 2003, the
              Department expects to reduce the number of systems to 32,
              representing the largest financial system overhaul ever
              undertaken by DOD.
      22. Manage risks in building the International Space Station:  The
    United States has the lead role in building the International Space
    Station, one of the most complex international projects ever undertaken
    in peacetime. The recent trend of annual budget growth has been curbed
    in the 2001 budget--a major success--but NASA must continue to manage
    the risks of completing assembly and reduce the potential for future
    cost growth. In 1999, the first elements of the Space Station had a year
    of successful in-orbit operation, and the program made good progress,
    albeit slower than planned, in preparing many other key elements for
    launch. The year 2000 is critical for the Space Station--with plans for
    the beginning of permanent human presence in space, and the initiation
    of research aboard the orbiting laboratory. The program also continues
    the transition from development activities to orbital operations and
    research. The program will control cost growth by balancing requirements
    within available resources, and will continue to address cost and
    schedule performance problems in its key contracts, strengthen contract
    management and cost controls, and further reduce risks from potential
    Russian shortfalls.
      23. Improve security and management of overseas presence: Since the
    end of the Cold War, the world's political, economic, and technological
    landscape has changed dramatically, but our country's overseas presence
    has not adequately adjusted to this new reality. Thirty Federal agencies
    now operate internationally, yet the condition of U.S. posts and
    missions abroad is unacceptable. In 1999, in the aftermath of the
    African embassy bombings, the Administration formed the Overseas
    Presence Advisory Panel to consider the future of our Nation's overseas
    representation, to appraise its condition, and to develop
    recommendations on how best to organize and manage our overseas posts.
    In 2000, the Administration will be working to ensure the thorough
    review and implementation, as appropriate, of the Panel's
    recommendations, including an examination of the U.S. Government's
    overseas needs and the current structure of financing and management for
    overseas facilities. We will also assess the need for additional
    security enhancements, including physical security upgrades, sound
    capital planning for the construction of new diplomatic and consular
    facilities, and begin to move toward a common information technology
    platform for all of our agencies abroad.
      24. Reengineer the naturalization process and reduce the citizenship
    application backlog: Immigration and Naturalization Service (INS)

    [[Page 303]]

    is reengineering the naturalization process to streamline and automate
    operations, while simultaneously reducing a backlog of more than 1.8
    million applications for citizenship. In 1999, INS reduced the backlog
    by more than 500,000 applications and the average processing time
    between application and naturalization of qualified candidates has been
    reduced from 27 months in 1998 to 12 months in 1999. The goal is to
    reduce processing time to six months by the end of 2000.

    Using Inter-Agency Groups to Get the Job Done

       To achieve the Administration's goal of making fundamental change in
    the operations of Government, inter-agency groups have been used
    extensively to lead crosscutting efforts. These groups draw together
    operational, financial, procurement, integrity, labor-relations, and
    systems technology experts from across the Government. The groups
    establish Government-wide goals in their areas of expertise, and they
    marshal the resources within individual agencies to meet these goals.
    Several of these groups were formed for the first time by this
    Administration, including the National Partnership for Reinventing
    Government, the President's Management Council, and the National
    Partnership Council (see Table 31-3).
      The National Partnership for Reinventing Government (NPR): President
    Clinton created the NPR in March 1993 to create a Government that works
    better, costs less, and gets results Americans care about. He asked Vice
    President Gore to lead this inter-agency task force. In 2000, NPR will
    continue its work to make agencies that have the most contact with the
    public to be more performance-based, results-oriented, and customer-
    driven. In doing this, NPR will partner with agencies to achieve the
    following outcomes:
       Customer satisfaction with Federal services equal to or
              better than the business services sector, as measured by the
              ACSI.
       An infrastructure to enable Americans to have access to all
              Government information and be able to conduct all major
              service transactions on line by 2003.
      NPR will also work with local and State governments and the private
    sector to:
       achieve dramatic reductions in gun violence;
       help States achieve their goals of universal health insurance
              for children; and,
       provide all Americans a seamless learning and employment
              system to get the job skills they need to be successful in the
              21st Century.
      More information on NPR is available at its website, www.npr.gov.
       The President's Management Council (PMC): The PMC consists of the
    Chief Operating Officers of all Federal departments and the largest
    agencies. The PMC provides leadership for the most important Government-
    wide reforms. Council priorities include: supporting labor-management
    partnerships; leading GPRA implementation; identifying criteria and
    recommending methods for agency restructuring; supporting electronic
    commerce and performance-based contracting; facilitating development of
    customer service standards; and, improving Federal energy efficiency.
       The National Partnership Council (NPC): President Clinton established
    the NPC in October 1993 to enlist the Federal labor unions as allies to
    reinvention and to shift Federal labor relations from adversarial
    litigation to cooperative problem solving. Members of the NPC include:
    representatives of Federal employee unions and Federal managers and
    supervisors; the Federal Mediation and Conciliation Service; the Federal
    Labor Relations Authority; the Office of Personnel Management; OMB; DOD;
    and the Department of Labor. In 1999, the Council continued to sponsor
    training conferences aimed at helping unions and agencies build the
    skills they need to establish effective and successful partnerships. The
    Council also sponsored a major research project involving eight Federal
    agencies to study the connection between labor-management partnership
    and bottom-line improvements in agency performance. In 2001, the Council
    will continue to build on the findings of its research project and,
    through its training programs, focus on strategies that will both
    stimulate best practices and overcome barriers to partnership. More

    [[Page 304]]

    information on the NPC can be found on its website, www.opm.gov/npc.

                                          Table 31-3. Major Inter-Agency Groups
    ----------------------------------------------------------------------------------------------------------------
                   Council Names/Membership                                   Recent Activities/Future Priorities
    ----------------------------------------------------------------------------------------------------------------
    Chief Financial Officers (CFO) Council: The CFOs and   .............    Significant accomplishments include: a
     Deputy CFOs of the 24 largest Federal agencies and                    steady increase in the number of CFO Act
     senior officials from OMB and Treasury. The Council,                  agencies receiving clean opinions on
     through its Committees, addresses such issues as                      their financial statements; timely
     financial statements and standards; financial                         issuance of the Government-wide audited
     systems; grants; human resources; debt management;                    financial statements for the second year
     and entrepreneurial Government.                                       in a row; the establishment of a Program
      http://www.financenet.gov                                            Management Office under the Joint
                                                                           Financial Management Improvement Program
                                                                           to develop financial systems requirements
                                                                           and testing vehicles; and the development
                                                                           of qualification and classification
                                                                           standards for certain Federal financial
                                                                           positions based on core competencies and,
                                                                           the completion of a comprehensive review
                                                                           of the Franchise Fund pilot program.
                                                                          ..........................................
                                                                            In 2000 and beyond, the Council intends
                                                                           to build on these accomplishments,
                                                                           continuing to seek clean audit opinions
                                                                           on agency, department and Government-wide
                                                                           financial statements; improvements in
                                                                           security and proficiency of financial
                                                                           management systems; and improvement in
                                                                           professional education and development of
                                                                           the Federal financial workforce. The
                                                                           Council also will support Administration
                                                                           efforts to seek permanence for the
                                                                           Franchise Fund pilot program.
    ----------------------------------------------------------------------------------------------------------------
    Chief Information Officers (CIO) Council: The CIOs     .............    In 1999, Council accomplishments
     and Deputy CIOs for 28 major Federal agencies, two                    included the successful transition of
     CIOs from small Federal agencies, senior officials                    Federal systems to year 2000; improved
     from OMB and representatives from two information                     capital planning capabilities; efforts to
     technology boards. The CIO Council develops                           further enterprise interoperability;
     recommendations for information technology                            pilots to implement work force core
     management policy, procedures, and standards;                         competencies; and, increased security
     identifies opportunities to share information                         awareness.
     resources; and assesses the Federal Government's                     ..........................................
     needs for an information technology work force.                        In 2000, the Council intends to build on
     http://cio.gov                                                        its progress promoting infrastructure to
                                                                           provide common access solutions; expand
                                                                           and explore opportunities for increased
                                                                           interaction and outreach with the
                                                                           worldwide IT community to disseminate and
                                                                           share information; support service
                                                                           delivery by working on security and
                                                                           privacy approaches that advance
                                                                           appropriate information access,
                                                                           exchanges, and protection, and support
                                                                           electronic commerce; develop and
                                                                           implement strategies for recruitment,
                                                                           retention, and development of IT
                                                                           professionals; and, promote the effective
                                                                           integration of IT management with
                                                                           agencies' missions and processes.

    [[Page 305]]

    President's Council on Integrity and Efficiency        .............    1999 accomplishments include:
     (PCIE): The Presidentially appointed Inspectors                       identification of billions of dollars of
     General (IGs), senior officials from OMB, and other                   Federal funds that could be reallocated
     key integrity officials.                                              to better use by Government managers;
                                                                           investigations resulting in successful
    Executive Council on Integrity and Efficiency (ECIE):                  prosecutions of thousands of wrongdoers;
     The 30 IGs appointed by agency heads, OMB, and other                  investigative and civil recoveries of
     key integrity officials. http://www.ignet.gov                         more than $1 billion; and,
                                                                           disqualification of thousands of
                                                                           unscrupulous businesses or individuals
                                                                           from receiving Government contracts or
                                                                           participating in Government programs. The
                                                                           IG's also collaborated on efforts to
                                                                           address emerging issues with systems
                                                                           security, to enhance financial management
                                                                           practices to enable clean opinions of
                                                                           audited agency financial statements, to
                                                                           continue to foster GPRA principles, bring
                                                                           to successful completion intensive year
                                                                           2000 activities, and to strengthen and
                                                                           enhance inter-agency training academies
                                                                           for auditors and criminal investigators.
                                                                          ..........................................
                                                                            Priorities for 2000 include developing a
                                                                           strategic plan to focus the Council's
                                                                           efforts on major crosscutting issues to
                                                                           better leverage IG resources across the
                                                                           Government.
    ----------------------------------------------------------------------------------------------------------------
    Electronic Processes Initiatives Committee (EPIC):     .............    In 1999, EPIC helped implement the
     Senior policy officials from DOD, GSA, Treasury and                   Government's strategic plan for
     OMB. EPIC's role is to further the use of electronic                  electronic purchasing and payment. EPIC
     technologies and processes within Government to                       sponsored user groups to help resolve
     improve service delivery and program efficiency.                      challenges in the implementation of the
      http://policyworks.gov/org/main/me/epic/ Government's SmartPay purchase and travel
                                                                           card program. EPIC also continued the
                                                                           development of a card-based approach for
                                                                           processing intra-governmental payments at
                                                                           lower cost.
                                                                          ..........................................
                                                                            In 2000, EPIC will continue to monitor
                                                                           implementation of the Access America for
                                                                           Students initiative, which provides a one-
                                                                           stop shopping and information site for
                                                                           student loans. EPIC will also sponsor an
                                                                           effort to expand use of the Government's
                                                                           Central Contractor Registration, through
                                                                           which vendors can, in one place, register
                                                                           payment information and other data
                                                                           necessary to do business with the Federal
                                                                           Government.
    ----------------------------------------------------------------------------------------------------------------
    Federal Credit Policy Working Group (FCPWG):           .............    In 1999, the FCPWG completed revisions
     Representatives from the major credit and debt                        to Government-wide policies to implement
     collection agencies and OMB. The FCPWG provides                       the Debt Collection Improvement Act,
     advice and assistance to OMB, Treasury, and Justice                   including a revision to Federal program
     in formulating and implementing Government-wide                       write-off policy. With the support of the
     credit policy.                                                        FCPWG, SBA completed its first loan asset
      http://www.financenet.gov/ financenet/fed/fcpwg                    sale program and HUD began centralizing
                                                                           its sale program. The GSA portfolio
                                                                           management schedule awarded over 50
                                                                           contracts for work in asset valuation,
                                                                           due diligence, and loan sales.
                                                                          ..........................................
                                                                            In 2000, the FCPWG will focus on
                                                                           Internet applications to improve customer
                                                                           access and modernize program financial
                                                                           systems, continue to build a government-
                                                                           wide loan asset sales program, and
                                                                           monitor the implementation of the Debt
                                                                           Collection Improvement Act, in particular
                                                                           referral of debt more than 180 days past
                                                                           due to the Treasury Department for
                                                                           collection.

    [[Page 306]]

    Procurement Executives Council (PEC): Senior           .............    In 1999, specific accomplishments
     procurement executives from major Federal agencies                    include: establishing a Government-wide
     and senior OMB officials. The PEC serves as a forum                   Acquisition Intern Program; developing an
     to improve Federal acquisition by leveraging                          inventory of desired skills and
     procurement influence and knowledge.                                  attributes of contracting professionals;
                                                                           and, developing draft guides for
                                                                           rotational assignments of contracting
                                                                           officers to industry organizations.
                                                                          ..........................................
                                                                            By 2001, the PEC intends to improve the
                                                                           intern program; use the inventory of
                                                                           contracting officer skills and the
                                                                           rotational assignment guides to improve
                                                                           training; establish a set of agency
                                                                           acquisition system performance measures;
                                                                           improve small business procedures; and
                                                                           develop a single point on the Web that
                                                                           makes Government solicitations freely
                                                                           available to any interested entity.
    ----------------------------------------------------------------------------------------------------------------
    Inter-agency Alternative Dispute Resolution Working    .............    In 1999, the Working Group conducted
     Group (ADR): The Attorney General, representatives                    more than 50 Government-wide training
     of the heads of all Cabinet Departments, and others                   sessions, meetings, and colloquia to
     with significant interest in Federal dispute                          promote and encourage the use of ADR in
     resolution. President Clinton established the ADR                     agencies.
     Working Group in May 1998 to assist Government                       ..........................................
     agencies in making greater use of consensual methods                   In 2000, the ADR Working Group will
     for resolving disputes, including mediation, neutral                  produce a detailed report on agency
     evaluation, arbitration, and other processes.                         success stories, lessons-learned, best
      http://www.financenet.gov/ financenet/fed/iadrwg                    practices and recommendations, and it
                                                                           will continue to mentor agencies in the
                                                                           development of ADR programs.
    ----------------------------------------------------------------------------------------------------------------
    Joint Financial Management Improvement Program         .............    In 1999, JFMIP published financial
     (JFMIP): A joint effort of GAO, OMB, Treasury, and                    system requirements for Core Financial
     OPM, with a rotating representative from another                      Management, Human Resources and Payroll,
     agency. JFMIP was established 50 years ago to                         Direct Loans, and Travel, and prepared
     encourage and promote government-wide sharing and                     drafts for Seized Property and Forfeited
     exchange of information concerning good financial                     Assets, Guaranteed Loans, Grants, and
     management techniques and practices.                                  Property; established a testing and
      http://www.financenet.gov.financenet/fed/jfmip/ certification process for commercial off-
                                                                           the-shelf (COTS) software supporting core
                                                                           financial management functions;
                                                                           established a website that supports the
                                                                           testing process, including system
                                                                           requirements, the test, and information
                                                                           on tested and certified qualified COTS
                                                                           software; and issued guidance on core
                                                                           competencies in financial management.
                                                                          ..........................................
                                                                            2000 priorities are to: prepare
                                                                           financial system requirement publications
                                                                           for financial management systems where
                                                                           publications do not exist or are
                                                                           outdated; continue testing COTS software
                                                                           supporting core financial management
                                                                           functions; offer testing for Federal
                                                                           agency systems that are used to provide
                                                                           core financial servicing for other
                                                                           agencies; incorporate new requirements in
                                                                           the core financial management software
                                                                           test; and share information on financial
                                                                           management systems and best practices
                                                                           through the web-based knowledge base.

    [[Page 307]]

    Small Agency Council (SAC): Principal management       .............    It speaks for the member agencies on a
     officials from 81 agencies with less than 5,000 FTE.                  variety of issues and proposals with OMB,
     The group was chartered to improve management                         OPM, and GSA. It annually sponsors a
     effectiveness through education, exchange of                          comprehensive training program open to
     information, self-help, and cooperation.                              all member agencies, covering matters of
      http://www.sac.gov                                                   current interest, such as Y2K, preparing
                                                                           annual performance reports, and
                                                                           alternative dispute resolution. In 1999
                                                                           more than 1,500 attended these sessions.

    ----------------------------------------------------------------------------------------------------------------
    Human Resources Technology Council (HRTC.) Under the   .............    In 1999, projects completed include an
     sponsorship of OPM, the HRTC consists of human                        Official Personnel Folder Data
     resources, information technology and Federal                         Dictionary, and a Government-wide Human
     financial decision makers. The HRTC operates as a                     Resources Information Study (now
     guiding body on government-wide information                           formalized as a JFMIP Financial Systems
     technology issues affecting personnel and payroll                     Standard).
     matters.                                                             ..........................................
      http://www.opm.gov/hrtc                                               In 2000 the HRTC will lead an effort to
                                                                           design and develop a Human Resources Data
                                                                           Network, recommended in the study noted
                                                                           above, which will facilitate the
                                                                           movement, storage and retrieval of HR
                                                                           data on employees, and will eliminate any
                                                                           future need for paper-based official
                                                                           personnel records.
    ----------------------------------------------------------------------------------------------------------------