[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]


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          31.  IMPROVING PERFORMANCE THROUGH BETTER MANAGEMENT

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  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


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   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.
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                                   Table 31-1.  Priority Management Objectives
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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.

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   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.

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

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

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

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  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

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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.
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                                                               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.

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  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

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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

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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

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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

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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

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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)

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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

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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.
----------------------------------------------------------------------------------------------------------------

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