[Analytical Perspectives]
[Performance and Management Assessments]
[2. Budget and Performance Integration and the Program Assessment RatingTool (PART)]
[From the U.S. Government Printing Office, www.gpo.gov]


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                  2. BUDGET AND PERFORMANCE INTEGRATION

                            I.  INTRODUCTION

  Good Government--a government fiscally responsible to the people--must 
have as one of its core purposes the achievement of results for the 
taxpayers. Taxpayers expect the Federal Government to implement programs 
that will ensure the Nation's security and provide critical services. 
Taxpayers want their money spent wisely and used to gain maximum 
benefit. Taxpayers have the right to hold the Federal Government 
accountable for its actions. To exercise this right, the taxpayers must 
have clear, candid, and up-to-date information about each program's 
successes and failures. For the second straight year, the Administration 
is providing this type of information to all Americans on 
ExpectMore.gov, a user-friendly government website that describes which 
programs are performing, which ones are not, and in both situations, 
what is being done to improve them. (Greater detail about ExpectMore.gov 
will be provided in a subsequent section.)
  The Administration is making the Federal Government increasingly 
effective by making program budget decisions based on program 
performance. The objective of the President's Budget and Performance 
Integration (BPI) Initiative is to ensure that Federal dollars produce 
the greatest results. Under the BPI Initiative, agencies and OMB 
identify which programs work well, which are deficient, and what can be 
done to improve performance of each program. In some cases, the 
Administration may find it necessary to reallocate funding from less 
effective programs to more effective ones. The final decisions about the 
scope of programs and the size of program budgets are ultimately made 
jointly by the Congress and the President. The BPI Initiative provides 
information on program performance to help the Executive and Legislative 
branches make better, more informed decisions. Information about program 
performance is now readily available and accessible to the public on 
ExpectMore.gov.
  The BPI Initiative measures a program's success in two principal ways:
     Improved Program Performance: The initiative requires each 
          agency to identify opportunities to improve program management 
          and design, and then develop and implement clear, aggressive 
          plans to get more for tax dollars every year. Agencies have 
          ready access to program performance information by using the 
          results of the Program Assessment Rating Tool (PART) 
          assessments of each program, program evaluations, 
          investigations, audits, and analyses from a variety of 
          sources.
     Greater Investment in Successful Programs: Overall, there 
          are now more program-funding needs and thus fewer resources to 
          be allocated to each funded program. These scarce resources 
          need to be allocated to programs that benefit the Nation most 
          effectively and efficiently. Though performance is not the 
          only factor used to decide the size of a program's budget, 
          Congress and the President can utilize information about a 
          program's effectiveness and efficiency in decision-making so 
          that taxpayer dollars are invested in programs that provide 
          the greatest return to the Nation. If poor performing programs 
          are unable to demonstrate improved results, then their 
          resources may be reallocated to programs that can demonstrate 
          greater success and returns to the taxpayer.
  Currently, the BPI Initiative is showing great progress toward the 
first goal. Programs are becoming more efficient and more effective 
through implementation of meaningful improvement plans.
  Many programs are demonstrating improved results. For example:
    The Social Security Administration increased agency 
          productivity by 13.1 percent since 2001 through increased use 
          of information technology and improved business processes. SSA 
          would have required $800 million more in 2006 to process the 
          same work if productivity improvements had not been realized.
    In 2005, the Bureau of Prisons reduced the construction cost 
          per bed in high security facilities, saving an estimated $54 
          million.
    The Federal Transit Administration implemented its plan to 
          process Formula Grants faster. In the past, the highest 
          reported processing time for processing grants was 90 days. 
          FTA now expects to process such grants within only 36 days.
  Agencies are identifying additional actions to improve the performance 
of each of their programs. All agencies, regardless of whether their 
programs perform poorly or well, strive for increased program 
performance each year.
  Progress toward the second goal of improving resource allocation has 
been slow, but this year, the administration had greater success. We 
have been successful in terminating some low-performing programs and 
better at targeting resources to well-performing programs. In 2006, 
seven programs were terminated, saving $230 million. Four programs were 
reduced, saving $300 million. Though no decision is based purely on 
performance, overall, high performing programs received larger funding 
increases than those that did not perform as well.

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    II.  HOW THE BUDGET AND PERFORMANCE INTEGRATION INITIATIVE WORKS

  Several aspects of the Budget Performance Integration (BPI) Initiative 
are designed to maximize program performance. They include:
    Assessment of performance with the PART (Program Assessment 
          Rating Tool);
    Publishing a Scorecard to hold agencies accountable for 
          managing for results, addressing PART findings, and 
          implementing follow-up actions;
    Broadcasting results to the public on ExpectMore.gov; and
    Facilitating program improvement through interagency 
          collaboration and cooperation.

 Comprehensive Assessment with the Program Assessment Rating Tool (PART)

  How do we ensure that Federal programs are improving every year? 
First, we assess their current performance. In order to improve a 
program's outcomes, it is critical to have a good understanding of how 
the program is currently performing. To date, we have assessed the 
performance of nearly 1,000 programs, comprising 96 percent of all 
Federal programs, using the PART.

                           History of the PART

  The Federal Government spends trillions of dollars on programs 
annually, but until the advent of the PART, there was not a uniform 
basis for assessing how well these programs actually work. For example, 
were the billions of taxpayer dollars the Federal Government spent on 
foster care actually preventing the maltreatment and abuse of children? 
Are Federal efforts to reduce air pollution successful? Previous 
administrations from President Johnson to President Clinton and Congress 
have grappled with this problem. Each prior administration has tried to 
come up with means by which government programs are measured for 
results. The most significant advance in bringing accountability to 
government programs was the Government Performance and Results Act of 
1993 (GPRA). This law requires Federal agencies to identify both annual 
and long-term goals and collect and report performance data. For the 
first time, agencies were required to explicitly identify measures and 
goals for judging the performance of each of their programs and to 
collect information on an annual basis in order to determine if they 
were meeting those goals.
  This Administration built upon GPRA requirements by creating the PART 
(Program Assessment Rating Tools), an objective, evidence-based and 
easy-to-understand questionnaire about program design, planning, 
management, and performance. Objectivity is paramount to a PART rating. 
For example, when the development of the PART began in 2002, the first 
draft included a question relating to whether a particular program 
served an appropriate federal role. Because many people believed that 
the answer to that question would vary depending on the reviewer's 
philosophical outlook, the question was removed.
  Public and private sector entities have reviewed the PART. Private 
sector reviewers have praised the PART assessment process for its 
transparency and objectivity and have also raised concerns that OMB has 
striven to address. For instance, some reviewers found assessments of 
different programs lack consistency in the answers to the same 
questions. OMB now audits all draft assessments to correct any obvious 
inconsistencies. Reviewers also found that agencies did not always agree 
with the final assessment of their programs. Agencies can now appeal to 
a high level subcommittee of the President's Management Council to 
dispute answers with which they disagree. To address concerns that OMB 
and agencies were not doing enough to involve Congress in the assessment 
process, agencies are now required to brief and consult their 
Congressional appropriators, authorizers, and overseers before the 
annual assessments begin.
  The accompanying timeline provides a history of the development of the 
PART.

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                                      What is the PART and How is it Used?
 
 
 
The PART helps assess the management and performance of individual programs. With the PART, agencies and OMB
 evaluate a program's purpose, design, planning, management, results, and accountability to determine its
 overall effectiveness. Agencies then identify and complete follow-up actions to improve program results.
 
To reflect the fact that Federal programs deliver goods and services using different mechanisms, the PART is
 customized by program type. The seven PART types are: Direct Federal, Competitive Grant, Block/Formula Grant,
 Research and Development, Capital Assets and Service Acquisition, Credit, and Regulatory. The PART types apply
 to both discretionary and mandatory programs. ExpectMore.gov also classifies each program by its specific
 program area (such as environment, transportation, education, etc.) to facilitate comparison so we can
 accelerate the improved performance of programs with similar missions.
 
Each PART includes 25 basic questions and there are additional questions tailored to the different program
 types. The questions are divided into four sections. The first section of questions gauges whether a program
 has a clear purpose and is well designed to achieve its objectives. The second section evaluates strategic
 planning, and weighs whether the agency establishes outcome-oriented annual and long-term goals for its
 programs. The third section rates the management of an agency's program, including the quality of efforts to
 improve efficiency. The fourth section assesses the results programs can report with accuracy and consistency.
 
The answers to questions in each of the four sections result in a numerical score for each section from 0 to 100
 (100 being the best score). Because reporting a single weighted numerical rating could suggest false precision,
 or draw attention away from the very areas most in need of improvement, numerical scores are combined and
 translated into qualitative ratings. The bands and associated ratings are as follows:
 


 
------------------------------------------------------------------------
                            Rating                               Range
------------------------------------------------------------------------
Effective....................................................     85-100
 
Moderately Effective.........................................      70-84
 
Adequate.....................................................      50-69
 
Ineffective..................................................       0-49
------------------------------------------------------------------------


 
 
 
 
Regardless of overall score, programs that do not have acceptable performance measures or have not yet collected
 performance data generally receive a rating of ``Results Not Demonstrated.'' This rating suggests that not
 enough information and data are available to make an informed determination about whether a program is
 achieving results.
 
PART ratings do not result in automatic decisions about funding. Clearly, over time, funding should be targeted
 to programs that can prove they achieve measurable results. In some cases, a PART rating of ``Ineffective'' or
 ``Results Not Demonstrated'' may suggest that greater funding is necessary to overcome identified shortcomings,
 while a funding decrease may be proposed for a program rated ``Effective'' if it is not a priority or has
 completed its mission. However, most of the time, an ``Effective'' rating is an indication that the program is
 using its funding well and that major changes are not needed.
 

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            Publish a Scorecard To Hold Agencies Accountable

  Agencies are achieving greater results with the help of the habits and 
disciplines established through the BPI Initiative. These agencies 
recognize that the PART can be a useful tool to drive improvement in the 
performance of their programs.
  Agency success is judged by clear, Government-wide goals or standards 
for Budget and Performance Integration. Agencies have developed and are 
implementing detailed, aggressive action plans to achieve these goals. 
Most importantly, agencies are held publicly accountable for adopting 
these disciplines. To meet the Standards for Success for the BPI 
Initiative, an agency must:
    Demonstrate that senior agency managers meet at least 
          quarterly to examine reports that integrate financial and 
          performance information that covers all major responsibilities 
          of the Department;
    Have strategic plans that contain a limited number of 
          outcome-oriented goals and objectives. Annual budget and 
          performance documents incorporate measures identified in the 
          PART and focus on the information used in the senior 
          management report described in the first criterion;
    Report the full cost of achieving performance goals 
          accurately in budget and performance documents and accurately 
          estimate the marginal cost of changing performance goals;

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    Have at least one efficiency measure for all PARTed 
          programs;
    Use PART evaluations to direct program improvements and hold 
          managers accountable for those improvements, and PART findings 
          and performance information are used consistently to justify 
          funding requests, management actions, and legislative 
          proposals; and
    Have less than 10 percent of agency programs receive a 
          Results Not Demonstrated rating for two years in a row.
   Each quarter, agencies receive two ratings. First, they are rated on 
their status in achieving the overall goals for each initiative. They 
are then given a green, yellow or red rating to clearly announce their 
performance. Green status is for success in achieving each of the 
criteria listed earlier; yellow is for an intermediate level of 
performance; and red is for unsatisfactory performance.
  Second, agency progress toward reaching the Budget and Performance 
Integration standards is assessed separately. This is reviewed on a 
case-by-case basis against the work plan and related time lines 
established for each agency. Progress is also given a color rating. 
Green is given when implementation is proceeding according to plans 
agreed upon with the agencies; Yellow for when some slippage or other 
issues require adjustment by the agency in order to achieve the 
initiative objectives on a timely basis; and Red when the Initiative is 
in serious jeopardy. In this case, it is unlikely to realize objectives 
absent significant management intervention.
  As of December 31, 2006, fifteen agencies achieved green status on the 
Budget and Performance Integration Initiative Scorecard. The agencies at 
green are:
1.          Department of Agriculture
2.          Department of Commerce
3.          Department of Education
4.          Department of Energy
5.          Department of Justice
6.          Department of Labor
7.          Department of Transportation
8.          Department of State
9.          General Services Administration
10.         National Aeronautics and Space Administration
11.         National Science Foundation
12.         Small Business Administration
13.         Smithsonian
14.         Social Security Administration
15.         U.S. Agency for International Development
  The Scorecard is an effective accountability tool to ensure agencies 
manage the performance of their programs. Although a scorecard rating is 
not directly linked to any specific consequences, it is quickly 
understood at the highest levels of the Administration as an indicator 
of an agency's strength or weakness.
  The Government-wide scorecard reporting on individual agency progress 
is published quarterly at www.results.gov/agenda/scorecard.html. 

                   Broadcast Results on ExpectMore.gov

   ExpectMore.gov provides Americans with candid information about which 
programs work, which do not, and what all programs are doing to get 
better every year.
  Up until the launch of ExpectMore.gov last year, Americans had limited 
access to information on how well the Federal Government performed. Now, 
every American can see for themselves how their government is 
performing. In many cases, the Federal Government performs well. In some 
cases, it performs better than the private sector.
   ExpectMore.gov contains PART summaries for all programs that have 
been assessed to date. The site provides the program information that a 
concerned citizen would need to assess a program's performance. Each 
assessment includes a brief description of the program's purpose, its 
overall rating, some highlights about its performance and the steps it 
will take to improve in the future. For individuals interested in more 
information, the site also provides links to the detailed program 
assessment, as well as that program's website and the assessment 
summaries of other similar programs. The detailed PART assessment 
includes the answer to each PART question with an explanation and 
supporting evidence. It also includes the performance measures for the 
program along with current performance information. In addition, there 
is an update on the status of follow-up actions to improve program 
performance.
  A visitor to the site may find, at least initially, programs are not 
performing as well as they should or program improvement plans are not 
sufficiently ambitious. We expect this site to help change that. The 
website has a variety of benefits, including:
    Increased public attention to performance;
    Greater scrutiny of agency action (or inaction) to improve 
          program results:
     --Improvement plans will be transparent
     --Statements about goals and achievements will be clearer; and
    Demand for better quality and more timely performance data.

                                     

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               Implement Inter-Agency Program Improvement

  The Administration continues to look for new ways to improve the 
performance of programs with similar purposes or designs by using the 
PART to analyze performance across agencies (i.e., cross-cutting 
analysis) and State and local levels. Cross-cutting analysis can improve 
coordination and communication by getting managers from multiple 
agencies to agree to a common set of goals and placing the focus on 
quantifiable results. This type of analysis breaks down barriers across 
the Federal, State, and local levels so that all entities work toward 
the same goal. Only topics that are expected to yield meaningful results 
are selected for cross-cutting analyses. This past year the 
Administration completed cross-cutting analysis of the government's math 
and science programs as part of the ACC (Academic Competitiveness 
Council).
  Academic Competitiveness Council. The ACC set out to identify all 
Federal education programs with a science, technology, engineering, and 
math focus; clarify the goals of these programs; identify the extent to 
which the programs have undergone independent, external evaluation based 
on sound, scientific principles and have quantitative evidence of 
achieving their goals; and identify better ways to measure and evaluate 
these programs and efficiently integrate and coordinate Federal spending 
on Science, Technology, Engineering, and Mathematics (STEM) education 
programs.
  The ACC first identified 109 STEM education programs funded in 2006 
for a total of $3.13 billion. Within that total, elementary and 
secondary programs received approximately $640 million (20 percent of 
the total), postsecondary programs, including graduate and postdoctoral 
programs, nearly $2.4 billion (76 percent) and informal education and 
outreach programs close to $103 million (4 percent). The group agreed on 
common goals for the programs, but found that few had been rigorously 
evaluated and determined to be effective. These programs, like many 
managed by the Federal Government, must do more to gather and report 
evidence of what activities are most effective at achieving common 
goals.

                              III.  RESULTS

  As mentioned above, the BPI Initiative measures its success according 
to two measures:
    Improved Program Performance; and
    Greater Investment in Successful Programs
  There has been greater success in achieving the goals of the first 
measure. The BPI Initiative has caused agencies to think more 
systematically about how they measure and improve program performance. 
Though there are many factors that impact program performance, it is 
clear that the BPI Initiative has framed the discussion around results. 
Agencies have developed ways to measure their efficiency so they can 
figure out how to achieve more with Americans' tax dollars.
  This marks the fifth year that the PART was used to (1) assess program 
performance, (2) take steps to improve program performance, and (3) help 
link performance to budget decisions. To date, the Administration has 
assessed nearly 1000 programs, representing approximately 96 percent of 
the Federal budget. Over the next year, the Administration will use the 
PART to assess the performance and management of most of the remaining 
Federal programs.

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  With the help of the PART, we have improved program performance and 
transparency. There has been a substantial increase in the total number 
of programs rated either ``Effective'', ``Moderately Effective'', or 
``Adequate''. This increase came from both re-assessments and newly 
PARTed programs. The chart below shows the percentage of programs by 
ratings category.

                                     


  These results demonstrate that the BPI Initiative has been very 
successful in focusing Agencies' attention on program performance. For 
example, approximately:
    14 percent of programs improved their performance rating 
          overall;
    80 percent of programs have acceptable performance measures;
    74 percent have achieved their long-term goals and 80 
          percent have achieved their annual goals; and
    90 percent of programs have efficiency measures and about 
          half of them have achieved their efficiency targets.
  Unfortunately, there has not been a similar level of accomplishment in 
the second measure: Greater Investment in Successful Programs. Though 
congressional use of performance information has been limited, most in 
the Congress are aware of the PART. This topic was discussed extensively 
in a Government Accountability Office (GAO) report issued last year.
  GAO recommends that OMB select PART reassessments and crosscutting 
reviews based on factors that include the relative priorities, costs, 
and risks associated with clusters of related programs, and reflect 
congressional input. Additionally, GAO recommended OMB solicit 
congressional views on the performance issues and program areas most in 
need of review; the most useful performance data and the presentation of 
those data. As mentioned above, OMB is using the PART to improve the 
performance of similar programs in areas that are expected to yield 
meaningful results. OMB and agencies are also actively soliciting the 
views of the Congress in PART assessments, on improvement plans, and 
oversight efforts.

                             IV.  NEXT STEPS

  The BPI Initiative has identified several activities to improve its 
effectiveness over the coming year:
   Ensure Plans are Aggressive and Result in Improved Performance.--
Rigorous follow-up on recommendations from the PART will accelerate 
improvements in the performance of Federal programs. This will ensure 
that the hard work done through the PART produces performance and 
management improvements. Additionally, implementation of these plans 
must be tracked and reported.
   Expand Cross-Cutting Analyses.--Use the PART to facilitate cross-
cutting analysis where there is a higher return than approaching 
programs individually. The goal of these efforts is to increase 
efficiency and save dollars, building on the success of previous cross-
cutting analyses. Congressional guidance will be a factor in

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choosing topics for the next group of cross-cutting analyses.
   Maximize ExpectMore.gov Impact.--The Federal Government should be 
accountable to the public for its performance. This web-based tool 
provides candid information on how programs are performing and what they 
are doing to improve. The BPI Initiative will work to increase the reach 
and impact of this valuable information to improve program performance 
and accountability for results.
  Note.--A table with summary information for all programs that have 
been reviewed using the Program Assessment Rating Tool (PART) is 
available at: www.whitehouse.gov/omb/budget/fy2008/sheets/part.pdf. This 
table provides program ratings, section scores, funding levels, and 
other information. Additionally, a complete data file and data model of 
all assessments on ExpectMore.gov is available at: www.whitehouse.gov/
omb/expectmore/whatsnew.htm. This is a comma-separated values file that 
academics and researchers can use to analyze performance data.