    [Analytical Perspectives]
    [Performance and Management Assessments]
    [2. Performance Improvement Initiative]
    [From the U.S. Government Printing Office, www.gpo.gov]

    [[Page 7]]

      ======================================================================

                     PERFORMANCE AND MANAGEMENT ASSESSMENTS

    ========================================================================

    [[Page 9]]

                      2. PERFORMANCE IMPROVEMENT INITIATIVE

                                 I. INTRODUCTION

      The American people expect the Federal government to implement
    programs that will ensure the Nation's security, provide critical
    national level services and produce meaningful results. To hold
    government accountable for its performance, taxpayers must have clear
    and candid information about the successes and failures of all Federal
    programs. For the third straight year, the Administration is providing
    this type of information to the public on ExpectMore.gov, a user-
    friendly government website that allows public access to government
    programs. ExpectMore.gov describes which government programs are
    performing, which ones are not, and in both situations, what is being
    done to improve them.
      The objective of the President's Performance Improvement Initiative
    (PII) (formerly the Budget and Performance Integration Initiative) is to
    ensure that Federal dollars produce the greatest results possible. The
    Initiative provides information on program performance to help the
    President and Congress make better, more informed decisions about the
    programs.
      The PII focuses on performance 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 from tax dollars every year. Agencies have
              ready access to program performance information from a variety
              of sources such as the Program Assessment Rating Tool (PART)
              and other independent program evaluations, investigations,
              audits, and analyses.
        Greater Investment in Successful Programs: Although
              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
              poorly 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 PII is showing great progress toward helping programs
    become more efficient and more effective through implementation of
    meaningful improvement plans.
      Many programs are demonstrating improved results. For example:
        Social Security Administration (SSA): SSA increased agency
              productivity by 15.5 percent since 2001 through increased use
              of information technology and improved business processes. SSA
              would have required $980 million more in 2007 to process the
              same work if productivity improvements had not been realized.
        High Intensity Drug Trafficking Areas (HIDTA): The HIDTA
              program improved the way it measures success by implementing a
              system for tracking and analyzing performance data. Using this
              information, more drug trafficking organizations were
              dismantled for less money. In 2005, 2,183 Drug Trafficking
              Organizations were dismantled for $80,000 each. By 2006, 2,332
              were dismantled for $76,000 each.
        Administration on Aging (AoA): AoA improved its outreach and
              services to elderly Americans who suffer from disease and
              disability. In 2006, there were 18 States that improved
              targeting to those living below the poverty level, serving an
              additional 80,000 elderly individuals who lived in poverty.
              Over 345,000 elderly and disabled individuals, who due to
              their physical conditions would otherwise be living in nursing
              homes, can continue to live in their own homes and stay
              connected to their communities. This is an increase of more
              than 52,200 nursing home-eligible individuals since 2003.
        Federal Bureau of Prisons (BOP): In 2006 as a part of its
              ``Greening Prisons'' initiative, the BOP piloted renewable
              energy technologies in several prisons and generated savings
              of $1.1 million. As a result, in 2006 and 2007, BOP entered
              into 18 new national Energy Savings Performance Contracts with
              energy services companies to generate additional savings.
      Agencies are identifying additional actions to improve the performance
    of each of their programs. For example:
      Progress toward the second PII goal of improving resource allocation
    has been limited, but this year, the Administration had more success in
    terminating some low-performing programs and targeting those resources
    to well-performing programs. In 2008 seven programs were terminated,
    saving $156 million and six programs were reduced, saving $1.120
    billion. Though no decision is based purely on performance, overall,
    high performing programs received larger funding increases than those
    that did not perform as well.

    [[Page 10]]

              II. HOW THE PERFORMANCE IMPROVEMENT INITIATIVE WORKS

      Several aspects of the Performance Improvement Initiative are designed
    to maximize program performance. They include:
        Comprehensively assessing performance using the PART;
        Publishing quarterly Scorecards to hold agencies accountable
              for managing for results, addressing PART findings, and
              implementing improvement plans;
        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 more than 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,
    are the billions of taxpayer dollars the Federal Government spends 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 can be 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 to 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 whether
    they were meeting those goals.
      This Administration built upon GPRA requirements by creating the PART
    (Program Assessment Rating Tool), 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 also have raised concerns that OMB has
    striven to address. For instance, some reviewers found that assessments
    of different programs lacked 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.

    [[Page 11]]

    [[Page 12]]

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

                                          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 and accelerate the
     improved performance of programs with similar missions.

    Each PART includes 25 basic questions and 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.

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

                Publish a Scorecard to Hold Agencies Accountable

      Agencies are achieving greater results with the help of the habits and
    disciplines established through the Performance Improvement Initiative
    (PII). 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
    consistent with the Program Improvement Initiative. Agencies have
    developed and are implementing detailed, aggressive improvement plans to
    achieve these goals. Most importantly, agencies are held publicly
    accountable for adopting these disciplines. To meet the Standards for
    Success for the PII, 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

    [[Page 13]]

              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;
        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--status and progress.
    First, they are rated on their status in achieving the overall goals for
    each initiative. They are given a green, yellow or red rating to clearly
    announce their performance. Green status is for success in achieving
    each of the criteria listed above; yellow is for an intermediate level
    of performance; and red is for unsatisfactory performance.
      Second, agency progress on the Program Improvement Initiative
    standards is assessed separately. Agency progress 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 of
    not realizing its objectives without significant management
    intervention.
      As of September 30, 2007, fourteen agencies achieved green status on
    the Program Improvement Initiative Scorecard. The agencies at green are:

    1.          Department of Agriculture
    2.          Department of Commerce
    3.          Department of Education
    4.          Department of Energy
    5.          Environmental Protection Agency
    6.          Department of Justice
    7.          Department of Labor
    8.          Department of Transportation
    9.          General Services Administration
    10.         National Aeronautics and Space Administration
    11.         National Science Foundation
    12.         Small Business Administration
    13.         Smithsonian Institution
    14.         Social Security Administration
      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,
    Americans can see for themselves how their government programs are
    performing. In many cases, the Federal Government performs well. In some
    cases, it performs better than the private sector.
      ExpectMore.gov contains summaries of PART results for all programs
    that have been assessed to date. The site provides program information
    that a concerned citizen could use 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, that 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 are transparent
         --Statements about goals and achievements are clearer; and
        Demand for better quality and more timely performance data.

                   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 encouraging managers from multiple
    agencies to agree to a common set of goals and by placing the focus on
    quantifiable results. Cross-cutting 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 se

    [[Page 14]]

    lected for cross-cutting analyses. To date, the Administration completed
    cross-cutting analyses of the government's math and science programs,
    community and economic development programs, import and food safety
    programs, and others.

                                  III. RESULTS

      As mentioned above, the PII measures its progress according to two key
    principles:
        Improved Program Performance; and
        Greater Investment in Successful Programs
      There has been greater success in leading 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 PII 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.
      2009 marks the sixth 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 more than 1,000 programs, representing approximately 96 percent
    of the Federal budget. The Administration will use the PART to assess
    the performance and management of the remaining Federal programs.
      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 PII has been very successful in
    focusing Agencies' attention on program performance. For example,
    approximately:
        89 percent of programs established or clarified their long-
              term and annual performance goals to focus on the outcomes
              that are important to the American people.
        82 percent of programs are achieving their performance
              goals.
        73 percent of programs are measuring their efficiency, a
              relatively new activity for Government programs.
        70 percent of programs are improving efficiency annually,
              producing more value per dollar spent.
        55 percent of programs that were initially unable to
              demonstrate results have improved their overall performance
              rating.
      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 recent debates in the Senate.

    [[Page 15]]

      Senator Wayne Allard introduced an amendment to cut funding for
    programs funded in the Labor, HHS, and Education 2008 Appropriations
    Bill rated as ``Ineffective'' by 10 percent across the board. In
    advocating his amendment, Senator Allard said:

        These assessments represent the combined wisdom of career officials.
          This is not a political process. These are objective evaluations
           done by career officials at agencies and OMB, and are based on
         evidence of that program's performance. While a program's overall
           rating should not be the sole determinant of funding, Congress
         should prioritize funding programs that perform well. Ineffective
         programs in particular should be scrutinized to determine whether
         the resources they use could be better spent elsewhere and whether
                 their goals could be achieved through other means.

      Senator Allard brought warranted focus on programs that aren't
    performing as they should. In arguing against the amendment, Senator Tom
    Harkin said:

        The Program Assessment Rating Tool . . . is intended to help assess
        the management and performance of individual programs. So it is not
          just a question of whether the program works, it also evaluates
          whether Congress has designed the program in a clear manner and
            whether Federal agencies do a good job managing the program.

      Both Senators went on to have a substantive debate about how programs
    were performing and how to get them to perform better. And soon
    thereafter, in arguing for his own amendment, Senator John Cornyn said:

          The Office of Management and Budget has recently reviewed over a
         thousand programs. As this chart indicates, upon a review of 1,016
        Federal Government programs, they have concluded that 22 percent of
          those programs rated either as ineffective or they are unable to
           determine whether they are effective. In other words, they are
           unable to find evidence that they are effective. They have not
        conclusively determined them as ineffective, but they have concluded
           that 22 percent of the Federal Government programs are either
          ineffective or the results are not demonstrated. Anybody who is
         interested anywhere in the world--certainly in the United States--
          can look at the information on this ExpectMore.gov Web site and
         inform themselves, as I am sure they would want to, about what the
             Federal Government is doing and not doing on their behalf.
      This debate on Senator Allard's amendment was an important one. It
    shows increasing attention to the objective rating of program
    performance.

                                 IV. NEXT STEPS

      The PII has identified several activities to improve program
    effectiveness over the coming year:
      Ensure Program Goals are Adequate and Improvement Plans are Aggressive
    and Result in Improved Performance.--Review of all completed PARTs and
    program goals, as well as 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 improvement must be tracked and reported.
      Appoint Agency Performance Improvement Officers.--To ensure successful
    implementation of the new policy of the Federal Government embodied in
    Executive Order 13450 to spend taxpayer dollars effectively, and more
    effectively each year, each agency will appoint Performance Improvement
    Officers. Performance Improvement Officers are responsible for
    coordinating the performance improvement activities of their agencies,
    including:
        Developing and improving the agency's strategic plans,
              annual performance plans, and annual performance reports, as
              well as ensuring the use of such information in agency budget
              justifications;
        Ensuring program goals are aggressive, realistic, and
              accurately measured;
        Regularly convening agency program management personnel to
              assess and improve program performance and efficiency; and
        Assisting the head of the agency in the development and use
              within the agency of performance measures in personnel
              performance appraisals, particularly those of program
              managers, to ensure real accountability for greater
              effectiveness.
      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 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 PII Initiative will work to increase the reach
    and impact of this valuable information to improve program performance
    and accountability for results.

    [[Page 16]]

      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/expectmore/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.