[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]



 
   THE PRESIDENT'S MANAGEMENT AGENDA: ARE AGENCIES GETTING TO GREEN?

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

                                HEARING

                               before the

                 SUBCOMMITTEE ON GOVERNMENT EFFICIENCY
                        AND FINANCIAL MANAGEMENT

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 11, 2004

                               __________

                           Serial No. 108-155

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpo.gov/congress/house
                      http://www.house.gov/reform

                                 _________


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                    COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana                  HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut       TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana              CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California                 DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky                  DANNY K. DAVIS, Illinois
JO ANN DAVIS, Virginia               JOHN F. TIERNEY, Massachusetts
TODD RUSSELL PLATTS, Pennsylvania    WM. LACY CLAY, Missouri
CHRIS CANNON, Utah                   DIANE E. WATSON, California
ADAM H. PUTNAM, Florida              STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia          CHRIS VAN HOLLEN, Maryland
JOHN J. DUNCAN, Jr., Tennessee       LINDA T. SANCHEZ, California
NATHAN DEAL, Georgia                 C.A. ``DUTCH'' RUPPERSBERGER, 
CANDICE S. MILLER, Michigan              Maryland
TIM MURPHY, Pennsylvania             ELEANOR HOLMES NORTON, District of 
MICHAEL R. TURNER, Ohio                  Columbia
JOHN R. CARTER, Texas                JIM COOPER, Tennessee
MARSHA BLACKBURN, Tennessee          ------ ------
------ ------                                    ------
------ ------                        BERNARD SANDERS, Vermont 
                                         (Independent)

                    Melissa Wojciak, Staff Director
       David Marin, Deputy Staff Director/Communications Director
                      Rob Borden, Parliamentarian
                       Teresa Austin, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel

     Subcommittee on Government Efficiency and Financial Management

              TODD RUSSELL PLATTS, Pennsylvania, Chairman
MARSHA BLACKBURN, Tennessee          EDOLPHUS TOWNS, New York
STEVEN C. LaTOURETTE, Ohio           PAUL E. KANJORSKI, Pennsylvania
CANDICE S. MILLER, Michigan          MAJOR R. OWENS, New York
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
------ ------

                               Ex Officio

TOM DAVIS, Virginia                  HENRY A. WAXMAN, California
                     Mike Hettinger, Staff Director
                 Larry Brady, Professional Staff Member
                          Amy Laudeman, Clerk
          Mark Stephenson, Minority Professional Staff Member





                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on February 11, 2004................................     1
Statement of:
    Johnson, Clay, III, Deputy Director for Management, Office of 
      Management and Budget......................................     5
    McSlarrow, Kyle, Deputy Secretary, Department of Energy......    29
Letters, statements, etc., submitted for the record by:
    Johnson, Clay, III, Deputy Director for Management, Office of 
      Management and Budget, prepared statement of...............     7
    Maloney, Hon. Carolyn B., a Representative in Congress from 
      the State of New York, prepared statement of...............    60
    McSlarrow, Kyle, Deputy Secretary, Department of Energy, 
      prepared statement of......................................    31
    Platts, Hon. Todd Russell, a Representative in Congress from 
      the State of Pennsylvania, prepared statement of...........     3
    Towns, Hon. Edolphus, a Representative in Congress from the 
      State of New York, prepared statement of...................    56


   THE PRESIDENT'S MANAGEMENT AGENDA: ARE AGENCIES GETTING TO GREEN?

                              ----------                              


                      WEDNESDAY, FEBRUARY 11, 2004

                  House of Representatives,
Subcommittee on Government Efficiency and Financial 
                                        Management,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2 p.m., in 
room 2247, Rayburn House Office Building, Hon. Todd R. Platts 
(chairman of the subcommittee) presiding.
    Present: Representatives Platts, Towns, and Maloney.
    Staff present: Mike Hettinger, staff director; Dan Daly, 
counsel; Larry Brady and Tabetha Mueller, professional staff 
members; Amy Laudeman, legislative assistant; Sarah D'Orsie, 
clerk; Adam Bordes, minority professional staff member; and 
Jean Gosa, minority assistant clerk.
    Mr. Platts. This hearing of the Government Reform 
Subcommittee on Government Efficiency and Financial Management 
will come to order. Our ranking member, Mr. Towns, is on his 
way and will be here shortly, and we will turn to him for his 
opening statement once he arrives.
    As elected representatives of the people, we have a 
responsibility to use taxpayer dollars in the most efficient, 
effective manner possible. Only by better understanding how 
these dollars are spent and managing the Federal Government in 
a more transparent, results-oriented way, can we begin to 
govern with accountability.
    President George Bush's management agenda is the most 
aggressive attempt by any administration to achieve this goal, 
and I certainly commend the administration for its steadfast 
efforts in this area. The administration's Program Assessment 
Rating Tool [PART], implemented for the first time last year, 
seeks to tie funding sources to outcomes at the program level. 
PART is a key tool, not only in the President's management 
agenda, but also as part of the broader performance-based 
accountability effort encompassed by the Government Performance 
and Results Act [GPRA].
    The vision behind GPRA was an effective, efficient 
government that produced tangible results, results that would 
form the basis for budgetary decisions. GPRA was intended to 
serve as a firm foundation on which to build a structure of 
performance management, and the President's management agenda 
is a logical evolution in bringing about such reform. The 
budget and performance integration aspect of the President's 
management agenda brings us closer than ever to one of the most 
elusive, yet critical goals--linking performance to budgeting 
decisions.
    PART, as it has been implemented in the last two budget 
cycles, is a proven and effective management tool. Agencies now 
understand what is expected of them in the PART process and are 
beginning to manage for results. This year, unlike last, a 
number of budget decisions can be directly linked to the use of 
the PART, but there is still a long way to go. The PART, as a 
budgetary tool, continues to evolve.
    Results should certainly be an important factor underlying 
budget decisions. Efforts to infuse performance-oriented 
information into the allocation of resources will, by 
definition, provide better informed budget decisions, as well 
as help to improve the programs being reviewed.
    Today we will hear from two senior administration officials 
with unique perspectives on the implementation of the 
President's management agenda and PART. Clay Johnson, Deputy 
Director for Management at the Office of Management and Budget, 
is responsible for implementing these reforms governmentwide 
and brings a broad perspective. From the agency perspective, 
Deputy Secretary of Energy Kyle McSlarrow is here to provide 
the subcommittee with specific information on successful 
reforms at the Department of Energy. I would like to thank each 
of you for your attendance and participation in this hearing 
and also for your extensive preparation and your written 
testimonies that you have submitted.
    [The prepared statement of Hon. Todd Russell Platts 
follows:]
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    Mr. Platts. With Mr. Towns not being present yet, I think 
what we will do is go ahead and swear in our witnesses and 
allow you to begin your opening statements. Then we will come 
back to Mr. Towns at the time he arrives and you have concluded 
your testimony.
    If I could ask our two witnesses to stand and any staff who 
will be advising you as part of your testimonies here today to 
also stand and raise your right hands.
    [Witnesses sworn.]
    Mr. Platts. The clerk will reflect that both witnesses 
affirmed the oath.
    Again, we appreciate your substantive written testimonies 
that will complement your oral testimonies here today. We would 
ask that you stay to roughly 5 minutes, but you bring valuable 
insights to this performance assessment process and so I'd 
rather we go long and you get a chance to share your thoughts 
than have you worry specifically about the 5-minute rule.
    I would also like to highlight for all of our attendees 
here today a little bit about each of your backgrounds.
    Clay Johnson is the Deputy Director of OMB. Previously, Mr. 
Johnson served the President as an assistant for Presidential 
personnel. From 1995 to 2000, Mr. Johnson worked for then 
Governor Bush, first as his appointments director and then as 
his chief of staff. In addition, he has held a number of 
prominent positions in the private sector. Again, we're 
delighted to have you here and to have your expertise shared 
with the committee. So if you would like to proceed with your 
testimony.

STATEMENT OF CLAY JOHNSON III, DEPUTY DIRECTOR FOR MANAGEMENT, 
                OFFICE OF MANAGEMENT AND BUDGET

    Mr. Johnson. Mr. Chairman, thank you for having us. We, 
Congress and the executive branch, can make the Federal 
Government results-oriented, which is what you talked about in 
your opening comments. We both of us, Congress and the 
executive branch, are accustomed to focusing on the amount of 
money we are spending as a validation for how much the Federal 
Government is committed to an objective. But the better measure 
of our commitment is not how much we are spending, or even how 
hard we are working. The better measure is what results we 
achieve on behalf of the American people.
    We can assess the performance of every Federal program, and 
if a program is not working as intended, we can work together 
to decide what to do about it. We can review and evaluate the 
cost of each program and activity, and if the cost is not 
considered to be satisfactory, we can work to reduce it to more 
acceptable levels.
    We can assess how government assets are being managed, 
maintained and deployed. We can assess the service levels we 
provide our customers--our citizens, taxpayers, State and local 
governments, and businesses--and if the service levels are not 
considered to be satisfactory, we can work to make them 
acceptable.
    We can create a results-oriented government, one that 
assesses its performance, controls costs, and manages assets 
and service levels to better serve the taxpayers and citizens. 
We can do this and we have begun to do so.
    The President's management agenda, and its executive branch 
management scorecard, help us do this. We are holding agencies 
accountable for becoming results oriented. Perhaps the most 
important achievement of the PMA, so-called, is the fact that 
many agencies are now using meaningful program performance 
information in their budget and management decisionmaking. In 
particular, a third of the government's major agencies meet 
regularly to use performance information to make program 
management decisions. Agencies, such as the Agriculture 
Department, Education, HHS, Department of Justice, 
Transportation, VA, EPA, GSA, NASA, Energy Department, agencies 
are using information gleaned from program assessments to 
identify program strengths and weaknesses and take appropriate 
action. Their assessments have improved program results. These 
assessments are causing us to ask consistently whether programs 
are working and, if not, what we should do about them.
    One of the most visible factors affecting a program's 
performance is funding. But I believe far too much attention is 
devoted to how much we are spending rather than how much we are 
getting for what we spend. Over time, funding should be 
targeted to program that can prove they achieve measurable 
results. I have included a table with my written testimony that 
shows not only all of the PART ratings, but the funding 
recommended for each assessed program in the President's 2005 
budget. As you will see from that document, a PART rating does 
not today, nor should it ever, result in an automatic funding 
decision. Indeed, a rating of ``Ineffective'' or ``Results Not 
Demonstrated'' may suggest that greater funding is necessary to 
overcome identified shortcomings, while a program rated 
``Effective'' may be in line for a proposed funding decrease 
because we have higher priorities or have already achieved the 
desired result.
    The PART is a vehicle for improving program performance. It 
builds on the strong foundation laid by the Government 
Performance and Results Act. Without the strategic and 
performance planning agencies conducted under this important 
law, there would be no basis on which to judge an agency's 
performance management practices or the goals by which it 
measures success. The PART reinforces the law's important 
requirements to set outcome-oriented goals and measure progress 
against those goals.
    We will continue to improve agency and executive branch 
implementation of GPRA by insisting GPRA plans and reports meet 
the requirements of this law and the high standards set by the 
PART. Codification of the requirement to conduct assessments of 
program performance would be a welcome complement to the 
statutory management framework laid by GPRA, easy for me to 
say.
    As more and more program assessments are conducted, the 
vast majority of budget and management decisions will be 
significantly influenced by information about how programs are 
performing. Agencies will be better able to describe to 
Congress and the taxpayer what his or her funding is purchasing 
and will be managing so that each year improvements in 
efficiency and service delivery can be documented. This is our 
goal, yours and ours--a results-oriented government. Thank you.
    [The prepared statement of Mr. Johnson follows:]
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    Mr. Platts. Thank you, Mr. Johnson.
    Next we have Mr. Kyle McSlarrow. Mr. McSlarrow is the 
Deputy Secretary of Energy. Prior to this assignment, he served 
as Chief of Staff to Energy Secretary Abraham.
    As Deputy Secretary, Mr. McSlarrow serves as the Chief 
Operating Officer of the agency and serves on the President's 
Management Council. Prior to joining DOE, Mr. McSlarrow served 
as vice president of Grassroots.com, as chief of staff to the 
late U.S. Senator Paul Coverdell, as well as deputy chief of 
staff and chief counsel for Senator Majority Leaders Bob Dole 
and Trent Lott between 1995 and 1997.
    Again, thank you for your presence here today. You may 
proceed.

 STATEMENT OF KYLE MCSLARROW, DEPUTY SECRETARY, DEPARTMENT OF 
                             ENERGY

    Mr. McSlarrow. Thank you, Mr. Chairman. I am pleased to be 
here to discuss how the Department of Energy seeks to achieve 
the goals of the President's management agenda, and especially 
how we are integrating performance and budget.
    Would you like me to hold?
    Mr. Platts. Actually, why don't you continue with your 
opening, and then, Mr. Towns, we will come to you for your 
opening statement.
    Mr. Towns. OK. I will just submit it for the record.
    Mr. Platts. OK. Great. Please continue.
    Mr. McSlarrow. When the President issued his management 
agenda in 2001, the PMA scorecard released by OMB rated the 
Department as ``red'' in the status column for all five PMA 
initiatives. Three years later, in the most recent scorecard, 
the Department received all ``yellow'' ratings.
    The reason is simple. The President's vision for ensuring 
that the Federal Government is efficiently run and results-
oriented forced the Department to make management improvement a 
top priority. As a result of the President's leadership, we are 
seeing results and continuing our progress toward making the 
Department performance-driven.
    We believe we have accomplished a great deal in 
implementing the PMA over the past 3 years. And in the interest 
of time, I am going to skip over some of this and would be 
happy to answer questions about it.
    One point I do want to make is that, in addition to what is 
commonly thought of as the five PMA initiatives, an important 
part that we have focused on is project management, which is 
really inseparable from some of the other initiatives. We have 
issued a departmental directive that establishes a common 
Department-wide framework for managing capital asset 
acquisitions and a manual that provides detailed guidance and 
procedures. Each month I receive a project status report which 
identifies all under-performing projects in the Department's 
portfolio and I meet personally with the senior leaders 
responsible for these projects. The reason I raise this is a 
very simple one. DOE is largely a contractor operated agency. 
We have over 100,000 contract employees and about 14,000 
Federal employees. So how we manage contracts is integral to 
everything else we do.
    When it comes to budget and performance integration, we 
have issued a new strategic plan which reflects the 
Department's overarching mission to advance the national, 
economic, and energy security of the United States and includes 
milestones toward achieving that mission. The DOE section of 
the fiscal year 2005 budget request is based upon our strategic 
plan and displays how each dollar we spend supports our goals 
in each of these mission areas.
    Under GPRA, the Government must maintain public 
accountability in a consistent manner across all Federal 
programs. The PART process is helping the government fulfill 
that mandate. For all of its forward thinking, GPRA does not 
include a forcing mechanism to validate the quality of 
performance measures or to require managers to be accountable 
for meeting commitments. I believe PART strengthens GPRA by 
requiring managers to report on results, indeed, one-half of 
the total PART score is based on demonstrated results, and 
mandating performance data into budget justifications.
    Codifying a requirement that Federal programs be assessed 
would strengthen GPRA and ensure that the effort to increase 
accountability is continued. However, it is important that OMB 
and the agencies have the flexibility to determine how 
assessments are to be conducted.
    The Department of Energy, for our part, has embraced the 
PART approach. To date, we have conducted PART reviews for over 
half our programs. We will continue on an ambitious schedule 
and will use the results to help make better informed 
programmatic, budget, and management decisions.
    I will close there, Mr. Chairman.
    Thank you.
    [The prepared statement of Mr. McSlarrow follows:]
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    Mr. Platts. Thank you, Secretary McSlarrow.
    I would like to start maybe with kind of a broad question 
to both of you from a governmentwide versus an agency 
perspective. Clearly, we all share the goal of performance-
based management and the benefits of it. What do you think is 
the greatest obstacle to achieving this goal? Is it accurately 
defining what the outcomes are we are going to assess for a 
program? Is it getting program managers and agency heads to 
really understand the benefits of it and buy into the approach 
in a true good faith manner? Is it resistance of Congress to 
really act on the information shared and incorporate it into 
budgeting decisions? What would be your thoughts on the 
greatest obstacle to this effort?
    Mr. Johnson. Yes. [Laughter.]
    Mr. Platts. All the above. A small challenge.
    Mr. Johnson. A small challenge. I think the biggest 
challenge is to just change habits. Right now when the focus is 
on money, not what the money buys, we have very specific 
reference points--$500 million, $5 billion, $50,000--a very 
specific number. When we focus on results, we oftentimes have 
very imprecise information. The Federal Government is involved 
in a lot of things that are hard to measure, and so we are 
going to find ourselves in situations where we have 10 or 5 or 
15 different measures that get at whether a program is working 
or not, but it will not be an exact measure of it is an A-minus 
or it is a B-plus or whatever. But it is much more relevant and 
much more productive and steers us toward more meaningful 
decisions, I believe, for the benefit of the taxpayer.
    So what we, Congress and the executive branch, agencies, 
have to get in the habit of is adapting to the new process 
where we have more relevant information but oftentimes less 
precise information, and just get in the habit of our asking 
ourselves in budgetary decisions, of authorizing, appropriating 
decisions, does this work, what do we know about it based on 
the fact that it does or does not work, based on the fact that 
we do not know whether it works or not, and based on a whole 
lot of other factors: What should we do about the structure of 
this program, what should we do about its management, what 
should we do, if anything, about its appropriations level.
    But it is, in general, a new habit, a new way of thinking 
about budgets, a new way of agencies interacting with Congress, 
a new way of agencies interacting with themselves. There was a 
great deal of resistance when we first started talking about 
this with agencies 2\1/2\ years ago within agencies. They were 
fearful of focusing on results. I believe they probably 
conjectured that if you were associated with a program that did 
not perform, you were history and the program was likely to get 
zeroed out and you would be without a role in that agency. And 
they have found that is not the case. The focus is on not 
getting rid of things that do not work, but making things work 
that do not. But it is just a new thought process, it is a new 
series of habits that I think we are all capable of doing. 
Agencies have made that transition and I have every confidence 
that Congress will do the same, with a lot of help from us.
    Mr. Platts. Secretary McSlarrow, from the department 
perspective.
    Mr. McSlarrow. I think the last point that Director Johnson 
just made is an important one; which is, this is about cultural 
change. Getting those managers who reported to me, who were, 
frankly, fearful about going out and objectively and honestly 
rating themselves and others, was difficult but I think we have 
gotten over it. And we still have work to do, to change the 
mindset that you are going to be rewarded for fixing problems. 
Once people got that, I think then it went along a lot more 
smoothly. That is always I think going to be an ongoing 
challenge.
    In terms of the challenges that face PART in general, there 
is really one macro and one micro. The macro one I think is, 
and, obviously, for OMB and others in this hearing, involves 
our efforts to get to this point. But for this to work, we have 
to have every constituent part working together. People have to 
appreciate and treat the PART process with credibility and 
respect, and that obviously includes a huge role for Congress.
    The micro challenge is one that we have struggled with a 
lot. We had, in fact, a whole day retreat just trying to come 
to grips with it about a year ago. And that is, how do you 
ensure that the people who are making the judgments are making 
the right judgments. Somebody has to make a judgment. But you 
should not be the judge of your own program, rather it should 
be somebody else on the outside. In this case, it is OMB. But 
how do you ensure that they are well-equipped to make judgments 
in which you can have some confidence, and how do you make sure 
that those judgments all across the programs are consistent 
with one another in a way that the scores actually mean 
something? And from where I sit, we have made tremendous 
progress so that I am comfortable with how I am being graded 
and I am comfortable that these are apples to apples 
comparisons. But I think that is always going to be a work in 
progress.
    Mr. Platts. You both touched on a number of issues I want 
to expand on in more detail. But before I get into some of the 
specifics, in the broad sense, and maybe first within the 
departments and agencies, it sounds like you have made efforts 
with managers to get them to understand that this is really a 
management tool. And a rating of ineffective does not mean no 
money, it may mean that we realize that you do not have enough 
money to achieve your goal, or it might mean that you need to 
rethink how you are spending that money.
    Mr. McSlarrow. Right.
    Mr. Platts. And it sounds like with your departmental 
retreat trying to develop that process and to educate the 
people on the front lines. What efforts have been made with 
Congress? Because, Mr. Secretary, as you said, everybody has to 
buy into this, everybody has to place true faith in the merits 
of these assessments for it to work in the end. What dialog may 
be between the administration and the appropriators especially, 
or with authorizing committee chairs, is there a process 
ongoing now with Members of Congress?
    Mr. Johnson. To move us in general toward the direction of 
focusing on results?
    Mr. Platts. Yes. To better understand what PART is all 
about and how it can be an asset and a benefit to 
decisionmakers here on the Hill as well as within the 
departments and agencies.
    Mr. Johnson. All right. Well, agencies work with their 
individual appropriators. Maybe that is the most important 
issue, important factor. Like NASA has been very successful 
working with the VA-HUD Appropriations Subcommittee, and yet 
other agencies in VA and HUD are less far along. And it is 
largely a function of the fact that Sean O'Keefe and his staff 
work very, very aggressively and closely with the appropriation 
subcommittees to get them to make that transition, to 
understand what was not to be feared and how it was better to 
focus on these things rather than those things. And so, there 
is individual agencies working with their appropriators that 
could be going on, and we are helping them wherever we can.
    We have called on specific subcommittee chairmen and 
Members to address questions they have about performance 
budgets and they want reassurances from us and agencies that we 
are going to help them make that transition. OMB is also 
meeting with Governmental Affairs, Government Reform staffs and 
Members, and Budget Committee staffs and Members, and other 
leadership members in the House and Senate to talk about what 
does it mean to have a Federal Government that is focused on 
results. Where do we think we have the opportunity, I would 
suggest without regard to who is President, where do we think 
we have an opportunity to be 5 years down the road and what 
does that mean for Congress, what does that mean for employees, 
what does that mean for taxpayers. I think it means all good 
things to be results-oriented versus not to be results-
oriented. This is to be pursued, not to be feared.
    So there is general background information, there is 
general seeking out input from employee groups, from Members of 
Congress and from their staffs, and then there is specific 
action with agencies and their appropriators on specific budget 
issues.
    Mr. Platts. And we talked briefly before we started about 
some of the language in the appropriations report language.
    Mr. Johnson. Right.
    Mr. Platts. Clearly, there has been some better acceptance 
or appreciation for the performance-based approach than 
elsewhere even within the same appropriations bill. Is that 
just you think it is going to take some time to change that 
mindset and to better understand what they are being offered?
    Mr. Johnson. Yes. It is our responsibility to help 
appropriations subcommittees make that change. They are used to 
seeing things lined up a certain way, and when all of a sudden 
they get it a different way, I would be resistant, too. Well, 
they need help, and it is our responsibility, the agencies' 
responsibility to help them make that transition. But I am 
without any doubt that 2 years, 3 years from now all these 
appropriations subcommittees will be using performance budgets 
and be glad they are doing so, in my opinion.
    Mr. Platts. I have some followups, but I would like to 
yield to the gentleman from New York, our ranking member, Mr. 
Towns.
    Mr. Towns. Thank you very much, Mr. Chairman. Mr. Johnson, 
let me make it sort of clear, I remain concerned that PART may 
be used as a political tool for negatively assessing various 
social programs that are not viewed favorably by the 
administration but that continue to provide meaningful and 
vital services to many of my constituents. I guess a classic 
example would be HOPE VI programs, Even Start would be another 
one, and the Federal Perkins Loan Program, they are all zeroed 
out in funding in the President's budget because they were 
deemed ineffective under the PART evaluation. Can you explain 
to me why such conclusions were reached when you can talk to 
anybody anywhere and their views are different. Can you tell me 
how you arrived at that?
    Mr. Johnson. I know a little bit about Hope VI, I do not 
know about the other programs. So let me respond just briefly 
to Hope VI, but then respond in general to your question, if 
that would be all right.
    Mr. Towns. Sure.
    Mr. Johnson. Hope VI, as I understand it, accomplished its 
designed purpose. It established a goal and it accomplished 
that purpose. But also, I believe it has been shown year after 
year that there was no further contribution being made to the 
greater goal of the housing goal that it was associated with. 
There is strong commitment in the administration to the housing 
goal, that I cannot specify in detail, that you are familiar 
with. And the feeling was that program, that money was not 
doing anything to help further the pursuit of the 
accomplishment of that goal. The commitment to the goal still 
remains strong. That program did not contribute to the 
accomplishment of that goal.
    Let me give you another example about a program that I am 
familiar with that has to do with Adult Literacy. My 
understanding it, and my first-hand experience is that adult 
literacy programs do not work. At best, they work about 25 
percent of the time. We spend $300 million or $500 million a 
year on adult literacy and yet they are successful a pitifully 
small percent of the time. There the conclusion is we would 
like adult literacy. We are not successful now at teaching 
adults how to read. We need to figure out how to do that 
better. Maybe we structure the program differently, maybe we 
provide for more accountability, maybe we get rid of the 
current program and replace it with another program. But what 
we are doing now does not work.
    So my sense of it, my view of Hope VI is what we hoped to 
accomplish in this housing area, what Hope VI was originally 
designed to accomplish, it either already accomplished or there 
was no evidence to suggest that it was accomplishing its 
desired goal and that a different program, some alternative 
program or another program that already existed should be 
looked to, to accomplish that goal.
    It is about our ability to accomplish the overall goal, not 
to maintain existing programs. The commitment to these goals 
remains large. And the fact that we eliminate a program, an 
education program or a housing program, does not mean there is 
not a commitment to the goal, it means it was determined that 
those 13 out of the 65 programs that have recommended for 
elimination were considered to be ineffective at accomplishing 
the objective. The other 52 programs that have been recommended 
for elimination were not necessarily because of results, it was 
because they were entirely duplicative, it was because they had 
accomplished the goal, because it was not a high priority. But 
there were 13 of the 65 where the primary reason was that they 
just do not work. But that does not mean that we are not 
committed to the objective. It means that those programs were 
not considered to be effective at achieving the goal.
    Mr. Towns. Let me just go at it another way. I am going to 
mention another program, I am going to leave that alone for a 
minute. EPA programs OMB evaluated under PART, 13 programs were 
given a rating of ``Results Not Demonstrated,'' right. The 
summary of the assessment of the nonpoint source grant program 
states that the administration will significantly reduce 
funding in recognition of increased spending on nonpoint source 
pollution through USDA Farm Bill programs. I am concerned that 
the Farm Bill programs alone simply are not sufficient to meet 
the need for grants to clean up nonpoint source pollution. Let 
me be candid. EPA's responsibility to implement and enforce the 
Clean Water Act, that is their responsibility, not the USDA. 
That is the kind of stuff that bothers me. And I hear you, but 
when I look at that, would EPA not be in a better position to 
do that than USDA?
    Mr. Johnson. Again, I am sorry, I apologize for not knowing 
the particulars of that program. But I would be glad to get 
back and respond to you particularly about that program as soon 
as we get back to the office and we will put something in 
writing and send it to you, sir.
    Mr. Towns. Yes. I just have lot of problems here, Mr. 
Chairman, because when you look at the fact that when you talk 
about programs like HOPE VI and other programs that do a lot of 
things in terms of being designed to bring down crime, and then 
when you find a situation where that is not the case that it 
has brought down and you say the program has achieved its 
goals, see, that is the problem I have. I mean, what are you 
evaluating here? I just think that maybe some politics might be 
entering the picture. That is what I am really having some 
difficulty with. And then you have other programs, for 
instance, that have joint kind of funding from State, local, 
and of course Federal, and then of course when you wipe out, I 
am not sure as to how this will work. Could you further 
convince me? I know my time has expired, Mr. Chairman, but let 
me just get an answer.
    Mr. Johnson. As I mentioned, we have been talking to 
congressional staff members and we will soon be talking to 
their Members, and one of the questions we ask them is, is it 
likely that a results-oriented government is going to be well 
thought of by Congress? And the focus, the answer that we got 
back, and I was kind to hear it, is that focusing on program 
results or agency results is good, it is what we should all be 
aspiring to do. We define what our goal is, not necessarily 
what our program goal is, but what are the overall objectives--
what are the President's priorities, what are Congress' 
priorities, what kind of funding, what kind of programs we have 
to address those larger objectives. Are we then accomplishing 
those objectives? If we are not accomplishing those objectives, 
then Congress or somebody else can decide that is not a 
priority for us. But as long as it is a priority, we have to 
figure out how to make those programs work. And if we cannot 
make those programs work, we need to recommend that they be 
suspended and that the money be spent elsewhere or that 
something else be done with the money, give it back to the 
taxpayers, we spend it on something else, we structure a 
different program to approach that objective.
    I do not believe it necessarily has to be driven by 
politics. I think the debate has to be what is the intended 
result, what is the intended change in the status quo that we 
seek, would the result of this combination of, in this case, 
housing programs accomplish that, how are each of the programs 
contributing to the desired result. If they are not 
contributing the desired result, the desired result which 
Congress and the executive branch has said is a worthy goal, 
then we need to figure out more effective ways of spending that 
money, more effective programs designed to get at the desired 
result. So I do not think that there is any more risk than 
normal for politics to be involved in what goes on here. In 
fact, I think it makes the debate potentially much less focused 
on politics and much more focused on intended outcomes.
    Mr. Towns. Well, let me say this and then I yield back, Mr. 
Chairman. I just think it is EPA's responsibility to implement 
and enforce the Clean Water Act and then I just cannot see USDA 
assuming the responsibility when EPA is in a much better 
position to do it than anybody, they have the experts. That 
just does not make any sense to me. I might as well be honest 
with you.
    Mr. Johnson. Yes. And I will be glad to get back to you 
with all that. I really just do not know anything about it.
    Mr. Towns. OK. Good. I yield back, Mr. Chairman.
    Mr. Platts. Thank you, Mr. Towns. Let me expand on Mr. 
Town's question. One of the challenges, and it is about kind of 
changing our mindset and how we look at decisions, you 
referenced Even Start, as an example, as deemed ineffective and 
being zeroed out, family literacy programs. If we look at it 
only in the light of we are assessing that program, saying we 
are going to stop investing in literacy, it would I think maybe 
seem possibly more partisan oriented or a partisan agenda 
verses policy oriented. Because if you look at it in the big 
picture and the goal is how we best achieve that goal, my 
understanding is the administration in zeroing out Even Start 
recommended and did move all of its money to an Early Reading 
First program. And that is the key with the PART process. As 
you look at the big picture, it is how do we truly achieve 
literacy for these families and their children. And if we do it 
in the big picture, it kind of all fits together in a more 
logical sense than if you look at that individual program. Am I 
accurate in that kind of summary of the important approach of 
how we look at PART and not just at individual programs, but 
what is the goal of that program and how best to achieve it?
    Mr. Johnson. Right. I would agree with that summary, and I 
think particularly any program that is recommended for 
elimination in the field of education. I do not think anybody 
would say that President Bush or the administration is not 
committed to all things related to education. But we are 
committed to being results oriented. And if we are spending 
money on a program that does not help us achieve the desired 
result, literacy or whatever it is, then we should find a more 
effective way to pursue that desired outcome.
    Mr. Platts. And that is certainly going to be one of the 
challenges for everybody and I think particularly for Members 
of Congress. As one who is familiar with Even Start, I saw that 
and said, well, what is this here? It seems like that is a 
significant change and we need to look at it more to see if it 
is something we think we can better achieve the goal by putting 
those funds into another program that is focused on a similar 
effort, or not.
    Mr. Johnson. Right.
    Mr. Platts. And I think that is something that does not 
happen overnight because it is not the way we have looked at 
program funding historically here on the Hill.
    Let me get into some of the way you are going about the 
PART process. And as it went into second year and about I guess 
a third of the original class of PART programs being re-
reviewed, how did you decide what 80 or so programs would get 
that second review? What went into that decisionmaking?
    Mr. Johnson. Well, the agencies decide if they believe 
there is likely to be a change in assessment of a program. 
Because maybe at the beginning they did not have performance 
measures, now they do, they have thought about it and they have 
come up with some other ways, they have changed the way it is 
managed, they have changed the way it is structured. And when 
they believe there is to be a change in the way the program is 
to be PARTed, they ask for it to be reassessed. So it is in the 
agency's best interest to have current readings of all their 
programs. And if they have been working to change the status, 
the performance, the measurement of the outcomes, they request 
a reassessment. So it is initiated by the agency.
    Mr. Platts. How about as you go into the new third round 
and which ones are selected? Really not just the third, but 
what you are looking at for the 4th, 5th year, kind of in the 
bigger picture of the selection process. Same thing, that it is 
really agency driven?
    Mr. Johnson. It is both. I think a lot of different things 
drive that. One is, agencies will say, well this one comes up 
for reconsideration, or we have a lot of questions about this 
program or how these programs work together. So they will ask 
for several programs to be PARTed in the same year so we have 
that information with which to better inform the dialog. In 
other cases, this year we are going to focus on programs of 
economic development, and job training, and I think rural water 
across the boards, so will be sure to PART a number of those 
programs so we can get a cross-agency look at it. In other 
cases, it is just pick the next ones, or some agencies want to 
the large programs first and do the smaller programs toward the 
end. That last 20 percent is going to be probably, in general, 
much smaller programs than we have analyzed in the previous 4 
years. But a number of different things go into that agency and 
OMB decision on which ones to PART.
    Mr. Platts. And that kind of leads into the comparisons, 
like economic development programs, and in the big picture, 
where OMB plays a role, is what you are doing to look at kind 
of the cross-cutting, not just looking at economic development 
at Commerce but in every agency. It seems like to have a good 
understanding whether this program is better served by shutting 
that down and moving the funds over here, the closer they are 
PARTed together the more informed your decision is going to be. 
Where do we stand in that kind of cross-cutting approach?
    Mr. Johnson. Well PART is one way to look at programs 
dealing with the same general issue. The White House has been 
looking for the last year at programs that touch and deal with 
the issue of disadvantaged youth. There are hundreds of 
programs and hundreds of billions of dollars of money that 
directly or indirectly go to that issue. And a good number of 
them have been PARTed. Even if they had all been PARTed, PART 
would only be one of the factors you'd look at. Because you 
might have a bunch of programs that work, but yet a big part of 
the issue related to disadvantaged youth may not be addressed 
by all of our programs and maybe we are double addressing 
something over here. So it is how individual programs work and 
how consistently their performance measures relate to one 
another and so forth. That is one of the factors we look at, 
but it is only one of them. There is no magic in a PART. Low 
score means this, high score means that. It is one of the 
things we look at.
    It was the White House's desire to look at disadvantaged 
youth that prompted that analysis, it was not the fact that we 
had PARTed all these programs, because we had not. We had 
PARTed, as it turned out, I think a majority of the programs. 
But we are going to specifically look at economic development 
this next year, and so we try to look at all that because we 
think there is a great opportunity there. We know there are a 
lot questions there about in almost every agency there are tens 
of billions of dollars and is there a way to do economic 
development more effectively.
    Mr. Platts. Yes. The number is maybe like 300 or so 
different economic development programs.
    Mr. Johnson. Yes, I do not know. It is some incredible 
number of.
    Mr. Platts. Yes. Given that government efficiency is part 
of our subcommittee title, it seems like we are probably not 
being the most efficient to have that many different programs 
supposedly focused on the same goals. So I think getting to 
that cross-cutting where it is looking at the service being 
provided will further strengthen the PART process and the 
actions or benefits that come from it.
    Mr. Secretary, how about within the Department of Energy, 
in your own department's process of which programs you are 
doing the second year? I think you had a couple that were re-
reviewed. How did you specifically as an agency make those 
decisions?
    Mr. McSlarrow. Well, we did. If it were up to me, I would 
try to do PART for everything. And I would try to do it every 
year because I want to build as many datapoints to actually see 
why things are happening. OMB allowed as how that might just 
completely swamp the system, and, frankly, it is a good day 
when I can have OMB cry uncle. [Laughter.]
    The budget is already out; so I guess I can say that. But 
what we are trying to do is, we have four major agency 
missions, and so what we are trying to do is touch on each of 
the major food groups. And as we go through that process, we 
are going to try and add new ones to it. And it is going to be 
a balance, and I do not know exactly how it will be struck, but 
it will be balanced between adding new ones and then making 
sure that we re-PART last year's, or certainly ones that were 
done 2 years ago. I would not want to go beyond the 2-year 
period. That would be time to see whether or not people have 
implemented the corrective action and actually gotten results 
from the PART itself. If you go much beyond that, I think you 
just sort of lose any focus you might have.
    So, as I say, I think we are fairly ambitious in what we 
want to do. Our view is that in addition to all the other good 
things that the PART process is doing that we are discussing 
here today, this is just a great management tool for us. Even 
if OMB were not making us do it right now, we would do it now.
    Mr. Johnson. Making you do it?
    Mr. McSlarrow. In a cooperative way. You know, it is just 
good management.
    Mr. Platts. One of the issues that we have been looking at 
kind of separate from PART is the financial management systems 
out there. Some agencies, departments have made great strides 
and are in great shape, and others continue to try to get their 
hands around having good information to provide decisionmaking 
from the financial management side. If you are PARTing a 
program that is in that category, SBA or some that have clearly 
identified challenges in the financial management, how is that 
impacting your ability to really get an idea of whether they 
are doing a good job? Or is that more likely to come up in the 
``Results Not Demonstrated'' because you do not have the 
information? And maybe again, from the department and the 
broader perspective, if you both could address that.
    Mr. McSlarrow. Well, in most cases where we have ``Results 
Not Demonstrated,'' I do not think this is entirely the case 
with every one, but with most of them we just simply were not 
able to get to the point where we could figure out what the 
performance metrics really were. In other words, people had 
performance metrics, that included things like, ``how many 
grants did we get out the door?'' ``Did we spend all the money 
that Congress appropriated?'' And getting to the next level of 
what are the grants actually doing was harder in some areas 
than others, particularly with applied R&D. And so the 
difference between last year and this year for some of those 
programs, particularly our scientific programs, is we were able 
to get to that next level.
    In terms of the financial management, that certainly has 
aspects to it because the cost accounting, knowing the value of 
a product you are getting or the output you are putting out, is 
something that we are trying to grapple with. It tends in my 
mind to be something that is largely driven by other portions 
of the President's management agenda. But, and this is probably 
important to note here, it is also true that all of these 
things work together. In other words, human capital is 
applicable to all the other PMA initiatives, including the PART 
process, as PART is to human capital. And so they all do 
integrate. But at the end of the day, the financial management 
side has a lot of huge challenges. Those are substantive 
challenges that we have to fix through the President's 
management agenda and then what PART does is tell us whether or 
not we are actually accomplishing it.
    Mr. Platts. And then, Mr. Johnson, before you respond, your 
comment about getting to that here's how much we spent and who 
got the grant and then really getting to did they achieve any 
goal, Maurice McTeague, one of our witnesses last week and last 
year, I mean, really, the accountability of outcomes and really 
which is I think exactly what we are after here, is you can 
show us where you spent the money and how much you spent, but 
what outcomes were achieved for it. That is exactly what I 
think all of us are after, and I think we have maybe a greater 
challenge here on the Hill to embrace that approach. But that 
approach that your department is taking is exactly what I think 
we need to do.
    Mr. Johnson. On that point, counting the number of grants 
they got out the door is an easier number to come by than all 
this research that they are doing, what are we getting for 
that, that is very hard to get at.
    Mr. Platts. Right.
    Mr. Johnson. And so that was the earlier point I was 
making, suggesting, was that less precise, harder to define, 
but more relevant.
    Mr. Platts. And that creates some of the challenge in Mr. 
Towns' question about if it is more subjective, the argument 
that maybe it is more politicized is more arguable. But I think 
the point that it is, but that is what we are really after. It 
is the benefit from the money spent, not just that we spent it 
as we said we would, but did we actually achieve a benefit for 
the taxpayers.
    Mr. Johnson. My answer to your basic question, first 
question, is that a number of agencies, DOD, HHS, HUD I think, 
are several years away from having the kind of financial 
management system that they want to have. So that hampers them 
a measuring, assigning cost to specific programs or parts of 
programs. But that should not hamper them from measuring the 
results that are being achieved by programs. So I think the 
primary shortcoming in the absence of a good, sound financial 
management system is the ability to measure financial 
performance or efficiency of programs, but it should not 
hamstring us from measuring effectiveness of programs. So that 
is the basic, most important thing. Until we start measuring 
results, we cannot measure results divided by spending, so we 
can still focus in the next 2, 3, or 4 years until we get good 
financial performance systems on doing a better job of managing 
results and then start looking at the cost to achieve those 
results.
    Mr. Platts. In the end it will present a better or more 
complete picture I guess as we get hand-in-hand, those good 
financial management tools in place and that information is 
part of the review.
    Mr. Johnson. Yes. Right.
    Mr. Platts. I guess that somewhat relates to a GAO 
recommendation about a governmentwide strategic plan and that 
GPRA should be amended to require that in addition to the 
individual plans. Would that approach, if we amended GPRA to 
have that governmentwide strategic plan, kind of complement 
well the idea of using PART, cross-cutting the services we are 
after, economic development, job training, or whatever it may 
be, would that type of strategic plan be an asset to what we 
are looking to do under PART?
    Mr. Johnson. OMB's feeling is that the budget currently is 
every year the President's strategic plan. The administration 
talks about it considers its priorities to be and how 
recommended spending lines up relative to those priorities. And 
if programs are not contributing to the pursuit of those 
objectives, how we propose dropping them, or expanding them, or 
keeping them the same, or whatever. So we approach the budget, 
the administration does, as if its budget is to serve as a 
strategic plan. And we are not sure we understand what the 
argument is for an additional planning document.
    Mr. Platts. That the budget and PART being incorporated 
into that budget really is flowing from that administration 
identified strategic plan.
    Mr. Johnson. Right. Right.
    Mr. Platts. The challenge--I apologize, we keep touching on 
different things and I'm jumping around here a little bit. I 
want to get to the codification issue and, if we are going to 
do that, how do we approach it. But on the approach we are 
taking, the difficulty in assessing like the grants, of how to 
assess whether it was a good outcome or not, or what is the 
exact outcome we are assessing, how do you do that where there 
is a program that has more than one intended goal, and how do 
you assess it if it is economic development and job training 
related and doing cross-cutting comparison, how do you line it 
up? What is the suggestion of how you are approaching that, and 
it might of course be more department-specific than the broad 
governmentwide.
    Mr. Johnson. I am counting on you. [Laughter.]
    Mr. McSlarrow. It is an interesting thing that, of course, 
you can have programs that have multiple goals. But if you get 
right down to it, you should not. In other words, when we first 
came to the Department 3 years ago we asked people: What do you 
think the mission is? We had a million different answers. Well, 
the answer the Secretary has given people and what we are 
implementing is national security. All of that cascades down to 
the program level. If things are cobbled together that really 
should not be, then they ought to be separated. So there is a 
management choice that you face as you go through this. I would 
not let the management organizational structure drive how you 
do PART. PART form should follow function. I probably cannot 
come up with anything more cliche than that at the moment. But 
nonetheless, PART should be viewed as a tool that is following 
the other decisions that you are making. And so there may be 
many different aspects to a particular goal, but if it is truly 
a coherent mission and some kind of unit that is an integrated 
whole, you can judge that, and you can judge that using the 
assessment rating tool.
    Mr. Platts. And am I understanding you correctly that PART 
also may help to identify--if you are looking at a program that 
has these various objectives, goals that maybe should not be 
under that same program, that you can, again from a management 
of that program, say this one should be over here, and this one 
should be its sole responsibility. Is that something you are 
seeing from your PART process?
    Mr. McSlarrow. We do. And it is broader than that. One 
reason why I was saying we would do this anyway now that we 
have seen the results, is that once you start asking these 
kinds of questions, it is amazing the answers you get. It is 
that simple. It could be exactly what you just described, or it 
could be other pieces of information. This is a discipline that 
now everybody must follow, because I have put all this into the 
performance criteria for how I judge performance decisions for 
personnel, whether it is SES or GS. And so now, all the way 
down the line people are turning around and asking the same 
sets of questions, and you never know what you are going to 
get. And so it has been useful in churning up some other 
decisions.
    Mr. Platts. My staff being always on top of things, I 
should reference when we talk about financial management and 
some of the challenges out there, the information they have 
given me is the DOE's realignment of your financial operations 
through the A-76 process, and with the Federal employees 
winning the competition and projected to save $30-plus million 
to taxpayers, that I should highlight that fine financial 
management being conducted within your department.
    Mr. McSlarrow. Thank you. We are proud of it. We are proud 
that our in-house team won. We were able to reduce the costs, 
we were able to streamline from over 10 different financial 
management sites down to 3, and, as you said, we are going to 
save the Government some money and provide all the service. So 
it was a win-win all the way around.
    Mr. Platts. And it is a good story for employees out there. 
A-76 is often looked at as kind of the enemy and it can be 
really a great partner in helping employees strengthen their 
work and in the goals they achieve and the services they 
provide for the funds spent of taxpayer money.
    Mr. McSlarrow. If I can, I think you raise an important 
point, which is that in my view there is no hidden agenda here. 
This is good management all the way around. And I think that is 
as true for A-76 as it is for the PART process. We just had a 
discussion about whether or not it hides a different agenda. 
Just from our Department's perspective, I do not need the PART 
tool to make a policy decision. The President sets a vision 
without using the PART tool. We all know what that is and 
people can agree or disagree. But the question is are you doing 
what you said you were going to do, and under performance 
metrics are you accomplishing it.
    And just to give you a counter example. I think most people 
would associate our administration with oil and gas. I am for 
more of it. They probably do not associate us with renewable 
energy. And yet we have done the PART scores, the two that got 
rated ineffective were oil and gas, the renewable energy 
programs all got rated very highly, and our funding decisions 
reflect that result. Oil and gas funding was substantially 
decreased because we could not in good conscience continue to 
throw money at that until we fixed the problem. Ideologically, 
that is not where I am. But that was a policy neutral tool 
helping us try to figure out that we have a problem and now we 
need to try to fix it.
    Mr. Platts. And I think maybe the challenge as we go 
through this process is the cynicism of Capitol Hill or 
Washington that there has to be a hidden agenda. You know, you 
are really just doing it for merit? That does not make sense. 
And I think you make the argument for why I commend the 
administration for the management agenda in total and for PART 
especially, is you are making your decisions more transparent, 
not less. Because the President has the authority for political 
reasons to do this or that, but, as you are saying, you are 
going to lay out the facts of these assessments and be willing 
to defend our assessments and our actions based on them. That 
is a more transparent government, which to me is a more 
accountable government for all American taxpayers.
    Let me move to the codification. I share the statements 
that you have made in your testimonies and the importance of 
codification. The GAO when they have done the review and looked 
at GPRA and how it has kind of transpired over the 10 years, 
and the importance that they found placed on the statutory 
requirements of GPRA from Federal managers knowing that it is 
here to stay and not going to be subject to this administration 
versus the next, that seems to argue pretty well in favor of 
codifying the PART process as well.
    One of the concerns we have heard last week and I think you 
both share, and maybe you could expand on it, is how we go 
about that and how restrictive or nonrestrictive we are if we 
are going to codify programmatic reviews as a complement to 
GPRA.
    Mr. Johnson. I think we do not restrict ourselves if we 
codify the concept of program reviews, periodic program 
reviews. I think it would be a mistake to lock in on one best 
way to do it. The PART, we like it. Is it perfect? No. These 
programs are really hard to measure and as we get smarter about 
it we will make tweaks in the PART system. We get smarter every 
year, and we are going to be smarter 2 years, 4 years from now 
about this. And maybe we will not call it the PART, but the 
concept of asking ourselves do these programs work, at what 
cost, and if they are not considered to be satisfactory, what 
are we going to do about them, I think that process, asking 
those questions, executive branch and Congress, codifying that 
process is a very good idea. And I think it adds substance to 
the process envisioned by GPRA. It allows us to look at large 
strategic questions and get the more detailed answers, this 
part of the energy conservation works, this one does not, so 
more of this, less of that. As you look at it by program, there 
is more action oriented kinds of things--funding, management, 
structure of programs--that can be looked at as a way to better 
pursue the strategic goals that are laid out in GPRA.
    Mr. Platts. Mr. Secretary.
    Mr. McSlarrow. Well, on the general point, I will defer to 
my leader to my right. But the only other thing I would say 
from an agency perspective, he was quite right to chide me for 
saying OMB makes us, the truth is it has been a cooperative 
process all along. It has been a cooperative process not just 
in the ratings themselves, but in how we have developed PART, 
and it is a work in process. So the only point I would say is 
that having the principle codified makes sense to me, but the 
low should allow for the flexibility, because we are all 
learning. As I say, this is a work in progress that is getting 
better. I would not want to get hamstrung. I think we are 
making good progress. We should be allowed to continue.
    Mr. Platts. How about in approaching it that we not define 
how to go about it, but timeframes. Right now, we are kind of 
on a timeframe of once in 5 years a program, at a minimum, will 
be reviewed, and perhaps, because of being re-PARTed, maybe two 
or three times in that timeframe. That there be a minimum 
requirement that as part of this programmatic review that every 
program has to be done at least once in 5 years, and perhaps 
for identification by the administration of high priority 
programs maybe it should be more current than 5 years, maybe it 
is once in 2 or 3 years. Thoughts on that type of language?
    Mr. Johnson. I think I want to get back to you about the 
high priority more frequently. I have not really thought about 
that. I think the idea of a frequency of review is a good idea. 
I think the idea of maybe talking about in the legislation the 
areas to perhaps be addressed in any kind of performance 
assessment, to look at performance and the availability of 
performance measures and efficiency measures, and management 
acceptability, and fit with the mission, and so forth, I think 
those kind of issues could be referenced in the legislation. 
But the idea of some programs being done more frequently, I am 
going to have to get back to you on that. It sounds like a good 
idea, but I really have not thought about it.
    Mr. Platts. When you talk about the area, are you talking 
about those specific, how you look at something, or the area 
meaning----
    Mr. Johnson. For any given program, I think what PART does 
is it looks, amongst other things, at are there performance 
measures, relative to those measures, does the program produce 
the intended results, what is the assessment of the management 
of the program, is the program consistent with the mission of 
the department or agency, and maybe if there is some deficiency 
in there. I think it might be good to reference those aspects 
of any given program as things that are important to consider 
in assessing a program, but not specify the specific means by 
which those aspects are looked at.
    Mr. Platts. Secretary McSlarrow.
    Mr. McSlarrow. That is the same thing I would add.
    Mr. Platts. What about specific requirements on the cross-
cutting approach, that, yes, it is once every 5 years, but it 
is in this year you should do all economic development 
together, or all job training, too prescriptive?
    Mr. Johnson. If the purpose of that question is can we be 
more effective economic developers, how do the individual 
programs perform is one of the pieces of information we would 
look at. We might define what is effective economic 
development, we might look at what aspects of that definition 
of a successful economic development effort do we now touch on 
with programs that we have, do those programs work or not, are 
there some areas we do not address, is it too scattered across 
agencies. There are a lot of different aspects to look at. If 
the general focus is on economic in general, PART is one piece. 
So maybe the bigger question is if the Congress said or if 
executive branch said we want to look at all of economic 
development, an Executive order or a request from Congress, or 
whatever form it takes, PART would be a piece of information we 
would look at, but it would not be the total of the analysis.
    Mr. Platts. How about a requirement, if a part of a program 
is deemed ineffective, of mandatory re-PARTing? Again, if you 
want to get back to us and give some thought to some of the 
specifics that we looked at based on our hearings last year and 
this year, but is that again making it mandatory that you have 
to re-PART?
    Mr. Johnson. I think a program now is re-PARTed when the 
agency believes that the situation has changed, that they have 
worked to improve something, or they believe something might 
have deteriorated. So if the result is not demonstrated, if 
they all of a sudden get performance measures the next year 
which would raise that part of the score, they would call for a 
re-PART. Then, all of a sudden, if they are able to demonstrate 
the next year that they are able to actually perform as defined 
by those measures, that would call for a re-PART, and then if 
they were actually able to reduce the cost of that or develop 
performance for cost-effectiveness information. So, in some 
cases it would be re-PARTed because it would be the status 
would change every year. Right now, it is triggered by it is 
re-PARTed if it changes. If the status has not changed, then 
the score does not change and it is not reassessed.
    Mr. Platts. So keeping discretion at the agency level and 
OMB, with the administration is going to be an important part 
of that decisionmaking process?
    Mr. Johnson. Right. One of the things we say at OMB, and I 
bet you the agencies feel the same way, is the PART score is 
nice, but that is just a means to an end. The most important 
part of any of the PART review process is the recommended next 
steps; do we change the management, do we change the structure, 
do we try to build more accountability into it, do we change 
the way we, do we want to write left-handed instead of right-
handed, what do we want to do differently. And it is the 
quality and aggressiveness of that followup by the agency, it 
is the so what of it all. You got a medium score, a bad score, 
a results not demonstrated score, what is the so what of that? 
What is the agency doing to make that score go up, to produce a 
more assured result as a result of that program existing and 
money being appropriated to fund that program.
    So what we have done, because we are now in the second year 
so we have some things to followup from last year, we have a 
process that we will be very actively involved in this year to 
periodically sit down with the agencies and say let's go over 
all the programs, the quality of the followup, have we got 
performance measures that we did not have, have we changed the 
management as we said we were going to do, have we structured, 
whatever. And so it will be in those discussions where 
decisions will be made by the agency, that for the presentation 
the point will be made by the agency we have changed the 
situation with this program, let's redo the score on this and 
we will re-PART it. But the key is that we build that habit in 
of reviewing, agencies reviewing with OMB, as they like to do, 
looking over their shoulder just to make sure that they are 
doing it aggressively and regularly and paying attention to all 
the things, the followup actions that they said they were going 
to engage in.
    Mr. Platts. Secretary McSlarrow, it sounds from your 
previous statements that your department's look at re-PARTing 
is that your managers have kind of well understood and bought 
into the importance of this and the benefits of doing this for 
your agency. So whether it is mandated that you are required in 
the timeframe of more than once in 5 years for high priority, 
that really once you have that mindset that this is helping you 
better manage, making it mandatory in that sense really is 
probably not as critical because you have that acceptance of 
the program's benefits.
    Mr. McSlarrow. I think that is true. And I have to say, to 
the extent we have been successful through this process, it has 
been because our career SES leadership has adopted this as 
their own. Clay says very often that we are moving from the 
time where it is the President's PMA to an agency's management 
initiative. The same thing is true of PART. The value of PART 
is apparent in so many ways that we have not even had a chance 
to talk about today to these managers that I think it will 
continue on. But, as we all know, things change, people have 
new initiatives. That is why I think there is a value in having 
something put in GPRA that just sends that signal that this is 
something that we should stay on top of. But it is quite 
possible at DOE, for example, we may be doing our ``PART'' even 
if they do not actually all end up in an OMB agency PART 
process, just because we decide we want to do that and because 
it may be easier just to have that cycle on an annual basis. 
And we have not decided, you know, we are only in the second 
year of this right now. But I think the more the agencies are 
invested in this, the better and the more likely it is going to 
be something that institutionally stays around.
    Mr. Platts. To followup on the specific benefits, and you 
kind of touched on to your managers, that relate to your 
department, you seem to have had some success in trying to 
assess what appear to be difficult outcome definitions 
regarding regulated activities and research and development 
efforts. And that being a big part of your department's mission 
responsibility, what do you think the success is behind your 
department's efforts and what do you think would be important 
for other departments to be aware of in how they are looking at 
their regulated activities or their R&D programs?
    Mr. McSlarrow. The first thing is the simplest, which is 
just the nature of scores themselves. We were rated all red at 
the beginning of this administration. That kind of gets your 
attention. This is not well known, but the President meets with 
each cabinet officer each year and goes over their ratings. So 
it has his and my full attention. So No. 1, that is what makes 
a difference. Everybody understands that this is going to 
happen and we are going to march forward and get to green.
    The second part of it is, as you point out----
    Mr. Platts. The analogy there being, if you are a fifth 
grader and you know you are going to actually get tested on 
what you read, you are probably going to make more certain that 
you read it when that test day is coming up. Simple human 
nature.
    Mr. McSlarrow. Right. There was a certain amount of that, 
and I do not mean to trivialize this, but there was a certain 
amount of going through the motions with GPRA. It really was 
not producing change. It was not that it was not doing good 
things, it was, but not changing the results. And I think that 
is what is different about this process. As you point out, the 
hard thing for us has been, and will continue to be, how do you 
judge R&D, how do you judge basic R&D and applied R&D. We 
actually led the effort, with OMB, on behalf of the Government 
to try to develop the kind of criteria by which you could judge 
the success of applied R&D. And I would say that we have been 
modestly successful. But that is always a very tough thing to 
do. It is easier to sort of say, well, we are going to run this 
big science accelerator and we are going to throw a bunch of 
neutrons at a target and we are going to learn something. It is 
hard to pin down a Nobel Prize winner and say what exactly are 
you going to learn. He looks at you like you are an idiot. But 
the truth is that----
    Mr. Platts. Even if he told me, I probably would not know 
what he told me.
    Mr. McSlarrow. You would not understand anyway, right. I 
know I would not. But at the end of the day, it turns out that 
if you actually sit down and walk through this, you learn quite 
a lot about what it is you can accomplish and what are 
achievable objectives and then you can throw those into a 
performance plan. And, as I say, it is still a work in 
progress. But I think we have gone a long way toward achieving 
that, which is one reason why last year we were ``Results Not 
Demonstrated'' on those science projects and this year they 
scored quite highly, and it was mainly the performance metrics.
    Mr. Platts. Is the President's Management Council that you 
serve on an avenue to share that with your counterparts 
elsewhere in the administration?
    Mr. McSlarrow. It is. Director Johnson is the chairman of 
that Council. We meet monthly, and we have retreats and we 
talk. We each have sort of lessons learned and we have talked a 
lot particularly about the applied R&D, because, obviously, it 
is not something that is just DOE, there are other big science 
agencies or agencies with big science budgets. So it is 
something we try to export. And, frankly, the philosophy of all 
of the President's management agenda has been instead of having 
10 agencies doing the same thing at once, to pick one who is a 
team leader and have the rest of them work with that agency on 
an initiative, as we were the team leader for applied R&D. And 
we are doing that in other respects as well.
    Mr. Platts. Two other specific followups to your 
department. The recent GAO report talked about agencies having 
difficulty meshing GPRA and PART in that strategic plan 
approach with more programmatic review. Is that something that 
you are experiencing? Or are you kind of ahead of the game and 
are better seeing how they complement each other as opposed to 
being kind of separate and independent efforts?
    Mr. McSlarrow. I do not think we have had any problem 
meshing the two together. As I say, the political and the 
career management leadership have seen this from the beginning. 
The only part, and this just echoes what Director Johnson said 
earlier, that I think we needed to get past was the idea that 
if everybody says we are for budget and performance 
integration, well the proof of the pudding is making that 
document be the budget itself. And I think that is the one 
difference that people were not expecting about what the 
administration did, put the performance plan and make that the 
budget and combine those two documents. So that is how we 
believe we have satisfied the GPRA requirement. But obviously 
there are other people who have different views on that.
    Mr. Platts. I hope that we see more embracing of your 
approach of the complement and how they go hand-in-hand, 
because I do think they are kind of a great one-two effort in 
that broad strategic approach and then how that translates down 
to individual programs.
    Earlier we talked in a broad sense about communications 
with the administration and Congress on performance budgeting 
and the PART process and how it can benefit decisionmakers here 
on the Hill. What has been your specific department's 
experience with your appropriators and how that has gone, and 
how you have communicated with them on your PART process?
    Mr. McSlarrow. I would say it is a mixed bag. As you say, 
we have both gone to at our appropriators, and Clay has led a 
team of us and invited me to come along to try to make 
presentations on what we are doing. I would say there is a 
certain amount of skepticism by the appropriators. And it is 
kind of understandable, I mean, we are only in the second year 
now. Essentially, up until this last week, you had one data 
point. And I think as they see that we are actually using this 
and that we are using it in a way that is credible and 
transparent, they will begin to trust the information we give 
them. And it is not that anybody is saying we do not trust it, 
it is I would just say not fully embraced. And it is obviously 
a mixed bag and it depends on who you are talking to, what 
staff or whatever. But I would say it is better and more 
positive this year than it was last year. And I would expect 
that by next year it will be better still.
    Mr. Platts. And hopefully that will be shared up here, the 
efforts from the congressional side being an open-minded 
approach from not just appropriators, but from my fellow 
authorizers as well on the various committees.
    Director Johnson, in your testimony you touched on the 
improper payments aspect and the progress being made there. I 
was wondering if you could give a general update of kind of 
where you think we are. Because whether it be part Improper 
Payments Act, you know, a law kind of moving forward, and I 
guess later this year, November 2004, being the timeframe for 
everybody coming on board, in the times that we are in and with 
the deficit projections that we are seeing, kind of tracking 
every dollar that we can is something that is important. And 
when I look at the numbers, you shared roughly $35 billion per 
$1 trillion in expenditure, if you translate that to a $2.4 
trillion budget, that is in line with the numbers we have been 
hearing, that we are up in the $60 to $80 billion range of 
improper payments every year. It certainly is important for us 
to go after that. I was wondering if you can give us a general 
update on where we stand on that issue.
    Mr. Johnson. Well the general update is on the $1 trillion 
in programs and the $35 billion, which is $30 billion too much 
and $5 billion too little, so it is a net savings of $25 
billion, but the total that is erroneous is $35 billion. 
Programs are being developed to eliminate that erroneous 
payment level. And then agencies are under way to analyze other 
trillion-plus dollars, programs that account for that spending, 
to determine the level of erroneous payments there, and then 
action plans will be developed. One of our challenges here is 
to get out of the business, get way beyond the business of 
well, it was this percent, it needs to be this percent, and 
some time or other it will come down. We need to try to be very 
specific about when the desired result will be, when we can 
possibly achieve it, when will we implement, what kind of 
program, what kind of cause of error from this level to zero, 
and then get the payment level down to the, as the bill called 
for it, level. A lot of these programs will be politically 
controversial because they deal with money going out to people 
in need. And if their money is going to people in need that is 
going to them in error, some people will not want to stop that 
payment. And we will have those debates and Congress will 
decide in discussion with the executive branch whether we 
pursue that or not, and there will be a lot of discussion. But 
we are moving forward to develop action plans to reduce or to 
improve accuracy of payments to as near 100 percent as 
possible.
    Mr. Platts. I appreciate the acknowledgement of the 
sensitivities in some. The earned income tax credit program, 
which my memory is about an estimated 30 percent of improper 
payments. It is really a disservice to those who need that 
assistance that we are providing assistance to those not 
entitled to it. But trying to address that problem is going to 
be politically sensitive.
    Mr. Johnson. Yes. The politically naive answer that is if 
these people are getting the payment, as opposed to the law 
calls for this smaller group, let's change law, and if you want 
them to get it, let's vote on it and get this large group to 
get the payment. But if the law calls for this, our 
responsibility is to see that the law is being implemented. But 
that is again politically naive, idealistic way of thinking of 
things.
    Mr. Platts. I am one who believes that idealism should 
remain here in Washington and we should not give up on that 
approach.
    Mr. Johnson. When the D.C. Idealist Club gets together----
    Mr. Platts. There will not be all whole lot of us there.
    Mr. Johnson. It would not be a very large group. 
[Laughter.]
    Mr. Platts. Well, we will build on it. Identifying that 
timeframe, that is driven by where each department is or each 
program is?
    Mr. Johnson. Yes, it is.
    Mr. Platts. So it is not across the board by this date?
    Mr. Johnson. Right. Yes.
    Mr. Platts. OK. That is something that we will continue to 
look at. I think Linda Springer is going to be up in the next 
month or so with us and we will probably further explore it 
with her as well. But your having touched on it, I appreciate 
your kind of giving us that update.
    Mr. Johnson. Be sure to give her very specific questions 
and come prepared to answer, because I think we will be in a 
position to do that. I'm not, she will be.
    Mr. Platts. In several different departments or programs, 
where they are?
    Mr. Johnson. Right.
    Mr. Platts. Great. I am checking to, you know, end the 
hearing and find out that my staff really wanted something else 
addressed that I did not. But I really appreciate the testimony 
here today, and most importantly your work out there across the 
government, Director Johnson, and Secretary McSlarrow, in the 
Department of Energy specifically, for you. I commend you 
personally and the administration in total for this effort 
because the more we can focus truly on the outcomes we are 
achieving for the money we are spending, I think the better we 
are serving the people who sent us here to do this work. On 
that, I think that is the approach when people spend their own 
money in that household budget. They do not just want to know, 
yes, I paid X dollars to these companies, but did I get 
something I thought I was going to get for paying that money 
out, was the service expected provided, or the goal achieved.
    President Bush and the whole administration is to be 
commended for your efforts. And as a subcommittee, we certainly 
look forward to continuing to work with both of you to advance 
this effort and to fine tune it, and to look at things we can 
do such as codifying this broad programmatic approach so that 
the benefits are long enjoyed by future taxpayers and, in the 
end, programs are running efficiently and effectively.
    Mr. Johnson. Great.
    Mr. Platts. We will keep the record open for 2 weeks. If 
there are any additional comments you want to share perhaps on 
specific questions on the codification issue, we would welcome 
those.
    I appreciate all who were in attendance today.
    This hearing stands adjourned.
    [Whereupon, at 3:40 p.m., the subcommittee was adjourned, 
to reconvene at the call of the Chair.]
    [The prepared statements of Hon. Edolphus Towns and Hon. 
Carolyn B. Maloney, and additional information submitted for 
the hearing record follow:]
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