[Senate Hearing 110-817]
[From the U.S. Government Publishing Office]
S. Hrg. 110-817
IMPROVING FEDERAL PROGRAM MANAGEMENT USING PERFORMANCE INFORMATION
=======================================================================
HEARING
before the
FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT
INFORMATION, FEDERAL SERVICES, AND
INTERNATIONAL SECURITY SUBCOMMITTEE
of the
COMMITTEE ON
HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
JULY 24, 2008
__________
Available via http://www.gpoaccess.gov/congress/index.html
Printed for the use of the Committee on Homeland Security
and Governmental Affairs
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44-582 WASHINGTON : 2009
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii TED STEVENS, Alaska
THOMAS R. CARPER, Delaware GEORGE V. VOINOVICH, Ohio
MARK L. PRYOR, Arkansas NORM COLEMAN, Minnesota
MARY L. LANDRIEU, Louisiana TOM COBURN, Oklahoma
BARACK OBAMA, Illinois PETE V. DOMENICI, New Mexico
CLAIRE McCASKILL, Missouri JOHN WARNER, Virginia
JON TESTER, Montana JOHN E. SUNUNU, New Hampshire
Michael L. Alexander, Staff Director
Brandon L. Milhorn, Minority Staff Director and Chief Counsel
Trina Driessnack Tyrer, Chief Clerk
FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT INFORMATION, FEDERAL SERVICES,
AND INTERNATIONAL SECURITY SUBCOMMITTEE
THOMAS R. CARPER, Delaware, Chairman
CARL LEVIN, Michigan TOM COBURN, Oklahoma
DANIEL K. AKAKA, Hawaii TED STEVENS, Alaska
BARACK OBAMA, Illinois GEORGE V. VOINOVICH, Ohio
CLAIRE McCASKILL, Missouri PETE V. DOMENICI, New Mexico
JON TESTER, Montana JOHN E. SUNUNU, New Hampshire
John Kilvington, Staff Director
Katy French, Minority Staff Director
Monisha Smith, Chief Clerk
C O N T E N T S
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Opening statement:
Page
Senator Carper............................................... 1
WITNESSES
Thursday, July 24, 2008
Hon. Martin O'Malley, Governor of Maryland....................... 4
Bernice Steinhardt, Director for Strategic Issues, U.S.
Government Accountability Office............................... 18
Marcus C. Peacock, Deputy Administrator, U.S. Environmental
Protection Agency, and Former Official at U.S. Office of
Management and Budget.......................................... 20
Donald F. Kettl, Director, Fels Institute of Government, and
Robert A. Fox Professor of Leadership, University of
Pennsylvania................................................... 23
James Dyer, Chief Financial Officer, and Performance Improvement
Officer, U.S. Nuclear Regulatory Commission.................... 36
Scott Pace, Associate Administrator for Program Analysis and
Evaluation, and Performance Improvement Officer, National
Aeronautics and Space Administration........................... 38
Daniel Tucker, Performance Improvement Officer, and Deputy
Assistant Secretary for the Budget, U.S. Department of Veterans
Affairs........................................................ 40
Alphabetical List of Witnesses
Dyer, James:
Testimony.................................................... 36
Prepared statement........................................... 92
Kettl, Donald F.:
Testimony.................................................... 23
Prepared statement........................................... 86
O'Malley, Hon. Martin:
Testimony.................................................... 4
Prepared statement........................................... 49
Pace, Scott:
Testimony.................................................... 38
Prepared statement........................................... 97
Peacock, Marcus C.:
Testimony.................................................... 20
Prepared statement........................................... 84
Steinhardt, Bernice:
Testimony.................................................... 18
Prepared statement........................................... 55
Tucker, Daniel:
Testimony.................................................... 40
Prepared statement........................................... 100
APPENDIX
Questions and Responses for the Record from:
Governor O'Malley............................................ 107
Ms. Steinhardt............................................... 112
Mr. Peacock.................................................. 117
Mr. Tucker................................................... 128
Prepared statement from Robert Shea, Associate Director for
Government Performance, Office of Management and Budget........ 131
Charts submitted for the Record by Governor O'Malley............. 136
IMPROVING FEDERAL PROGRAM MANAGEMENT USING PERFORMANCE INFORMATION
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THURSDAY, JULY 24, 2008
U.S. Senate,
Subcommittee on Federal Financial Management,
Government Information, Federal Service,
and International Security,
of the Committee on Homeland Security
and Governmental Affairs,
Washington, DC.
The Subcommittee met, pursuant to notice, at 2:35 p.m., in
room SD-342, Dirksen Senate Office Building, Hon. Thomas R.
Carper, Chairman of the Subcommittee, presiding.
Present: Senator Carper.
OPENING STATEMENT OF SENATOR CARPER
Senator Carper. The Subcommittee will come to order.
Governor, welcome. We are delighted that you are here.
Thank you so much for taking time to join us. Senator Tom
Coburn is the Ranking Republican of this Subcommittee. He will
be here shortly. But given all that you have on your plate,
Governor O'Malley, we are delighted that you are able to find
time to be here and talk about something not only that you are
interested in, but you know a whole lot about, and we thank you
for your willingness to share your experiences, your
perspectives, both as Mayor of Baltimore and now as Chief
Executive of the State of Maryland.
One of my favorite sayings is ``I would rather see a sermon
than hear one,'' and I think we can look at what you have done,
both as mayor and as governor of your State, to actually show
us by your own behavior that this works and it is something
that may just work for us, as well.
In a little less than 6 months from now, we will have a new
President standing on the West Portico of the Capitol,
preparing to raise his right hand and take an oath to defend
our country and Constitution. Our new Chief Executive will face
a soaring Federal deficit at home, and security challenges
abroad. Those are just a couple of the exceptional challenges
that our Federal Government must be prepared to face. No matter
who is elected President, whether it is Senator Obama or
Senator McCain, we must make sure that person has the
information and the tools that they need in order to keep our
ship of state headed toward the horizon.
And though our politics may differ here in Washington and
across the country, I think we can all agree that the strength
of our democracy hinges on the ability of our government to
deliver its promises to the people. We have a responsibility to
be judicious stewards of the resources the taxpayers invest in
America and ensure that those resources are managed honestly
and that they are managed effectively.
Just recently, this Subcommittee heard from a number of
witnesses, including our former Comptroller General, David
Walker, about the dire fiscal situation this country faces, not
just this year, not just in this decade, but for decades to
come. Over the next two decades, 80 million baby boomers--I am
one of them--will become eligible for Social Security and
Medicare. Today, these two programs already make up over 40
percent of our government's total expenses. And as boomers like
me start to draw benefits, some experts we have heard from say
that the share of these programs could equal within 40 years
not 40 percent of our government's outlays, but all of our
government's outlays.
Without any changes, we will not have extra funds to
prepare a world-class workforce in the 21st Century, funds to
make us energy independent, meet our transportation needs,
clean our air, or address our pressing national security needs.
There is only so much pie to go around, so how we manage who is
getting the next slice, and how big it is going to be, becomes
increasingly important.
In 1993, the year that I became Governor of Delaware, the
Government Performance and Results Act (GPRA), was enacted to
help us better manage our Nation's finite resources and improve
the effectiveness and the delivery of Federal programs. Since
that time, agencies have collected, and provided to Congress, a
tremendous amount of performance data. However, Senator Coburn
and I wondered if this information was being translated into
results, or at least into improved results. Producing the
information does not by itself improve performance, and we knew
that there had been little increase in the actual use of
performance data by agency managers.
A lot of work has been done by GAO and others on how this
data could be used, but nobody has really looked into whether
agencies were putting theory into practice. A year or so ago,
Senator Coburn and I asked the GAO to examine how performance
information is being used to better manage Federal agencies,
and if managers could be, and should be, employing it more
often in their decisionmaking processes. We also asked the GAO
to consider the recent efforts by the Administration to improve
the usefulness of agency performance information and through
initiatives such as the Program Assessment Rating Tool (PART),
a key component of President Bush's Management Agenda.
I am eager to hear GAO's findings and ask that we focus our
discussion on the following crucial questions today. To what
extent are Federal agencies using performance information to
perform key management tasks, such as identifying performance
problems and taking corrective actions or identifying and
sharing best practices?
Second, how can Federal agencies make better use of
performance information to improve our results, and our
outcomes?
And finally, what lessons can be learned and how can we
build on this Administration's efforts to improve the
usefulness and employment of performance information?
Today, with these questions in mind, I want us to do the
following. One is to accurately assess how well and how often
Federal agencies are using performance information to correct
problems and promote best practices.
Two, I would like for us to discuss how the use of
performance information can be increased and improved in the
next Administration.
And three, I want us to solicit ideas about how Congress
can play an effective role in the path forward.
Today, it is my hope that we can begin to develop a
blueprint for the next Administration. We must do all that we
can to ensure that the transition is streamlined and that our
next President has a clear picture of the strengths and
weaknesses of agencies under his direction.
We face, in this country, unparalleled challenges both here
and abroad and these require a knowledgeable and nimble Federal
Government that can respond effectively. With concerns growing
about our mounting Federal deficit and national debt, the
American people deserve to know that every dollar we send to
Washington is being used to its utmost potential. Performance
information is an invaluable tool that can do just that, if we
use it. If used effectively, it can identify problems, help us
find solutions, and develop approaches that improve results.
We thank, again, not only our lead-off witness, but all of
our witnesses for taking this opportunity, setting aside time
in their own lives to be with us today to share with us some of
their ideas about the challenges before us and how best to
address those challenges.
Our lead-off witness is Governor Martin O'Malley. He was
elected Governor of Maryland in 2006, coming on the heels of an
unusually successful tenure as Mayor of the City of Baltimore.
Early in his life, as a young troubadour, he led his Irish
group into the City of Wilmington and left the fans at O'Friels
Irish Pub standing and cheering in his wake at an age when he
was actually too young to get in legally to O'Friels, but came
in and did a great job performing for us.
In 2005, Time Magazine named him one of America's Top Five
Big City Mayors. As Mayor, he pioneered the CitiStat, a
statistics-based tracking system that focuses in on areas of
under-performance and demands a results-driven government
model. CitiStat has saved Baltimore residents more than $350
million and was awarded Harvard University's prestigious
Innovations in American Government Award in 2004.
As governor, he has brought the program State-wide,
implementing StateStat across all Maryland's government
services, and provided a model not just for mayors, I think not
just for governors, but I think maybe for Presidents and for
those of us who serve here in the Legislative Branch of our
government.
We are honored by your presence and we are especially
honored to be able to serve here on a daily basis with your
mother, who works, as some of the people here know, for Senator
Mikulski. I am not sure who works for whom, and I don't know if
Senator Mikulski is actually here. She was going to try to stop
by today. She may pop in. But if your mother is around and if
she shows up, please introduce her to us. We are delighted that
you are here and that your mom raised you so well. [Laughter.]
Governor O'Malley, you are recognized to speak for as long
as you wish.
TESTIMONY OF HON. MARTIN O'MALLEY,\1\ GOVERNOR OF MARYLAND
Governor O'Malley. Chairman Carper, thank you very much.
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\1\ The prepared statement of Governor O'Malley appears in the
Appendix on page 49.
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Senator Carper. Thank you.
Governor O'Malley. Thank you for the opportunity to be able
to join you at this important Subcommittee and as part of the
discussion of this day.
I am also joined by a number of members of my staff.
Apropos to today's discussion, Matt Gallagher is here who runs
our StateStat office and is the Deputy Chief of Staff for
Operations in our State government.
Senator Carper. Would you ask him to raise his hand?
Governor O'Malley. There he is.
Senator Carper. All right.
Governor O'Malley. He also before that ran the CitiStat
office in the City of Baltimore before that.
It is an honor to be here today before you to talk about an
issue that, frankly, I believe is changing, for the better, the
way that many of us look at the operations of our government,
and it is our government. It is our belief that the same
performance-based governing strategies that were so very
valuable in igniting Baltimore's come-back and have been so
valuable to us at the State level in Maryland this past year-
and-a-half can also work not only in the Federal Government,
but in any large human organization.
In our public life, we tend to be very good at measuring
inputs. We typically refer to those inputs as the budget, and
it is typically done on an annual basis. But we have often
neglected to pay enough attention to outputs, to the product of
government. We are constantly asking, what is our funding
level. For example, for something like interoperable
communications without asking whether or not the purchases that
have been made by local, municipal, or State governments this
year have been in accordance with the standard that moves us
down the road to a point in time when all first responders
throughout our Nation can actually talk with one another when
responding to an emergency.
Performance-based government, in its essence, is about
measuring, tracking, and improving outputs. Inputs play a role,
but only in the pursuit of outputs.
Mr. Chairman, I was first introduced to this model of
governing about 8\1/2\ years ago when I began my first term as
Mayor of the City of Baltimore. And when we were handed the
keys to that 16,000 person, $2 billion a year operation known
as city government, we inherited our fair share of challenges,
some of them very big challenges. More than 300 of our fellow
citizens every year were being murdered in our city. The
streets were too often littered with trash. Our schools were
too often failing and people were abandoning our city, in
essence, voting with their feet, and leaving behind them
buildings and homes that were vacant and themselves becoming
nuisances.
Quite understandably, the public at the time was demanding
immediate results and immediate turn-around, and we rolled up
our sleeves and got to work and found in beginning that work
that there was very little in city government that was actually
being measured in a consistent and real-time fashion. Now,
don't get me wrong. Oftentimes, information was being collected
at the ground level, sometimes very faithfully, sometimes very
dutifully, not always the right information, but rarely, if
ever, was it being used in a timely manner by the appropriators
and the policy makers and the administrators at the highest
level in order to deliver better outputs and better outcomes
for citizens on the ground.
So we were very blessed to have met a gentleman by the name
of Jack Maple, who was one of the great minds behind the
performance-based strategies employed in the New York City
Police Department for its turnaround. Jack was the Deputy
Commissioner of Police under Commissioner Bratton and we felt,
having observed ComStat in action, that if the NYPD could so
successfully use simple off-the-shelf software, computer pin
mapping, deploying police resources to where the crime was
actually happening, that data collection and mapping technology
could also work for the other things that government does,
whether it is garbage collection or repairing streetlights or
addressing complaints about potholes.
And from this approach was expropriated the four main
tenets of CitiStat, which were the main tenets of ComStat. One,
timely, accurate information shared by all; two, rapid
deployment of resources; three, effective tactics and
strategies; and four, relentless follow-up, not on an annual
basis, not on a biannual basis, but on a daily, weekly,
biweekly, monthly basis in order to improve performance.
So we started setting goals. We started measuring results.
And we did so weekly. We began tracking outputs instead of just
tracking inputs and we started geomapping every conceivable
service. And in short time, we turned around the city where
many neighborhoods were considered ungovernable and we started
making our city government function again in order to improve
the quality of life in every neighborhood.
I go into some greater detail about some of the results we
achieved in the written statement I submitted to the
Subcommittee, but just a few examples. Most important of all is
the primary responsibility of all governments and that is
public safety. We were able to achieve a 40 percent reduction
in violent crime, its lowest level, actually, in four decades.
We were able to back up with 98 percent success a 48-hour
guarantee to address complaints from citizens about potholes.
We reduced the number of children exposed to dangerously
high levels of lead from lead dust, lead paint poisoning from
old homes and deteriorating homes by 65 percent in a relatively
short period of time.\1\ We were able to identify and reclaim
by clearing title more than 5,900 vacant homes and buildings
which then enables them to be redeveloped and put back on the
tax rolls.
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\1\ The chart referred to appears in the Appendix on page 138.
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We had a boarding and cleaning backlog of about some 8
months, which is how long it took when we began to address a
boarding or cleaning complaint from any citizen. By the time we
left, that was down to 14 days. Now, that didn't happen
overnight. It didn't happen by measuring things annually. It
happened by measuring them every single day and every week.
And probably the most important outcome of all is that we
were able by improving our quality of life with better-
performing government to be able to reverse four decades of
what had been seemingly insurmountable population loss, and the
city started growing again.
I brought two charts with us today. One of them on the far
right is the combination of homicides, shootings,\1\ and you
will see three kinds of death, and you can see them over time.
Again, these are just measured annually, but we measured them
every 2 weeks and, by golly, when you look over your shoulder,
you see you are actually making progress shrinking those danger
zones in our city.
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\1\ Chart referred to appears in the Appendix on page 136.
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This next map is the cleaning and boarding measured not in
terms of the reduction of the wait time but in terms of the
improvement of the productivity.\2\ Again, these are annual
outcomes, but the only way we were able to achieve the annual
outcomes is because we developed systems so that we could
measure every day, every week, and that information was then
able to get back up to the policymakers, the administrators,
the appropriators.
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\2\ Chart referred to appears in the Appendix on page 137.
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In 2007, when we were given the keys to an even larger
organization, namely the State government of the great people
of Maryland, we took this model with us. We created a program
called StateStat, which has allowed us to track and measure
progress on a level that we have never before been able to
achieve in our State government. And through our StateStat
program, while only in its first year and a half, we have been
able to identify problems in information sharing among various
law enforcement agencies and across several jurisdictions and
we work every day to improve them.
Second, we were able to identify right off the bat the
imperative, the need to close the House of Corrections, an old,
dilapidated, and very dangerous prison in our State. We were
able to close that without incident within 50 days, saving
probably lives and also saving $3 million in overhead and
overtime.
We were also able to identify and fix more than 100
problems within our juvenile detention facilities, many of
which had been under various consent decrees and court orders
for a long time without ever improving those conditions.
We are now using GPS technology and performance measures to
target our resources that are geared at restoring the national
treasure, which is the Chesapeake Bay, through a program that
we call BayStat. You may notice that virtually anything, if you
measure it, you can slap a ``stat'' on the end of it and you
have a new way of saying whether what you are doing is making
any impact on the problem you are trying to solve.
We go through a few more accomplishments in the written
statement I have submitted to you, but I wanted to close by
just saying a couple of words about CitiStat, StateStat, and
why this model, I believe, can be and should be applied at the
Federal level, particularly in the realm of homeland security.
We believe the same approach can be relevant to governments
and organizations anywhere and of any size. Recently, I had
occasion to meet and to listen to Sir Michael Barbour from Tony
Blair's government who applied many of these principles to the
administration of national government in the United Kingdom and
also implemented a new innovation called the delivery unit to
make sure that all of those along the chain of delivery, from
policy maker to appropriator to administrator to implementor
down to the level of citizen, were actually held accountable
for their piece of delivering improved performance.
The Environmental Protection Agency, I understand, has
launched an EPAStat program, and there are governments
worldwide that are working to implement this model. In fact, we
have had several delegations from governments all over the
world who have come to visit us in Maryland to learn about the
workings, the early workings, of our program of statewide
performance measurement.
Government performance management, I believe, is really a
nonpartisan issue. There is no Democratic or Republican way to
fill a pothole, to make sure that you improve the outcomes,
whether it is at a municipal, State, or National Government.
The beauty of a map is that a map doesn't know whether a
neighborhood is black or white, or whether a neighborhood is
rich or poor, or whether a neighborhood is Democratic or
Republican.
Most of us in government would say that it is the
responsibility of every public official to provide the most
effective government possible and to provide for continued
progress and improvement. That is what CitiStat and StateStat
are really about.
Mr. Chairman, I want to close today with the words of
Robert Kennedy, who once said, ``There is no basic
inconsistency between ideals and realistic possibilities, no
separation between the deepest desires of the heart and of the
mind, and the rational application of human effort to human
problems.'' The rational application, well and timely measured,
of human effort to human problems.
That is what performance-based government is about, and I
thank you so very much for your interest and your leadership in
bringing this to our Federal Government. Thanks very much.
Senator Carper. Governor, thank you very much.
One of my finest memories of being governor was going to
New Governors School every 2 years, right after the election.
About the middle of November, current governors, would host the
newly-elected governors and spouses and teach the new governors
and spouses by virtue of our own experience the things we had
done wrong, in many cases, and some of the things we had done
right.
We had a Center for Best Practices within the National
Governors Association. I suspect we still do. I am just
wondering, does your experience with CitiStat and what you are
doing with StateStat, does any of that show up within the
National Governors Association, either at a New Governors
School like a forum, or through the Center for Best Practices
so that other States can learn from what you have done, both in
Baltimore and in Maryland?
Governor O'Malley. Yes. To some degree, other States have
begun this in one way, shape, or form, and some of them started
doing it years ago on the heels of seeing the success of the
NYPD. In fact, Christine Gregoire, who began her first term as
Governor of Washington State, visited us, actually before all
the votes were totally counted in that close race----
Senator Carper. I said to Christine, who had been Attorney
General, I said, keep counting the votes and recounting the
votes until you win. Then stop. [Laughter.]
That is what they did.
Governor O'Malley. Well, during the period of pre-
transition, she sent a group of her people to Baltimore and has
actually begun and does have a performance measurement program
in Washington State. I know I have had conversations with
Kathleen Sebelius in Kansas back at the time, and I believe she
applied it to some things, as well.
It is, I believe, part of the National Governors
Association, part of their Office of Best Practices, and we
were able to recruit from there not only Malcolm Wolf, our
Energy Administrator with whom you had some discussions, but
also our policy directors from that area. The best ideas are
the ones that you find from other practitioners. That is what
we believe.
One of the exciting things about beginning this program in
Baltimore years ago is that other cities have taken it up, and
I have found myself learning from things that Mayor Cicilline
in Providence was doing to apply this to juvenile justice, to
be able to learn from Mayor Slay in St. Louis the things he was
doing on lead paint abatement and the like.
So I hope, and I believe, that there will be more of this
going on at the State level that we can learn from.
Senator Carper. In Baltimore, I presume this initiative was
something that you promoted as mayor, and as governor, I
presume that this is an approach that you have been championing
in your State.
Governor O'Malley. Absolutely. One of the things I have
noticed, Senator, is that newly-elected executives tend to have
an easier time embracing this than those of us who have been in
office for some time. The very uncomfortable part of this
process is that when you begin measuring things that have never
been measured before and start sharing that information widely
and broadly, everyone comes to understand how poorly many
things had been functioning in the past. The fresh start of a
new executive is, I think, something that enables an
organization to make that sort of culture shift in ways that
others find more difficult.
It has also been my experience that however uncomfortable
that initial period is of the openness and the transparency,
which are the hallmarks, I think, of performance measurement
and a republican form of government, certainly, that openness
and transparency over time pays tremendous dividends, however
embarrassing the up-front moments are of, oh my goodness, I
didn't know that we were that bad at that particular service
delivery. Over time, people come to respect and appreciate it.
Another innovation that we borrowed from Mayor Richard
Daley in Chicago was the use of the 311 center for all city
services. In the past, we would go around knocking on doors at
campaign time and giving out the ``where to call for help''
card. The ``where to call for help'' card had some 300 various
services listed alphabetically. Look under V for vacant houses.
Look under R for rat abatement. And then we would have 300
different phone numbers.
The 311 system on the front end and being able to have a
call courteously answered and give every citizen, regardless of
what neighborhood that the call came from, being able to give
them a customer service number that was common to all citizens
and a time frame within which to expect that service, whether
it was a broken curb, a pothole, dead tree, or what have you, a
time frame within which to expect that service to be delivered
was something that gave our citizens a lot of optimism about
the future and the fact that they still do, in fact, have the
reigns of controlling and holding accountable that government
into which they pay their hard-earned dollars.
Senator Carper. Well, you are going to have a whole crop of
new governors being elected this November. A couple of weeks
after that, they are going to show up at the NGA School for New
Governors and Spouses and they are going to be looking for
things, ways to provide good services, working within the
constraints of tight budgets, as you know. I suspect that you
can provide a real service for them as you are here today in
sharing with them your successes in Baltimore and in Maryland.
Actually, talking about taking good ideas, we used to steal
the best ideas from one another. Sometimes you would attribute,
sometimes not. But we have taken the ideas of New Governors
School and we have actually incorporated it here in Washington.
In the middle of November, 2 weeks after the election, we will
have, I call it New Senators School, but it is actually this
orientation for new Senators and their spouses, 3 days, very
much like NGA. Faculty are current Senators and spouses, and
basically learn from one another.
Governor O'Malley. And I trust that they put former
governors at the front of the class?
Senator Carper. Actually, three of the people who started
it, Lamar Alexander, former governor, former NGA Chair from
Tennessee, George Voinovich, former governor, former NGA Chair,
Mark Pryor has very active as Attorney General from the State
of Arkansas, and yours truly. So three out of the four are all
governors.
In Baltimore, you obviously have a city council,
Legislative Branch. As governor, you have a General Assembly,
Legislative Branch. Here, we have the Legislative Branch in
which I am privileged to serve. What role in city, State, and
maybe in the Federal Government, the National Government, can a
Legislative Branch play? How is this relevant in the lives of
the Legislative Branch in the city, State, and in Washington?
Governor O'Malley. Initially, like many new ideas, it was
greeted with a tremendous amount of skepticism and----
Senator Carper. By your legislators?
Governor O'Malley. Yes. Let me talk first on the city
council and then I will talk at the State level. In the city
council, the concern was that this was going to undermine or
somehow diminish the ability of council members to deliver for
the constituents who called them for a variety of city
services, and so over time, we were able to overcome that,
primarily because of the openness and the transparency of the
process and also the ability of city council staff to be able
to log into the same system that our 311 operators were able to
log into in order to give out those citizen service complaints
and the time frame within which to expect that those services
would be delivered.
And once the council staff were trained in it and they went
back and worked on their council members, a lot of the fears
dissipated because everybody wants to be able to produce.
Everybody wants to know that when their constituent calls, that
they will be able to pick up the phone and deliver.
On the State level, we recently created a new fund for the
restoration and health of the Chesapeake Bay, work that has
been going on for some time, work that needs to be accelerated
and improved and--the tendency, I think, in most legislative
bodies is to specifically designate any new dollars that are
appropriated for a given purpose, namely the cleanup of the
Chesapeake Bay. In a big public health challenge like the
Chesapeake Bay, there are probably at least 100 different
activities that could be funded that contribute to the health
of the Chesapeake Bay, everything from stormwater upgrades to
cover crops to expanding the forested buffer along streams.
The legislature, because of the openness, because of the
transparency, and because of the performance measurement that
they saw in BayStat and their belief, their well-founded hope,
I think, that the deployment of those dollars will be guided by
the best science and the most effective use of those dollars,
they chose after some deliberation not to specifically
designate this first $2 million shall go to this. This next $3
million shall go here to that.
I think that legislators that have seen the beginning of
this process are encouraged that they will be able to get more
timely, accurate reports on the things that are working, the
things that are not, which then will make them much more
effective in exercising their oversight of the things that we
do fund, the things that we maybe should fund more of, and the
things that perhaps we should not be funding as much of.
Senator Carper. In our State, and certainly in your State
and the other 48 States, we have spent a lot of time and energy
and money on raising student achievement. Most of the States
have established academic standards of what we expect our kids
to know and be able to do in math, science, English, social
studies, and other curriculum. We designed these tests to
measure student performance to try to figure out how to hold
schools accountable, students accountable, educators
accountable, even parents accountable. We have created enormous
amounts of information from the results from our tests. Some
States give tests on an annual basis to selective grades. Now
more and more, we are giving at least annual tests to a broader
cross-section of students and grades of students.
In my own State, we have a program called Principal for a
Day. The State Chamber of Commerce does it in conjunction with
our school districts. We have a little over 200 public schools.
It is a program I participate in almost every year, so last
year, I was Principal for a Day at a school called Stanton
Middle School, about 10 miles outside of the City of
Wilmington. They had been taken under the wing of Selbyville
Middle School. Selbyville is in southernmost Delaware, almost
in Ocean City.
Selbyville Middle School had figured out how to raise
student achievement in ways most middle schools have not, and
the results were dramatic and impressive and sustained, and the
folks at Stanton had been struggling to figure out, what are we
doing? What are they doing right? How can we learn from them?
What they found out is that the folks at Selbyville Middle
School in Southern Delaware had figured out how to, not to
teach to the test, but to say these are our standards. We want
our teachers to teach to the standards. Then we will have a
test and the test will reflect the standards.
But the school--Selbyville was able to figure out how to
use the information gained from the tests to change the way
they taught, to change the way they allocate resources, to
change the way they work with individual students. Stanton
Middle School last year--in fact, this year, was selected as
one of the best, most improved schools in our State, and what
they learned to do was to take the information and to use that
to change behavior, not just of the students, but of the
educators and the administrators, as well.
Have you had the opportunity in your State to take this
approach of performance information and using that to manage
for better results and to put it to work in your schools?
Governor O'Malley. To a degree. We attempted with some
success to do this in the City of Baltimore and our schools
there and it was embraced to a degree, especially when it came
to some of the management functions of the school district. The
school district in our State that has embraced the notion of
performance management, performance measurement most
wholeheartedly is Montgomery County under Dr. Weast, and I have
had occasion to observe his SchoolStat meetings where he brings
in principals, and oftentimes it is, as you would suggest, a
principal from one of the higher-performing schools and a
principal from one of the more struggling schools, and just as
governors and mayors learn from one another, principals learn
from one another the things they are doing and the things that
work.
Montgomery County has done it the best and the most
wholeheartedly. Other school districts, I hope will follow on.
I was reminded in listening to your story about the two school
districts in Delaware, one of the leading governors in America
on education reform is Mike Easley of North Carolina----
Senator Carper. And he followed another great governor,
Governor Hunt.
Governor O'Malley. A good man.
Senator Carper. Oh, a terrific education governor.
Governor O'Malley. I once heard him say, and it is true of
all performance measurement, not just in schools but whether
you talk about the potholes or the boarding or the other
environmental things, he said, ``You are not going to improve
the weight of the pig just by constantly weighing it.''
Applying the standards and the performance measurement is
important. Setting the goals is important. But along with that
go the other tenets of the rapid deployment of resources,
having real serious dialogue, conversation, and some
experimentation to determine which tactics are effective, which
strategies are effective, and having the guts to jettison some
and embrace others, and doing so in a relentless follow-up way.
There is always a temptation that if we wave the magic wand
and simply weigh the pig more constantly, that somehow that is
going to improve the weight of the pig, but the inputs matter.
How you manage those inputs, where you deploy those inputs do
matter. But the only way to determine that is by being wide
awake and aware and having that dashboard that measures the
performance over time----
Senator Carper. All right. Thank you.
I think there is a great opportunity in my State to build
on what has happened at the two schools that I have mentioned.
There are others, as well. But we are thinking about changing
the way we actually administer our tests. Instead of being a
test that is given out, pen and pencil test given once a year
to a third grade, to a fourth grade, to a fifth grade, to have
a computer-assisted test so the students could actually do the
test from a computer. They would get the results almost
immediately.
And the test is something that if it is happening in the
third grade and they are performing at a second or a first
grade level, or a fourth or fifth grade level, that would be
garnered and it would be a better tool to help the teachers and
educators in that school to work with an individual student,
and it is a test that could be given not just once a year, it
could be given several times during the course of a year, and
as you watch somebody who is an under-performer move from high
first grade performance to low second grade, to middle second
grade toward lower third grade during the course of a year, you
actually see that progress.
So we think about changing No Child Left Behind so there is
more--it is there not to discredit or embarrass school
districts, but to help and to really be a way to help move
student performance. There is real potential here for applying
what you have done in your State and city, I think.
Governor O'Malley. May I say a word about the testing and
the inputs? One of the real benefits that we have seen from the
standardized tests over the last 7 years is the positive
outcomes in achievement that followed almost immediately on the
heels of a tremendous investment in full-day kindergarten for
all children throughout our State.
When I was first elected Mayor of Baltimore, not one of our
grades scored majority proficient city-wide in reading or math,
not one. Within the very first year after the first cohort of
children in our city, which has a lot of challenges with
poverty and adult literacy and other things, we saw the first
graders score a majority proficient in reading and math, and
some said, well, that was just a blip and once they are longer
in the system, they will go down.
Well, quite to the contrary. As we look over our shoulders
now from that point in time, that cohort has not only
maintained its level of achievement, but every class and cohort
of kids after them have come up to that rising level and it
showed us that the investment that we made--we went from about,
I think, $3.2 billion as a State to roughly $5 billion in State
aid to local education, a big part of which was that full-day
kindergarten, and we have seen that investment has brought
about these results, including a narrowing of the achievement
gap between minority--so-called minority students and non-
minority students.
High expectations are very important and I do believe that
expectations become behavior if together we make the right
choices to make it so. But the testing alone, I think the
biggest part of the improvement of test scores in our State and
certainly in our city was a result of the big investment, not
necessarily a result of more tests.
Senator Carper. By having the testing results, when the
testing results--actually, you trying to find out why are these
kids doing better----
Governor O'Malley. Right.
Senator Carper [continuing]. In a particular school
district, and then you look at the number of kids that maybe
have the opportunity for full-day kindergarten, or you look at
the kids in the school districts where they actually have an
opportunity to get decent pre-K training, you are right. In my
State and your State and across the country, one of the best
indicators of better performance is quality----
Governor O'Malley. We are also about to borrow another idea
from Governor Easley, the teacher surveys and learning from
what the teachers are telling us----
Senator Carper. Excellent.
Governor O'Malley [continuing]. Almost in a sort of
corporate 360 approach.
Senator Carper. That is great. A couple questions and we
will let you escape. Let me just ask, how do you, as chief
executive of your State, convey your own personal commitment to
addressing specific performance issues to the agency staff, the
folks that are responsible for bringing about improvement? How
do you do that?
Governor O'Malley. We do it through--you mean actual means
of keeping engaged as the executive in this process, Senator?
Senator Carper. Is this something you talk about in your
State of the Union? Is it something that is reflected in your
budget? How do you convey to the people that work in your
agencies, not just the cabinet secretaries, not just the
division directors, but also to rank-and-file employees why
this is important, why you think it is working, why they should
do it?
Governor O'Malley. The relentlessness of our meetings--I
was in a meeting today, for example, with the folks from our
Public Safety Department, and in our State, Public Safety
includes not only the prisons, but also parole and probation
and all the agents that go into the sort of community
supervision of people on the street. And at that meeting, there
were probably some 30 or 40 people present. Now, not everybody
talks at the meetings, but we like to think everybody listens
at the meetings.
The fact that at the meetings we have not only an executive
summary that is distributed to all parties beforehand, but we
also have minutes that are taken and sort of an after-action
report as to the things that we need to prepare for by the next
meeting, the questions that need to be answered by the next
meeting. That is sort of our method, and the fact that we are
relentless about it and that it is not subject to my schedule.
I don't go to all of them, but they always happen. And the fact
that they are relentless and that the follow-up always happens,
and fortunately, I have dedicated people like Mr. Gallagher and
Michael Enright that continue to drive that train regardless of
whether I am pulled out of town or to important committee
hearings in Washington.
Senator Carper. I understand. Well, good. How important do
you think it is to recognize good performance when it does
occur?
Governor O'Malley. Oh, critically important. A lot of times
when people write about this and sometimes when journalists
come to observe a session, they focus in on how uncomfortable
these sessions are for the under-performers. The more
significant change, I think, comes from the executive and
leadership recognizing leadership at the department level, at
the implementor level.
Jack Maple had this theory of progress in a big
organization. He said 80 percent of the people are in the
middle, and then on one side are the leaders, and on the other
10 percent of the bell curve are the slackers. And if
leadership and the executive recognize the leaders and the
achievers, the whole organization tilts towards the leaders and
the achievers. It improves morale. It improves outputs. It
improves progress. It improves effectiveness. And that is what
we try to do.
So in our city, the methods we used for such things were, I
don't know, something as simple as a thank you note when the
crews hit the 48-hour pothole guarantee. It seems like a little
thing. It was probably the first time they were ever able to go
home to their spouses and say, ``Hey, look what the Mayor sent
to me.'' Sometimes we would give tickets to Oriole games or the
Mayor's Box at the Ravens game or other things, and we would do
it in front of people at these events.
And the people that are the leaders at one level of
government were also the people that we promote in the course
of time that hopefully imbues a sense of meritocracy to
governments that quite honestly in the past, decisions are
often made for reasons having little to do with the level of
achievement, the leadership, or the industry or hard work of
the individuals.
Senator Carper. You mentioned the Ravens games. The top
draft pick for the Ravens at the NFL draft this year, they
picked a quarterback from the University of Delaware, Joe
Flacco. In Delaware, people tend to follow the Ravens or we
tend to follow the Eagles. We will see how it turns out.
One last thing. Six months from, it will be January 20. I
believe that is the day we swear in a new President and Vice
President. The Congress will be sworn in on January 3. So we
are going to have in the space of a couple of weeks 435 new
members, just sworn, newly minted House members and about a
third of the Senate will be newly sworn in.
If you were going to give that new President and new Vice
President, and maybe even the folks who serve in the
Legislative Branch, just some friendly advice on how we can
take your experience in Baltimore and your experience in
Maryland and apply it to provide better service, better
results, and some things that are important for all of our
States and for our country, what advice might that be?
Governor O'Malley. I think the most important advice is
that beyond the guts and the courage that it takes to set goals
and beyond the trust in the public that it takes to create a
system that is open and transparent and performance measured,
the third really important part of this sort of performance
management is executive commitment.
This cannot be something that an executive at any level--
municipal, county, State, national--does for the sake of a one-
day press conference or even for the sake of rolling into a
budget address or a State of the Union. It requires a
tremendous amount of executive commitment and relentless
follow-up by that man or woman that is in charge of that
government, because if there is not the commitment at the
executive, it is very hard for it to transform that pyramid of
command and control that is a big Federal Government.
So those are the three things, Mr. Chairman. Have the guts
to set goals. Have enough faith in the people we serve to
create a system that is open, transparent, and measured for
results. And third, stay committed as an executive to driving
it every day and to never waver from that commitment to
openness, transparency, and performance measurement.
Senator Carper. Good. Among the new governors who will be
elected this year will be the Governor of Delaware, my State
and your neighbor. The thought of coming in with a new chief
executive, and as good as we think we are, we always know we
can do better. But my hope is that our new governor will reach
out to you and to see what he can learn from the experiences
that you have had and the progress that you have made in your
own city and your own State.
One of the things that we are doing--we talked about this
last week and again today--one of the things that we are trying
to do in Delaware is endeavor to become the first State to
deploy an offshore wind farm about 12 miles off the coast of
Rehoboth Beach, as you know. Our hope is that we can find some
partners to our south and to our west and maybe to our east and
to our north who might like to partner with us. We talked a
little bit about this, but my hope is that you and that
Maryland might like to be a partner, at least explore that
possibility with us.
Governor O'Malley. Well, we are very interested in that. We
have the renewable portfolio standard that was just updated,
upgraded, increased by our legislature in, I believe, the most
recent General Assembly session. We have a number of entities
that are working on renewable sources and hats off to Delaware
for leading the way on that offshore wind. I hope once we work
through our request for proposals process, we will be able to
join in that. We still have a long way to go, but I think it
makes a whole lot of sense.
It is certainly needed as we move ourselves into more
sustainable energy future, and we do so as a region. In fact,
that might be the only way that this is able to be
accomplished, or at least that could well be the leading edge
of that progress, is when States join together and create the
critical mass necessary to prime new endeavors like the wind
project off Delaware's coast.
Senator Carper. A couple of years from now, people will
look at Rehoboth Beach on a clear day like today, and if they
can look out 12 miles to the east, they will see sticking above
the horizon some small objects about the size of a thumbnail
that will be 60 or 70 windmills that collectively will provide
about 15 percent of our electricity needs in Delaware. We
believe, and I think you do, too, that to the extent that we
can have more turbines and look for economies of scale, it is
not just advantageous to us, but to our neighbors, as well. So
I am encouraged with what you have said.
Governor O'Malley. I am very interested.
Senator Carper. Last, going back to football again for just
a moment, I will close with this.
Governor O'Malley. I reserve the right to turn to staff.
[Laughter.]
Senator Carper. Vince Lombardi, that legendary head coach
of the Green Bay Packers, used to say that unless you are
keeping score, you are just practicing. And it occurs to me
that they didn't just do more than keep score at Green Bay all
those years that they played so well, but what they did is they
kept not just score, but they kept the results from how each of
the players did, the plays that worked, the plays that didn't,
and then they used that to change their game plans and really
to change their defense and their offense. They actually
applied the information that they collected.
We are pretty good in government in keeping score, using
the football analogy, how are we using the score that we are
keeping, how are we using those scores and the information that
we gather to actually change the plays that we call at the line
of scrimmage, the plays that we call in the huddle, the way we
deploy our defense or our offense, the kind of players that we
draft? It actually does apply. It applies in the world of
football and it applies very much in city government, State
government, and I think in the Federal Government.
You have been just a stand-out on this front, and I know
the people of Baltimore have recognized that and rewarded you
for that and the people of Maryland have done so, as well.
Thank you so much for being here and helping to show us the way
as a Nation, and we look forward to hearing our second and
third panels, as well, but you have gotten us off on the right
start.
Governor O'Malley. Mr. Chairman, thank you very much.
Senator Carper. Thank you.
Governor O'Malley. To the extent that we have been
successful, it is because of the people we serve and the good
people that I have been blessed to be able to work with in
public service. Thank you very much.
Senator Carper. Thank you.
Governor O'Malley. Thanks for your leadership.
[Pause.]
Senator Carper. Before I introduce our witnesses on our
second panel, I want to take just a moment and thank all of our
witnesses, from certainly the governor and this panel and our
third panel, as well, for doing something that doesn't happen
every day, and that is for providing all of your testimony on
time. You are to be commended for doing that and we are
grateful. It is a notable achievement.
Our three witnesses today, I will start off by providing
just a little bit of background. Bernice Steinhardt is Director
for Strategic Issues at the Government Accountability Office,
where she is responsible for examining government-wide
management issues. For over 9 years, she has led the GAO's
efforts in strategic planning and helped to develop the
organization's first strategic plan. She has held a number of
positions at GAO, including Director of Public Health Issues
Group and Associate Director for Energy, Natural Resources, and
Science Issues, as well as Environmental Protection Issues.
Before joining GAO, she served at the Department of the
Interior at the President's Council on Environmental Quality.
Who was the President at that time when you were on the Council
on Environmental Quality?
Ms. Steinhardt. The first time I was there, the Chairman
was Russ Peterson and the President was Gerald Ford.
Senator Carper. You were just a child. Were you an intern
then?
Ms. Steinhardt. You are very kind.
Senator Carper. Russ Peterson is still alive and well.
Ms. Steinhardt. Is he?
Senator Carper. He is 91 years old and he was a Republican
then, now he is a Democrat, but I think he was always a
Democrat if you want to know the truth.
Ms. Steinhardt. Well, he was an environmentalist, I can say
that.
Senator Carper. He is a strong environmentalist. But he is
still just doing incredible things at the age of 91. What an
inspiration.
Ms. Steinhardt. He was a wonderful Chairman.
Senator Carper. He is one of my mentors.
Ms. Steinhardt. Mine, too.
Senator Carper. Good. Thank you.
Marcus Peacock is the Deputy Administrator of the U.S.
Environmental Protection Agency, where he currently is focused
on improving EPA management systems. Previously, he served as
an Associate Director in the U.S. Office of Management and
Budget, where he was responsible for making budget decisions
encompassing $160 billion in spending at various Federal
agencies. While at OMB, he created the Performance Assessment
Rating Tool (PART), which is used to rate the effectiveness of
Federal programs.
We want to thank Mr. Peacock for really filling two roles,
wearing two hats here today, one speaking on behalf of EPA and
also providing some insight into his former work at OMB. We had
invited Clay Johnson of OMB to be with us today, but
unfortunately, he is out of the country and OMB has kindly
provided testimony for the record from Robert Shea and we look
forward to including it as a part of our hearing today.\1\
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\1\ The prepared statement of Mr. Shea appears in the Appendix on
page 131.
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We are really grateful that you are here, Mr. Peacock.
Dr. Don Kettl is Director of the Fels Institute of
Government and the Robert A. Fox Leadership Professor at the
University of Pennsylvania, where he specializes in management
of public organizations. We consider him a neighbor, too,
because he lives only about 30 miles up the road from us in
Philadelphia.
In 2008, he was awarded the John Gaus Award for a lifetime
of exemplary scholarship in political science and public
administration. He is the author or editor of a dozen or so
books and has won twice the Louis Brownlow Book Award for the
best book published in public administration. His newest book,
due out in November, is entitled ``The Next Government of the
United States: Why Our Institutions Fail Us and How to Fix
Them.'' He has consulted for governments at all levels, both
here in the United States and abroad. Dr. Kettl is currently a
nonresident Senior Fellow at The Brookings Institute and is a
regular columnist for Governing Magazine.
We are delighted that all of you are here. Your entire
statement will be made part of our record. You are welcome to
summarize that, and I would ask you to stick close to 5
minutes, but we won't quarrel if you go a little bit beyond
that.
Ms. Steinhardt, I would welcome your leading this parade.
Thank you so much for coming.
TESTIMONY OF BERNICE STEINHARDT,\2\ DIRECTOR FOR STRATEGIC
ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE
Ms. Steinhardt. Thanks very much for having me. I am
pleased, in turn, to be here today, especially in such
distinguished company, and to share with you some of the
lessons that we have learned in examining the progress that the
Federal Government has made in managing for results.
---------------------------------------------------------------------------
\2\ The prepared statement of Ms. Steinhardt appears in the
Appendix on page 55.
---------------------------------------------------------------------------
Starting at least 15 years ago with the Government
Performance and Results Act, the Congress and each
Administration have put into place a framework of strategic
plans, performance measures, and reports that together have
heightened focus on performance and accountability for results.
So today, I would like to talk about where we now stand and to
suggest some actions that the next Administration can take to
sustain and build on what we have accomplished so far.
Since 1997, GAO has conducted four surveys of Federal
managers across the government in order to gauge the extent to
which a performance culture has taken hold. Clearly, there has
been progress compared to what we saw in our first survey, and
I would call your attention to the chart up top there.\3\
Significantly more Federal managers that we surveyed in 2007
reported having performance measures for their programs, which
is to say the basic information that they need to judge how
well their programs are working. The blue bars are the 2007
results and the white bars, which you can see outlined there,
are for 1997. So there is quite a bit of difference.
---------------------------------------------------------------------------
\3\ Chart referred to appears in the Appendix on page 137.
---------------------------------------------------------------------------
But in order for this information to make a difference, it
has to be useful and used. To borrow Governor Easley's term,
this is about weighing the pig. How are we making changes in
the pig's weight? So the second chart shows that there are
still large percentages of managers who aren't using
performance information to a great extent in making decisions,
like setting priorities or allocating resources.\1\
---------------------------------------------------------------------------
\1\ Chart referred to appears in the Appendix on page 137.
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In fact, there has been significant change in only two of
these nine areas, the ones that are highlighted there. One is
an increase--and this is a good thing--in the use of
performance information to reward employees. But at the same
time, we also see a decrease in the use of performance
information for making decisions about new program approaches
or work processes, which does give us some concern, this
decline, because this is where you would want to see managers
using information to change direction when performance is not
up to the standards.
From our earlier work, and these latest survey results
confirm this, we know that there are a number of practices that
could spur some movement in these relatively static trend lines
and lead to more widespread use of performance information.
First and perhaps most importantly, and Governor O'Malley, I
thought, underscored this very clearly, the agency leadership
needs to demonstrate its commitment to achieving results. If
the leaders don't care or if they don't show they care, then
managers are not going to pay much attention, either. In fact,
our survey results only underscore this report because those
managers who reported using performance information to a
greater extent also reported that their leadership showed a
commitment to using the results of that information.
Second, agencies need to link organizational results to
individual performance. That is a kind of line of sight from
the organization's results to individual performance. And here,
performance management systems can be used to let employees
know how they can contribute to results and then to hold them
accountable for doing so.
Third, agencies need to make sure that they have the
capacity to collect and to use performance information.
Managers aren't going to use the information if it is not
timely, if it is not relevant, if it is not accurate, if it is
difficult to use, or if they simply don't know how to use it.
Promoting these practices within agencies ought to be a
first step for the next Administration. Beyond this, though, we
would advise a few others, again based on insights that we have
gained from our work over the years.
First, we would urge a more strategic and cross-cutting
approach to overseeing performance across government. Many of
the challenges that government faces today, whether it is
homeland security, emergency response, climate change, all of
them involve multiple agencies and programs. While this
Administration's major performance improvement initiative, the
PART process, has brought heightened attention to the
performance of individual programs, we also need an approach
that encompasses multiple programs and provides a more
integrated view of what government is accomplishing.
Second, performance information has to be more useful to
the Congress. Whatever performance initiatives the next
Administration adopts, the Congress should be engaged in
helping to identify meaningful measures of success as well as
the form in which the performance information will be useful to
Congress in its oversight, legislative, and appropriations
role, each of which could require different types of
performance information.
Finally, OMB can do more to build agency confidence in its
performance assessments. OMB deserves full credit for its
leadership in fostering a performance culture across
government, but as our survey data suggests, many Federal
managers still question the quality of the PART assessments.
The more confidence that managers have in the quality of the
assessments, the less they perceive them as paperwork
exercises, the more likely they are to use the results.
I want to close by noting that our study for you that is
continuing, and we hope to be reporting back here early next
year on additional actions that some agencies can take to
increase their use of performance information. But in the
meantime, we welcome the opportunity to work with you and your
staff, who have been very helpful already in organizing this
hearing, and we hope we can continue to work with you on these
critical issues.
With that, I will conclude my remarks and look forward to
your questions. Thank you.
Senator Carper. Thank you so much for your coming. Thank
you very much to you and your colleagues at GAO for your work
in this arena and for helping us as we approach the change in
administrations and the new Congress. Thank you.
Ms. Steinhardt. Our pleasure.
Senator Carper. Mr. Peacock, you have done good work, both
at OMB and clearly at EPA on this front, in this and other
endeavors, too. We thank you for that and we welcome your
testimony today. Thanks for joining us.
TESTIMONY OF MARCUS C. PEACOCK,\1\ DEPUTY ADMINISTRATOR, U.S.
ENVIRONMENTAL PROTECTION AGENCY; AND FORMER OFFICIAL AT U.S.
OFFICE OF MANAGEMENT AND BUDGET
Mr. Peacock. Well, thank you, Mr. Chairman. Thank you for
having this hearing. As you have noted, my name is Marcus
Peacock and I serve as the Deputy Administrator at the
Environmental Protection Agency. I do sincerely thank the
Subcommittee for having this hearing. Congress has lots of
hearings every year, but they tend to focus on how a particular
government program can do a particular job better. I think this
Subcommittee understands that you can come up with similar
methods for not just improving one, two, or three Federal
programs, but for improving all Federal programs.
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\1\ The prepared statement of Mr. Peacock appears in the Appendix
on page 84.
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The President certainly gets that idea. That is why in
2001, he directed that agencies integrate performance
information into their budgeting decisions. This meant agencies
had to identify performance measures for each Federal program
and factor that when they did their budgets, the ultimate goal
was to improve results across the government, and at that time
the President directed me to lead this cross-agency effort.
The result of the initial work we did was the Program
Assessment Rating Tool (PART). PART is essentially a method for
assessing the effectiveness of Federal programs, and more
importantly, making recommendations regarding how those
programs can be improved. And since its inception, the PART has
won a number of awards. It has been copied by other
governments.
I am often given credit for creation of the PART, but I
will tell you, I was very fortunate to have three things on my
side. The first was support from the top, and that was from the
President. The second was to have a very talented team of
people at OMB, the Office of Management and Budget, who did the
hard work of creating and fleshing out the PART. And finally,
third, we had a very talented and smart advisory committee,
which included Dr. Kettl, who kept looking at our work and
reviewing it.
In 2005, I moved from OMB to run the day-to-day operations
of EPA, and in the last 3 years, I have spent a large amount of
my time improving EPA's performance management systems. A
number of my predecessors, including Al Alm and Hank Habicht
also spent--emphasized improving management systems, and
hundreds of EPA staff over the last 20 years have spent time on
this effort. So I know better than anyone else that I really
stand on their shoulders.
EPA has come a long way. As the governor mentioned, we just
rolled out EPAStat. It is the first Federal agency to have a
Stat program. But I would say the biggest problem EPA currently
faces is to make sure our performance measures are actually
used. You can treat a measurement system like a thermometer or
a thermostat, and, of course, a thermometer measures the
temperatures, but a thermostat not only measures the
temperature, but allows you a way of changing it. And
performance management systems should be thermostats, not
thermometers. They should be used to produce change so that we
become more effective at serving the public.
Metrics for reporting don't mean much, but metrics for
management, I think, are vital. There are five barriers that I
have found in trying to get performance information used more,
and the first is a lack of fresh and frequent data. The Federal
Government has lots of annual measures, but annual measures
don't work too well in running the day-to-day operations of an
organization or program.
There is this Enterprise Rent a Car commercial you may be
familiar with where the car is all wrapped up in brown paper
and I have always wondered how that car stays on the road. You
can't look out the windshield or the windows. And I think
trying to use annual performance measures to manage the day-to-
day operations of a program is similar to trying to drive that
car around. With annual measures, you can't really see where
you are going.
The second barrier to using performance measures that I
have run into is a focus on money and not results. Washington,
DC still operates in a culture that asks how much did a program
get rather than what did the program produce, and that is not a
healthy way, I think, of looking at things. Just think about
the incentives inherent in declaring an organization more
successful simply by its spending more money.
A third barrier is too many meaningless measures. What
matters gets measured, but if everything is being measured, it
is hard to tell what matters. So measures need to be meaningful
and you need to be able to objectively evaluate where the
measures came from.
Fourth, too little access. The fewer people that have
access to performance measures, the fewer people are able to
actually use them. That is why I believe performance
information should be made available to the widest possible
audience.
And then finally, the fifth barrier is resistance. Many
people naturally worry about the consequences of not meeting
performance targets. They think performance data may be used as
a cover to either cut funding or punish people. And the fact is
that these systems can be abused, but that is a very poor
reason to avoid them. An organization cannot become excellent
without measuring its performance. If you can't see what you
are doing right, then you won't learn from that.
In conclusion, I am fortunate to work at a place like EPA.
The employees love the mission of the agency. They are very
results-driven, so that if you can show them that you are going
to be able to improve the results, they are willing to change
what they are doing in order to get there. They understand that
when EPA works better, public health and the environment
improve faster. And EPA management initiatives that aren't
linked to results are just gobbledy-gook. You need to
demonstrate that they will lead to cleaner air, water, and
land.
We need to get to the point where all Federal agencies
practice good performance management. Whether the latest and
hottest issue is homeland security or securities regulation or
climate change, a functioning performance management system is
invaluable to helping any Federal agency, no matter what its
work, do its job better. We need to get to the point where
there is always an answer to any Federal employee who asks the
question, ``How can I do my job better?''
Thank you.
Senator Carper. Thank you very much. I want us to come back
during the questions and answers. Mr. Peacock has just run
through five reasons why we don't always use information to
help us improve our performance and I am going to ask our other
witnesses to comment on those, if you would.
Dr. Kettl, you were good enough to spend some time with
Wendy Anderson and myself in our office earlier this week. We
are grateful for that and for your years of work in this area
and for all that you have written and lectured. We appreciate
your being here today and helping us to do better, to do our
job better. Thank you. You are recognized.
TESTIMONY OF DONALD F. KETTL,\1\ DIRECTOR, FELS INSTITUTE OF
GOVERNMENT, AND ROBERT A. FOX PROFESSOR OF LEADERSHIP,
UNIVERSITY OF PENNSYLVANIA
Mr. Kettl. Thank you, Mr. Chairman. It is a great pleasure
to be here today. I want to thank the Subcommittee for this
opportunity to explore what in many ways is the most important
issue facing this government, which is how to make sure that it
works, how to make sure it delivers results and value to
citizens. It may very well be the most important question we
never stop to ask until it is too late, and smart government
means getting out ahead of that to make sure that we are
prepared for the challenges that we know that we need to find a
way to be able to master.
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\1\ The prepared statement of Mr. Kettl appears in the Appendix on
page 86.
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I want to make several points here today as we try to
explore that question, the first of which is that if you look
from a 30,000-foot level at the question of government reform,
we are, in all likelihood, at the end of a natural life cycle
of Presidential management reforms. For the first time since
the Eisenhower Administration, we are now in a place where the
next thing that the Federal Government might do, the next thing
a new President might do is obvious.
President Eisenhower had the Hoover Commission. President
Kennedy had his whiz kids. President Johnson had planning,
programming, budgeting systems and budget reform. President
Nixon had management by objectives. President Carter brought in
zero-based budgeting from Georgia. The Reagan Administration
brought in a whole wide privatization initiative. At this point
in the campaign back in 1992, it was very clear that President
Clinton was going to reinvent government based on the best
seller. And by this point in the campaign in 2000, President
Bush had already delivered a major speech on the management of
the Federal Government.
It is not clear what it is that is going to happen next,
but it is clear that what we have done so far has accomplished
a lot, but that we are now at the point where we are going to
need to do something different, that more of the same kinds of
reforms are not likely to get us to where we need to go.
So the first point is that we are at a crucial turning
point because we are at the end of a series of natural life
cycles in the reform movement.
The second thing is that we have to find a way to get very
smart very fast about what kind of reform we need because we
face a set of wicked problems that will prove especially
punishing if we do not find a way to get ahead of these
problems. We face problems whether we are talking about
tomatoes in the supermarkets or hurricanes like Katrina that
come up very quickly, that are very large, that provide little
time to react, and that impose large consequences for failure.
And so we are at a point where we need to find a way to do
smart things fast to be able to deal with these issues that we
know we are going to be facing, and we know that more of what
we have been doing is simply not going to do the job.
The third point is I want to look in particular at what the
reforms in the Clinton and Bush Administrations have produced.
Both of these are tremendously importantly initiatives that in
many ways, although they may not seem like it from a distance,
are part of the same broad fabric of looking at results and
trying to motivate managers to do better.
The Clinton Administration brought a strong focus on
results for the first time to the entire Federal Government. It
encouraged Federal managers to innovate. It brought an expanded
customer service initiative to the government, ranging from
Social Security to the IRS, in ways that were truly
breathtaking and important. But at the same time, one of the
things the Administration did was to engage in substantial
downsizing of the workforce without engaging in a right-sizing
of what that workforce ought to look like.
As a result of that, the Government Accountability Office
has now named human resource management one of the high-risk
areas that the Federal Government faces, the issues that are
most likely to cause the biggest problems in management, and
GAO has identified this and in many ways it is the consequence
of trying to figure out now what kind of government do we need.
We clearly can't downsize any further without thinking about
how to right-size what it is that we do, and that was a major
question that the Clinton Administration left unanswered.
In the Bush Administration, the PART process we have heard
discussed here this afternoon was a tremendous breakthrough.
For the first time, all Federal agencies had to try to assess
goals for all their programs. They had to measure what it is
that they were trying to accomplish and focus on activities,
and it was government-wide in the scale that was anticipated in
some ways by the Clinton Administration but never fully
realized. And two other things happened tied to the Office of
Management and Budget and tied to the budgetary process. Both
of these were tremendously important and major breakthroughs.
The piece that we have left unanswered here is trying to
find ways of separating out the ideological commitments to some
parts of the management agenda, for instance, increasing
contracting out, from the question of what it is that we want
the contracting out process and other management processes to
accomplish, focusing on these goals and objectives, and
ensuring that we have a focus on activities that cut across
government agencies.
The basic fact, for better or worse, is that there is no
program that can adequately encompass any problem that matters.
Or put differently, there is no problem that matters to anybody
that any one Federal agency, any one level of government, any
one unit can possibly control. That was a lesson from Hurricane
Katrina and it strikes through every single important thing
that the Federal Government does.
So the problem is trying to figure out how to get leverage
over these long and complex chains that typically require
action across many agencies, and the piece that lies next after
the President's management agenda in this Administration is
finding a way to get to that cross-cutting piece. What the PART
process was terrific at was the vertical integration of
knowledge. The next step has to be the horizontal management
coordination to try to ensure that kind of collaboration.
What we need, in short, is my fourth point, actionable
intelligence, trying to find ways of finding out the things
that we can do something with, and once we figure out what it
is that we need to know, getting action to happen. We need
people--this is a lesson from the Clinton Administration--we
need Federal managers who can lead. The difficulty is that we
have a lot of very smart people who are doing very good things,
but often out there feeling that they need to work against the
odds. And what we have to do is find a way to help them to do
what it is that they know they need to know and know what they
need to do in a way that makes it easy.
We need information that focuses government on results
instead of collecting information within silos. We need to
drive that results to try to improve the way the government
works instead of simply producing, as we have been discussing
here this afternoon, more weights on the pig without making the
pig any better.
We need, finally, a focus on collaboration that builds
cooperation along a horizontal chain against all those people,
all those organizations, all those agencies, to be part of a
solution to ensure that, in the end, the problem gets solved
instead of just the agency gets managed.
We, in short, need to try to find ways of developing a new
generation of reforms. More of what we have been doing is
likely to produce diminishing returns because, as GAO is
pointing out, we are collecting more and more information, but
it is not like people are doing anything much with it. What we
need to do is figure out how to make sure that the information
that we have is information that improves the way that
government works.
We need results that matter to people, which gets to my
fifth point about trying to figure out how to make that work.
First, we need to talk about what it is that we are trying to
do. Often, a focus on results within individual agencies has to
do with how many checks have been mailed, how many grants have
been processed, how many forms have been filed, but in the end,
none of that matters unless the problems get solved.
The fact is that most citizens don't care about what it is
that the FAA does, but what they want is when they go to the
airport, they want to be able to take off to where they are
going and land at the destination safely. They don't care about
the FDA, but they would like to be able to eat tomatoes safely
without having to worry about it. Citizens care about results
and we need a government that is driven toward those results.
The second point within this, though, is that the chain of
producing accountability toward those outcomes, which is what
people care most about, is often long and complex, where
individual agencies, individual units contribute pieces, but
nobody controls the whole thing. That means we need to find a
way to hold each individual player accountable for their
contribution to the outcome as a whole. We need to know what we
are trying to accomplish and understanding what each
individual's contribution to that is.
This means ultimately, as my third point here, that the
government needs to get leverage over the outcomes that it
wants to try to accomplish. One of the great findings and
discoveries about EPA is that EPA is most effective not when it
does it itself, but when it enlists its partners toward the
common pursuit of making the environment clean.
What is it this ought to look like in the next
Administration? For the President, there are several things
that could happen. The first is a new generation of reforms
that understands the importance of what has happened before but
the need primarily first to focus on outcomes and results that
matter.
Second, a kind of geographic information and performance
stat for those parts of the Federal Government that make sense
so that we can look at what it is that matters and measure in
real time today how well we are doing it because if we wait
until the end of the year for a GPRA report to produce some
kind of results, by that point, it will be too late to change
what it is that needs to be fixed.
We need an Office of Personnel Management that is more
robust and develops leadership in the Federal Government, and
we need a focus in the White House in particular to have
somebody in the White House who can focus on the issues of
making the government work and making that important for the
President.
For Congress, we need a system of the Government
Performance and Results Act that focuses on results that
matter, hearings that on every occasion ask people what is it
that we are trying to accomplish and how well are we doing it,
and a focus on programs and agencies that put outcomes that
matter for people at the forefront of things.
We have plenty of information. We need to make it
actionable and find ways of producing results for the citizens
in the end, because that is what it is that the people expect.
Senator Carper. Excellent. Thank you very much for really
three terrific testimonies.
I want to go back to, as I said I would, to Mr. Peacock.
You mentioned five barriers to agencies taking this approach
and improving their outcomes. Would you briefly mention those
again, and then I am going to ask our other two witnesses to
comment on them.
Mr. Peacock. Sure. The first one is lack of fresh and
frequent data. The second is a focus on money, not results, and
you could broaden that to inputs, not results or outcomes.
Third is too many meaningless measures. Let me know if I am
going too fast. Fourth is too little access. The governor
talked about transparency. It is the same issue there, too
little access to the measures. And then finally, just
resistance, organizational resistance to change.
Senator Carper. Let me just ask either Ms. Steinhardt or
Dr. Kettl, I want to ask both of you, to react to those five
points, if you would.
Ms. Steinhardt. I think our work supports every single one
of those points. In fact, where we have seen greater use, real
live use of performance information is where agencies have been
able to overcome some of those kinds of barriers.
It is very important in agencies or organizations to be
able to communicate the kind of performance information
throughout the organization, making it transparent to everyone,
and we have seen some good examples of how agencies do that,
communicating frequently to all of its employees where they
stand. It helps spur competition. It provides good benchmarks
for units across the organization. It has real benefits and a
number of agencies have been able to do that.
Let me consult my list again here.
Senator Carper. Go right ahead.
Ms. Steinhardt. Real-time information, absolutely. This was
a point that I was making, I think, earlier, where the
information isn't timely, credible, accurate, it is not going
to be used, and organizations that figure out how to make that
information available on a daily or real-time basis are ones
that are going to see that it is used, and Governor O'Malley
talked about how that concept is applied and was applied in
Baltimore and now in StateStat. We have seen some very good
examples of that, as well.
Too many measures, that is sort of a basic precept of
performance measurement. The vital few. You can't expect people
to focus and really align themselves with what the organization
is trying to accomplish if it is diffuse and scattered.
Senator Carper. Good. Thank you. Dr. Kettl.
Mr. Kettl. I simply couldn't agree more. That is exactly
the core point here. The real issue here is that any time the
process of performance descends into questions of measurement,
we have in a sense lost the game because we get away from what
it is that performance is all about. It is about communication.
It is about talking about what it is that matters and figuring
out how that communication gets people to act. And so as we
tend to slice and dice things into ever smaller pieces and
measure more things, we are likely to get to a point where we
are unlikely to get people to act. Performance is about
communication. It is not primarily about measurement.
What is it that communication ought to be about? The key to
overcoming resistance is primarily one of getting people to
agree on what problem they want to try to solve and how to go
about trying to do that.
One of the examples that while mayor, Governor O'Malley
worked on was something called the rat rub-out program in
Baltimore. They had rats that they wanted to rub out. They had
maps that showed where citizens were complaining about problems
of rats. Which department in Baltimore is in charge of rats?
The answer is, none of them are. On the other hand, it is a
function of public health, of housing, of redevelopment, of
transportation, of the people in charge of water and sewer. It
is a cross-cutting collection of agencies which, put together,
have to be responsible for solving the problem.
If you ask everybody, do you want to collaborate?
Everybody, of course, always says yes. But getting it to happen
in real time and in real life is very hard to do. You put a map
up on the board that shows, here is a problem with rats. Is
anybody happy with that? No. What we are going to do about
that? We want to get together to solve it. Who is going to
solve it? Everybody understands their particular contribution
to solving that problem, and that is what it is that drives it.
It is communication about results that matter and getting
people to put themselves to work to solve the problems that
matter.
So the reason why so often performance management doesn't
work is it becomes issues of measurement and that conversation
never happens.
Senator Carper. Ms. Steinhardt, and then Mr. Peacock, you
may want to say something here when she is finished.
Ms. Steinhardt. I just wanted to add to this concept of
visibility of information, because I think that is really also
extremely key here. I came across this article a couple of days
ago in the Wall Street Journal about how U.S. Airways has now
gone from the bottom of the list of airlines in on-time
performance to the top so far in 2008. What is really striking
to me--the article is actually very interesting in discussing
how it did that--is the fact that everybody knows about on-time
performance. It is a very widely-used statistic. And in the
airline industry, it is one of the key indicators of their
viability as a company. It really matters to the CEO and
everybody in the company, how their on-time performance is
ranked. It is the visibility of the information, I think, that
really makes such a big difference.
Senator Carper. Excellent. Mr. Peacock, do you want to add
anything before we move to another question?
Mr. Peacock. The governor mentioned that EPA had rolled out
an EPAStat program and he also mentioned two other things. He
said it is easy to take any measurement program and put the
``stat'' label on it, which is true. But he also mentioned that
if you are going to do this seriously, you really have to be
committed to it and have some core elements that you are
committed to to make it work.
Across these five barriers we have been talking about, EPA,
through its EPAStat program, I think, is probably tackling--has
tackled about three-and-a-half of them. But when I got to the
agency, regarding lack of fresh and frequent information, I
went in hoping to get monthly information. The most we could
tolerate and are tolerating right now is quarterly information,
which still took a lot of work to get. If it was any less
frequent than that, it wouldn't work.
The number of measures we had was too many. We have been
able to cut it by 15 percent. We will continue to decrease it
so that it becomes more manageable.
In terms of access, the relentless meetings, EPAStat
meetings we have, and they do have to be relentless--this gets
back to Dr. Kettl's point, which I think is critical. This is
all about communication. We have meetings--I have meetings
personally with each assistant administrator and regional
administrator every quarter on these statistics, but the
richness of this is in discussing them and having a
conversation about what is going right, what is going wrong,
and what we are going to do about it.
We now broadcast those meetings internally to any EPA
employee who wants to view them, and our quarterly management
report, as far as I know, we are the only Federal agency that
on a quarterly basis puts out our performance measures to the
public for anybody to look at. So we are very strong on the
access.
And then in terms of resistance, once again, I just happen
to work in a culture where people are willing to see if changes
results in us meeting our mission. There is just not a lot of
resistance.
But we still have a problem, I think, with focus on money
and inputs rather than results. It is the sort of culture we
run into, not just at EPA but throughout the Federal Government
and outside the Federal Government, where people want to know,
well, how much money are you asking for, when really the first
question should be, what are you planning on delivering next
year?
Senator Carper. So true. Why do you suppose that is the
case?
Mr. Peacock. If I knew that, I wouldn't be at three-and-a-
half of these solved. I would be at four-and-a-half of them
solved. I mean, I would be interested to hear why other people
think that is the case.
I will tell you, my experience in the OMB, where we
realized this was a big problem, I mean, when the budget comes
out every year, still, the first thing that is talked about is
the dollars that are being proposed, not what we are going to
get for it. So it is just ingrained in the way we think about
things and I think it is going to be incremental, but it is a
change that has started to take place, but it is going to have
to keep taking place.
Senator Carper. Dr. Kettl, do you want to respond to that
same question that I just asked?
Mr. Kettl. I think your question is why is it we focus so
much on inputs----
Senator Carper. Yes.
Mr. Kettl [continuing]. And it is like the old joke about
the drunk looking for the keys underneath the lamppost. Is that
where you lost them? No, I lost them over here. Why are you
looking under the lamppost? Because that is where the light is.
People focus on the things that are easy to look at and easy to
measure because OMB at least publishes a budget that has all
the numbers in it and it is easy to say, how do we know we care
about something? Because we are spending a lot of money on it.
Then we wonder why it is that we are not producing good
results. Well, because that is not the function of what it is
that we are driving the system to.
But what we need is, in a sense, an alternative way of
thinking about accountability. What citizens care about--what
citizens know about is that they want government to work, and
in the end, quick headline, increases, decreases, symbols that
are valuable. But if it doesn't make the government work
better, citizens don't care, and in fact, it makes them even
more cynical.
I think the main reason why we do it is, first, because the
numbers are there and they are easy and there is no clear
alternative otherwise, and second, it has to do with the fact
that we don't have an obvious alternative accountability
mechanism that focuses on outcomes. Why? Because we have lots
of measures, but we haven't figured out what to do with them
yet. That is the next generation of reform that I think we
need.
Senator Carper. OK. Let us talk about the importance of
leadership. I don't think the City of Baltimore would have gone
to CitiStat without the leadership of their mayor. My guess is
that the State of Maryland wouldn't have gone to StateStat
without the leadership of Governor O'Malley.
In Federal Government, we elect a President every 4 years,
we elect or reelect. We have six-year terms here in the Senate
and two-year terms, as you know, in the House. Folks who serve
in the Executive Branch as cabinet secretaries are--they can
serve for 4 years, occasionally 8 years, but more often than
not they serve less than 4 years. Folks that are deputy
secretaries and associate secretaries and under secretaries,
they tend to come and go.
How important is leadership and the continuity of
leadership at the top and then down to different levels of
government here in Washington? How important is the consistent
message, that this is important, we have got to do this, and to
hear that not just from the very top of the government, but
also the top of each department and with the agencies
themselves? How important is that? Please.
Ms. Steinhardt. I would say it is absolutely the first
step. It is the precursor. Nothing else--none of the other
recommendations, none of the other practices that we talk about
would be successful if the leader of the organization doesn't
care about this because nobody else will if the leader of the
organization does not. It doesn't end there, but it starts
there.
Senator Carper. All right.
Mr. Peacock. I agree. It is a prerequisite, but there are
two ways to institutionalize these systems and this way of
thinking. One is through standard operating procedures and
organizational structure, so for instance, at EPA, we now have
put in place as part of a regular annual process we go through
scrubbing our measures to make sure that they are meaningful,
and that is actually the process by which we are reducing our
measures.
And second, in terms of an organization, for instance, we
have now created a Program Analysis Division at EPA which
essentially, with the Office of the Chief Financial Officer,
makes the system run, produces the statistics. It is
essentially like the EPAStat Office or the analogy which these
cities and the State of Maryland, for instance, have.
And then the second way to institutionalize this is the
career people. Obviously, the policy officials, the political
appointees aren't there very long, but we have career officials
and managers who, at least at EPA, have been there a very long
time. Particularly as the value of these systems are
demonstrated to them, they become believers and advocates for
them, and whether or not you have what the political appointees
may be doing, or even if the standard operating procedures are
in place, if this is a value to good managers in terms of
managing their programs, then these systems will be used.
Mr. Kettl. Mr. Chairman, the people question is absolutely
essential. There is a paradox in the way in which the Federal
Government has evolved, I think. As it has gotten more complex,
the role of people in leadership has become more important. We
had this model for a long time that said we will create a very
complex system and we will slide people in and out in standard
operating procedures because they will be pretty much
interchangeable. The idea of being able to create a civil
service system and all kinds of standard operating procedures
were not to make people unimportant, but to make it less
important who was serving in those positions.
It is increasingly important now, the more complex the
system has gotten, to have the right people, smart people in
the right places to drive things forward or otherwise things
just don't happen, and the way in which it does happen, and,
for example, the Coast Guard has proven this, is making that
part of the organization's culture. When the standard operating
procedure becomes a culture that reinforces the pursuit of
strong outcomes, that is what it is that produces this piece.
Unfortunately, too often in the Federal Government, it is
something that happens either by accident or by people having
to do it despite the fact that the game somehow seems rigged
against them. We have got to find a way to institutionalize
strong performance-oriented cultures into the very core of the
way government operates.
Senator Carper. In looking at our third panel and thinking
about the agencies that we are holding up here for acclaim, for
applause, because they have gotten it and they are really
setting an example for the rest of us, EPA is one of those and
I think it is fair to say that, Mr. Peacock, he probably
wouldn't admit this, but he is a big reason why EPA has moved
down this road and has good results to show for it.
But among the other agencies that are here, the Nuclear
Regulatory Commission, NASA, the VA, and I wonder if there is
any common thread with all of those or if you can think if
maybe there is. I am not sure, but I think there might be, but
any thoughts?
Mr. Kettl. Mr. Chairman, I think it is in some ways a very
simple answer to a very complex problem. They know what they
are trying to do. They focus relentlessly on doing it. They
reinforce people for doing it. They keep track of how well they
are doing it. And it is a simple process that focuses on
results and having a culture that reinforces what they are
doing and they focus on what their outcome is.
Their job is not simply to, at the VA, for example, taking
a stack of papers on veterans' benefits from Part A and moving
them over to Part B. They focus on the veterans. They have had
a system, for example, of veteran-centered health care for a
long time that is what drives them and drives what it is that
they do. They know what they are there for and they know who
they are trying to serve and they focus the system on serving
them. And developing standard operating procedures and
leadership to try to do that is the key to making a high-
performing organization.
Senator Carper. Anyone else?
Mr. Peacock. I think Dr. Kettl is exactly right. A clear
mission that everybody can see and believes in has got to be a
prerequisite for this. I don't remember who mentioned it, but
this clear line of sight idea that everybody in the
organization can see not only the mission of the agency, but
how it connects to what they do on a day-to-day basis, and that
is a prerequisite for this.
There are other agencies that have a clear mission and I
think everybody sees it but aren't necessarily doing a great
job at this. So while it is a prerequisite, I don't think it is
sufficient.
Senator Carper. Ms. Steinhardt.
Ms. Steinhardt. I agree completely with Dr. Kettl and Mr.
Peacock's comments. I would add, though, and I don't
necessarily apply this to VA and NRC, perhaps to NASA, but
sometimes it is a crisis that focuses an agency on what it is
about and what its mission and what its desired goals ought to
be.
This happened to the IRS, actually, in the mid-1990s. There
were oversight hearings, a lot of press attention,
Congressional attention on allegations of taxpayer abuse and
dismal customer-taxpayer service and IRS had no information,
performance information, to refute all of these horror stories
that were coming out. And the Congress itself, I think, played
a very key role in setting some very specific performance
targets for the agency, and the agency began to collect the
information, became very performance focused and it really
turned itself around.
In the period certainly from the 2000 survey, when we
started, when we were asking about managers' use of information
there to the most recent survey, they have showed a really
positive improvement there, and more significantly in actually
how the agency is performing, they have really made great
strides.
Senator Carper. All right. Well, good. There is still
plenty of work to be done. Every year, we hear the size of the
tax gap, and we learned last year it is over $300 billion,
monies that are owed, not being collected. We deal with this on
this panel. We deal with the improper payments. Not everyone,
not all of the Federal agencies are reporting their improper
payments, but of those who do, we know that our improper
payments are, I think, roughly $50 billion a year, mostly
overpayments. And it occurs to me that if somehow there were no
tax gap and if we weren't making these improper payments, we
would basically have a balanced budget.
Ms. Steinhardt. But today, we know the size of the tax gap,
or at least now IRS is able to estimate the size of the tax
gap.
Senator Carper. We weighed the pig. [Laughter.]
Ms. Steinhardt. Well, first step.
Senator Carper. There you go. A couple more questions and
then we will excuse this panel and invite our last panel to the
table.
Ms. Steinhardt, in light of your survey results showing
improvements in the amount and the types of performance
measurements that agencies have at their disposal, why do you
think so little change in managers' use of that information is
being displayed in their decisionmaking?
Ms. Steinhardt. Well, just to comment on the survey
results, a lot of the results--the average, rather, is affected
by the fact that we have a couple of large agencies like DOD
and the Interior Department that are low, relatively low users
of performance information. The smaller agencies like NASA,
NRC, EPA, tend to be higher, but they don't color the average
so much.
In terms of why we are not seeing so much progress or use
in those other agencies like Interior, for example, that is the
subject of the second part of our study, so we hope to be back
here. So we hope to be back here with some more concrete
information on what those agencies can do to improve.
Senator Carper. All right. Thank you.
Mr. Peacock, how do you suppose the next Administration can
get agency leaders to buy into such assessments and use a
review process in resulting performance information to improve
their management decisions?
Mr. Peacock. I mean, there are so many directions one could
go in that would be worthwhile, although I think that Dr. Kettl
hit on some of them. We now have a wealth of information that
wasn't there before, and looking at this information but from a
cross-agency perspective, looking at it from the sense of the
public who is more interested in protecting wetlands rather
than whether it is the Corps of Engineers or the Department of
Interior or EPA that is protecting the wetlands and being able
to compare across agencies which programs are doing this the
best, doing it the most efficiently, and then using that
information in terms of making budget decisions or policy
decisions.
I mean, there would be any number of ways to do that, but
there probably needs to be less emphasis now on trying to
collect this information and more emphasis on actually bringing
it in-house and someone sifting through it to actually use it
and make decisions using it.
Senator Carper. OK. Thank you.
And finally, one more for Dr. Kettl, if I could. In your
work on how government responded to Hurricane Katrina, you have
described the importance, and I am going to quote here, ``the
importance of working in horizontal networks instead of
struggling over a vertical chain of command.'' As GAO has
testified, there are many programs that need to work together
to accomplish common outcomes. I think Mr. Peacock has said as
much, too. What are some approaches the next Administration
could take to bring about a more cross-cutting focus on
performance issues?
Mr. Kettl. The first thing, Mr. Chairman, is to underline
the importance of these cross-cutting approaches to begin with
because increasingly, what it is that government does has to
happen through those relationships.
The second thing is to focus on a smaller number of more
important outcome-based measures, less on how many applications
for processing, more on what kind of results we are producing,
getting the information in real time, getting the information
displayed graphically. One of the things about Mayor and then
Governor O'Malley's work is that if you look at the maps, you
just look at it and it talks to you. It tells you what the
problem is and where to go about doing it.
For example, he had a series of charts about the decline in
the murder rate in the three kidney-shaped areas that he talked
about. You look at that and you see it, you can see the change,
you can see the progress, you see where the problem is. It
tells you what it is that you need to work on and where you
need to go. There is something about information that is
focused on what matters, that is real time, that focuses on
where it is that it happens that drives the collaborations that
are required and then makes it possible to have the
conversations about who it is who is going to contribute to the
solutions to the problems that in the end matter.
That is the secret to the successes in EPA's work, of
trying to figure out what are we trying to do. How can we make
the air cleaner? Who has got a piece of the action? How can we
measure whether or not we are doing it? And it is that kind of
relentless cycle of follow-through, not once a year, once every
5 years collecting some interesting reports and putting it on a
chart. It has got to be real-time information that drives
action and drives action the citizens care about.
I can say that with confidence not because I know it to be
true, but because I have watched others do it. The successful
managers around the Federal Government are doing that and more
of that is what it is that we need.
Senator Carper. I will just close with an observation. When
I was privileged to serve as the chief executive of our State,
there are a number of goals that we set. We wanted to raise
student achievement, and we didn't want to just put it all on
the schools or on the Department of Education. We wanted to
reduce the incidence of teenage pregnancy. We just didn't want
to put it all on the kids department or on the Department of
Health and Social Services. We wanted to reduce the incidence
of recidivism in our prisons, but we didn't want to put it all
on our prisons. We wanted to reduce the crime rate, but we
didn't want to put it all on our police.
And we ended up establishing a Family Services Cabinet
Council which included about half of the cabinet, and I would
meet with them every month and we would set measurable goals
and then try to hold one another accountable for progress. But
I think the fact that I sat with the cabinet secretaries every
month and then they would meet once a month without me with
members of my governor's office staff just to follow up had
some pretty good effect.
There is something to be said for trying to hold a
particular agency responsible for getting, say, ``A'' done, but
sometimes ``A'' needs to be done in collaboration with a bunch
of other folks. So you need somebody saying, you guys and gals
have to work together. We do have stovepipes in the Federal
Government just like we did in State Government and they are
hard to get rid of.
I want to thank you so much for your testimony today,
really for your terrific work. Ms. Steinhardt, to you and your
colleagues at GAO who are just enormously helpful to this
Subcommittee and really to our Executive Branch, too. To Mr.
Peacock, who has worked in OMB and done great work there and
now gone to EPA and helped to show as a practitioner what we
can do and always is a source of inspiration, actually. And Dr.
Kettl, we have a lot of people who testify before us. Few are
as clear and concise, particularly academics---- [Laughter.]
Who are as concise and able to put in terms that everybody,
even I, can understand. It is a real gift. So we thank you. It
is easy to see why you have had real success and are highly
sought after.
I want to leave the record open for a week or two so that
folks who are not here can have a chance to submit some
questions, and if you get those and would respond to them in a
timely way, we would be most grateful.
But thank you so much for joining us today. Thank you.
Ms. Steinhardt. Thank you.
Mr. Peacock. Thank you.
Mr. Kettl. Thank you, Mr. Chairman.
Senator Carper. To our third panel, welcome. Thank you for
hanging in here until almost 4:30. We promise not to keep you
much longer, but thanks a lot. Have you all been here for the
presentations of our first two panels?
Mr. Tucker. Yes, sir.
Senator Carper. Good. Well, a special thanks.
One of the questions that I asked is, what are the common
threads between the agencies that we are really holding up for
acclaim here, who seem to get it and have been achieving better
results because of that fact, in terms of measuring outcomes
and actually using the information to change performance. That
is one of the questions that I am going to be asking each of
you, so be thinking about that, if you will.
Jim Dyer is the Chief Financial Officer for the Nuclear
Regulatory Commission. We were privileged in another committee
that I serve on and chair, a subcommittee with Senator
Voinovich, to have a chance to work with your agency a lot and
have a very high regard for you. What is it, the best agency in
the Federal Government in which to work?
Mr. Dyer. The best place to work.
Senator Carper. The best place to work, yes. But there, you
serve as the person who is responsible for planning, for
budgeting, and financial management of agency resources. You
are also, I understand, currently the agency's Performance
Improvement Officer, responsible for leading the agency's
performance management activities.
Prior to your position as Chief Financial Officer, I
understand you served as Director of the Office of Nuclear
Reactor Regulation, where you were responsible for agency
safety programs for the commercial power, research, and test
reactors of the United States. A couple of people suggested to
me you also may have at one time served in the U.S. Navy and
that you were a submarine officer from 1973 to 1977. I was on
active duty from 1968 to 1973 looking for submarines and had a
pretty good naval flight officer, P-3s, Orions, and our job was
to hunt for Red October. We found plenty of them, but whenever
we were looking for you guys, for our guys, we could almost
never find you. You are mighty good at what you did. You served
in the Naval Reserve until your retirement in 1995, and I
served in the Reserves until my wife made me quit in 1991. But
thank you for your service then and for your service today.
Scott Pace is the Associate Administrator for Program
Analysis and Evaluation at NASA. He is responsible for
providing objective studies and analyses in support of policy,
program, and budget decisions by the NASA Administrator.
He previously served as Chief Technologist for Space
Communications, where he participated in the negotiations that
resulted in the 2004 GPS-Galileo agreement between the U.S. and
the European Commission, and Mr. Pace also previously served as
the Deputy Chief of Staff to NASA Administrator Sean O'Keefe.
What is he doing these days?
Mr. Pace. I believe he is working in industry these days.
Senator Carper. All right. Tell him the Junior Senator from
Delaware was asking for him if you run into him, please.
Mr. Pace. Certainly.
Senator Carper. Daniel Tucker, Deputy Assistant Secretary
for Budget for the Department of Veterans Affairs. In this
capacity, Mr. Tucker helps to oversee the $90 billion budget
for the Department. In addition, Mr. Tucker serves as
Performance Improvement Officer for the Department and is
responsible for overseeing the development of Veterans Affairs'
annual performance plan and managing Program Assessment Rating
Tool evaluations. Prior to his current position at the VA, he
served as the Chief Financial Officer for the National Cemetery
Administration.
With those introductions behind us, let me just ask Mr.
Dyer if you would go ahead and lead us off. Summarize, if you
will, in roughly 5 minutes and then we will have some questions
and call it a day. But thank you. Please proceed.
TESTIMONY OF JAMES DYER,\1\ CHIEF FINANCIAL OFFICER, AND
PERFORMANCE IMPROVEMENT OFFICER, U.S. NUCLEAR REGULATORY
COMMISSION
Mr. Dyer. Thank you, Mr. Chairman. It is an honor to appear
before you today to share our approach for using performance
information to improve management of U.S. Nuclear Regulatory
Commission programs.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Dyer appears in the Appendix on
page 92.
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The mission of the NRC is to license and regulate the
Nation's civilian use of byproducts, source, and special
nuclear materials to ensure adequate protection of public
health and safety, promote the common defense and security, and
protect the environment.
The NRC is pleased that the Government Accountability
Office recognized our improvements in the use of performance
information and we believe it is the result of three factors:
One, a strong commitment by the NRC commissioners and senior
management to continuous improvement; two, the effective
implementation of our planning, budgeting, and performance
management process; and three, NRC openness with employees and
our external stakeholders.
We also believe that the recent government activities to
create the Performance Improvement Officers and Performance
Improvement Council can further improve the NRC performance
management.
We created the NRC planning, budgeting, and performance
management process in response to the Government Performance
and Results Act in 1997 and still use the four simple
integrated components of the process to manage our program
performance.
First, our current strategic plan concisely identifies two
strategic goals for safety and security to accomplish our
mission and an organizational excellence objective which
characterizes the manner in which we intend to achieve these
goals.
Second, our budget process involves multiple levels within
the NRC organization, so we obtain staff's commitment to
complete the planned activities on a schedule and within
budget.
Third, NRC executives monitor performance using office
operating plans that track budget expenditures and performance
targets well beyond the detail in the NRC performance budget
delivered to Congress to improve our accountability.
And fourth, our program assessments integrate the inputs
from several sources, including Congressional hearings and the
OMB PART tool results to develop program improvements.
Additionally, we have recently started using the Lean Six Sigma
evaluation process to more systematically assess program
performance. These program assessments provide a significant
input for NRC's senior executive and manager appraisals and
awards.
We also strive to effectively communicate NRC performance
expectations and results to our staff and external stakeholders
to promote openness and increased accountability. The NRC uses
a strategic plan, the performance budget, Congressional
reports, and our performance and accountability report to
communicate with our stakeholders and receive their feedback.
Commission meetings concerning NRC program performance reviews
are some of our best attended public meetings. NRC offices
publish quarterly operating plan results on their internal
websites, routinely discuss the performance results during
periodic staff meetings, and in newsletters, and recognize
staff contributions to agency mission through the awards
process.
However, we do face challenges with effective performance
management. As you are well aware, the NRC has had significant
growth in the past few years, and this has increased the
complexity of performance monitoring, with new programs, new
organizations, and an increased level of work within the
agency. Better performance management through expanded use of
techniques such as the Lean Six Sigma and evaluation is needed
for improved regulatory program consistency, efficiency, and
effectiveness.
Additionally, our current system of performance monitoring
and assessments is very labor intensive. We need to modernize
methods for processing performance information using the latest
technology. Improving our budget structure and integrating cost
and performance information in a more timely manner will
facilitate improved performance management.
Also, our performance metrics focus on the quantity and
timeliness of our products over the quality because of the ease
of measurement. Most often, quality issues are identified by
schedule delays because of required rework. We need to develop
methods for more timely measurement of the quality performance
of our programs.
The Office of Management and Budget-led Performance
Improvement Council provides a forum to discuss these
challenges through sharing agency best practices for improving
the use of performance information. Presentations by other
agencies on their experience with implementing Lean Six Sigma
evaluations have been valuable to the NRC, and the Council's
planned agenda items offer the potential to further improve our
performance management.
In conclusion, we appreciate the Government Accountability
Office's recognition, but realize that we can further improve
our use of performance information for managing our programs.
We intend to continue to improve our performance through
effective use of internal assessments, external oversight
inputs, public feedback, and sharing experience with other
Federal agencies.
Thank you. I look forward to answering your questions.
Senator Carper. Mr. Dyer, thank you very much.
Mr. Pace, your entire statement will be made part of the
record for each of you, so if you want to summarize, feel free.
TESTIMONY OF SCOTT PACE,\1\ ASSOCIATE ADMINISTRATOR FOR PROGRAM
ANALYSIS AND EVALUATION, AND PERFORMANCE IMPROVEMENT OFFICER,
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
Mr. Pace. Just the highlights. Good afternoon, Mr.
Chairman. Thank you, and it is a pleasure to be here.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Pace appears in the Appendix on
page 97.
---------------------------------------------------------------------------
As you mentioned my background at NASA, probably the most
relevant point for today's hearing is I am also the agency's
Performance Improvement Officer under Executive Order 13-450
and the lead for various program improvement initiatives under
the President's Management Agenda, which, of course, as you
know, Sean O'Keefe had a lot to do with in writing. So I have
had maybe a bit of an advantage.
I have been able to observe the full spectrum of NASA's
activities, its performance, where we have excelled and where
we can improve, and I would like to share some observations, I
think, on why NASA generally receives good marks and continues
to receive strong bipartisan support from Congress, for which
we are very grateful.
First of all, as some of the other speakers, I think, have
mentioned, NASA is really fortunate in being charged by the
Administration and Congress with missions that are well suited
to performance management. We have a performance-based culture
that values mission success as a central tenet, and through
hard experiences, both good and bad, NASA has sought to put the
right tools and governance processes in place to better ensure
accountability, transparency, and oversight. These processes
are not ends in and of themselves but means for accomplishing
the missions that are assigned to us by the Administration and
Congress.
In our experience, the best tools for creating
accountability and transparency are those that provide
consistent external reporting requirements, that provide
flexibility internally in the design of measurement techniques
tailored to our unique missions. Consistent external reporting
helps focus the agency on the most important measures. As was
mentioned, if you measure too many things, you are probably
deluding yourself. And flexibility is important to help avoid
the trap of imposing simple one-size-fits-all performance
measures that can really mask more than they can reveal.
While our system is generally working well, we are not
without challenges and we need the support of Congress in
maintaining our commitment to the efficient and effective
execution of agency missions. Our mission is very concrete and
our goals readily flow down to every level of the agency. Fly
each Space Shuttle mission safely until retirement. Complete
the International Space Station. Develop the next generation of
launch vehicles that will return us to the moon, Mars, and
beyond. And the performance against concrete goals is,
therefore, measurable, traceable, and thus actionable.
Our budget is aligned to our goals. We have well-
established program and project management policies driven by
the need to deliver a wide portfolio of missions of many
different sizes, many different destinations.
Our programs are typically milestone-driven and we face
hard deadlines, such as planetary windows, which we just have
to hit. Our schedules are complex and must be integrated. Many
organizations have to come together to fly each mission. And as
an agency, we are comparatively small and compact, and
therefore the key strategic informed conversations can be held
at the highest levels of the agency. So our internal decision
loops can be fairly tight.
We are currently focused on aligning all of our external
reporting to a single set of measures. We are linking internal
performance indicators directly to these measures and
commitments, in particular GPRA and the PART tools, as has been
discussed earlier.
I could describe our processes in a lot of detail, but the
real demonstration, I think, of performance management is
mission success. We currently have 56 robotic spacecraft
operating throughout, and in some cases beyond, the solar
system. We continue to conduct groundbreaking scientific and
aeronautics research. The Space Station is nearing completion.
We have seven more assembly flights to go plus two logistics
flights, which we hope we will be able to fly before Shuttle
retirement in 2010. This October, we are looking toward a final
Shuttle mission to the Hubble space telescope to finish its
repair.
In the risky business we are in, we are going to continue
to face challenges. Nine projects have breached cost or
schedule thresholds in fiscal year 2008 against performance-
based lines that we established with the Congress in our major
program annual reports. We are continuing aggressive effort to
improve the fidelity of our up-front estimates of cost and
applying more rigor to our life cycle cost estimates than
really any other time in the agency. There are many sources of
these cost growths, some we can control, some we can't, and we
are working on each one.
We accept the need to improve performance and transparency,
but at the same time, we are struggling with the issue of
reporting complexity. Of course, if a project is in trouble, it
is in trouble, but under current reporting requirements from
the multiple stakeholders, such as the OMB, Congress, and the
Government Accountability Office, we have a variety of
different trigger points and thresholds that include life cycle
costs, development costs, schedule growth, key milestone slips,
and each one of them can be slightly different.
So we are looking for some greater consolidation in how
these various breaches are defined, greater consolidation of
requirements for what is in and out of that reporting, not only
to reduce our reporting transaction costs, but also to ensure
that agency attention and effort is focused on mitigating the
most significant project performance issues so we stay focused.
I really want to thank you very much for your time this
afternoon and really appreciate you drawing the Committee's
attention to this important topic. It is something that is near
and dear to us and we appreciate your interest. Thank you.
Senator Carper. Thank you, and thank you for coming and for
the example that you provide. Mr. Tucker.
TESTIMONY OF DANIEL TUCKER,\1\ PERFORMANCE IMPROVEMENT OFFICER,
AND DEPUTY ASSISTANT SECRETARY FOR THE BUDGET, U.S. DEPARTMENT
OF VETERANS' AFFAIRS
Mr. Tucker. Thank you, Mr. Chairman. I appreciate the
opportunity to be here today to discuss how the Department of
Veterans Affairs is using performance information to improve
service delivery to veterans and accountability for results.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Tucker appears in the Appendix on
page 100.
---------------------------------------------------------------------------
Since the passage of GPRA 15 years ago, we have seen a
major transformation in the manner in which performance
information is used in budgeting and performance management
throughout the VA. We have made noteworthy progress in using
performance information to better justify our requests for
resources, monitor our programs throughout the year, and
document our accomplishments and challenges in a manner that is
transparent to veterans, our stakeholders, and the general
public.
Every year, we reevaluate the performance measures included
in our Congressional budget justifications and operating plans.
We analyze each measure to ensure it is still appropriate and
meaningful and we develop new or improved metrics that present
a better gauge of program results. We use customer feedback to
ensure that the performance metrics we employ are measuring
those things that are most important to veterans and their
families.
Today, our budget request for every program contains a
wealth of information on our strategic goals and objectives,
our historical and projected performance levels, and the means
and strategies we will use to achieve our goals. In other
words, our budget is justified not only by the kinds of
activities we will conduct, but more importantly, by the
results we expect to achieve.
VA employs a variety of mechanisms to monitor program
performance. The most important of these tools is our monthly
performance review. Chaired by the Deputy Secretary, these
reviews involve senior leaders throughout the VA and focus on
financial management and program performance as well as the
execution of major construction and information technology
projects. These meetings play a vital role in keeping the
Department focused on its highest priorities, achieving key
performance goals, and resolving operational challenges.
On November 15 each year, we publish our annual Performance
and Accountability Report. This report presents a detailed
description of how well VA performed relative to the
performance goals we established at the beginning of the year.
Our commitment to transparency and reporting has been
highlighted by the Mercatus Center of George Mason University.
This independent research organization conducts an extensive
evaluation of all agency performance reports. They have ranked
VA among the top-rated reports all 9 years they have conducted
their analysis. For the last 2 years, the Mercatus Center has
presented an award to VA for achieving the highest score in the
Federal Government in transparency in reporting and the
Department is extremely proud of this recognition.
Another one of our major accomplishments has been our
success in establishing a performance culture in VA. This has
largely involved a gradual movement away from a focus on inputs
toward a more meaningful discussion of program outputs and
outcomes. And education and training within the Department for
staff and managers is critical to this successful shift in
emphasis.
Our monthly performance reviews have also been instrumental
in institutionalizing a performance culture at VA. Most
importantly, these monthly meetings are a clear demonstration
of the interest and support of VA's top policy issues in using
performance measurement to oversee departmental programs and
operations.
Another key strategy we employed to institutionalize a
performance culture was to develop a set of key performance
measures. Several years ago, we realized that we have been
pretty successful in developing improved performance metrics,
but we had created so many that it is hard to figure out what
was most important. So to correct this problem, we identified a
set of about 25 key measures that we considered critical to the
success of the Department. These key measures formed the
foundation of our budget request, our monthly performance
reviews, and our annual performance report.
While we have successfully tackled many of these
challenges, we still have more that need further attention. We
have a sound set of outcome measures for some of our programs,
particularly medical care, but there are other program areas
for which we still need better indicators of the extent to
which VA programs improve quality of life for veterans and
their families.
An additional challenge all agencies face is how to more
tightly link cost data to program performance. In particular,
we need to strengthen our ability to demonstrate how
performance could change if resource levels vary. As with all
performance metrics, this will require the necessary
information systems and analytical tools to produce valid and
reliable data.
That concludes my statement, Mr. Chairman. I will be happy
to answer any questions.
Senator Carper. All right, Mr. Tucker. You are right on the
money. That was exactly 5 minutes. Thank you.
Thank you all for wonderful testimony. Why do you suppose
your agencies have risen to the top, at least with respect to
your use of information to be able to improve performance? What
common threads are there with your agencies in terms of your
experience and improvement? Mr. Dyer, when you retired from the
Navy, what was your rank?
Mr. Dyer. I was a captain, sir.
Senator Carper. Captain Dyer, OK. I was a captain, too.
Mr. Dyer. Yes, sir.
Senator Carper. A recovering captain. A recovering
governor.
Mr. Dyer. Senator, as I heard the other two presentations,
that was the first time I had heard or seen their text, too,
the thing that I heard--the three reasons I thought that we had
improved in the past few years, I heard that come out in
theirs, and that is a commitment to doing it--and we heard it
from the earlier panels, too--a commitment to doing it, a
mission statement that is simplified and that allows you to go
to outcomes, which drive outputs, which drive the inputs to the
budget, and that kind of a focus on executing to achieve the
outcomes intended.
Senator Carper. Mr. Pace.
Mr. Pace. I would agree. I think the most important
advantage, I remember the prior panel talking about as things
become more and more complex, people become more and more
important because they are not interchangeable and I think that
the performance culture that we have at NASA, which is
reinforced in so many different ways, has been actually really
crucial, so that when you come in with a performance
measurement system of some sort, initially, it is looked at
askance. What is this, a new unfunded mandate dropping down on
us?
But when people get into it and see that you are going to
use that information to make better decisions that then have
some linkage to mission success, then there is a greater
acceptance of it. It is something that actually reinforces the
performance culture of the agency because it is not seen as
alien to the agency but, in fact, is integral and consistent
with the values of the agency, and that in turn is reflected by
statements from the top management down through the system.
So it is a very interwoven problem, but as you hear, it is
a very consistent one that repeats in many organizations.
Senator Carper. All right. Mr. Tucker.
Mr. Tucker. I think from what the panel members here have
stated as well as the members of the previous panels, the thing
that you hear consistently is top management interest and top
management involvement. You have to have the leadership
engaged. If the leadership is engaged and focused on using
performance information, that will drive change throughout the
organization.
Senator Carper. Let me just interrupt for a second. I have
been privileged to know three VA Secretaries during my time
here in the Senate, and that was in 7 years, so you have had a
number of Secretaries. Is it Tom Bowman? Who is the Chief of
Staff----
Mr. Tucker. Tom Bowman is.
Senator Carper. I think Mr. Bowman has been around for a
while----
Mr. Tucker. Yes, sir.
Senator Carper [continuing]. And maybe he provides the
continuity. An old Marine, as I recall.
Mr. Tucker. Yes, sir.
Senator Carper. But you have had a fair amount of turnover
at the top in the VA, but a continued commitment to
improvement.
Mr. Tucker. I think the commitment from those that remain,
like Tom Bowman is a good example as the Chief of Staff, he
sits in on our monthly performance reviews every month. He is
certainly a very active member of the management team. I think
also what is important, especially at the VA, even though we
are a very large agency and we have a great diversity of
programs, we are all there to serve veterans and we are all
there to serve their families and those that are eligible for
the different benefits that we provide, and I think that is
part of our performance and the success of our performance
culture at the VA, is a real clear mission statement and we
know who we are there to serve.
Senator Carper. If you think of it, let Tom Bowman know we
just opened our second VA outpatient clinic in Delaware. We
only have three counties. We have two of these clinics now. We
just opened two of them in the last 2 or 3 months. But he was a
big help in getting that done, so tell him we are grateful for
that and for his service.
Mr. Tucker. I will do that.
Senator Carper. You have mentioned performance culture. Mr.
Pace has mentioned it. I think Mr. Dyer has mentioned it. One
of my other hats is chairman of the subcommittee that has
jurisdiction over nuclear safety. We talk a fair amount about
safety culture, and during the time in my 23 years in Naval
aviation, oftentimes our commanding officers would say to us,
and again, our job was to hunt for Red October, track Soviet
nuclear submarines, and do all kinds of surface surveillance
and fly missions off the coast of Vietnam and Cambodia and
other places.
But our skippers would always say the most important thing
you are doing in your mission today isn't whether you are
trying to mine some harbors or whether you are doing certain
service missions where you are tracking the bad guys, the bad
submarines, the Ruskies, whatever it was. He said your most
important thing that you are doing is taking off safely, flying
safely, coming back and landing safely, and walking away from
it and going home. So that is the most important thing that you
are doing.
Almost everything that we did, whether it was in the
aircraft, the folks who were maintaining our aircraft, training
us, everything pointed toward safety. It was really a culture
of safety and we tried to do it in a way so it wasn't a
``gotcha'' system, so that if people observed things that were
wrong, they would actually step forward and say, ``This isn't
really a very safe practice,'' and not be penalized or punished
for having said that.
So we try to take the same thing, the same approach with
respect to our nuclear power plants and to encourage them, and
I know that the NRC are very much involved in doing that for
us. The safety culture, we have 104 nuclear power plants. We
want every one of them to be as committed to safety as we were
in my squadron, our squadrons in the Navy.
Talk to me, if you will, about performance culture. How do
we establish a kind of--obviously, you have a performance
culture at your agencies and we have a bunch of agencies who
don't have it. You are the exception, not the rule. How do we
establish the kind of performance culture at more agencies,
much as we are trying to establish safety cultures at 104
nuclear power plants? And that would be a question for each of
you. I don't know who cares to go first. Mr. Dyer, feel free.
Mr. Dyer. Yes, sir, Mr. Chairman. Just like you talked
about the safety culture at the nuclear plants and the
guidelines that go along with them, I think starting with the
performance culture at the NRC, it begins actually with the
formulation of the budget. When we get in to recognizing the
roles and responsibilities and of the individuals within the
organization and get their commitment that we are going to
expend this amount of resources to achieve this kind of
results, we get that kind of commitment of them that they have
bought in, that they sign up for it, and it is not something
that we pass down from on top and just say, you are going to
get X number of resources and get it done. It is they have an
input to it that starts, that contractor, that bond, if you
will, to actually perform the work and get the results that are
intended.
Senator Carper. All right. Thank you. Mr. Pace.
Mr. Pace. Really, I want to also agree with that. One of
the crucial issues we have is aligning the resources that
content, that we make program commitment agreements and we say
we want to do this vehicle, do this kind of mission, this is
what it is going to cost, and if we change the resources, we
change the content that we ask of people. And if we change what
we ask of people, we also change the resources. The two in the
budget process have to be very closely linked. So if the
schedule slips or something else slips or new problems crop up,
that we account for it.
And I think that is part of having really almost an ethic,
a moral duty, really, to the people we ask to do the work, that
we are going to back them up and they, in turn, have an
obligation to bring forward their best estimates about what it
is going to take because we are both trying to achieve that
mission success. So the budget process is at the center of it.
The second thing I would add is that along with having a
safety culture, it is important that our independent reviews
and our assessments are done with the mindset of assisting the
project to be successful, not of a mindset of auditing the
project or trying to come up with a certain number of gigs. The
mentality we try to bring to it is we are kind of like the
graduate TAs. We are there to get the other students to pass.
We may beat on them pretty hard, may review them pretty hard,
but our goal is we want them to pass, we want them to succeed,
and we are there to help them succeed, and having that
mentality of an assist function also gets people to buy in,
bring their problems forward because we are not out there to
have them fail. We are there for mission success.
Senator Carper. Thank you. Mr. Tucker, anything you would
like to add?
Mr. Tucker Just adding on top of what the other witnesses
have said, I think one of the big changes that we have seen in
establishing a performance culture at the VA is the shift from
the discussion on inputs into outcomes. A lot of folks have
said that today.
I can think back years ago and when we would have monthly
budget reviews in the Department. It was always just simply a
discussion of, well, what is the variance from plan? Did you
spend more than your monthly plan this month? Did you spend
less? How much more? How much less? People were either happy or
sad about the results, but the discussion didn't really focus
on program results.
Those are the kinds of discussions that we have now. We
have the data. We have the data systems in place to facilitate
that discussion. And management from the very top all the way
down to the medical center level use that information to
improve performance. The measures are the same whether they are
at the national level, the network level, or the local level.
An example I can give you is on wait times for VA patients
to get into our health care system. We have used performance
information to really drive improvement in reducing the number
of veterans that are waiting more than 30 days for an
appointment from--it was over 250,000 in April 2006 and we have
driven that down to about 51,000 in June, just last month. So
that is one example of how leadership is focused at the top all
the way down to the facility level to drive performance
improvement.
Senator Carper. OK. Thank you. Mr. Pace, maybe one last
question for you. According to a GAO survey, I think it was
done in 2007, a large majority of your managers said that they
use performance information to identify and solve program
problems. Do you think that looking at program performance
information has helped improve NASA's programs, and if so, how?
You have talked about this already, but do you want to add
anything else?
Mr. Pace. I think one of the major areas of differences
where I have certainly seen a change in the time that I have
been at NASA is when I first came there, we would go to program
reviews and people would be talking about the status and in
some cases how they felt about the program or project, as Mr.
Tucker was just saying. What you see in the status reviews that
we have monthly now and baseline performance reviews is much
more toward quantitative. So programs are coming in with--here
is where we are on the finances. Here we are on the human
capital. This is what the state of the asset and facilities is
looking like. This is where the program has hit various
milestones. So monthly meetings, much more quantitative.
That then sparked discussions. I mean, the most important
thing that occurs in that quantitative data and where people
see various disconnects is then a conversation occurs at the
senior management level that says, why are those disconnects
happening? What can we do about them? What is the resolution
path forward?
So I think that it is helping NASA quite a bit. We are
doing things that are consistent with our culture, but we are
doing them, I think, in a much more rigorous and consistent
way. We are still learning. We still have plenty of other areas
that are imperfect, but I think the intention on performance
being quantitative and getting those discussions out in front
of senior management has been very helpful.
Senator Carper. Thank you. Mr. Dyer, according to the GAO's
same 2007 survey results, the NRC's managers report a
significant increase in the use of performance information
since responding, I think to a survey 7 years earlier, the 2000
survey. In fact, I am told that NRC managers are now among the
most positive among their government-wide counterparts in their
reported use of performance information. I just ask, in your
view, how and why you think this change came about.
Mr. Dyer. Mr. Chairman, I believe we have had this same
process in place since 1997 and every year we do a little bit
better. We revise our performance indicators. We reach out and
get them to lower levels in the organization. And I think the
people can trend progress and we report out on it and we
provide feedback to the staff on it and they recognize that
these things are important and that they now accept them and
embrace them.
Senator Carper. All right. One of the things that I find
remarkable when we have testimony from the NRC and from the
nuclear industry and others who are interested in the industry
is the increase in the power plants that we have, their ability
to provide power. If they are able to provide power 100 percent
of the time, that would be terrific. But it wasn't that long
ago when they were down around 60, 70 percent, and today they
are up over 90, 91 percent. That is a remarkable achievement.
Mr. Dyer. Yes, sir.
Senator Carper. A lot of people deserve credit for that and
I know among those people are the NRC.
The last question would be really for all of you. Each of
your agencies has had programs that were assessed by OMB
through the PART process. What suggestions do you have for the
next Administration, whoever might lead that, but the next
Administration on how to design and structure a performance
assessment process such as PART?
Mr. Tucker. I will go first.
Senator Carper. Yes, Mr. Tucker, feel free.
Mr. Tucker. I think what will be helpful for OMB to do is
to work collaboratively with the agencies to look at the
criteria that is used and really to continue the process and
refine the process of the evaluation and performance measures.
I mean, I think that has been the key benefit that the VA has
obtained from going through the PART process is having a really
hard look at the performance metrics that we use, whether they
are outcome-focused or efficiency focused, and developing
action plans and requiring the action plans to be updated on a
regular basis so you are continually improving the metrics that
the organization is using to assess performance.
I think one other thing--I will just put in a plug--is
recently in response to the Executive Order that the President
signed back in November, OMB did establish an interagency
Performance Improvement Council. I think that council should
continue into the next Administration. It is just getting
started. It is growing. It is getting traction, starting to get
some legs under it.
Senator Carper. Who heads up that council?
Mr. Dyer. Robert Shea is leading the Performance
Improvement Council at OMB right now.
Senator Carper. OK. Thank you.
Mr. Dyer. But I hope that it will be as successful in the
future as the Budget Officers Advisory Council has been that
OMB had established a long time ago where the budget officers
from the different departments come together once a month to
share best practices, to raise issues and concerns, and just to
have that face-to-face once-a-month meeting and discussion. And
I think the Performance Improvement Council can do the same
thing.
Senator Carper. Good. I had not heard of the Performance
Improvement Council. It sounds like a good idea. I hope it
continues, as well. Thank you.
Mr. Dyer. Thank you.
Senator Carper. Mr. Pace.
Mr. Pace. Well, I would also actually endorse some of the
Performance Improvement Council meetings. I also go, as well.
But I think one of the things I have found most valuable for it
is actually the cross-agency discussions that have happened, so
seeing what other agencies are doing, sharing notes with them,
and comparing best practices. I thought that has been a useful
forum. I know that other speakers have talked about cross-
agency issues.
Regarding the PART, I think it obviously should continue. I
think it has been helpful. We have been able to improve the
measures of effectiveness for some of our programs.
Particularly we have made some improvements, I think, in our
education efforts that have been helpful and traceable to PART.
But the other thing I would say in terms of maybe a
particular parochial plug that we and some other agencies have
is in measurements of R&D. We have a very project-oriented
agency. Other agencies are very process-oriented. But some of
our science agencies, NSF, maybe NOAA, ourselves, Geological
Survey, when we are doing R&D activities that stretch over a
longer period of time, it is often harder to see the results
each year. You have to look over a longer time horizon to judge
what the benefits of R&D are.
So ourselves and NSF have had some good conversations about
this. I know with DOE Science Office, we have also had some
good conversations, and measuring effectiveness of R&D is one
of those areas where a simple one-size-fits-all sometimes
doesn't work. And the conversations we have had in the PIC, I
think have been helpful to us, coming up with some ideas we are
going to hope to pursue.
Senator Carper. Thank you. Mr. Dyer, the last word?
Mr. Dyer. Mr. Chairman, I think the PART program, the PART
is fundamentally sound and it is a good program. At the NRC, we
have had seven PART evaluations. Six of them have been rated
high as effective and one was moderately effective, and I
owned, designed that one that was moderately effective, and it
had a good therapeutic effect, I think, on the NRC that when we
went back and pulled the string on it, what we really looked at
and came up with was that we had a problem with our budget
structure and that cascaded down into problems, and that wasn't
what we thought going in.
So I have got a healthy respect for the PART. That being
said, it is an extremely resource-intensive process. So as we
go forward, I would hope that we streamline the process so we
don't have to dedicate the amount of energy that goes in in
conducting the PART evaluations.
Senator Carper. All right. Thank you.
We are at the end of our hearing. I was just reflecting on
this. It is pretty clear I haven't had a lot of company up here
on this side of the rostrum. We have a lot of the agencies, not
all the agencies have really emulated your success and your
approach by taking seriously our ability to use the information
that it has generated to improve our performance. Not everyone
does that.
Having said that, we are going to have a new President in 6
months. We will have a new Congress in less than that. And we
are going to still have a lot of problems to face here at home
and around the world. We don't have unlimited resources. We are
finding out just how limited our resources are, financial
resources are to deal with those challenges.
And if we are smart, and I hope we will be, the more of us
here in the Legislative Branch and the folks in the Executive
Branch, including right at the top, will realize that if we
want to provide better results, better outcomes for the folks
who are paying the taxes in this country, there are a variety
of ways to do it and one of them is to take all this massive
information that we have, try to figure out what of it we can
learn from in order to provide cleaner air, in order to provide
better transportation, in order to reduce our threats from
within and without, and act on that. If we do those things,
taxpayers will be happy and we will be better off as a Nation,
too.
We chose in this hearing today not to focus on the agencies
that, frankly, weren't doing a good job. We chose to hold up a
handful that are doing a good job in this regard and to say by
inference to other agencies that could learn from you, take a
look at these folks.
I said to Governor O'Malley, we would rather see a sermon
than hear one, and with you, you have had a chance to give us a
little bit of a sermonette, but we have also had an opportunity
to watch your performance over a number of years and we like
what we see. Hopefully, by holding you up for praise and
acclaim, we will encourage some other agencies to emulate your
good performance.
With that having been said, we are going to leave the
record open for 2 weeks so we will have the opportunity for
some of my colleagues and to submit some questions, maybe some
statements, as well, for the record. We would ask if you do
receive questions that you just respond promptly and we will be
better for it.
Thank you so much for coming, for the good work that you
and your colleagues back in your agencies are doing. Convey our
congratulations and our thanks to them, if you will. Thank you
so much.
Mr. Dyer. Thank you.
Mr. Pace. Thank you.
Mr. Tucker. Thank you.
Senator Carper. This hearing is adjourned.
[Whereupon, at 5:10 p.m., the Subcommittee was adjourned.]
A P P E N D I X
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