[Congressional Record Volume 149, Number 112 (Friday, July 25, 2003)]
[Extensions of Remarks]
[Pages E1590-E1591]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   COMMENDATION AND RECOGNITION FOR MERCATUS CENTER'S REPORT ON THE 
 ``TRANSPARENCY OF ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORTS FROM 
                   THE 24 FEDERAL CFO ACT AGENCIES''

                                 ______
                                 

                        HON. TODD RUSSELL PLATTS

                            of pennsylvania

                    in the house of representatives

                        Thursday, July 24, 2003

  Mr. PLATTS. Mr. Speaker, as Members of Congress, we are accountable 
not only to the constituents who elected us, but to all American 
taxpayers. We are responsible for making informed decisions, that 
incorporate a base of knowledge. The Mercatus Center at George Mason 
University provides a valuable, objective, independent evaluation to 
Members of Congress and taxpayers, by reviewing the annual performance 
reports of the 24 CFO Act agencies and ranking them according to three 
criteria: transparency, public benefit, and forwardlooking leadership. 
Mercatus evaluates the Annual Performance and Accountability Reports of 
each of these Agencies to determine how transparently an agency reports 
its successes and failures, how well an agency documents the tangible 
public benefits it claims to have produced, and whether an agency 
demonstrates leadership that uses annual performance information to 
devise strategies for improvement.
  Their analysis and the report I submit to the Congressional Record, 
allows us as Members of Congress to have a common understanding about 
which agencies report to the public most clearly. Their analysis also 
allows agencies to learn from their colleagues how best to present 
useful data about the performance of their organizations. Armed with 
this report, and upon reviewing performance information provided by 
agencies, we can and must determine appropriate resource allocations, 
based not on the amount appropriated and spent last year, but on what 
benefit was earned from this expenditure. We owe it to the people who 
pay our salaries, to demonstrate the public benefit created with the 
money entrusted to us. And where the government is a poor steward of 
funds, we must intervene to improve the Federal Government's role in 
providing efficient and effective service to the American people.
  I commend the Mercatus Center's report to my colleagues.


                           Executive Summary

       Public disclosure is the mechanism used to report on 
     performance to those who are entitled to know. In this 
     Scorecard we assess how effective reports of the agencies of 
     the federal government are in disclosing pertinent 
     information to the American people. We review these reports 
     with the mindset of ordinary citizens, who are interested in 
     looking for the benefits that the agencies provide and the 
     effectiveness of the agencies' efforts. Thus, our research 
     efforts emphasize an assessment of an agency's transparency 
     of communications with the general public, identification and 
     assessment of the public benefits it provides, and its 
     leadership vision for the future.
       In an era of increased demand for accountability, 
     disclosure and transparency, the government has a 
     responsibility to supply the American people with quality 
     disclosures on the public benefits it provides. Clear, 
     descriptive disclosure of the public benefits provided by 
     governmental agencies allows ordinary citizens to understand 
     the strategic goals and assess the agencies' performance 
     relative to those goals.
       Annual performance and accountability reports are one 
     avenue for agencies to communicate with both citizens and 
     policymakers. The purpose of this Scorecard is to encourage 
     improvement in the quality of reporting on results achieved 
     by government agencies. We do this by evaluating and ranking 
     (1) how transparently an agency reports its successes and 
     failures; (2) how well an agency documents the tangible 
     public benefits it claims to have produced; and, (3) whether 
     an agency demonstrates leadership that uses annual 
     performance information to devise strategies for improvement.
       Researchers at the Mercatus Center at George Mason 
     University conducted our fourth annual evaluation of the 
     reports produced by the 24 agencies covered under the Chief 
     Financial Officers Act, using similar criteria to evaluate 
     the fiscal year (FY) 2002 performance and accountability 
     reports. By assessing the quality of agencies' reports (but 
     not the quality of the results achieved), we wish to learn 
     which agencies are supplying the information that Congress 
     and the public need to make informed funding and policy 
     decisions. The importance of quality reporting has taken on 
     added significance in light of the President's Management 
     Agenda that highlights the intent to use agency performance 
     information to make budget decisions.
       Best Reports: For FY 2002, the Department of Labor (Labor), 
     the Department of Transportation (Transportation), the Small 
     Business Administration (SBA), and the Department of Veterans 
     Affairs (Veterans) produced the highest rated reports. Three 
     of these agencies, Department of Labor, Department of 
     Transportation, and the Department of Veterans Affairs were 
     rated the top three agencies for FY 2001 as well. The SBA 
     joins their ranks this year.
       Reports Most In Need Of Improvement: The Department of 
     Defense (Defense), U.S. Agency for International Development 
     (USAID), the Department of Health and Human Services (HHS), 
     and the Department of Energy (Energy) earned the lowest 
     rankings for FY 2002.
       Most Improved Reports: Eleven agencies improved their 
     scores from FY 2001 to FY 2002. Of these, the Small Business 
     Administration, the Federal Emergency Management Agency, and 
     the Department of State showed the most improvement in their 
     rankings. The Small Business Administration moved from 16th 
     to 3rd in the rankings, the Federal Emergency Management 
     Agency jumped from 19th to 8th, and the Department of State 
     moved from 20th to 11th.
       Most Common Strengths: (1) accessibility of reports, and 
     (2) clarity of reports.
       Most Common Weaknesses: (1) weak or missing explanations of 
     failures to achieve strategic goals, and (2) lack of well-
     articulated descriptions of changes in policies or procedures 
     to address weaknesses or failures.
       Mixed results: The average score of the 24 reporting 
     agencies was 30, a 4.1 percent increase for FY 2002 reports 
     compared to FY 2001. The average scores for seven of the 
     twelve criteria improved this year, led by improvements of 
     26.9 percent for accessibility and 19.7 percent for better 
     explanations of the linkages between the agencies goals and 
     results to their costs. However, on average, agencies did not 
     make progress in several areas, particularly in providing 
     quality trend data (decline of 13.0 percent) and clearly 
     articulating their goals and objectives as outcomes (decline 
     of 9.9 percent).
       Scorecard Rankings for FY 2002 (1) Labor; (2) 
     Transportation; (3) SBA, Veterans; (5) Commerce; (6) EPA, 
     Interior; (8) FEMA; (9) NRC, SSA; (11) State; (12) 
     Agriculture, Education, GSA, Justice, NASA, OPM; (18) HUD, 
     NSF, Treasury; (21) Energy, HHS; (23) USAID; and (24) 
     Defense.


                              Introduction

       Following the passage of the Government Performance and 
     Results Act of 1993 (GPRA), federal agencies developed 
     strategic plans, performance plans, and performance reports 
     to explain what they are trying to accomplish, identify 
     performance measures, and report on their results. A new 
     reporting requirement for FY 2002 requires agencies to 
     prepare and submit a combined performance and accountability 
     report. The combined Performance and Accountability Report 
     includes the strategic plans, performance plans, and 
     performance reports previously included as well as a 
     financial section, which incorporates the audited financial 
     statements and report of the Office of Inspector General 
     (OIG) on serious management challenges.
       President Bush's FY 2002 budget proposal called upon the 
     federal government to produce better results for citizens by 
     enhancing accountability for dollars collected and dollars 
     spent. The administration also began using information on 
     agency performance in the FY 2003 budget for a selected set 
     of programs, a practice that has been expanded for the FY 
     2004 budget. Performance-based budgeting means that money 
     will be allocated not just on the basis of perceived needs 
     and policy priorities, but also according to the federal 
     government's ability to address those needs and priorities 
     effectively. Program proponents will have to demonstrate that 
     the particular programs actually accomplish their stated 
     goals.
       For performance-based budgeting to work, performance 
     information has to be transparent, accessible, and reliable. 
     GPRA and its amendments require federal agencies to produce 
     annual performance reports. The purpose of these reports is 
     to give Congress and the American people accurate and timely 
     information that will let them assess the extent to which 
     agencies are producing tangible public benefits. In line with 
     expectations under the legislation, agencies published their 
     first reports (for FY 1999) in spring 2000, the second series 
     in spring 2001 (covering FY 2000), the third series in spring

[[Page E1591]]

     2002 (covering FY 2001), and the current series in spring 
     2003 (for FY 2002). Beginning with FY 2002 reports, agencies 
     are required to consolidate their performance reports with 
     financial reporting information in a combined Performance and 
     Accountability report. With society's increased emphasis on 
     accountability, transparency, and disclosure, it is incumbent 
     on the federal government and its agencies to meet the 
     highest standards in their external reporting efforts. 
     Effective accountability in public service requires that 
     agencies present a comprehensive, concise, accurate, and 
     reliable assessment of the benefits created for the public, 
     as well as the costs of producing those benefits. Equipped 
     with such information, the administration and Congress can 
     allocate federal resources in ways that continually advance 
     government's contribution to citizens' quality of life (The 
     Mercatus Center has developed a seven-step process, called 
     ``Outcome-Based Scrutiny,'' that provides a framework for 
     comparing the results and costs of programs with similar 
     objectives and assessing the likely impact of reallocating 
     resources to the most effective programs. For a pilot study 
     applying Outcome-Based Scrutiny to federal vocational 
     training programs, see http://www.mercatus.org/
 governmmentaccountability).
       To help policymakers assess this year's reports and 
     agencies improve the quality of future reports, a Mercatus 
     Center research team evaluated the reports produced by the 24 
     agencies covered under the Chief Financial Officers' Act. 
     This marks the fourth year that researchers at the Mercatus 
     Center's Government Accountability Project have evaluated 
     agencies' reports. It is our goal that this annual assessment 
     will not only help to inform decision makers, but that it 
     will also inform the American people more generally. By 
     promoting the American spirit of competition and 
     accountability and applying it to government performance 
     reporting, it is also our hope that agencies can and will 
     improve the quality and cost-effectiveness of the services 
     they deliver.


                       Interpreting Our Findings

       It is important to emphasize that our research team 
     evaluated only the quality of reporting, not the quality of 
     results. Therefore, it would be a mistake to conclude that 
     the agencies with the highest-scoring reports necessarily 
     produced the best results for the country. Ideally, an 
     agency's report reflects more about its managers' 
     capabilities than just their ability to write reports. 
     Instead, a high scoring report reflects an agency's ability 
     to translate what it does into understandable and meaningful 
     results that Americans can appreciate.
       Similarly, it would also be inappropriate to draw policy 
     conclusions from our analysis. We offer no recommendations on 
     whether the federal government should or should not be 
     engaged in its current menu of activities.
       So what do the findings in this study really mean? By 
     assessing the quality of agency reports, we are trying to 
     evaluate the agencies that are supplying the information that 
     Congress and the public need to make informed funding, 
     budgeting, and policy decisions. An additional word on 
     information quality is also in order. Our researchers 
     assessed the quality of each report's disclosure of data 
     verification and validation procedures. In the interest of 
     producing a timely study, we did not, however, verify the 
     performance information cited in each agency's report. Given 
     the importance of accurate data for sensible decisions, we 
     believe that verification and validation should be a high 
     priority for Inspectors General, Congress, the General 
     Accounting Office, and the Office of Management and Budget.
       For the complete report, visit the Mercatus Center's 
     Government Accountability Project website at 
     www.governmnentaccountability.org.

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