The Results Act: Assessment of the Governmentwide Performance Plan for
Fiscal Year 1999 (Letter Report, 09/08/98, GAO/AIMD/GGD-98-159).

Pursuant to a congressional request, GAO reviewed the federal government
performance plan, focusing on: (1) whether the plan complies with the
act's statutory requirements and congressional intent; and (2) assessing
the plan in the context of GAO's guidance developed for agency
performance plans and congressional expectations set forth in a December
17, 1997, letter to the Director of the Office of Management and Budget
(OMB).

GAO noted that: (1) the issuance of the Governmentwide Performance Plan
in February 1998 marked the culmination of the first annual performance
planning cycle under the Government Performance and Results Act; (2) OMB
developed and implemented an approach and framework for this plan that
generally addressed the basic requirements of the Results Act; (3) the
plan was issued with the President's budget submission and included a
broad range of governmentwide management objectives and a mission-based
presentation of key performance goals based on agency performance plans;
(4) the plan's framework should ultimately allow for a cohesive
presentation of governmentwide performance, but the specific contents of
this initial plan did not always deliver an integrated, consistent, and
results-oriented picture of fiscal year 1999 federal government
performance goals; (5) many of the issues discussed in this report can
be traced to the challenges of preparing the first-ever governmentwide
plan for an entity as large and diverse as the federal government; (6)
future plans will need to go beyond the formal requirements of the act
if they are to more fully address its basic purposes and meet the
evolving needs of congressional and other users; (7) to add value to the
government's overall performance planning and management efforts,
attention is needed in two critical areas: (a) addressing observed
weaknesses of individual agency performance plans that necessarily
affect the quality of governmentwide performance planning; and (b)
emphasizing an integrated, governmentwide perspective throughout the
plan; (8) as GAO noted in its recent individual agency and overall
assessments, much work remains to improve agency performance plans, the
building blocks of the governmentwide plan; (9) OMB will need to work
with federal agencies to strengthen these plans to ensure a solid
foundation for the governmentwide plan; and (10) at the same time, by
more explicitly emphasizing governmentwide perspectives and better
integrating the performance implications of all federal strategies
within more consistent and complete mission-based presentations, the
governmentwide plan can continue to complement and extend agency
performance planning processes and provide valuable new contexts and
information for federal decisionmakers.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  AIMD/GGD-98-159
     TITLE:  The Results Act: Assessment of the Governmentwide 
             Performance Plan for Fiscal Year 1999
      DATE:  09/08/98
   SUBJECT:  Strategic planning
             Agency missions
             Congressional/executive relations
             Interagency relations
             Program evaluation
             Accountability
             Internal controls
             Federal agency reorganization
             Reporting requirements
IDENTIFIER:  GPRA
             Government Performance and Results Act
             
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Cover
================================================================ COVER


Report to Congressional Requesters

September 1998

THE RESULTS ACT - ASSESSMENT OF
THE GOVERNMENTWIDE PERFORMANCE
PLAN FOR FISCAL YEAR 1999

GAO/AIMD/GGD-98-159

The Governmentwide Performance Plan

(935260)


Abbreviations
=============================================================== ABBREV

  CFOC - Chief Financial Officers Council
  HCFA - Health Care Financing Administration
  OMB - Office of Management and Budget
  RMO - resource management office

Letter
=============================================================== LETTER


B-279593

September 8, 1998

Congressional Requesters

In 1993, the Congress enacted the Government Performance and Results
Act, commonly referred to as the "Results Act," to address the
growing public demand that government become more effective and less
costly.  The Results Act is a key part of a broad statutory framework
enacted during the 1990s that seeks to improve federal management by
shifting decision-making and accountability away from a preoccupation
with the activities that government undertakes and toward an emphasis
on the results of those activities--that is, for example, from grants
awarded or inspections performed to real gains in performance,
quality, or responsiveness. 

Under the Results Act, executive departments and agencies (hereafter
referred to as "agencies") developed multiyear strategic plans and
submitted those plans to the Congress and the Office of Management
and Budget (OMB) on September 30, 1997.\1 The act also requires the
President to include with his annual budget submission a federal
government performance plan.  The Congress intended that this plan
provide a "single cohesive picture of the annual performance goals
for the fiscal year."\2 To support this requirement, the act directs
the Director of OMB to require agencies to develop annual performance
plans, which are provided to the appropriate committees of the
Congress after publication of the governmentwide plan.  The first
annual performance plans cover fiscal year 1999, with the
governmentwide plan submitted to the Congress in February 1998.  The
Results Act also requires agencies to submit annual program
performance reports, with the first report covering fiscal year 1999
to be issued by March 31, 2000. 

As part of your continuing efforts to ensure that the Results Act
achieves its full promise, you asked us to review the fiscal year
1999 agency and governmentwide performance plans.  As you know, we
have completed our reviews of the individual agencies' annual
performance plans and have issued a separate report on our overall
assessment of those plans.\3 This report responds to your request
that we separately review the federal government performance plan. 
Specifically, our objectives were to (1) assess whether the plan
complies with the act's statutory requirements and congressional
intent and (2) assess the plan in the context of our guidance
developed for agency performance plans\4 and your expectations set
forth in a December 17, 1997, letter to the Director of OMB. 


--------------------
\1 See Managing for Results:  Agencies' Annual Performance Plans Can
Help Address Strategic Planning Challenges (GAO/GGD-98-44, January
30, 1998) and Managing for Results:  Critical Issues for Improving
Federal Agencies' Strategic Plans (GAO/GGD-97-180, September 16,
1997). 

\2 Government Performance and Results Act of 1993, Committee on
Governmental Affairs, United States Senate, S.  Rpt.  No.  58, 103d
Cong.  1st Sess.  p.  27 (1993). 

\3 Managing for Results:  An Agenda to Improve the Usefulness of
Agencies' Annual Performance Plans (GAO/GGD/AIMD-98-228, September 8,
1998). 

\4 Agencies' Annual Performance Plans Under the Results Act:  An
Assessment Guide to Facilitate Congressional Decisionmaking
(GAO/GGD/AIMD-10.1.18, February 1998) and The Results Act:  An
Evaluator's Guide to Assessing Agency Annual Performance Plans
(GAO/GGD-10.1.20, April 1998). 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

The issuance of the Governmentwide Performance Plan in February 1998
marked the culmination of the first annual performance planning cycle
under the Results Act.  OMB developed and implemented an approach and
framework for this plan that generally addressed the basic
requirements of the Results Act.  The plan was issued with the
President's budget submission and included a broad range of
governmentwide management objectives and a mission-based presentation
of key performance goals based on agency performance plans.  The
plan's framework should ultimately allow for a cohesive presentation
of governmentwide performance, but the specific contents of this
initial plan did not always deliver an integrated, consistent, and
results-oriented picture of fiscal year 1999 federal government
performance goals. 

Many of the issues discussed in this report can be traced to the
challenges of preparing the first-ever governmentwide plan for an
entity as large and diverse as the federal government.  Future plans
will need to go beyond the formal requirements of the act if they are
to more fully address its basic purposes and meet the evolving needs
of congressional and other users.  To add value to the government's
overall performance planning and management efforts, attention is
needed in two critical areas:  (1) addressing observed weaknesses of
individual agency performance plans that necessarily affect the
quality of governmentwide performance planning and (2) emphasizing an
integrated, governmentwide perspective throughout the plan.  As we
have noted in our recent individual agency and overall assessments,
much work remains to improve agency performance plans, the "building
blocks" of the governmentwide plan.\5 OMB will need to work with
federal agencies to strengthen these plans to ensure a solid
foundation for the governmentwide plan.  At the same time, by more
explicitly emphasizing governmentwide perspectives and better
integrating the performance implications of all federal strategies
(spending, tax expenditures, and regulation) within more consistent
and complete mission-based presentations, the governmentwide plan can
continue to complement and extend agency performance planning
processes and provide valuable new contexts and information for
federal decisionmakers. 


--------------------
\5 GAO/GGD/AIMD-98-228, September 8, 1998. 


   BACKGROUND
------------------------------------------------------------ Letter :2

In addition to the Results Act, the statutory framework that the
Congress put in place during the 1990s to provide greater
accountability for results and to help resolve long-standing
management problems that have undermined the federal government's
effectiveness and efficiency includes the Chief Financial Officers
Act of 1990, as amended by the Government Management Reform Act of
1994, and information technology reform legislation, including the
Paperwork Reduction Act of 1995 and the Clinger-Cohen Act of 1996.\6
When seen together, these laws provide a powerful framework for
developing and integrating information about agencies' missions and
strategic priorities, the results-oriented performance goals that
flow from those priorities, performance data to show the level of
achievement of those goals, and the relationship of reliable and
audited financial information and information technology investments
to the achievement of those goals. 

The Results Act was intended to address several broad purposes,
including strengthening the confidence of the American people in
their government; improving federal program effectiveness,
accountability, and service delivery; and enhancing congressional
decision-making by providing more objective information on program
performance.  In addition to establishing strategic and annual
performance planning requirements, the Results Act includes a
requirement for the first-ever federal government performance plan. 
Specifically, the act requires that the President shall include in
each budget "beginning with fiscal year 1999 a Federal Government
performance plan."\7 In the accompanying committee report, the
Congress stated its intent that the plan should "be submitted
coincident with the principal budget documents, so that Congress will
have the plan available when reviewing the agency budget estimates."
Given the unique nature of this requirement, the report indicated
that the Director of OMB would have broad discretion to determine the
"best manner and useful form for submitting" the plan, but that the
plan should provide "a single cohesive picture of the annual
performance goals for the fiscal year." The governmentwide
performance plan was expected to be based on agencies' performance
plans, and the Director was authorized to "summarize or abstract
material contained in an agency's annual performance plan, presenting
at least the key measures of program performance."\8

While broad discretion was afforded OMB, the Senate committee report
for the act identified two specific items that the federal government
performance plan should contain. 

  -- As specified in the committee report, "To obtain a comprehensive
     picture of the government's performance," the plan was to
     include a "schedule for periodically assessing the effects of
     specific tax expenditures in achieving performance goals." Tax
     expenditures refer to tax code provisions, such as deductions,
     exclusions, credits, or preferences, which seek to encourage
     certain types of economic or social activity or provide relief
     to certain groups of taxpayers.  The committee report noted that
     although tax expenditures are established to achieve specific
     national objectives, similar to federal spending, their effect
     "in achieving these goals is rarely studied." The required
     assessments were expected to consider the interactions between
     spending programs and related tax expenditures in order to
     "foster a greater sense of responsibility for tax expenditures
     with a direct bearing on substantial missions and goals."

  -- The plan was also to include proposed waivers from nonstatutory
     administrative requirements.  Recognizing the importance of
     flexibility to a results-oriented management environment, the
     act authorized agencies to request, and OMB to approve, waivers
     of certain nonstatutory administrative requirements.  Proposed
     waivers were expected to describe in measurable terms the
     anticipated effects on performance resulting from greater
     managerial or organizational flexibility.  All proposed waivers
     were to be included in the governmentwide performance plan in
     order to ensure that general notice was provided in advance of
     the effective date of the waiver. 


--------------------
\6 Managing for Results:  The Statutory Framework for
Performance-Based Management and Accountability (GAO/GGD/AIMD-98-52,
January 28, 1998). 

\7 31 U.S.C.  1105(a)(29). 

\8 S.  Rpt.  No.  103-58, p.  27. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :3

To perform this assessment, we obtained and reviewed the
Governmentwide Performance Plan issued by OMB on February 2, 1998, as
part of the President's Fiscal Year 1999 Budget, and a subsequent
revision issued on February 27, 1998.  We also included in our review
some of the key sources referenced in the plan, for example,
interagency and governmentwide planning documents accessed through
referenced Internet sites. 

We compared the content and format of the plan to the act and
accompanying Senate committee report to determine if the plan met
basic statutory requirements and intent.  Recognizing the broad
discretion afforded the Director of OMB in preparing this plan, we
interviewed key OMB officials to determine the approaches and factors
that were considered.  We also performed the following steps to
provide a qualitative basis for assessing whether the plan provided a
"single cohesive picture" of government performance. 

  -- To assess overall coverage and inclusiveness, we reviewed the
     content of each section of the plan, focusing on the manner and
     form used by OMB to present performance goals.  To determine
     agency coverage, we compared the plan's contents, using
     automated text searching tools, to an electronic file of agency
     spending by budget function.  We also compared selected
     objectives and goals from section V of the Budget, which
     summarized presidential priorities but was not formally included
     as a component of the plan, to other plan sections to assess the
     extent of coverage of these initiatives. 

  -- To determine the consistency of the plan with underlying agency
     plans, we selected performance goals from the management and
     program performance sections of the plan and compared them to
     underlying agency plans.  To assess the manner in which agency
     performance plans were reflected in the plan, we compared the
     performance plans for several agencies\9 to relevant
     presentations within the plan. 

We used our assessment guides\10 to make judgments about the overall
quality and usefulness of agency performance plans and incorporated
those judgments into this review as appropriate.  To identify
opportunities to improve the usefulness and value of the
governmentwide plan, we considered expectations described in your
letter dated December 17, 1997, to the Director of OMB, our
assessment guides, and related work we have done concerning Results
Act implementation. 

We performed our work from February through May 1998, in accordance
with generally accepted government auditing standards.  We requested
written comments on a draft of this report from the Director of the
Office of Management and Budget or his designee.  The Acting Deputy
Director for Management provided us with written comments, which are
discussed in the "Agency Comments and Our Evaluation" section and are
reprinted in appendix II. 


--------------------
\9 Department of Defense, Department of Education, Social Security
Administration, General Services Administration, Department of
Commerce, National Park Service, and Drug Enforcement Administration. 

\10 GAO/GGD/AIMD-10.1.18, February 1998, and GAO/GGD-10.1.20, April
1998. 


   OMB'S APPROACH TO DEVELOP THE
   FIRST GOVERNMENTWIDE
   PERFORMANCE PLAN
------------------------------------------------------------ Letter :4

OMB officials told us that they sought to develop the federal
government performance plan as an integral component of the annual
budget preparation process, an approach consistent with the
requirements of the Results Act.  OMB developed the plan around a
general framework intended to broadly capture the government's
fiscal, management, and program performance and used budget function
classifications\11 to present a mission-based aggregation of agency
performance goals.  The process of preparing the plan was
decentralized, with involvement by both OMB and agency staff, and was
affected by the developmental status of agency performance plans. 
After issuance of the Fiscal Year 1999 Budget, OMB also published the
plan as a separate document. 

OMB officials stressed that developing the governmentwide plan was
viewed as an essential and integral component of the President's
budget and planning process.  From OMB's perspective, both the plan
and the budget submission are intended to serve as communication
tools for a range of possible users.  In their opinion, the plan adds
value by reflecting a governmentwide perspective on policy choices
made throughout the budget formulation process.  OMB acknowledged
that the plan itself did not serve to change the process through
which decisions on government priorities were made but enhanced it by
placing a greater emphasis on results.  As one official described it,
the governmentwide performance plan was a derivative document,
reflecting the budget and management decisions made throughout the
process of formulating the President's budget submission. 

OMB officials told us that development of the federal government
performance plan was based on (1) specific requirements of the act,
(2) expressed congressional interests, which emphasized the need to
include key administration management priorities to address
long-standing problems, and (3) recent analyses of changes affecting
foreign government central budget offices,\12 which identified the
need for an aggregate fiscal context for governmentwide performance
planning.  The resulting governmentwide plan includes three main
sections, corresponding to the fiscal, management, and program
performance of the federal government. 

  -- Section III, "Creating a Bright Economic Future," describes
     economic and federal fiscal performance and presents the
     administration's forecasts.  This section of the plan was
     intended to broadly define the fiscal context--specifically,
     overall economic projections and aggregate estimates of federal
     revenues and outlays--for the other sections of the plan.  OMB
     officials said that this section was primarily developed by its
     Economic Policy staff. 

  -- Section IV, "Improving Performance through Better Management,"
     describes the administration's management reform agenda.  This
     section has four components addressing proposals from the
     National Performance Review\13 to reinvent federal agencies and
     address service and citizen responsiveness concerns (i.e., the
     "High Impact Agencies" initiative); interagency and
     agency-specific priority management objectives; additional
     management support initiatives; and objectives and initiatives
     from nine interagency working groups that deal with crosscutting
     issues and represent a variety of key agency officials, such as
     chief operating officers, inspectors general, chief financial
     officers, and chief information officers.  According to an OMB
     official, this section was primarily developed by OMB staff from
     its Office of Federal Financial Management. 

  -- Section VI, Investing in the Common Good:  Program Performance
     in Federal Functions, contains key performance goals and
     measures derived from agency performance plans.  To present a
     more thematic picture that groups together similar programs and
     allows for different agency performance goals and measures to be
     related, OMB chose to aggregate agency performance information
     into 17 chapters corresponding to budget functions--a well-known
     and long-used budget classification structure that focuses on
     federal missions, or areas of national need, rather than
     organizations.  Each of the chapters begins with a 7-year
     (1997-2003) summary of federal resources supporting the
     function, differentiated in terms of spending, credit activity
     (i.e., loans and loan guarantees), and tax expenditures; the
     tables are generally followed by 4- to 7-page narratives, which
     begin with brief descriptions of the federal role in the
     function, in some cases specific governmentwide goals, and
     selected goals and measures from agency performance plans.  OMB
     officials told us that staff in its resource management offices
     (RMO), working with their agency counterparts, were principally
     responsible for developing their respective chapters.\14

Finally, in addition to these three principal sections from the
President's Budget, OMB also published a stand-alone document, "The
Governmentwide Performance Plan." This separately published document
included the three sections described above and also relevant
supporting material contained elsewhere in the President's budget
submission.  The supplementary material was added to present a fuller
discussion of approaches--in addition to spending--that are used to
achieve federal performance goals and includes the following. 

  -- Regulation:  Costs and Benefits, chapter 32 from section VI of
     the Budget, discusses the important role federal regulation
     plays in pursuing a variety of federal performance goals.  This
     section also discusses the efforts and progress made in
     estimating the benefits and costs of regulation.  In section VI,
     some of the budget function presentations included more
     extensive discussions of the role of regulation in achieving
     relevant performance goals. 

  -- Tax Expenditures, chapter 5 in the Analytical Perspectives
     volume of the Budget, discusses the implications of tax
     preferences, deductions, credits, and exclusions in various
     federal policy areas.  This chapter also includes a discussion
     of the need to compare tax expenditure, regulatory, and spending
     policies for selected budget functions.  Summary estimates of
     the value of tax expenditures by budget function are included in
     the section VI presentations. 

A significant factor affecting preparation of the fiscal year 1999
plan was the developmental status of agency strategic and performance
plans.  Under the Results Act, annual performance plans are both a
culminating step in the agency performance planning process that
begins with strategic plans and the building blocks for the
governmentwide plan.  OMB guidelines called for initial performance
plans to be submitted to OMB with the agency budget request in
September; for fiscal year 1999, the target date for submissions was
September 8, 1997.  However, most federal agencies were also
completing during this time frame their first strategic plans, which,
under the Results Act, were to be sent to the Congress by September
30, 1997, and provide the necessary foundation for subsequent annual
performance plans.  According to OMB officials, the initial agency
performance plans went through several iterations, which delayed the
selection of goals and measures for inclusion in the governmentwide
plan.  OMB officials told us that agency performance goals and
measures incorporated into the governmentwide plan were expected to
be consistent with presidential priorities and fiscal projections,
included in the underlying agency performance plans, and subject to
two final criteria:  relevance to OMB and agency managers and
importance to the public. 

About 3 weeks after issuing the separately published plan, OMB chose
to reissue this document, revising six chapters\15 within section VI
to capture late-developing presidential priorities.  Those priorities
had been generally summarized in 10 broad subject areas\16 within
section V of the Budget entitled, "Preparing for the 21st Century,"
but this section was not designated by OMB as a component of the
governmentwide performance plan.  Although much of this section
appeared to be incorporated in relevant chapters of section VI, some
key initiatives were not included.  For example, reducing tobacco
smoking among young people was not included in the original Health
chapter of section VI, although it was regarded as one of the
administration's top priorities.  Updates of the federal government
performance plan are not required under the act, but OMB decided
almost immediately to revise and reissue the fiscal year 1999 plan to
respond to congressional inquiries about the relationship between the
administration's priorities and the governmentwide performance plan. 

OMB officials emphasized that they view the governmentwide
performance plan as part of a larger planning and budgeting process,
reflecting more than causing decisions that are made in those other
contexts and forums.  However, as annual performance planning
improves and reliable performance information becomes more available,
OMB expects that governmentwide and agency performance planning will
provide valuable information and have a more direct effect on the
decision-making process. 


--------------------
\11 The budget function classification system is a method to classify
budgetary resources and tax expenditures according to the national
needs being addressed.  National needs are grouped into 17 broad
areas to provide a coherent and comprehensive basis for analyzing and
understanding the budget, plus three additional categories (net
interest, allowances, and undistributed offsetting receipts) to cover
all other budgetary transactions. 

\12 The Changing Role of the Central Budget Office, Organization for
Economic Co-operation and Development (OCDE/GD[97]109), Paris,
France, 1997. 

\13 The National Performance Review is now called the National
Partnership for Reinventing Government. 

\14 In 1994, OMB announced a reorganization of its structure and
staff responsibilities that was intended to better integrate its
budget analysis, management review, and policy development roles. 
Among other changes, this reorganization created RMOs as successors
to the budget review groups.  See Office of Management and Budget: 
Changes Resulting From the OMB 2000 Reorganization
(GAO/GGD/AIMD-96-50, December 29, 1995). 

\15 International Affairs; Transportation; Education, Training,
Employment, and Social Services; Income Security; Health; and
Veterans Benefits and Services. 

\16 Investing in Education and Training; Supporting Working Families;
Strengthening Health Care; Protecting the Environment; Investing in
Infrastructure; Promoting Research; Enforcing the Law; Strengthening
the American Community; Advancing United States Leadership in the
World; and Supporting the World's Strongest Military Force. 


   GOVERNMENTWIDE PERFORMANCE PLAN
   GENERALLY ADDRESSED THE
   REQUIREMENTS AND INTENT OF THE
   RESULTS ACT
------------------------------------------------------------ Letter :5

As required by the Results Act, a "single" federal government
performance plan was issued on February 2, 1998, as a part of, but
separately identified within, the President's Budget.  OMB's
subsequent decision to publish these portions of the President's
Budget as a stand-alone "Governmentwide Performance Plan," although
not required by the act, was a useful method to bring attention to
this first-ever plan. 

Structurally, the plan's framework provides a foundation for
addressing the inherent challenges associated with encompassing an
entity as large and diverse as the federal government, as well as
merging a new and complex governmentwide process into the annual
budget process.  For example, the decision to begin the plan by
defining the overall federal fiscal context was complementary to
congressional intent that agency performance planning be consistent
with budget requests.  OMB's decision to include interagency and
agency-specific management objectives, along with key agency
performance goals and measures as required by the act, was a
practical approach to add essential context and depth to the plan. 
Similarly, its decision to array agency performance goals and
measures by budget function allowed similar programs to be grouped
together to begin to present relationships among the goals.  Finally,
OMB made extensive use of references to other sources and reports,
including agency and special purpose Internet sites, to limit the
volume of the plan while providing links to supplemental performance
information. 

As mentioned earlier, the Senate committee report identified two
additional expectations for the plan:  a comprehensive picture of
federal performance supported by tax expenditures and discussions of
waivers of nonstatutory administrative requirements.  The plan
partially addressed the first expectation.  To its credit, OMB
included program performance information related not only to tax
expenditures but also federal regulations, an additional strategy
used to accomplish federal purposes.  Although the plan did not
include a schedule for periodic assessments of tax expenditures, OMB
described a series of pilot studies to explore the methods and
resource needs associated with evaluating the relationship between
tax expenditures and performance goals; the pilot studies will be
undertaken by the Department of the Treasury, in recognition of
Treasury's role in the oversight and evaluation of tax policy and tax
expenditures. 

Regarding the second expectation, OMB provided no discussion of the
extent and type of waivers of nonstatutory administrative
requirements requested by federal agencies.  According to an OMB
official, OMB received very few requests, which he described as
"limited in scope"; none were approved.  Accordingly, no discussion
of waivers was presented in the plan.  In some regards, this result
mirrors experiences associated with the pilot projects on managerial
accountability and flexibility under the Results Act; relatively few
proposals to be designated as pilot projects were submitted and none
were accepted.\17


--------------------
\17 See GPRA:  Managerial Accountability and Flexibility Pilot Did
Not Work as Intended (GAO/GGD-97-36, April 10, 1997). 


   SIGNIFICANT CHALLENGES REMAIN
   TO ACHIEVE A USEFUL AND
   INFORMATIVE GOVERNMENTWIDE
   PERFORMANCE PLAN
------------------------------------------------------------ Letter :6

Developing a federal government performance plan rests on two
pillars:  the soundness of underlying agency performance plans and
the quality of the integrating framework that places agency-level
performance expectations within a governmentwide perspective. 
Although some progress has been made, we agree with OMB's overall
assessment:  "more work remains."\18 For example, our assessments of
agency performance plans indicate that substantial improvements are
needed to ensure that these building blocks of the governmentwide
plan provide the needed foundation.  Similarly, focusing broadly on
governmentwide outcomes should be a central and distinguishing
feature of the federal government performance plan.  To be most
effective and supportive of the purposes of the act, the
governmentwide plan must be more than a compilation of agency-level
plans; integration, rather than repetition, must be its guiding
principle.  Although the overall framework developed by OMB should
support a mission-based discussion of governmentwide performance,
more needs to be done to build on this foundation to achieve the
complete, consistent, and results-oriented presentation that OMB
sought and to support comprehensive consideration of common
performance expectations across federal agencies and strategies. 


--------------------
\18 "Governmentwide Performance Plan," extracted from Budget of the
United States Government, Fiscal Year 1999, p.  2. 


      ADDRESSING THE UNDERLYING
      QUALITY OF AGENCY
      PERFORMANCE PLANS
---------------------------------------------------------- Letter :6.1

To the extent it is based on agency performance plans, the overall
quality of the governmentwide plan depends on two underlying
assumptions.  First, agency performance plans must be of sufficient
quality, consistent with the expectations of the Results Act.  Simply
stated, the governmentwide plan will inevitably reflect the
foundation of its building blocks.  Second, to enhance and clarify
agency accountability for specific goals, the governmentwide plan
must accurately reflect selected agency performance goals, and agency
performance plans must incorporate any goals included in the
governmentwide plan.  While meeting these assumptions was hindered by
the obvious timing and coordination challenges associated with this
first annual performance planning cycle, that was not the only
problem.  Our reviews of the agencies' fiscal year 1999 performance
plans and of the governmentwide plan indicate areas of concern. 

As we noted in our summary report on agency performance plans,\19
agencies' first annual performance plans showed potential for
providing decisionmakers with valuable perspective and useful
information for improving program performance.  However, most of the
plans we reviewed contained major weaknesses that undermine their
usefulness in that they (1) did not consistently provide clear
pictures of agencies' intended performance, (2) generally did not
relate strategies and resources to performance, and (3) provided
limited confidence that performance data will be sufficiently
credible for decision-making.  For example, many plans did not
contain goals and performance targets for mission-critical management
problems, such as steps to address the Year 2000 computing crisis. 
In addition, most annual plans provided only superficial descriptions
of the procedures the agencies would use to verify and validate
performance data; specific verification and validation systems,
related efforts, and milestones for verification and validation
generally were not cited.  These weaknesses in agency performance
plans were reflected, to varying degrees, in the governmentwide plan. 

Because developing a complete and convincing picture of intended
agency performance is an important step in preparing a useful
governmentwide performance plan, ensuring the sustained high quality
of the agency plans is fundamental to the governmentwide performance
planning process.  Given its key role with respect to the
governmentwide plan, OMB has recognized its responsibility for
addressing these problems.  The fiscal year 1999 plan appropriately
identifies implementation of the Results Act as one of the
governmentwide priority management objectives.  OMB includes specific
performance commitments to prepare "lessons learned" from its review
of the fiscal year 1999 plans and to revise guidance for and review
the fiscal year 2000 plans "to assure improvements and appropriate
changes are made."

Beyond this more fundamental question, consistency between the agency
and governmentwide plans also needs to be addressed.  Consistent
presentations enhance agency accountability by decreasing the
potential for confusion about the specific results to be achieved. 
Agency performance goals included in the plan generally could be
traced to relevant agency plans.  However, we did note
inconsistencies that will need to be addressed in future plans.  For
example, under the High Impact Agencies initiative, the Department of
Education performance plan defined a time frame for its performance
commitment regarding eligibility determinations for student aid
applications (i.e., October 2001) that was different from that shown
in the governmentwide plan (i.e., October 2000), while a National
Park Service performance commitment shown in the governmentwide plan
could not be found in the Department of the Interior performance
plan.  As another example, the plan includes as a performance
commitment that the International Trade Administration will review 15
more applications for free trade zones in 1999 than in 1998,
supporting a gross increase of 25,000 jobs.  However, the Department
of Commerce plan does not describe this goal as either a "Secretarial
Initiative" or as a "key goal or objective" and sets the expected
result at 20,000 jobs. 


--------------------
\19 GAO/GGD/AIMD-98-228, September 8, 1998. 


      THE PLAN DID NOT ALWAYS
      PROVIDE A CLEAR AND COMPLETE
      PICTURE OF GOVERNMENTWIDE
      PERFORMANCE
---------------------------------------------------------- Letter :6.2

Although the basic framework of this first plan generally allowed for
a cohesive presentation of governmentwide performance, the content of
separate sections did not always deliver a complete, consistent, or
clear discussion of fiscal year 1999 performance goals.  OMB's
decision to organize key agency performance goals in a mission-based
framework using budget functions was appropriate, as was its decision
to consider all of the strategies--tax expenditures and regulations,
in addition to spending and credit activities--to achieve federal
performance goals.  This approach, which facilitates looking across
organizations and approaches to better communicate performance
contributions, is an integral characteristic of an effective
governmentwide performance plan and an essential step in identifying
and resolving fragmentation and overlap within federal agencies and
strategies.  However, these otherwise appropriate and reasonable
approaches were hindered by inadequate development and presentation,
as discussed in the following sections.  Future plans would be
enhanced by more consistently presenting and integrating expected
agency-level performance and more clearly relating and addressing the
contribution of alternative federal strategies to common performance
goals.  Certainly many of the issues discussed as follows can be
traced to the challenge of preparing this first-ever governmentwide
plan, but they remain significant matters that should be addressed in
future plans. 


         FISCAL PERFORMANCE
-------------------------------------------------------- Letter :6.2.1

Section III sets the fiscal performance context for the federal
government by projecting balanced budgets and defining certain key
economic assumptions.  Much of this section is oriented toward
discussions of past accomplishments, with little elaboration of the
external conditions and factors, if any, that could affect future
fiscal performance expectations.  There is also little discussion in
this section of the longer-term fiscal outlook that would provide
both a broader context in which to understand the implications of
current policy and a valuable additional perspective to be considered
when making policy choices.  GAO, the Congressional Budget Office,
and OMB have modeled the long-term budget and economic outlook, and
some discussion summarizing these results would help put
governmentwide performance goals in a long-term context.\20 Related
discussions of both the sensitivity of budget estimates and long-term
fiscal forecasts to economic conditions are contained in the
Analytical Perspectives volume of the President's budget submission
but are not incorporated or referenced in this section of the plan. 


--------------------
\20 See Budget Issues:  Long-Term Fiscal Outlook
(GAO/T-AIMD/OCE-98-83, February 25, 1998) and Congressional Budget
Office, Long-Term Budgetary Pressures and Policy Options, May 1998. 


         MANAGEMENT PERFORMANCE
-------------------------------------------------------- Letter :6.2.2

Identifying and setting goals for mission-critical management
problems or other management-related issues that could significantly
impede achievement of program goals is an essential element of a
governmentwide performance plan.  Appropriately, OMB separately
presented an array of management objectives and initiatives in
section IV of the plan that appear consistent with the basic purposes
of the Results Act, addressing, for example, issues dealing with
citizen responsiveness, service delivery, and program performance and
management.  Similarly, OMB's inclusion of the priorities of major
interagency councils, such as the President's Management Council and
the Chief Financial Officers Council, was a useful way to recognize
the critical role such groups play in leveraging and directing agency
involvement toward governmentwide management goals.  However, a
clearer and more focused discussion of the relationship between
management objectives and performance expectations would better
integrate this section with the program performance presentations and
identify actions that need to be reflected in underlying agency
performance plans. 

The objectives and initiatives included in section IV fall across two
different levels:  governmentwide issues, including many we have
described as fundamental to future federal program performance, such
as Year 2000 conversion and Results Act implementation, and
program-specific and agency-specific issues, some of which, such as
Department of Defense infrastructure and Federal Aviation
Administration reforms, we have previously identified as high risk
due to their vulnerability to waste, fraud, or mismanagement.\21 For
many management performance objectives, the plan includes challenging
goals, such as obtaining timely and unqualified audit opinions in
1999 for most agency financial statements, and often identifies these
performance goals and commitments separately by references to
Internet sites. 

To improve the clarity and usefulness of the plan, section IV could
provide a more integrated and focused discussion of the strategies
associated with the priority management objectives.  For example, in
several cases, apparent relationships among the components of section
IV are not recognized and discussed, leaving the reader without a
clear understanding of the significance and extent of
interconnections among the many issues discussed.  For example, the
apparent association among the "debt collection" interagency
objective, the debt collection objectives of the Department of the
Treasury Financial Management Service, and the debt collection
component of the "error reduction" management support initiative is
not explicitly developed.  Similarly, this section appropriately
describes the role played by interagency working groups, such as the
Chief Financial Officers Council (CFOC) and Chief Information
Officers Council, in identifying and implementing ways to better
manage federal resources, but does not offer much discussion of their
responsibilities and contributions toward specific section IV
objectives.  For example, the crucial leveraging role of the CFOC in
implementing the Results Act, one of the plan's interagency priority
management objectives, is not discussed.  Rather than referencing all
of the priorities and initiatives of these interagency groups, the
plan would be enhanced by selective use and better integration of
specific initiatives that are key to achieving governmentwide
performance goals. 

Moreover, addressing a variety of presentation problems would improve
the overall quality and value of section IV.  The following are
examples where the plan could have provided a more complete and
results-based picture of expected performance. 

  -- The discussion of the High Impact Agency initiative is an
     example of an otherwise effective approach that was compromised
     by an incomplete presentation.  This initiative is intended to
     improve service and citizen confidence in government by focusing
     on the performance of federal agencies that interact most with
     individuals and businesses--in effect, it addresses one of the
     most basic purposes of the Results Act.  The plan briefly
     describes a few of the over 200 performance commitments being
     made by 32 agencies and then refers the reader to an Internet
     site for those performance commitments.  Given the large number
     of commitments to be established by so many federal agencies,
     highlighting a few while referencing an Internet site for each
     agencies' performance commitments could have been an informative
     and reasonable approach to incorporate this highly visible and
     relevant initiative into the plan.  However, the effectiveness
     of such an approach depends on prompt posting of agencies'
     commitments.  Performance commitments for almost two-thirds of
     the agencies had not yet been posted on the referenced Internet
     site about 2 weeks after the plan's issuance; in fact, more than
     2 months later, about one-third of the agencies were still not
     included on the site. 

  -- OMB chose to use the plan to meet a critical requirement under
     the Clinger-Cohen Act, namely a .  .  .  report on the net
     program performance benefits achieved as a result of major
     capital investments .  .  .  and how the benefits relate to the
     accomplishments of the goals of the executive agencies.
     However, the presentation in the plan requires substantial
     improvement to meet congressional expectations.  For example,
     there is no discussion regarding either the criteria used to
     select the 35 information technology projects included in the
     report or the specific governmentwide goals or agency priorities
     that are supported by the projects.  Performance benefit
     descriptions included in the list often describe what the system
     will do or provide (e.g., "lowers costs," "improves accuracy,"
     or "simplifies and streamlines") rather than the "net program
     performance benefits" that will be achieved.  Finally, given the
     size of major technology projects, which often require many
     years and the completion of many separate components, the report
     would be most informative if it distinguished between achieved
     and expected performance and between expended and estimated
     budgetary needs. 

Clearer discussion of the program performance implications of
governmentwide management objectives will help achieve a better
integration between governmentwide and agency performance plans.  As
noted in our overall assessment of fiscal year 1999 agency
performance plans, most agencies did not consistently incorporate
strategies to address mission-critical management problems,
including, for example, the Year 2000 computer conversion issue,
which is the first interagency management objective included in the
governmentwide plan.  Improving the discussion of the performance
consequences of these priority management objectives is an essential
step to assist agencies in developing relevant goals and strategies
for inclusion in agency plans and to clarify agency accountability
for specific results. 


--------------------
\21 Appendix I summarizes the relationship between the plan's
priority management objectives and our high-risk federal program
areas. 


         PROGRAM PERFORMANCE
-------------------------------------------------------- Letter :6.2.3

As expected under the Results Act, the majority of the plan is
directed toward compiling and summarizing key performance goals and
measures from agency performance plans.  OMB chose to summarize this
information and associated strategies (spending, credit activity, tax
expenditures, and regulation) in terms of budget functions "to group
similar programs together and begin to present the relationship
between their goals."\22 For the most part, section VI provides a
foundation to begin to discuss governmentwide performance issues. 
For example, each chapter generally begins with a brief description
of the federal role in the function; many, but not all, chapters
begin with broad governmentwide goals for the function; and all
include performance goals and measures from agency plans. 

To some extent, the plan was constrained by the absence of crucial
performance information from underlying agency plans.  For example,
the Health Care Financing Administration (HCFA) recognized that it
needed cooperative arrangements with state and local governments
before developing performance baselines and targets for major
programs, such as Medicaid.  Similarly, the Drug Enforcement Agency
emphasized that some performance indicators were in a developmental
stage and that historical data upon which to base a credible
performance goal were not available.  The fiscal year 1999 plan
necessarily includes very limited information for these activities,
except to generally note, for example, that HCFA "will work with the
States to develop and test Medicaid performance goals," or that
"Federal and non-Federal entities will work together to reduce the
availability and abuse of illegal drugs."\23

It is also apparent that OMB used its discretion in preparing the
governmentwide plan to address some other inadequacies of agency
performance plans.  OMB compensated for some weaknesses identified
during our assessments of agency plans by broadly summarizing agency
plans or by incorporating information from sources other than the
annual plan, as in the following examples. 

  -- In our assessment of the Department of Defense plan, we noted
     that it was difficult to determine the department's strategies,
     objectives, and measures because information critical to
     understanding performance was contained throughout the Secretary
     of Defense's fiscal year 1999 annual report to the President and
     the Congress, which included the annual performance plan, and
     numerous other documents.  The governmentwide plan succinctly
     summarized key performance goals for each of the department's
     six strategic objectives, providing a much more coherent and
     concise discussion of expected fiscal year 1999 performance. 

  -- The Social Security chapter of section VI not only includes a
     table showing the number of beneficiaries served, an output
     measure that is included in the agency plan, but also a
     discussion of the effect of Social Security on reducing poverty
     among the elderly, an outcome that was not discussed in the
     fiscal year 1999 agency performance plan. 

  -- The General Services Administration plan often lacked context
     for its performance measures, which the governmentwide plan
     addressed by including comparative and baseline information. 
     For example, although the agency plan states that local
     telephone service monthly line charges for fiscal year 1999 will
     be held to the same level as in 1997 and 1998, the
     governmentwide plan describes this as a 28 percent reduction
     from 1994 rates.  Similarly, although the agency plan focuses on
     the increasing cost per mile of the automobile fleet, the
     governmentwide plan notes that automobiles will be leased to
     agencies at rates that average 20 percent below commercial
     rates. 

Although section VI includes numerous agency performance goals that
include specific target levels of performance (e.g., "the program
will serve 150,000 special needs youth and frail elderly"), some do
not (e.g., "step up efforts to disrupt and dismantle illegal
activities"), reflecting some of the problems in the underlying
agency plans.  However, even in cases where specific performance
targets are described in the plan, the overall value and usefulness
of this performance information could be improved by including
baseline and trend data.  For example, prior year performance results
can provide a framework for assessing the realism of annual
performance targets and for disclosing a more complete picture of
performance over an extended period.  Such data can assist readers by
placing performance goals and measures in context\24 and is
particularly relevant in that a separate governmentwide performance
report is not required under the Results Act. 

The section VI program performance presentations also would be
enhanced if there was a clearer and more direct discussion of
governmentwide goals and objectives in addition to key agency
performance goals.  In some cases, the plan does highlight major
crosscutting efforts within the function-based chapters.  For
example, the National Homeownership Initiative, a major
administration initiative involving several agencies and both
spending and credit programs, is discussed in the Commerce and
Housing Credit chapter.\25 Similarly, the Natural Resources and
Environment chapter includes an extended discussion of the many
agencies involved in federal land management, presented in the
context of three governmentwide federal land management goals: 
protecting human health and safeguarding the natural environment;
restoring and maintaining the health of federally managed lands,
waters, and renewable resources; and providing recreational
opportunities for the public to enjoy natural and cultural resources. 
However, unlike the management performance discussion in section IV,
which directly referenced the priorities and initiatives of a variety
of interagency councils, section VI only marginally reflects the
crucial crosscutting role in promoting and establishing
governmentwide performance goals played by such entities as the
Office of National Drug Control Policy, the Trade Promotion
Coordinating Committee, and the Office of Science and Technology
Policy.  Recognizing and incorporating these statutory policy
coordinating entities would bring visibility to their efforts and the
governmentwide results they are intended to introduce and encourage,
while helping to focus agency accountability for results. 

In addition, the overall value and usefulness of the program
performance discussions in section VI would be enhanced by improving
the organizing framework.  OMB's decision to use budget function
classifications to meet the need for an integrated, mission-based
framework was reasonable; classifying by budget functions is a
well-known and long-standing method to categorize the purpose of
government without regard to organizational arrangements.  However,
this structure does not in all cases portray mutually exclusive
mission-based groupings of federal activities, thus leading to
incomplete performance discussions.\26 For example, the discussion of
governmentwide performance expectations in the Health chapter in
section VI was constrained by a classification structure in which
other federal health programs that are targeted to specific
beneficiaries (e.g., Medicare and veterans health activities) are
assigned to different functions (i.e., chapters).  There were cases
in which OMB recognized the limitations imposed by budget functions
on its discussions of fiscal year 1999 performance expectations.  For
example, the plan includes a footnote in the Natural Resources and
Environment chapter to emphasize that the chapter does not include
all federal activities associated with these missions.  In another
example, a major federal activity--assisted housing programs of the
Department of Housing and Urban Development--was not discussed in the
chapter in which it is typically associated in budget function
presentations (i.e., the Income Security function), but was included
in the Commerce and Housing Credit chapter, presumably to better
relate it to other housing programs. 

Moreover, descriptions of program performance in several chapters
were presented in a sequential, agency-by-agency format that missed
opportunities to address well-known areas of fragmentation and
overlap.  Organization-based presentations are appropriate to
emphasize agency accountability but tend to stovepipe performance
discussions and inadequately describe crosscutting governmentwide
performance goals and both common and complementary performance
measures.  For example, the General Science, Space, and Technology
chapter sequentially discusses performance goals for three agencies
(National Aeronautics and Space Administration, the Department of
Energy, and the National Science Foundation) but does not address the
apparent overlap stemming from over 500 research laboratories
operated by 17 federal agencies.  Similarly, the Community and
Regional Development chapter organizes performance discussions in
terms of eight involved agencies, but does not address the
inefficiency, confusion, and potential duplication arising from a
patchwork of about 100 rural development programs operated by over a
dozen federal agencies.\27 This weakness in the governmentwide
performance plan mirrors comparable problems in the agency
performance plans, which also did not sufficiently describe
crosscutting programs and needed coordinating efforts.  Collectively,
fiscal year 1999 performance planning could more directly address
areas of fragmentation and overlap and thus better ensure that
federal resources are well targeted and that accountability is
clearly defined. 

Similarly, section VI also did not fully integrate discussions of the
effects of various federal strategies to achieve governmentwide
performance goals.  Often, discussions of federal approaches and
strategies missed opportunities to describe and compare expected
performance goals, the relative contribution of each approach toward
governmentwide goals, and the potential for developing common or
complementary performance measures.  The Transportation chapter
offers one illustration.  A variety of federal approaches--grants,
regulations, inspections, and direct federal service provision--are
briefly discussed in the context of common performance goals, such as
"reduce transportation-related deaths and injuries." However, there
is no discussion of expected performance for these separate
strategies and no discussion of the relative contribution of each
approach to achieving the governmentwide goal. 

For the most part, discussions of tax expenditures within section VI
tended to focus on what the tax expenditure is or does (e.g.,
"Interest from certain U.S.  Savings Bonds is tax-free if the bonds
go solely to pay for education.") rather than its contribution toward
governmentwide or specific program performance goals.  For example,
in section VI, the estimated value of tax expenditures associated
with each budget function is summarized in the "federal resources"
table that begins each chapter, and a general discussion of
performance measurement issues presented by tax expenditures is
included in a supplementary section of the separately published plan. 
However, a more extensive and informative listing of specific tax
expenditures by function, which is included in chapter 5 of the
Analytical Perspectives volume of the Budget, is not referenced, and
specific discussions of the contribution of major tax expenditures
toward federal performance goals is often lacking.  For example,
estimated spending and tax expenditures are shown as roughly
comparable shares of total federal resources (about $60 billion) in
fiscal year 1999 in the Education, Training, Employment, and Social
Services chapter, but the effect on federal performance goals of the
new child credit tax expenditure in that year is not discussed. 
Similarly, the contribution of tax policies toward achieving specific
federal health goals, such as distributional equity or access to
quality care, is not discussed in the Health chapter, although such
tax expenditures are expected to amount to almost $86 billion in
fiscal year 1999, with the exclusion for employer-provided benefits
accounting for most of this.\28

Although not required by the Results Act or congressional intent, OMB
included in section VI discussions of federal regulation, an
alternative and important policy strategy for the federal government. 
The nature and general effects of regulation are discussed within the
program performance chapters, typically as a separate segments of the
chapters, and performance goals and measures are sometimes provided. 
For example, the Energy chapter includes descriptions of the programs
of the Federal Energy Regulatory Commission and the Nuclear
Regulatory Commission in a results-based framework, discussing the
impact of regulation on achieving goals relating to, for example,
public health and safety and the maintenance of fair and efficient
interstate energy markets.  In addition, the separately published
Governmentwide Performance Plan included a supplementary section that
provided a general discussion of the nature, costs, and benefits of
regulation but does not include explicit performance goals; this
supplementary section does include some regulatory issues that are
not included within the program performance narratives.  For example,
a group of 41 economically significant regulations studied by OMB are
briefly discussed, with a reference to an Internet site for a more
complete discussion.  Neither the "monetized benefits" discussed in
this section, nor the broader implications on program performance
goals are explicitly identified and discussed in the program
performance sections. 


--------------------
\22 Budget of the United States Government, Fiscal Year 1999, p. 
143. 

\23 Budget of the United States Government, Fiscal Year 1999, pp. 
214, 243. 

\24 See The Government Performance and Results Act:  1997
Governmentwide Implementation Will Be Uneven (GAO/GGD-97-109, June 2,
1997) and GPRA Performance Reports (GAO/GGD-96-66R, February 14,
1996). 

\25 This initiative defines a national goal of 67.5 percent
homeownership by 2000, from a current baseline of 66 percent.  The
plan describes specific activities and performance goals for three
agencies that will contribute to this crosscutting initiative. 

\26 See Budget Function Classifications:  Origins, Trends, and
Implications for Current Uses (GAO/AIMD-98-67, February 27, 1998). 

\27 For a general discussion of these issues, see Managing for
Results:  Using the Results Act to Address Mission Fragmentation and
Program Overlap (GAO/AIMD-97-146, August 29, 1997) and Federal
Management (GAO/OCG-98-1R, January 9, 1998). 

\28 For a broader discussion of this topic, see Tax Policy:  Tax
Expenditures Deserve More Scrutiny (GAO/GGD/AIMD-94-122, June 3,
1994). 


   CONCLUSIONS
------------------------------------------------------------ Letter :7

The fiscal year 1999 Governmentwide Performance Plan marked the
culmination of the first full cycle of performance planning under the
Results Act.  This first plan represents a milestone and, as OMB
suggests, should be seen as the first step in an evolving
results-based planning and budgeting process.  Although the plan will
necessarily reflect administration policies and priorities, the
challenge will be to identify and implement those changes that will
make the plan more useful and informative to the broader public
policy community with respect to the basic purposes of the act:  to
improve citizen confidence, service delivery, and program performance
and management, while enhancing congressional oversight and
deliberation. 

The Governmentwide Performance Plan can be a powerful tool to pursue
these goals.  A central and distinguishing contribution of the
governmentwide plan is its potential to provide a cohesive
perspective on the performance of a wide array of federal activities. 
Similar to the President's budget submission, it can be a document
that builds on agency-level submissions but whose overall value
exceeds the sum of its parts.  As it evolves, the process of
developing the plan could prompt a more integrated and focused
discussion between the Congress and the administration about
priorities and how agencies interact in implementing those
priorities.  For example, it might (1) present traditional
program-specific and agency-specific budget decisions in a new
context that promotes more fundamental comparisons and assessments of
expected performance, (2) provide a place where fragmented and
overlapping federal programs and strategies are pulled together in an
integrated proposal that reflects mission-based goals, and (3)
enhance the visibility of expected federal performance, thus
providing incentives to agencies to achieve performance goals and
increasing accountability to citizens. 

Several steps would help ensure that the plan achieves its full
potential and becomes more useful within both congressional and
executive branch decision-making processes.  The usefulness of the
governmentwide performance plan rests on the quality and
comprehensiveness of the methods used to describe and integrate
governmentwide goals and outcomes.  Our assessment of the fiscal year
1999 plan indicated four key opportunities for improvement. 

  -- First, the quality of the plan's organizing framework is key to
     achieving a more integrated and broader discussion about
     governmentwide missions and performance.  While the use of
     budget function classifications offers a reasonable and logical
     structure to cut across organizational boundaries and federal
     strategies, this classification system does not always provide
     mutually exclusive descriptions of governmentwide missions.\29 A
     more cohesive picture of federal missions would be presented if
     discussions were broadened beyond the functional lines where
     necessary to capture the full range of government players and
     activities and aimed at advancing broad federal goals. 

  -- Second, within this broad mission-based framework, the approach
     used to present information within a given mission area also
     contributes to the effectiveness of the plan.  Presenting
     information in an agency-by-agency or strategy-by-strategy
     manner is useful to indicate the range of actors and approaches
     within a given mission area, but a more integrated discussion
     organized in terms of broad federal goals and objectives would
     better reflect the relative contributions of various agencies
     and strategies to the mission area and provide opportunities to
     compare and assess interactions. 

  -- Third, future governmentwide plans would be more informative and
     useful if baseline and trend information were presented
     consistently with annual performance goals. 

  -- Fourth, crucial performance concerns included in the
     governmentwide performance plan--including not only priority
     management objectives that will broadly affect program
     performance but also crosscutting program performance
     goals--should be reflected in relevant agency performance plans. 
     This is an essential step to better integrate governmentwide
     performance planning with agency performance planning and to
     clarify agency accountability for specific results. 

In many respects, achieving these improvements to the governmentwide
plan rests upon changes in the underlying agency performance plans. 
As OMB has acknowledged, and as discussed in our reports on the
agency plans, considerable effort must be made to improve these
building blocks of the governmentwide plan.  In our overall
assessment of the fiscal year 1999 agency performance plans, we
encouraged OMB to consider five key opportunities for improvement as
it commences its intended review of agency performance:  (1)
articulating a better results orientation, (2) strengthening
coordination of crosscutting programs, (3) describing better how
strategies will be used to achieve goals, (4) showing the performance
consequences of budget decisions, and (5) building capacity within
agencies to gather and use performance information.\30 Clearly,
addressing these issues in agency performance plans will contribute
significantly to enhancing the governmentwide plan in the four areas
previously discussed.  For example, the ability to present cohesively
the relative contributions of all relevant programs and agencies to
broad mission goals in the governmentwide plan will largely depend on
how well each of those entities has articulated its results and
strategies.  Similarly, the presentation of baseline and trend data
in the governmentwide plan rests on the availability of such data in
agency plans. 

Beyond these specific improvements to agency and governmentwide
performance plans, many other fundamental changes will be needed to
fully achieve the benefits of the Results Act.  For example,
developing common goals and complementary performance measures across
agencies and programs that are directed at similar missions will
require not only better plans and planning processes but also
extraordinary coordination within the executive branch and sustained
attention within the Congress.\31 Ensuring that goals and measures
focus on true results--that is, real gains in performance,
responsiveness, and quality--will be a serious challenge for many
agencies.\32 And even developing results-based measures for some
federal strategies--notably tax expenditures and regulations--will
require improvements in areas that are marked by complexity and
ambiguity and that have often proven resistant to such
measurement.\33

These and many other changes will not occur quickly, but the Results
Act provides the overall context within which these challenges can be
systematically addressed. 


--------------------
\29 GAO/AIMD-98-67, February 27, 1998. 

\30 GAO/GGD/AIMD-98-228, September 8, 1998. 

\31 GAO/GGD-97-109, June 2, 1997; GAO/GGD-97-180, September 16, 1997;
and GAO/AIMD-97-146, August 29, 1997. 

\32 See Program Evaluation:  Agencies Challenged by New Demand for
Information on Program Results (GAO/GGD-98-53, April 24, 1998) and
Managing for Results:  Analytic Challenges in Measuring Performance
(GAO/HEHS/GGD-97-138, May 30, 1997). 

\33 Managing for Results:  Regulatory Agencies Identified Significant
Barriers to Focusing on Results (GAO/GGD-97-83, June 24, 1997). 


   RECOMMENDATIONS
------------------------------------------------------------ Letter :8

While still an evolving concept and document, the governmentwide
performance plan represents a uniquely valuable tool to help the
Congress and the executive branch address critical federal
performance and management issues.  Therefore, to continue the
development of this distinctive and important resource, we recommend
that the Director of OMB take the following actions. 

To achieve a more cohesive picture of governmentwide performance and
provide an effective construct for considering related missions and
goals and addressing program overlap concerns, we recommend that OMB
augment the presentations by budget functions in the governmentwide
plan where necessary to achieve a more complete view of performance
in mission areas. 

To comprehensively portray and analyze the performance of the federal
government, we recommend that OMB develop approaches to better
integrate all federal strategies and tools--including tax
expenditures and regulations--with key agency performance goals
associated with federal spending in the governmentwide plan
presentations.  In the near term, this should include, minimally, a
more integrated discussion of the role of spending, tax expenditures,
and regulation within mission areas and strategic objectives.  In the
longer term, OMB should work with cognizant agencies to begin to
develop objective, measurable, and quantifiable goals for all federal
strategies and tools to better disclose the relative contribution of
each toward overall federal performance goals. 

To better depict the context for and progress associated with
performance goals defined in the governmentwide plan, we recommend
that OMB include baseline and trend information, where credible data
are available or include information on efforts to develop such data. 

Finally, to ensure priority attention and promote accountability in
addressing governmentwide performance concerns--both priority
management objectives and crosscutting performance goals included in
the governmentwide plan--we recommend that OMB ensure that agencies
incorporate appropriate goals and strategies in their annual
performance plans and describe their relevance to achieve objectives
described in the governmentwide performance plan. 


   AGENCY COMMENTS AND OUR
   EVALUATION
------------------------------------------------------------ Letter :9

On August 19, 1998, we received OMB's written comments.  On August
20, 1998, we received additional technical comments from a senior OMB
official; we have incorporated these comments where appropriate. 
OMB's letter of August 19, 1998, includes comments on both this
report and our companion report on agency annual performance plans. 
Our evaluation of OMB comments on our assessment of the
governmentwide performance plan is provided below; OMB's comments on
our assessment of agency performance plans are discussed in our
companion report.\34

In his August 19, 1998 letter, OMB's Acting Deputy Director for
Management emphasized that the fiscal year 1999 governmentwide
performance plan exceeded statutory requirements but also agreed that
our report provided constructive suggestions to improve future plans. 
Agreeing that "weak agency plans translate into weak sections of a
governmentwide plan," OMB committed to improve fiscal year 2000
agency performance plans, which they believe will in turn enhance
future governmentwide plans as well. 

OMB stated that our draft report appeared "to misjudge the nature of
the governmentwide plan." In OMB's view, the governmentwide plan
should focus "almost entirely on performance goals," but our
discussion of underlying agency performance plan weaknesses included
issues "that are largely unrelated to performance goals." We did not
mean to suggest that the governmentwide plan should contain detailed
discussions of strategies to improve agency plans or address all of
the elements that are essential components of agency plans.  Rather,
we observed that the governmentwide plan will continue to be limited
as long as its building blocks contained in agency plans were
limited.  In our companion report on the annual performance plans, we
have recommended that OMB pursue an explicit agenda for improving the
quality and utility of agency performance plans. 

OMB expressed concern with our recommendation to augment where
necessary budget function presentations to achieve a more complete
view of federal performance.  OMB stated that this "would generate a
hybrid plan which would carve up the functional presentations." This
is not what we have in mind.  We agree that the budget function
structure provides an appropriate organizational base.  However, as
we indicate in this and a previous report,\35 current budget
functions do not in all cases portray mutually exclusive
mission-based groupings of federal activities; for example, the
Health function does not include large and important federal health
programs targeted to specific beneficiaries (e.g., Medicare and
veterans).  There are several ways in which a more integrated
discussion of federal performance goals could be presented, including
greater use of cross-referencing among current budget function
classifications.  Contrary to OMB's concern, we believe that this
would avoid the scattering of otherwise related performance goals
that occurred in this year's plan as a consequence of presentations
based solely on budget functions. 

Finally, OMB was concerned that our comparison of OMB's Priority
Management Objectives to our High-Risk Program Areas could be
interpreted to suggest that "some high risk areas are not being
monitored by OMB or addressed by the agencies." This was not out
intent.  The table in appendix I was developed solely to show the
extent of similarity between the two lists. 


--------------------
\34 GAO/GGD/AIMD-98-228, September 8, 1998. 

\35 GAO/AIMD-98-67, February 27, 1998. 


---------------------------------------------------------- Letter :9.1

We are sending copies of this report to the Minority Leader of the
House; to the Ranking Minority Members of the Senate Committee on the
Budget, the Senate Committee on Appropriations, the Senate Committee
on Governmental Affairs, the House Committee on the Budget, the House
Committee on Appropriations, and the House Committee on Government
Reform and Oversight; to other appropriate congressional committees;
and to the Director of the Office of Management and Budget.  We will
makes copies available to others upon request. 


The major contributors to this report are listed in appendix III.  If
you or your staffs have any questions, please call Paul L.  Posner on
(202) 512-9573 or L.  Nye Stevens on (202) 512-8676. 

Paul L.  Posner
Director, Budget Issues

L.  Nye Stevens
Director, Federal Management and Workforce Issues


Congressional Requesters

The Honorable Richard K.  Armey
Majority Leader
House of Representatives

The Honorable Dan Burton
Chairman, Committee on Government Reform and Oversight
House of Representatives

The Honorable John R.  Kasich
Chairman, Committee on the Budget
House of Representatives

The Honorable Bob Livingston
Chairman, Committee on Appropriations
House of Representatives

The Honorable Pete V.  Domenici
Chairman, Committee on the Budget
United States Senate

The Honorable Ted Stevens
Chairman, Committee on Appropriations
United States Senate

The Honorable Fred Thompson
Chairman, Committee on Governmental Affairs
United States Senate

The Honorable Larry E.  Craig
United States Senate


PRIORITY MANAGEMENT OBJECTIVES
FROM THE GOVERNMENTWIDE
PERFORMANCE PLAN AND RELATED GAO
HIGH-RISK PROGRAM AREAS
=========================================================== Appendix I

                                          Related high-risk program
Priority management objectives            areas
----------------------------------------  ----------------------------
Year 2000                                 Year 2000 problem

Government Performance and Results Act    ---

Financial management                      IRS financial management
                                          Customs Service financial
                                          management

Information technology                    Information security

Selected information technology systems   ---
(interagency systems dealing with tax
and wage reporting and international
trade data)

Acquisition reform                        Defense contract management
                                          Defense weapon systems
                                          acquisition
                                          National Aeronautics and
                                          Space Administration
                                          contract management

Loan portfolio management                 ---

Debt collection                           Farm loan programs

International credit programs             ---

Statistical programs                      ---

Regulation                                ---

Defense financial management reforms      Defense financial management

Defense infrastructure outsourcing and    Defense infrastructure
privatization

Education student aid programs            Student financial aid
                                          programs

Energy acquisition reforms                Energy contract management

Housing and Urban Development management  Department of Housing and
reforms                                   Urban Development

Interior/Bureau of Indian Affairs tribal  ---
trust fund and lands reforms

Transportation/Federal Aviation           Air traffic control
Administration human, financial, and      modernization
information resources management reforms

Treasury/Financial Management Service     ---
management reforms

Treasury/Internal Revenue Service         Tax systems modernization
information technology reforms            IRS receivables
                                          IRS filing fraud detection

Veterans Affairs infrastructure           ---
consolidations

Social Security Administration claims     Supplemental Security Income
processing reforms                        claims processing

---                                       Defense Corporate
                                          Information Management
                                          initiative

---                                       Defense inventory management

---                                       Justice and Treasury asset
                                          forfeiture programs

---                                       Medicare overpayments

---                                       National Weather Service
                                          modernization

---                                       Superfund program management

---                                       2000 decennial census
----------------------------------------------------------------------



(See figure in printed edition.)Appendix II
COMMENTS FROM THE OFFICE OF
MANAGEMENT AND BUDGET
=========================================================== Appendix I



(See figure in printed edition.)



(See figure in printed edition.)


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================= Appendix III

ACCOUNTING AND INFORMATION
MANAGEMENT DIVISION, WASHINGTON,
D.C. 

Michael J.  Curro, Assistant Director
Elizabeth A.  McClarin, Senior Evaluator
Robert D.  Yetvin, Senior Evaluator

GENERAL GOVERNMENT DIVISION,
WASHINGTON, D.C. 

Alan M.  Stapleton, Assistant Director
Victoria Miller O'Dea, Senior Evaluator

ACKNOWLEDGEMENTS

In addition to those named above, the following individuals made
important contributions to this report:  From the Accounting and
Information Management Division, Susan J.  Irving, Associate
Director; Laura E.  Castro, Senior Evaluator; John W.  Mingus, Jr.,
Senior Evaluator; and David L.  McClure, Assistant Director.  From
the General Government Division, J.  Christopher Mihm, Associate
Director, and Joseph S.  Wholey, Senior Advisor for Evaluation
Methodology. 

*** End of document. ***