Managing for Results: Experiences Abroad Suggest Insights for Federal
Management Reforms (Chapter Report, 05/02/95, GAO/GGD-95-120).
Pursuant to a congressional request, GAO reviewed the experiences of
Australia, Canada, New Zealand, and the United Kingdom in implementing
management reforms that U.S. federal agencies may wish to consider
during their implementation of the Government Performance and Results
Act.
GAO found that: (1) the four countries' reform approaches included
establishing and communicating a clear direction by defining agency
missions and goals through strategic planning, linking annual objectives
to missions and goals through operating plans, measuring output-oriented
results, and reporting progress; (2) program outcomes were difficult to
measure accurately because conditions beyond managers' control affected
the outcomes; (3) key lessons learned focused on enhancing the
usefulness of performance measures, making performance measures
selective and balanced, including qualitative and quantitative
information in performance measurement systems, and providing aggregate
detailed information to upper management and program managers; (4) the
countries held managers accountable for program results through
published performance standards and public surveys, performance goal
agreements, and reports to their parliaments; (5) to give managers more
flexibility to achieve reforms, the countries eliminated central control
of departments' operating expenditures and staffing levels and provided
departments with more authority and incentives to manage resources
within overall budget ceilings; and (6) changing the government culture
in the four countries required that agencies be held accountable for
program results.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: GGD-95-120
TITLE: Managing for Results: Experiences Abroad Suggest Insights
for Federal Management Reforms
DATE: 05/02/95
SUBJECT: Agency missions
Foreign governments
Accountability
Budget administration
Cost control
Work measurement standards
Reporting requirements
Strategic planning
Decentralization
Management information systems
IDENTIFIER: Australia
Canada
New Zealand
United Kingdom
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Cover
================================================================ COVER
Report to Congressional Requesters
May 1995
MANAGING FOR RESULTS - EXPERIENCES
ABROAD SUGGEST INSIGHTS FOR
FEDERAL MANAGEMENT REFORMS
GAO/GGD-95-120
Managing for Results
Abbreviations
=============================================================== ABBREV
GDP - Gross Domestic Product
GPRA - Government Performance and Results Act of 1993
NPR - National Performance Review
OECD - Organization for Economic Cooperation and Development
OMB - Office of Management and Budget
Letter
=============================================================== LETTER
B-260057
May 2, 1995
The Honorable William V. Roth, Jr.
Chairman
The Honorable John Glenn
Ranking Minority Member
Committee on Governmental Affairs
United States Senate
The Honorable William F. Clinger, Jr.
Chairman, Committee on Government
Reform and Oversight
House of Representatives
The Honorable John Conyers, Jr.
Ranking Minority Member
Committee on the Judiciary
House of Representatives
This report responds in part to your request that we identify the
approaches other governments took in implementing management reforms
that federal agencies may wish to consider as they implement similar
reforms required by the Government Performance and Results Act of
1993 (GPRA). This report focuses on the experiences of Australia,
Canada, New Zealand, and the United Kingdom, which are recognized as
among the leaders in implementing management reforms intended to
focus attention on achieving the intended results of government
programs. A related report discussed the experiences of six leading
state governments. These two reports, along with other work we have
done, are being used to help us develop our assessment of GPRA
implementation.
We are sending copies of this report to the Vice President; the
Director, Office of Management and Budget; other interested
congressional committees; and other interested parties. We will make
copies available to others on request.
The major contributors to this report are listed in appendix III.
Please contact Charles I. Patton, Associate Director, or me on (202)
512-8676 if you have any questions.
L. Nye Stevens
Acting Director
Federal Management Issues
EXECUTIVE SUMMARY
============================================================ Chapter 0
PURPOSE
---------------------------------------------------------- Chapter 0:1
The enactment of the Government Performance and Results Act of 1993
(GPRA) was an important step in shifting the focus of federal
management and accountability away from inputs, such as personnel
levels, and adherence to prescribed processes to a greater focus on
achieving desired program results. Under GPRA, federal agencies are
to implement results-oriented management reforms, such as strategic
planning, establishing program goals and objectives, measuring their
progress in meeting those goals, and reporting publicly on that
progress. Also, to aid performance, agencies may request waivers
from certain administrative rules to provide them with greater
authority over program expenditures.
Australia, Canada, New Zealand, the United Kingdom, and other nations
have been implementing results-oriented management reforms, such as
those required under GPRA, for the past 10 to 15 years. The
countries' relative size and parliamentary form of government suggest
that direct comparison with the United States should be made with
caution. Recognizing this, the Chairman and Ranking Minority Member
of the Senate Committee on Governmental Affairs, the Chairman of the
House Committee on Government Reform and Oversight, and the former
Chairman of the House Committee on Government Operations asked GAO to
identify the approaches other governments took and the experiences
they had in implementing management reforms that may assist federal
agencies in implementing GPRA. This report presents some of the
approaches to and experiences with implementing results-oriented
management reforms in Australia, Canada, New Zealand, and the United
Kingdom. A companion report focused on the approaches used by
leading states to implement results-oriented management reforms.\1
--------------------
\1 Managing for Results: State Experiences Provide Insights for
Federal Management Reforms (GAO/GGD-95-22, Dec. 21, 1994).
BACKGROUND
---------------------------------------------------------- Chapter 0:2
Starting in the 1980s, Australia, Canada, New Zealand, and the United
Kingdom faced serious economic problems, such as economies dominated
by government spending and high budget deficits. Further, government
studies in the four countries found that government organizations
lacked accountability for achieving program results and that there
were many constraints to increasing such accountability. The studies
proposed results-oriented management reforms similar to those
required under GPRA.
In response to these problems, each of the countries embarked on
comprehensive reforms intended to increase the accountability of the
civil service for the effective and efficient management of
government programs. In exchange for increased accountability for
results, the countries provided program managers with more
flexibility in their use of resources.
RESULTS IN BRIEF
---------------------------------------------------------- Chapter 0:3
The approaches the four countries took to implement results-oriented
management reforms included departments and agencies establishing and
communicating a clear direction by defining their missions and goals
through strategic planning, establishing annual objectives that were
directly linked to missions and goals, measuring performance to
assess how well objectives were being met, and reporting on progress.
The countries derived a number of key lessons from their experiences
in developing performance measurement systems. These lessons focused
on enhancing the usefulness of performance information to management
for improving program results. The four countries sought to
reinforce this focus on results by holding agency management
accountable for the results that agencies were trying to achieve.
For example, the countries used performance agreements between
different levels of management to ensure accountability for achieving
agreed-upon performance goals.
As part of the shift to a more results-oriented approach to
management and accountability, the four countries recognized, to
varying degrees, that to more effectively and efficiently manage
their programs and achieve significant improvements in performance,
agencies and managers must be provided with greater flexibility over
resources and incentives. The four governments eliminated detailed
central control of departments' operating expenditures and staffing
levels and provided departments with more authority to manage
resources within overall budget ceilings.
The four countries also found that changing the culture of government
to become more results oriented did not come quickly or easily. They
found that changing the culture of government required agencies to
build the capacity to manage and be held accountable for results.
For example, line managers needed information systems and training to
collect, report, and use performance information and implement other
reforms. To assist the implementation of results-oriented management
reforms and to help provide a central focus for lessons learned,
central management departments or other high-level management groups
provided guidance and assessed implementation over time to determine
the challenges and benefits to the reforms from the perspective of
department management.
GAO'S ANALYSIS
---------------------------------------------------------- Chapter 0:4
STRATEGIC PLANNING,
OPERATIONAL PLANNING, AND
MEASUREMENT HELPED INSTILL A
FOCUS ON RESULTS
-------------------------------------------------------- Chapter 0:4.1
The four countries' governments sought to instill a focus on results
in government management through strategic planning, operational
planning, and performance measurement and reporting. Australian and
United Kingdom officials said that some staff and managers had
participated in establishing goals through the strategic planning
process and that such participation helped to create a sense of
ownership and a commitment to improved program performance.
Although approaches differed, departments and agencies in the four
countries used the planning process as the vehicle for communicating
organizational missions and goals to staff and the public. Operating
plans were used to translate strategic plans into detailed objectives
for day-to-day activities and to identify how progress in achieving
objectives would be measured.
The New Zealand and United Kingdom governments primarily focused on
setting objectives for and measuring the results of program
operations in terms of quantity, quality, efficiency, and cost of
outputs. In addition to such output-oriented measures, the
Australian and Canadian governments focused on establishing
objectives for and measuring the results of programs in terms of
outcomes. Even so, most of the measures GAO observed in performance
reports prepared by departments and agencies in Australia and Canada
were output-oriented.
According to government officials and government evaluations GAO
reviewed, accurately measuring the contribution of program activities
to achieving program outcomes was challenging because factors beyond
the control of program managers, such as economic conditions, could
affect those outcomes. The departments and agencies in the four
countries that developed outcome-oriented measures used qualitative
assessments, customer or client surveys, or formal program
evaluations to determine the impact of their programs.
Government evaluations GAO reviewed and officials GAO interviewed
suggested a number of key lessons that the countries derived from
their experiences in developing performance measures. They suggested
that (1) the types of performance measures developed should flow from
a program's objectives, whether output- or outcome-oriented; (2)
performance measures should reflect the ability of the program's
management to influence the achievement of output or outcome targets;
(3) program staff should have a role in designing the performance
measures for their programs; (4) performance measurement systems
should collect and report on a few key measures and be balanced by
demonstrating different dimensions of performance, such as quantity,
quality, efficiency, and cost; (5) performance measurement systems
should include qualitative in addition to quantitative performance
information and interpretations of performance results; and (6)
performance measurement systems should provide more aggregated
information on the achievement of organization goals to upper
management and more detailed information to program managers. (See
ch. 2.)
ACCOUNTABILITY FOR
PERFORMANCE ADDRESSED BY
RESULTS-ORIENTED MANAGEMENT
REFORMS
-------------------------------------------------------- Chapter 0:4.2
In conjunction with requirements that departments and agencies define
their missions, goals, and objectives, and report on progress in
achieving those objectives, the four countries used performance
information to increase the government accountability for achieving
results in three ways. First, the United Kingdom and Canada measured
the quality of services provided directly to the public and publicly
reported the results. Second, the four countries introduced
performance agreements between different levels of management to
ensure accountability through the management hierarchy for achieving
agreed-upon performance targets. Third, departments and agencies in
the four countries prepared performance reports for their respective
parliaments. These reports were generally available to the public.
The officials GAO interviewed and reports GAO reviewed suggested that
initially the four parliaments made limited use of performance
information in the reports to hold departments and agencies
accountable for meeting goals. However, these sources also suggested
that use of the reports was increasing. Constraints discussed by
these sources included the lack of staff, time, and expertise in the
parliaments to evaluate the performance information in the reports.
(See ch. 3.)
RESULTS-ORIENTED MANAGEMENT
REFORMS INCLUDED RESOURCE
FLEXIBILITY AND INCENTIVES
FOR LINE MANAGEMENT
-------------------------------------------------------- Chapter 0:4.3
As part of the shift to a results orientation in government
management, each of the four countries implemented reforms intended
to provide government managers with greater flexibility over
resources and incentives to more effectively and efficiently manage
their programs. To provide greater flexibility and incentives to
managers, the four governments eliminated detailed central control of
departments' operating expenditures and staffing levels and provided
departments more authority to manage their resources within overall
budget ceilings. In addition, the four governments encouraged top
department management to extend as much flexibility as possible to
their line managers. The four governments also began to simplify
personnel rules and transfer control of human resource management
functions, such as hiring, position classification, promotion, and
pay, from central personnel agencies to departments and from
departments to line managers. Along with this flexibility, the
governments sought to create incentives for more effective and
efficient management by implementing market-type mechanisms, such as
competition and requiring departments and agencies to charge for
their services and fund their operations from revenues collected.
Australia, New Zealand, and United Kingdom evaluated their use of
increased flexibility and incentives. According to staff surveyed,
the benefits included creating incentives to save and the more
efficient allocation of resources. To a more limited extent,
market-type mechanisms enabled government departments and agencies to
operate more effectively and efficiently.
Despite the four governments' policies to extend flexibility and
incentives to line managers within departments, government
evaluations suggested that top management in some departments had
done so in a limited manner or that the departments maintained their
own controls that conflicted with the intent of the reforms.
Although evaluations suggested that the four governments were
satisfied with the progress they had made in providing greater
flexibility and incentives, the evaluations also suggested that
departments were continuing to grapple with such issues as the risk
that accompanied increasing the authority of line managers. (See ch.
4.)
INVESTMENT APPROACHES
SUPPORTED RESULTS-ORIENTED
MANAGEMENT REFORMS
-------------------------------------------------------- Chapter 0:4.4
The four governments found that long-term investments in information
systems and training were critical to the success of their efforts.
For example, according to government reports GAO reviewed and
officials GAO interviewed, the four governments found that managers
needed information systems to collect and report performance
information, manage resources, and implement commercial reforms. The
countries also found they needed to invest in the training of staff
so that they could meet new responsibilities for measuring
performance, interpreting performance information, exercising
spending flexibility, managing human resources, and operating in a
more commercial environment.
Moreover, in the four countries, central management departments or
other high-level management groups provided guidance and training to
department and agency managers on implementing results-oriented
management reforms, such as strategic and operational planning,
performance measurement, and budget flexibility. Those central
management departments or high-level groups assessed implementation
of the reforms from the perspective of department and agency
management. (See ch. 5.)
RECOMMENDATIONS
---------------------------------------------------------- Chapter 0:5
GAO is not making recommendations in this report.
AGENCY COMMENTS
---------------------------------------------------------- Chapter 0:6
Because GAO did not evaluate the policies or operations of any
federal agency to develop the information presented in this report,
GAO did not seek comments from any agency.
INTRODUCTION
============================================================ Chapter 1
The objective of the landmark Government Performance and Results Act
of 1993 (GPRA) is to shift the focus of federal management and
accountability from what federal agencies are doing to what they are
accomplishing. To achieve this shift, GPRA requires federal agencies
and programs to implement results-oriented management reforms, such
as strategic planning, performance planning, and performance
measurement and reporting.\1 GPRA also allows agencies to propose
waivers from nonstatutory budgeting and spending requirements with
the intent of achieving measurable performance improvements. For a
more detailed description of GPRA's requirements, see appendix I.
Some foreign and state governments implemented results-oriented
management reforms similar to the requirements of GPRA. The
countries we selected to review for this report--Australia, Canada,
New Zealand, and the United Kingdom--implemented their reforms over
the past decade or more and have learned from their experiences. A
report we issued in December 1994 discussed the results-oriented
management reforms of selected state governments.\2 Federal agencies
may wish to consider the experiences of these other governments with
results-oriented management reforms as they implement similar reforms
required under GPRA.
--------------------
\1 Results-oriented management of an organization or program entails
articulating its mission and goals, developing plans and measures
tied to the mission and goals, and reporting on program results.
Strategic planning is the process organizations use to assess their
current situation and future path, develop missions and goals, and
devise strategies to achieve the missions and goals. Performance--or
operational--planning is the process organizations use to determine
how their strategic goals will be met through activities of their
staffs. Performance measurement involves the development of
measurable indicators that can be tracked over time to assess
progress made in achieving predetermined goals. Performance
reporting entails the comparison of actual performance achieved
versus predetermined goals for a given period.
\2 GAO issued a related report on results-oriented management reforms
in six state governments--Florida, Minnesota, North Carolina, Oregon,
Texas, and Virginia. See GAO/GGD-95-22, Dec. 21, 1994.
THE COUNTRIES WE SELECTED
INTRODUCED RESULTS-ORIENTED
MANAGEMENT REFORMS
---------------------------------------------------------- Chapter 1:1
The results-oriented management reforms introduced in the four
countries we selected were closely related to the requirements of
GPRA. The four countries--Australia, Canada, New Zealand, and the
United Kingdom--introduced results-oriented management reforms
designed to increase the accountability of their government
organizations and officials for results. These reforms were also
designed to create incentives for line management to maximize the
effective and efficient delivery of government programs.\3
--------------------
\3 Hereafter, "line" refers to the level of an organization that
develops and delivers its services.
THE FOUR COUNTRIES FACED
ECONOMIC PROBLEMS, SOUGHT
ACCOUNTABILITY FOR RESULTS
-------------------------------------------------------- Chapter 1:1.1
According to government officials and reports, during the 1980s, the
four countries we selected experienced serious economic challenges,
such as rising global competitiveness, economies dominated by
government spending, and high budget deficits. Furthermore, each of
the four countries completed studies assessing the management of its
government and reported that government organizations lacked
accountability for achieving program results. These studies reported
that the countries faced constraints to increasing the accountability
of government organizations for results and proposed results-oriented
management reforms similar to those required under GPRA.\4 For
example, in 1983, Canada's Auditor General identified the following
three major constraints to effective government management:\5
Political priorities had a major adverse impact on productive
management.
Managers felt unduly constrained by administrative procedures and
conflicting accountability requirements.
There were too few incentives for productive management but many
disincentives.
Similarly, a special study commissioned by Prime Minister Margaret
Thatcher of Great Britain described the following constraints:\6
Because of a strong emphasis on policy development, focus on the
delivery of government services was insufficient.
There was a shortage of management skills and experience among
senior civil servants in service delivery functions.
Short-term political priorities squeezed out long-term planning.
There was too much emphasis on spending money and not enough on
getting results.
The civil service was too large and diverse to manage as a single
organization.
Central rules took away the flexibility managers needed to manage
for results.
An overly cautious civil service culture resulted in too much
review and worked against personal responsibility.
In New Zealand and Australia, reports described similar constraints
to improving the accountability of government organizations for
results.\7
--------------------
\4 The National Performance Review (NPR) similarly identified
constraints to effective and efficient government management and
proposed reforms designed to reduce bureaucratic constraints and
produce better outcomes for citizens. See From Red Tape to Results:
Creating a Government That Works Better and Costs Less, report of the
National Performance Review, Vice President Al Gore, Sept. 7, 1993.
\5 "Constraints to Productive Management in the Public Service,"
Report of the Auditor General of Canada to the House of Commons,
1983. Minister of Supply and Services, Canada, 1983.
\6 Jenkins, Kate, Karen Caines, and Andrew Jackson. "Improving
Management in Government: The Next Steps," Report to the Prime
Minister. London: HMSO, 1988.
\7 For New Zealand, see Economic Management. The Treasury. P. D.
Hasselberg, Government Printer. Wellington: New Zealand, Jul. 14,
1984. For Australia, see Financial Management Improvement Program:
Diagnostic Study. Australian Public Service Board and Department of
Finance. Prepared in Collaboration with W. D. Scott & Co.
Canberra: Australian Government Publishing Service, Feb. 1984.
OVERVIEW OF RESULTS-ORIENTED
MANAGEMENT REFORMS IN THE
FOUR COUNTRIES
-------------------------------------------------------- Chapter 1:1.2
During the past 10 to 15 years, each of the countries implemented
results-oriented management reforms, such as requiring departments
and agencies to define their program mission and goals, measure the
progress they made in achieving their goals, and report on their
actual progress made compared to goals.\8 To support these reforms,
the countries also sought to simplify central government regulations
and reduce central government controls over spending so that
government managers would have greater flexibility in the way they
used resources to achieve desired program results.
--------------------
\8 Hereafter, "department" designates an organization comparable to a
U.S. cabinet-level department. "Agency" designates an organization
within a department that carries out one or more of its functions.
AUSTRALIA
------------------------------------------------------ Chapter 1:1.2.1
In 1983, Australia began a comprehensive management improvement
effort that centered on changing public service culture; creating the
structures, standards, and practices conducive to good management;
and developing management skills in the public service. To do this,
Australia implemented results-oriented management reforms called
Program Management and Budgeting and the Financial Management
Improvement Program. Program Management and Budgeting required
departments to define the program goals they sought to achieve, plan
how they would achieve those goals, measure program effectiveness and
efficiency, report on program performance, and adjust the operations
of their programs on the basis of that performance information. The
Financial Management Improvement Program provided departments with
greater spending flexibility, stabilized the departments' funding
levels over 3- year periods to enable the departments to do better
medium-term planning, and required departments to achieve annual
savings in their operating expenses.
CANADA
------------------------------------------------------ Chapter 1:1.2.2
Since the early 1980s, Canada has implemented numerous
results-oriented management reforms. To increase accountability and
clarify responsibility for program performance, Canada instituted
performance agreements between upper and lower departmental
management and reduced the number of management levels within
departments. To support the achievement of program performance
goals, the government provided departments with greater authority
over spending and the size of their staffs and simplified human
resource regulations. Canada's most recent management reforms,
Public Service 2000 and the Service Standards Initiative, focused on
improving the quality of government services to citizens.
NEW ZEALAND
------------------------------------------------------ Chapter 1:1.2.3
New Zealand also implemented management reforms designed to increase
the accountability of government managers for achieving desired
program results. Beginning in 1984, New Zealand's management reforms
initially focused on transferring government enterprises to the
private sector or running the government's enterprises in a more
businesslike manner. Later, New Zealand passed two key laws--the
State Sector Act of 1988 and the Public Finance Act of 1989--designed
to create a business orientation in as many other government
functions as possible. New Zealand sought to increase accountability
for achieving desired program results by implementing performance
agreements between departmental chief executives and their ministers
and by requiring departments to report on performance against
targets. In addition, the government provided departments greater
flexibility over spending and human resource management to achieve
the specific results for which they were responsible.
UNITED KINGDOM
------------------------------------------------------ Chapter 1:1.2.4
The United Kingdom implemented the Financial Management Initiative in
1982 to provide managers at all levels of departments with the
information they needed about program goals, performance, and costs
to plan and manage their programs. A 1988 government report on the
implementation of this reform found that progress had been made.
However, because the civil service was seen as too large to manage as
a single entity with uniform sets of rules, the government needed to
take additional steps.\9 As a result of this report, the government
implemented the Next Steps Initiative, which shifted the focus of
management reform from departments as a whole to the "executive" or
service-providing functions within departments. These functions were
reorganized as separate "executive agencies" within departments. The
relationship between the executive agencies and their parent
departments was defined in contracts between department heads and
agency chief executives that defined the performance goals to be
achieved by the agency and provided enhanced discretion over spending
and human resource management. At the time of our review, executive
agencies were the predominant form of government organization
covering about 60 percent of the civil service. The United Kingdom's
reforms also focused on improved service to citizens and increased
competition from the private sector for the provision of government
services.
--------------------
\9 Jenkins, Caines, and Jackson. Report to the Prime Minister.
GOVERNMENT SYSTEMS AND SIZES
DIFFERED SIGNIFICANTLY
---------------------------------------------------------- Chapter 1:2
Compared to systems in the United States, the significantly smaller
size and the different government systems of the four countries
suggest that while the countries' experiences can provide general
insights for the United States, direct comparisons to systems in the
United States should be made with caution. Some comparative
statistics on the size of the four countries' economies and public
sectors are provided in table 1.1. In terms of the size of their
economies, the countries we studied compare with some of our state
governments. For example, in 1990 California had a gross state
product of $745 billion; New York, $467 billion; Illinois, $272
billion; and Mississippi, $40 billion.
Table 1.1
Comparative Economic and Government Data
for United States, Australia, Canada,
New Zealand, and United Kingdom, 1991
Co
un Civil
tr Population servants GDP\a Public
ie (in (in (in sector
s millions) thousands) billions) outlays\bc Deficit\bcd Taxes\bce
-- ----------- ----------- ----------- ----------- ----------- -----------
Un 252.2 3,091.1 $5,610.8 36.7% 3.4% 29.8%
i
t
e
d
S
t
a
t
e
s
Au 17.3 148.1 280.0 36.6 2.6 29.2
s
t
r
a
l
i
a
Ca 27.0 217.8 520.6 47.9 6.3 37.3
n
a
d
a
Ne 3.4 42.9\d 46.6 NA NA 36.0
w
Z
e
a
l
a
n
d
Un 57.6 565.3\d 899.8 39.7 2.7 36.0
i
t
e
d
K
i
n
g
d
o
m
--------------------------------------------------------------------------------
\a Gross domestic product (GDP) is everything produced by a nation
during a given period, except earnings from overseas.
\b Percentage of GDP.
\c For purposes of comparability among countries, the most commonly
used standardized measures of fiscal deficits and surpluses are those
for all levels of government, or general governments, reported by the
Organization for Economic Cooperation and Development (OECD) from the
United Nation's System of National Accounts. However, deficits for
all general governments may not be exact proxies for budget deficits
as they are perceived in a particular country.
\d The figure for the United States includes the Social Security
surplus. The estimate is 4.4 percent excluding the Social Security
surplus.
\e Data are for 1992.
Source: OECD.
Unlike the United States, all four countries have parliamentary
systems of government. In a parliamentary system, a prime minister
and cabinet ministers, each of whom leads a major department or group
of departments, are drawn from the ranks of the leading party of
parliament. Also, unlike the United States, the United Kingdom and
New Zealand have unitary political systems in which the national
government also provides local services, such as education, much as
state and local governments do in the United States. Like the United
States, Canada and Australia have federal government systems in which
the federal government provides grants to provincial or state
governments to provide some local services. Among the four
countries, Australia, Canada, and the United Kingdom have two-house
parliaments, and New Zealand has a one-house parliament.
The United States shares a strong civil service employment tradition
with the four countries, except for political appointments to top
department management positions in the United States. In departments
in the four countries, top management positions below the minister
generally are filled through nonpolitical civil service appointments
either from within the career civil service or, increasingly, from
outside of government. We have noted that maintaining a clear and
continuing commitment to performance improvement can be extremely
difficult in the U.S. government due to turnover among political
appointees.\10 Experience has shown that obtaining and sustaining a
commitment to improvements will be a continuing challenge in the
federal government because improvement efforts must be maintained
well beyond the tenure of the average political appointee. Our work
has shown that the average tenure of top political appointees in
large agencies is about 2 years, and that some positions are vacant
longer than they are filled.\11
--------------------
\10 Government Reform: Goal-Setting and Performance
(GAO/GGD-95-130R, Mar. 27, 1995).
\11 Political Appointees: Turnover Rates in Executive Schedule
Positions Requiring Senate Confirmation (GAO/GGD-94-115FS, Apr. 21,
1994).
OBJECTIVE, SCOPE, AND
METHODOLOGY
---------------------------------------------------------- Chapter 1:3
The Chairman and Ranking Minority Member of the Senate Committee on
Governmental Affairs, the Chairman of the House Committee on
Government Oversight and Reform, and the former Chairman of the House
Committee on Government Operations asked us to identify state and
foreign governments' approaches to and experiences with implementing
results-oriented management reforms that may assist federal agencies
in implementing GPRA. As part of that request, this report presents
some of the approaches taken to implement results-oriented management
reforms in Australia, Canada, New Zealand, and the United Kingdom.
Also as part of that request, our December 1994 report discussed the
results-oriented management reforms of six U.S. states.\12
To select the countries, we reviewed OECD's surveys on public
management, which report on management innovations in member
countries. We also reviewed a 1990 article on performance budgeting
in other countries by Allen Schick, who is an authority on budget
systems and policies, public management, and government finance.\13
On the basis of those surveys and the article, we judgmentally
selected Australia, Canada, New Zealand, and the United Kingdom as
among the countries that were particularly advanced in implementing
results-oriented management reforms.
We visited Australia, Canada, New Zealand, and the United Kingdom
between December 1991 and May 1992 to interview officials from each
country's government. To obtain a variety of perspectives, we met
with officials from the countries' central management departments;\14
national audit offices; departments and agencies with different
functions, such as policy development, regulation, service delivery,
and research and development; consultants for these governments; and
academics.
These officials, consultants, and academics provided us with
documents, including government-sponsored evaluations of their
countries' management reforms and department and agency strategic
plans, operational plans, and performance reports. In this report,
we discuss the findings of those government-sponsored evaluations and
some of our own observations concerning the plans and reports
prepared by departments and agencies in the four countries. The
major documents we relied on are listed in appendix II.
Our review focused on aspects of ongoing public sector reforms in the
four countries that were similar to the requirements of
GPRA--strategic planning, performance planning, performance
measurement, performance reporting, managerial flexibility, and
performance budgeting. We did not independently evaluate the
effectiveness of their reforms, and we did not attempt to compare
their approaches or the relative successes or failures among the
countries. The emphasis we place on a particular country's
experiences in implementing reforms reflects the documents and
comments that were provided to us at the time of our review and does
not necessarily reflect the absence of those experiences in the other
countries.
We did our work from December 1991 to December 1993 in Washington,
D.C., and the four countries in accordance with generally accepted
government auditing standards. Because we did not evaluate the
policies or operations of any federal agency to develop the
information presented in this report, we did not seek comments from
any agency.
--------------------
\12 GAO/GGD-95-22, Dec. 21, 1994.
\13 Schick, Allen. "Budgeting for Results: Recent Developments in
Five Industrialized Countries," Public Administration Review
(Jan./Feb. 1990), pp. 26-34. The article discussed recent
developments in performance measurement and budgeting in five
countries: Australia, Canada, Denmark, Sweden, and the United
Kingdom.
\14 Hereafter, "central management department" designates an
organization comparable to a U.S. central management agency, such as
the Office of Management and Budget (OMB) or the Office of Personnel
Management.
STRATEGIC PLANNING, OPERATIONAL
PLANNING, AND MEASUREMENT HELPED
INSTILL A FOCUS ON RESULTS
============================================================ Chapter 2
The four countries attempted to instill a focus on results in
government management by requiring departments to plan strategically,
set goals and objectives for operations, and measure performance
against goals and objectives. Table 2.1 describes the approaches the
four countries took to strategic planning, operational planning, and
performance measurement. A key element of strategic planning
suggested by Australian and United Kingdom officials was that the
involvement of staff in the planning process helped communicate
organization goals. Operational plans by departments in the four
countries translated how strategic goals would be met through
everyday activities and how progress would be measured. The focus of
goal-setting and performance measurement in Australia and Canada was
on the outcomes, or the final impacts of programs, while the focus in
New Zealand and the United Kingdom was on outputs, or the number and
quality of services produced. The countries reported a number of
lessons they learned for measuring program performance that focused
on enhancing the usefulness of the performance information for
intended audiences.
Table 2.1
Approaches to Annual Planning and
Measurement in the Four Countries
Performance
Countries Strategic plan Operating plan measures
------------------ ------------------- ------------------- ------------------
Australia Approach varies, Units within Output-and
but generally departments prepare outcome-oriented
identifies a operating plans
department's that typically
mission and goals include targets
and the strategies that need to be met
and programs to to achieve the
achieve those goals in the
goals. Sets strategic plan.
strategic
direction,
articulates
corporate values,
and serves as an
umbrella document
for lower level
plans.
Canada\a Includes program Departments prepare Output-and
objectives, program annual operating outcome-oriented
elements, a results plans that specify
statement for each the program results
element, statements anticipated, the
that demonstrate goals to be
how program element achieved, and the
results contribute associated costs.
to overall
objectives, and
what the program
results will cost.
Serves as the basis
for operational
planning.
New Zealand Includes the \b Output-oriented
government's
desired outcomes,
department purpose,
external
influences,
background
information,
outputs to be
produced,
relationship
between outputs and
outcomes, the cost
of each output,
criteria for
assessing
performance, other
management issues,
and financial
performance.
United Kingdom\c Both a planning and \b Output-oriented
a reporting system
that provides top
management with
performance
information for
each of the
department's
activities to
support the setting
of departmentwide
objectives,
decisions on
priorities, the
allocation of
resources, and the
review of
achievements. Top
management set
targets and
resources for
successive
management levels
that corresponded
to the
departmentwide
objectives and
resource plans.
--------------------------------------------------------------------------------
\a Special operating agencies within departments annually prepare 3-
to 5-year strategic business plans.
\b Strategic plan includes elements of both strategic and operational
planning.
\c Executive agencies within departments prepare multiyear corporate
plans.
Source: Country guidance to departments and evaluations of
results-oriented management reforms.
STRATEGIC PLANNING ALIGNED
STAFF AND ACTIVITIES TOWARD
GOALS
---------------------------------------------------------- Chapter 2:1
Departments and agencies in the four countries used a variety of
approaches to strategic planning that had common aims. According to
the planning documents and government reports we reviewed, these
approaches included the identification and communication of missions
and goals and the description of activities designed to achieve those
missions and goals.\1 Australian departments engaged in strategic
planning to identify their mission and goals and described the
strategies needed to achieve those goals. New Zealand departments
annually prepared strategic plans that included performance targets
for the next year. The plans described a department's mission;
desired outcomes; significant issues affecting performance; the
outputs to be produced at an agreed cost, quantity, and quality;
management goals; and financial goals. Strategic planning in United
Kingdom departments--called "top management systems"--involved annual
exercises in which the management of operating divisions within
departments provided key information about performance results to the
department's top management. The department's top management used
this information to review the results against previously set goals
and to set new goals for and allocate resources to the operating
divisions. In Canada, departments described their goals and
objectives in documents called Operational Plan Frameworks. In
Australia, Canada, and the United Kingdom, some agencies or divisions
within departments published their own multiyear strategic plans.
Comments provided by some Australian and the United Kingdom officials
in interviews and evaluations suggested that the goal of their
strategic planning processes was to create a corporate culture by
aligning staff and activities with the achievement of common
organizational goals. For example, in the United Kingdom, the
Secretary of the Department of the Environment wrote to his staff:
"The aim [of the top management system] is to ensure everybody
has a clear idea of the objectives which their Division is
pursuing, and has an opportunity to get involved in developing
these objectives, in planning how they are going to be met, and
in looking back to see how far they have been achieved.
Information systems alone do not lead to good management. But
they can help all of us by providing a framework to see how our
own Division's work contributes to the Department's policies,
and to measure how well we are doing."\2
According to Australia's evaluation of its reforms, several
departments commented on the importance of involving staff in
developing their strategic plans. According to those departments,
the benefits from such involvement included obtaining staff support
for the departments' goals and helping staff relate their own work to
those goals. For example, the Department of Social Security
submitted the statement that "corporate and strategic planning were
developed after wide consultation in order to win broad commitment to
the plans" and that "these processes had contributed to a sense of
corporate identity."\3 Similarly, the Department of Employment,
Education, and Training submitted the statement:
"the consensus amongst managers is that the [strategic planning]
process plays a significant role in focusing the attention of
staff at all levels on the direction, aims and goals of the
organisation. It is also regarded as a significant factor in
the cultivation of a greater outcomes/performance orientation
among [Department of Employment, Education, and Training]
staff."\4
Australian Department of Finance officials we interviewed stressed
the importance of involving all levels of the organization in the
planning process. One of the officials contrasted an early strategic
planning effort that was developed primarily by top management to
later efforts that involved a large number of staff. The official
said the early effort was a good start but did little to change the
culture of the department. In contrast, the later efforts involved
staff from all levels of the organization in working through
strategic issues and defining the department's customers. The
official said that this wide participation helped to change the
culture of the department from one that was control-oriented to one
that was more customer-oriented.
--------------------
\1 The plans we reviewed from the four countries were not called
strategic plans but provided information similar to that required for
strategic plans under GPRA, such as mission, goals, objectives, and
strategies for achieving those goals and objectives. The Australian
and New Zealand plans we reviewed were generally called corporate
plans. United Kingdom and Canadian departmental plans were called
top management systems and Operational Plan Frameworks, respectively.
Also, the strategic plans prepared by departments in the four
countries were updated annually rather than every 3 years as required
under GPRA. For ease of reference, the word strategic is used to
represent all of these plans.
\2 Top Management Systems. Report by the Cabinet Office
(MPO)/Treasury Financial Management Unit Submitted January 1985 (June
1985), p. 31.
\3 The Australian Public Service Reformed: An Evaluation of a Decade
of Management Reform. Prepared for the Commonwealth Government's
Management Advisory Board with Guidance from its Management
Improvement Advisory Committee. Task Force on Management
Improvement. Canberra: Australian Government Publishing Service,
Dec. 1992, p. 339.
\4 The Australian Public Service Reformed, p. 341.
OPERATIONAL PLANS LINKED
OPERATIONS TO STRATEGIC PLANS
---------------------------------------------------------- Chapter 2:2
The four countries we reviewed supported their strategic plans with
operational plans that translated overall goals into more detailed
objectives for everyday activities and included targets for
performance. Progress in achieving objectives could be determined by
comparing actual measures of performance with the targets contained
in the plans. Reports on progress made toward achieving objectives
were to provide feedback to managers at all levels and enable them to
identify operations or strategies that needed adjustment. United
Kingdom and Australian government evaluations described operational
plans and performance reports as management tools that were effective
only to the extent that they were useful to and used by line managers
and upper management to improve an organization's performance.
Certain departments in these countries emphasized the need to create
operational plans and reports that provided managers at all levels
with the information they needed, when they needed it, to meet their
performance goals.
In the United Kingdom, according to a 1986 National Audit Office
report, departments recognized the need for managers at successive
levels down the line to establish performance targets for the
objectives that were contained in the departments' strategic plans.
The strategic and operational planning systems developed by United
Kingdom departments in the mid-1980s were based on the same data to a
large extent but at different levels of aggregation and detail. Top
management used performance information reported by successive
management levels to set overall department goals and objectives.
Successive management levels then developed new objectives and
performance indicators that were tied to the achievement of the
overall goals and objectives. The report concluded that the
availability of consistent information for decisionmaking throughout
an organization was one of the main benefits of such an integrated
approach.
In 1991, the United Kingdom National Audit Office reviewed the
development of management information systems for operational
planning and monitoring in three departments with very different
missions. The audit office found that each department had
established a hierarchy of objectives from top management down to
line staff and that these departments had made good progress in
measuring and monitoring performance. Although the frequency with
which performance information was produced for comparison to
objectives varied, managers reported that they were receiving more
useful performance information for managing resources than under
previous management information arrangements.
Australian departments also linked their day-to-day activities to the
achievement of the goals in their strategic plans by developing
separate operational plans, according to several Australian
government reports. Line managers were responsible for planning to
meet departmental goals by devising strategies and operational plans
to implement the strategies. For example, the Department of
Education, Employment, and Training linked its overall strategic plan
to individual program strategic plans and annual operational plans
that defined specific objectives and targets. The Department of
Health, Housing, and Community Services developed operational plans
for each work area within its programs. The operational plans
consisted of strategies that were broken down into measurable targets
and specific tasks. Table 2.2 illustrates how an Australian program,
the Australian Customs Service's Barrier Control, linked its overall
purpose, or mission, to objectives, strategies, actions to be taken,
and desired results.
Table 2.2
Excerpts from the Australian Customs
Service, Barrier Control Action Plan,
1991-1992
----------------------------- -----------------------------
Purpose To ensure all persons, goods,
vessels, and aircraft
entering or leaving Australia
are brought within the
control of Customs and that
they remain within Customs
control until all Customs
requirements have been
satisfied.
Objective Facilitate through the
Customs barrier, the
legitimate movement of
persons, goods, ships, small
craft, and aircraft without
detriment to the control
environment.
Strategic [Further] the development of
initiative air cargo automation by the
introduction of a national
air cargo system in July at
Sydney and Melbourne
airports, with progressive
implementation at other
regional centres.
Key action Implementation of air cargo
automation at nominated
airports.
Key result Implementation by target
date.
------------------------------------------------------------
Source: Australian Customs Service, Barrier Control Action Plan,
1991-1992.
PERFORMANCE MEASURES REFLECTED
PROGRESS TOWARD ACHIEVING
OPERATIONAL OBJECTIVES
---------------------------------------------------------- Chapter 2:3
We reviewed performance reports prepared by departments and agencies
in each of the four countries and observed that the way results were
measured varied both within each and among all the governments we
studied. In many cases, results were measured in terms of the
quantity; quality, such as timeliness, accuracy, or lack of defects;
and/or efficiency of services provided. The countries also measured
financial results, such as the recovery of full economic costs
through user-charging. Table 2.3 provides examples of quantity,
quality, efficiency, and financial performance measures.
Table 2.3
Examples of Performance Measures Used by
the Four Countries
Organization,
Measure Example Target country
--------------- ------------- ------------- -------------
Quantity Number of Increase the The
services number of Government
provided completions Property
effected to Lawyers,
5,910 United
Kingdom
Quality Service Pay 80 Social
(Timeliness) provided percent of Security, Job
within new Job Search
approved Search Allowance,
timeframe Allowance Australia
claims within
2 days of the
client
lodging their
first income
statement
Quality Service Provide a Inland
(Accuracy) provided service that Revenue,
lacks defects ensures that Taxpayer
in 90 percent Information
of cases the Services, New
customer is Zealand
given a
technically
correct
answer in a
form that is
understandabl
e
Efficiency Service Process Revenue
provided per 55,766 Canada,
unit of input travellers Customs and
per person- Excise, Port
year Operations
Financial Meet a Achieve a Her Majesty's
financial current cost Stationery
target, such operating Office,
as recovering profit of �8 United
the full cost million, Kingdom
of operations before
through fees exceptional
items
------------------------------------------------------------
Source: Country data.
Results were also expressed as outputs relative to planned program
objectives and strategies to achieve those objectives. In Australia,
these outputs were often described as "outcomes" of the strategies
employed. For example, the Australian Customs Service, the details
of whose Barrier Control Action plan are depicted in table 2.2,
described the desired result of the Customs Service's strategy to
further develop air cargo automation in terms of an output--the
implementation of automation systems at specific airports by a
specific date. The assumption that underlies this example is that
implementing such systems would help achieve the Customs Service's
subobjective of facilitating the movement of people and things
through Customs barriers in airports. However, without an evaluation
of the impact of the automation systems on the speed with which
people and things were processed, the final outcome of the automation
systems would not be known. This type of outcome-oriented
performance information was the least evident in the performance
reports we reviewed.
In New Zealand and the United Kingdom, the lack of outcome-oriented
performance information was the result of government policy to focus
primarily on output-oriented performance information. New Zealand
and United Kingdom government policies called for departments and
agencies to be accountable for effective and efficient delivery of
specific services. Therefore, these governments called for
departments and agencies to develop input- and output-oriented
performance measures, such as the quantity, quality, efficiency, and
cost of the services provided. In contrast, Australian and Canadian
government policies called for departments to evaluate and report on
the effectiveness of government programs in achieving desired
outcomes for program target groups. Therefore, these governments
called for departments to measure program outcomes, in addition to
inputs and outputs. However, despite their focus on outcomes,
Australian and Canadian government studies of the progress
departments made in measuring program outcomes indicated that while
some outcome-oriented performance measurement was occurring, more was
needed.
MEASURING PROGRAM OUTCOMES
POSED CHALLENGES
-------------------------------------------------------- Chapter 2:3.1
A common challenge discussed by government officials and the studies
we reviewed was that program outcomes were difficult to measure
because of the difficulty of determining the effect program
activities had on outcomes versus the effects of nonprogram factors,
such as changes in the economy.\5 For example, an official from
Canada's National Sciences and Engineering Research Council, an
organization whose programs provide grants to universities,\6 said
that one challenge the Council faced was measuring the contribution
its grants made to the programs' desired outcomes versus the
contributions of other activities in the research community, such as
grants provided by the universities themselves.
The Australian Customs department characterized the difficulty of
assessing the impact of program activities on desired program
outcomes as follows:
"Problems continue to be encountered in verifying that stated
long-term objectives have been met through day to day program
management and operational activities; that is, adequate
assessment of outcomes by analysis of performance indicators has
been difficult to achieve."\7
--------------------
\5 For example, the outcome of a jobs program might be adversely
affected by a downturn in the economy that resulted in increased
unemployment.
\6 Canada's National Sciences and Engineering Research Council's
mission involved supporting scientific research in universities,
investing in training the next generation of scientists, and creating
research partnerships between universities and private industry.
\7 The Australian Public Service Reformed, p. 335.
PROGRAM EVALUATION AND
SURVEYS HELPED TO MEASURE
PROGRAM EFFECTIVENESS
-------------------------------------------------------- Chapter 2:3.2
The Australian and Canadian governments used program evaluation and
client surveys to help assess program effectiveness in achieving
desired outcomes. Australian and Canadian reports and guidance
stressed that tracking the progress programs made in achieving
desired outcomes required--in addition to ongoing input, output, and
efficiency measures--periodic program evaluations and client surveys.
In Australia, program evaluation, along with performance measurement,
was considered an integral part of program management, and
departments were required to evaluate the effectiveness of each of
their programs every 3 to 5 years. For example, according to a 1993
Department of Finance study, the Australian Health, Housing, and
Community Services department evaluated the effectiveness of its aged
care assessment program. The objective of the program was to ensure
that aged people in need of a substantial level of care and support
gained access to the available residential and community care
services appropriate to their needs. An evaluation of the program
provided information on the extent to which access to residential and
community care services enabled elderly people to stay in their
homes.\8
According to Canadian policies established in 1976 and 1977,
departments were to have in place the ability to measure
effectiveness and report the results in both an ongoing and periodic
way. The two types of activities were to differ in their focus and
use. Ongoing effectiveness measurement represented the compilation
of information on program outputs and outcomes gathered on a regular
basis, allowing program management to monitor the operations of the
program. Periodic studies of program effectiveness involved a more
in-depth review of whether program objectives were being met.
For example, according to the 1993 report of the Auditor General of
Canada, the objective of the government's Cape Breton Investment Tax
Credit program was to promote durable employment in Cape Breton by
encouraging new investment in the region. The program provided a
60-percent tax credit to new investors in the region. The Department
of Finance evaluated the program using such measures of effectiveness
as
the additional number of jobs created in the region as a result of
the tax credit,
the cost per job created versus the cost of other regional
development measures,
value of new investment by private industry as a result of the
program, and
the reduction in regional unemployment disparities.
With regard to the value of new investment generated by the program,
the Department of Finance determined that only 19 percent of the
total new investment in Cape Breton could be attributed to the
program and that the remaining investment would have occurred whether
or not the tax credit was offered. On the basis of this evaluation,
the tax credit was discontinued.
In addition to program evaluations, certain departments in each of
the countries we reviewed relied on surveys of program recipients to
measure program effectiveness. For example, Canada's Natural
Sciences and Engineering Research Council used surveys to assess the
effectiveness of one of its grant programs: "More than 90% of
Canadian University administrators surveyed stated that the Operating
Grants [Research Grants] program played an important role in
retaining good researchers in Canada." The Australian Department of
Finance study cited the Aged Care Assessment program within the
Australian Health, Housing, and Community Services department, which
used client satisfaction with the types of services recommended for
them as one of its outcome measures.\9 According to New Zealand's
fiscal year 1993 to 1994 budget, the Department of Labor's Promoting
Excellence in Safety and Health Management program was to measure its
own effectiveness by randomly surveying selected clients to confirm
the perception that the products or publications provided are
accurate, relevant, useful, and well presented.\10 In the United
Kingdom, National Health Service Estates, the agency responsible for
managing real estate for the national health service, held workshops
with a cross-section of customers to review three major product
areas. As a result of these workshops, the three product areas were
to be produced, delivered, and paid for differently to match customer
needs.
--------------------
\8 Funnell, Sue. Effective Reporting in Program Performance
Statements. Prepared for the Department of Finance. Performance
Improvement Pty. Ltd., Australia, May 1993, p. 34.
\9 Funnel. Effective Reporting in Program Performance Statements, p.
34.
\10 New Zealand refers to lines of effort within departments as
"output classes" rather than programs.
STUDIES PROVIDED KEY
PERFORMANCE MEASUREMENT LESSONS
---------------------------------------------------------- Chapter 2:4
The government studies and performance reports we reviewed suggested
a variety of performance measurement lessons learned for departments
in the four countries. These lessons, discussed in detail below,
focused on enhancing the usefulness of performance measurement
systems to the recipients of the performance information for
improving program performance and decisionmaking.
LINKING MEASURES TO GOALS
AND OBJECTIVES
-------------------------------------------------------- Chapter 2:4.1
We reviewed performance reports prepared by departments and agencies
in each of the four countries and observed that the type of
performance measures chosen--whether output- or
outcome-related--varied depending on the nature of a program's goals
and objectives. Programs with service-oriented goals developed
measures of the quantity, quality, cost, and efficiency of their
service delivery. For example, the stated objectives of the United
Kingdom's Social Security Contributions Agency, which administered
the collection of revenue for the National Insurance system similar
to Social Security in the United States, included the following:
ensure compliance with the law relating to National Insurance
contributions, and
provide an information and advisory service to the business
community and members of the public.
To address these objectives, the agency developed measures that
included the following:
increase aggregate yield by increasing collection of contributions
arrears by �13.3 million over 1991-92,
clear 99 percent of benefit enquiries handled clerically in 3
working days with 98-percent accuracy,
provide a level of public service considered satisfactory by at
least 75 percent of customers surveyed.
We observed that programs attempting to achieve a social impact
developed outcome-oriented measures of program performance. For
example, the main objective of one Australian employment program was
to provide financial support to unemployed people who were actively
seeking work and to encourage their reentry into the workforce. A
subobjective of the program was to provide incentives for self-help
and financial independence. One outcome measure that addressed this
subobjective was "the proportion of allowees who [did] not rely on
payments under this program as their sole means of support."
SELECTING PERFORMANCE
MEASURES THAT STAFF CAN
INFLUENCE
-------------------------------------------------------- Chapter 2:4.2
The Australian Department of Finance study suggested that program
management should develop performance measures that can be directly
influenced by program staff. This is particularly important in
programs where a direct link between what program staff do and the
desired final outcomes may not be clearly related. For example, the
study reported that developing performance measures for grant
programs was problematic because the provision of the grant is only
one of many factors that affect final outcomes for the target of the
grant. Similarly, the study reported that developing performance
measures of the effectiveness of policy advice was problematic
because its impact on final outcomes was difficult to determine.
According to the study, policy advice "might be expected to have
outcomes that pertained to changes in knowledge, skills, attitudes
and perhaps behaviour of those being advised, to their own or others'
benefit."\11 In a further example, a department's evaluation and
analysis staff reported that
"all but one [of their 19 evaluations] were found to have been
worthwhile and useful to program managers. The information was
used in modifying program management, in Cabinet submissions,
Ministerial reports to Parliament and in advising Ministers."\12
--------------------
\11 Funnel. Effective Reporting in Program Performance Statements,
p. 3.
\12 Funnel. Effective Reporting in Program Performance Statements,
Appendix, p. 24.
INVOLVING USERS OF
PERFORMANCE INFORMATION IN
THE DEVELOPMENT OF PLANS AND
MEASURES
-------------------------------------------------------- Chapter 2:4.3
A 1991 study by Canada's Comptroller General suggested that in order
for performance measurement and reporting systems to be useful, they
need to be "owned" by line managers and others who would use the
performance information.\13 The study suggested that such ownership
could be achieved by involving those who would directly use the
performance information in designing the measures. According to a
1985 United Kingdom Treasury study of strategic planning in 16
departments, one of the benefits of planning was that line managers
used the resulting plans for their own management purposes and not
just to provide required information to higher management.
According to government studies and officials, some United Kingdom
and Canadian departments made special efforts to involve their line
managers and staffs in developing performance measurement systems for
their own use.\14 For example, according to a 1986 study by the
National Audit Office, the United Kingdom Department of Environment,
after initially encountering skepticism by lower level managers
toward operational planning, began involving line managers in the
definition of objectives, targets, and tasks. An internal review
found encouraging results from this approach. Lower level managers
were setting objectives and measuring performance. These managers
reported they welcomed the new approach because they and their staffs
were more involved in management issues. Similarly, some Canadian
officials commented on the importance of line staff participation in
developing performance measurement systems. For example, one
department worked with its enforcement staff to develop a performance
measurement system that would help line managers with operational
issues and allow top managers to focus on strategic issues.
--------------------
\13 Into the 90s: Government Program Evaluation Perspectives.
Office of the Comptroller General. Communications and Consultations
Division, Treasury Board of Canada, Jun. 1991, p. 28.
\14 A performance measurement system is the set of performance
measures and associated performance targets against which actual
performance is collected and reported.
MAKING PERFORMANCE
MEASUREMENT SYSTEMS
SELECTIVE AND BALANCED
-------------------------------------------------------- Chapter 2:4.4
The 1991 study by Canada's Office of the Comptroller General also
recommended that, among other things, performance measurement systems
should be selective and balanced.\15 The study stated that a
performance report needs to focus on a small number of measures
critical to a program's performance. The study also suggested that
to provide a balanced perspective on program performance, it is
useful to have a variety of performance measures, such as quantity,
quality, and efficiency. Such a variety of measures is important
because they "pull" program performance in different directions and
preclude an overreliance on one measure at the expense of the others.
We reviewed performance reports prepared by executive agencies in the
United Kingdom and observed examples of selective and balanced
performance measurement systems. The United Kingdom publishes an
annual report that includes a one-page performance report for each
executive agency that describes the agency's performance for the
current year and plans for the next year in terms of quality,
quantity, efficiency, and finance. In 1993, the average number of
performance measures reported by an agency was eight. The Social
Security Resettlement Agency, charged with providing housing to the
homeless, either directly or through grants to nonprofit providers,
reported seven key measures of quantity, quality, and finance. Table
2.4 shows how this agency used a balanced and selective set of
measures.
Table 2.4
Selective and Balanced Performance
Measurement System Reported by the
Social Security Resettlement Agency,
United Kingdom, as of December 1993
Type of measure Target
------------------ ----------------------------------------
Quantity Provide not less than 95% of published
facilities
Quality Survey residents to confirm that not
less than 85% express satisfaction with
standards [of service]
Financial Manage the agency's resources so as to
deliver its business plan within a total
budget of �31.065 million, including
�12.846 million for the costs of
existing resettlement units and agency
headquarters
------------------------------------------------------------
Source: Next Steps: Agencies in Government, Review 1993. London:
HMSO, Dec. 1993. 113.
--------------------
\15 Into the 90s: Government Program Evaluation Perspectives, p.
28.
INCLUDING QUALITATIVE
PERFORMANCE INFORMATION AND
EXPLANATIONS OF RESULTS
-------------------------------------------------------- Chapter 2:4.5
The Canadian Comptroller General's 1991 study also recommended that
performance measurement systems include qualitative performance
information in addition to quantitative measures.\16 According to the
study, program performance can rarely be adequately captured through
quantitative measures alone. Qualitative information on performance
can help clarify aspects of performance that are difficult to
quantify or provide needed explanatory information.
The Australian Department of Finance 1993 study of performance
reports prepared by departments recommended that all performance
reports should include qualitative in addition to quantitative
performance information and interpretations and explanations of
results regardless of whether results were above or below
expectations. This qualitative information is critical to
identifying and understanding the factors that contributed to a
particular result. The study also suggested providing qualitative
information, such as the robustness of the measures used, factors
that were within the control of the program, and factors that were
outside the control of the program.\17
A 1991 case study on using performance information for management
decisionmaking prepared by the Programs Division of the Australian
Department of Employment, Education, and Training described sources
of qualitative performance information, such as periodic program
evaluations; research projects; and feedback from field staff,
clients, and interest groups. The department used such qualitative
information to provide insights on how its program's outcomes were
achieved. For example, the department used qualitative data to
identify why the performance of its JOBSTART program was superior to
its other employment programs.
--------------------
\16 Into the 90s: Government Program Evaluation Perspectives, p.
28.
\17 Funnell. Effective Reporting in Program Performance Statements,
p. 4.
REPORTING PERFORMANCE
INFORMATION TO APPROPRIATE
AUDIENCE
-------------------------------------------------------- Chapter 2:4.6
A 1985 United Kingdom government study emphasized that performance
measurement and reporting systems should contain performance measures
that are most appropriate for the intended audience, such as line or
top management. The study described the performance measurement
system intended for top management as the tip of a pyramid of
information systems that was drawn from the same data, but at higher
levels of aggregation than at the line management level. For
example, according to the study, in the Customs and Excise
Department, top management's performance measurement systems became
increasingly a strategic framework that lower level units could use
to prepare more detailed plans. Reports to top management were
restricted to overall aims and objectives in terms of final outputs
achieved.
RESULTS-ORIENTED MANAGEMENT
REFORMS ADDRESSED ACCOUNTABILITY
FOR PERFORMANCE
============================================================ Chapter 3
The four countries took a variety of approaches to using performance
information to increase the accountability of government
organizations for delivering quality services to the public and for
achieving the government's desired goals. One approach employed by
the United Kingdom and Canada was to publish performance standards
for departments and agencies that directly served the public and
measure and report to the public on performance against those
standards. Another approach employed by the four countries was to
introduce performance agreements between higher and lower management
levels of departments and agencies. These agreements specified
management's responsibility for meeting annual performance targets
that contributed to a department or agency's overall goals. Finally,
results-oriented management reforms in the four countries also called
for increased accountability for performance to parliament through
performance reporting. Although the parliaments initially made
limited use of performance reporting, studies and officials suggested
that the use of performance reports by the countries' parliaments was
increasing. Table 3.1 summarizes the approaches the four countries'
used to increase the government organizations' accountability for
performance.
Table 3.1
Approaches to Reinforcing Accountability
for Performance in the Four Countries
Co
un Pay
tr Service Types of Parties linka Provided
y principles standards involved Purpose ge Content to
-- ----------- ------------- -------- ------------ ----- ---------- --------
Au \a \a All Related Yes Program Parliame
st senior individual objectives nt and
ra and mid- performance in terms the
li level to the of public.
a managers achievement outputs,
. of the outcomes,
department's and costs,
goals and and an
objectives. assessment
of whether
those
objectives
have been
achieved.
Ca Service Timeliness, Secretar Detailed a Yes Program Parliame
na description accuracy, y of the limited objectives nt and
da , quality reliability, Treasury number of , the
pledges, responsivenes Board key performanc public.
delivery s, coverage, and management e against
targets, client departme issues for targets,
complaint satisfaction. nt which the and
mechanisms, deputy deputy program
and costs. minister minister costs.
Performance s. would be
information held
published. accountable.
Ne \a \a Departme Detailed the Yes Quantity, Parliame
w nt chief quality, nt and
Ze minister executive's and cost the
al and key of outputs public.
an departme management against
d nt chief objectives, targets.
executiv responsibili
e. ty for
meeting the
department's
output
performance
targets, and
obligation
to support
governmentwi
de concerns
and
policies.
Un Standards, Timeliness, Departme Outlined Varie Output- Parliame
it information accuracy, nt specific d oriented nt and
ed and reliability, minister output and and the
Ki openness, responsivenes and financial financial public.
ng choice and s, coverage, chief performance performanc
do consultatio client executiv targets to e
m n, courtesy satisfaction. e of an be achieved informatio
and executiv by the n against
helpfulness e agency in a targets.\b
, putting agency. given year.
things
right, and
value for
money.
-----------------------------------------------------------------------------------
\a Did not take this approach. However, New Zealand departments set
targets for quality of service and reported results along with other
performance information. Australian departments also reported on
quality of service where appropriate.
\b Both departments and executive agencies publish this information
in separate reports. The government summarizes this information for
all executive agencies in an annual review.
Source: Country guidance and reports.
PUBLISHED PERFORMANCE STANDARDS
FOR GOVERNMENT SERVICES
PROVIDED ACCOUNTABILITY TO THE
PUBLIC IN THE UNITED KINGDOM
AND CANADA
---------------------------------------------------------- Chapter 3:1
The United Kingdom's Citizen's Charter and Canada's Service Standards
reforms called for agencies to publish service standards, measure
performance against those standards, and solicit citizen feedback on
performance.\1 Other service principles to be implemented through the
Citizen's Charter reform included providing citizens with service
choices, consultation, courtesy, complaint mechanisms, and value for
money.\2 Australia and New Zealand included many quality of service
measures in their performance measurement systems, but with less
emphasis on soliciting customer views of performance and providing
customers with performance information.
According to the 1994 Citizen's Charter report, the United Kingdom
had published 38 Citizen's Charter documents covering major public
services and setting out the specific service standards that citizens
could expect and what citizens could do if the standards were not
met. For example, according to the report, the Social Security
Benefits Agency committed to taking no more than 4 days on average to
pay income support benefits in 1992-93. The agency reported that it
achieved an average payment time of 3.5 days during that period.
Also according to the 1994 report, agencies' charters were to specify
remedies for performance problems when they occurred. For example,
the Post Office was to compensate customers for late arrival of a
special delivery item by refunding twice the fee paid or a book of
first-class stamps, whichever was greater. The Social Security
Benefits Agency committed to staffing each office with a customer
service manager, whose name and telephone number would be displayed
and who was to respond to complaints within 7 days.
The 1994 Citizen's Charter report provided information on the
performance commitments public service organizations made, how these
organizations performed against the standards, and performance
commitments for the future.\3 Table 3.2 provides an excerpt from the
report for the Post Office.
Table 3.2
Excerpt from The Citizen's Charter,
Second Report: 1994, the United Kingdom
Post Office, Achievements and Plans
What we promised What we have done Future commitments
-------------------- ------------------ ------------------
First-class letter Achieved 91.9 1993-94 target is
delivery target for percent. for delivery of 92
1992-93: 90.5 percent of first-
percent to be class letters on
delivered on next the next working
working day after day after posting.
posting.
In 1992-93, 96 Achieved 96 Waiting time
percent of customers percent. target of 96
to be served in 5 percent of all
minutes at Crown and customers to be
franchise offices. served within 5
minutes will be
extended to 5,000
of the largest
sub-post offices
by March 1994;
10,000 by March
1995.
Publication of Information is Local information
clearer and more provided in the will continue to
local information on Post Office's be produced and
service targets and annual report and published
performance against in posters in all regularly.
them. Crown and
franchise offices.
------------------------------------------------------------
Source: The Citizen's Charter, Second Report: 1994, p. 32.
According to the government's 1994 Citizen's Charter report, public
service organizations that demonstrated excellence and innovation in
delivering services in line with Charter principles could win a
service quality award called the "Charter Mark." In 1993, the Prime
Minister awarded Charter Marks to 93 organizations. According to the
report, many public service organizations used the criteria for the
Charter Mark award to assess how well they applied Charter
principles, regardless of whether they applied for the award. To
retain the Charter Mark award, organizations were to demonstrate that
their performance had continued to improve.
--------------------
\1 At the time of our review, Canada's Service Standards Initiative
was in initial stages of implementation. Therefore, the discussion
in this chapter focuses on the United Kingdom's Citizen's Charter
reform, which had been underway since 1991.
\2 In response to the NPR recommendation to create a customer-driven
government, on September 11, 1993, the President issued Executive
Order 12862, which required all executive departments and agencies
that provide significant services directly to the public to, among
other things, survey customers, establish service quality standards,
measure performance against the standards, and address customer
complaints. Subsequently, 152 agencies published more than 1,500
customer service standards that were based on customer input.
According to NPR officials, the next step for agencies was to measure
and publish their performance against those standards.
\3 The Citizen's Charter, Second Report: 1994. Presented to
Parliament by the Prime Minister and the Chancellor of the Duchy of
Lancaster by Command of Her Majesty. London: HMSO, Mar. 1994.
PERFORMANCE AGREEMENTS
REINFORCED ACCOUNTABILITY FOR
PERFORMANCE
---------------------------------------------------------- Chapter 3:2
The four countries introduced top-down performance agreements between
the political leaders of departments and their top civil service
managers to introduce a sense of personal responsibility for
performance and to reinforce the connection between individual
performance and organization mission and goals. These performance
agreements focused on the program performance factors that were
within the control of program managers. Along these lines, the NPR
recommended that the President develop performance agreements with
politically appointed agency heads and that agency heads should also
use performance agreements within their agencies to forge an
effective team committed to achieving organizational goals and
objectives.\4 Eight U.S. agency heads had signed such performance
agreements as of September 1994.
--------------------
\4 From Red Tape to Results: Creating a Government That Works Better
and Costs Less, p. 75. We agreed with NPR's recommendation,
commenting that developing such agreements could help focus agency
management's efforts on key priorities and help achieve the
results-oriented environment that we believe is needed to improve
effective delivery of government programs. Management Reform: GAO's
Comments on the National Performance Review's Recommendations
(GAO/OCG-94-1, Dec. 3, 1993), p. 202.
PERFORMANCE AGREEMENTS
LINKED INDIVIDUAL
PERFORMANCE TO ORGANIZATION
GOALS
-------------------------------------------------------- Chapter 3:2.1
In the United Kingdom, government policy called for performance
agreements to be negotiated between the political heads of
departments--ministers--and the nonpolitical chief executives of
operating divisions, called executive agencies, within departments.
Executive agencies were established in 1988 as the service
delivery--as opposed to the policy development--arms of the
government. For example, within the Department of Trade and
Industry, the Accounts Service Agency provided financial and
management accounting services to its parent department and to other
United Kingdom departments and agencies on a fee-for-service basis.
According to government reports, accountability between the executive
agencies and their parent departments was to be achieved through an
annual performance agreement. The performance agreement was
negotiated between the department minister and agency chief
executives. The annual performance agreement outlined specific
performance targets to be achieved in a given year. The agency chief
executive was personally responsible for the agency's performance in
relation to those targets.
The accountability of chief executives was reinforced in three ways.
First, the details of an agency's targets and its performance against
them were published in its parent department's annual report.
According to a government review of the executive agency reforms,
chief executives were acutely aware of their visible personal
responsibility and accountability for the success of their agencies.
The review suggested that these chief executives said that publicly
stated targets were the most effective guarantee to bring about their
best possible performance. Second, increasingly, chief executive pay
was being tied to performance through bonuses paid for achieving
annual targets. Third, chief executives were hired on limited term
contracts that would not have to be renewed if performance was deemed
poor.
New Zealand's Public Finance Act of 1989, as amended, established
that department chief executives were to be accountable for the
quality, quantity, and cost of outputs produced by the department
that would help the government achieve its desired outcomes.
Accountability between department chief executives and department
ministers was to be achieved through a performance agreement.
According to government guidelines, performance agreements were to
outline (1) key management objectives requiring the chief executive's
personal attention; (2) the chief executive's responsibility for the
delivery of the department's outputs according to targets agreed upon
by the department's minister; and (3) the chief executive's
obligation to support the collective interests of the government and
to manage human resources, finances, information resources,
purchasing, and energy in a manner consistent with government
policies and statutes.\5 Similar to arrangements for chief executives
in the United Kingdom, the pay and tenure of New Zealand Chief
Executives was linked to the achievement of the objectives in the
performance agreement.
The Canadian government sought to increase the accountability of its
deputy ministers--the top civil service managers in a
department--through a program initiated in 1991 called Shared
Management Agenda. A shared management agenda was a set of key
management priorities and objectives identified and agreed upon by
the Secretary of the Treasury Board and the deputy minister of a
department. The agenda was to contain a very limited number of
management issues of highest mutual priority to the Secretary of the
Treasury Board and the deputy minister. The agenda was intended to
provide a simple and flexible means for two-way communication between
the Secretary of the Treasury Board and a deputy minister and a basis
on which to assess the performance of the deputy minister.
Performance on these management issues was to be included in the
annual performance assessments of deputy ministers. These
assessments, conducted by a committee of senior government officials,
determine a deputy minister's performance rating and bonus.
In addition to these high-level performance agreements, departments
in the four countries had begun introducing performance agreements
between lower levels of management and staff. Australian, New
Zealand, and United Kingdom reviews suggested that such performance
agreements increasingly were used to link individual performance
standards to the achievement of a department's overall objectives.
For example, according to a government evaluation of Australia's
management reforms, the performance of Australian senior managers was
appraised on the basis of agreements that related individual
performance to the goals of the strategic plan. According to the
evaluation, among the benefits achieved through these agreements was
"heightened staff attention to corporate values and organizational
goals and objectives."\6
--------------------
\5 Although performance agreements were to be made between chief
executives and their ministers, under the Public Finance Act, an
independent State Services Commissioner was to review the performance
of chief executives in fulfilling the terms of the agreement. The
intent of this arrangement was to remove political considerations
from the performance appraisal.
\6 The Australian Public Service Reformed, p. 183.
MANAGERIAL ACCOUNTABILITY
LIMITED TO AREAS OF CONTROL
-------------------------------------------------------- Chapter 3:2.2
We observed that performance agreements in the four countries were
designed to hold managers accountable primarily for those results
over which they were able to exercise control. According to
government reports and officials we spoke to in the four countries,
this focus on controllable results stemmed from the limited control
managers had over all the factors outside the scope of their programs
that affected outcomes. In the United Kingdom and New Zealand, this
view was manifested in the structure of government, which separated
responsibility for service delivery from the development and
evaluation of government policies.
In the United Kingdom, according to guidance prepared by the Treasury
for executive agencies, executive agencies were responsible for the
effective and efficient delivery of government services, such as
finding jobs for the unemployed. In contrast, the agencies' parent
departments were responsible for determining whether their agencies'
services were effective in meeting the government's social policy
goals. Executive agencies' performance agreements laid out their
service delivery responsibilities in the form of specific,
quantitative, service delivery targets that agencies were to achieve.
Such targets were thought to be under the control of an agency's
management. For example, according to the Employment Service's
1991-92 performance agreement with its parent department, the
Employment Service was responsible for meeting the target of
"1,300,000 placings of unemployed people into jobs."\7 Other measures
focused on targets for various subgroups of unemployed clients, such
as the long-term unemployed, and the amount of time it took for
agency staff to meet with clients at various stages of the process.
In contrast, department policy analysts were responsible for
evaluating the effectiveness of such services in meeting the
government's policy goals. However, the Treasury guidance suggested
the need for agencies to work closely with department staff to
provide the data they would need to do such an evaluation.
Similar to executive agencies in the United Kingdom, New Zealand
departments were responsible for achieving performance targets for
the outputs they delivered. According to a New Zealand Treasury
official, the government did not choose to rely on outcome measures
for accountability purposes because a manager could always point to
other, noncontrollable, environmental factors--such as a downturn in
the economy--that caused her or him to fail to meet an
outcome-oriented performance target.
With the passage of the State Sector and Public Finance Acts of 1988
and 1989, respectively, the New Zealand government was restructured
to be the purchaser of outputs--goods and services--from government
departments led by competitively appointed chief executives. The
performance agreement between New Zealand Ministers and their chief
executives contained specific output targets, including quantity,
timeliness, cost, and quality for which the chief executive was
accountable. Examples of outputs purchased by the government from
the Department of Labor included employment placement services,
occupational health and safety prevention and compliance services,
and immigration visa and permit processing. Government
ministers--not their chief executives--were responsible for selecting
the program outputs to pursue to achieve the government's desired
outcomes. The government also purchased "policy advice" from
departments that pertained to whether or not the particular outputs
the government had "purchased" were having the desired effect on
outcomes. For example, the government purchased employment policy
advice, occupational health and safety policy advice, and immigration
policy advice from the Department of Labor.
Canadian and Australian government studies also suggested that
managers do not control all the factors that contribute to program
outcomes. Nevertheless, these studies maintained that part of a
program manager's responsibility was to assess the effectiveness of
his or her programs in achieving outcomes and report on both
controllable factors, such as the manner in which program staff
interact with clients, as well as noncontrollable factors, such as
economic conditions, that affect outcomes. According to an
evaluation of Australia's reforms, this view of program management's
responsibility "recognizes the reality that public servants make
policy decisions in everyday program implementation, and that
ongoing, effective services to citizens depend to a great extent upon
a sense of responsibility for the impacts of programs on people."\8
Similarly, according to a 1991 report by the Canadian Comptroller,
managers increasingly were being asked to evaluate the continued
relevance, success, and cost-effectiveness of their programs.
--------------------
\7 The performance agreement did not contain any reference to the
quality or duration of the jobs obtained by clients.
\8 The Australian Public Service Reformed, p. 524.
PARLIAMENTARY USE OF
PERFORMANCE INFORMATION LIMITED
BUT INCREASING
---------------------------------------------------------- Chapter 3:3
The four countries sought to increase the accountability of
government departments and agencies to parliament for the results of
their programs by requiring them to report publicly on the outputs
and outcomes they produced. However, the parliaments of the four
countries initially made limited use of results-oriented performance
information to hold departments and agencies accountable for their
performance, according to government officials we spoke to and
studies we reviewed. Although the four countries were seeking to
relate program performance and costs, we did not find that they were
seeking to demonstrate how program performance would vary according
to different funding scenarios, as will be tested under GPRA in
fiscal years 1998 to 1999 in the United States.\9
Departments in each of the four countries were required to report
performance information annually to their parliaments along with
budget and expenditure information. Generally, the goal of each
country was to provide more information about program results being
achieved for the funds being spent.
Despite the improved availability of performance information in
reports to parliament, studies by the four countries suggested that
performance reports were not always used extensively by parliaments
for scrutinizing the performance of departments. For example, in the
United Kingdom, a 1990 report by the House of Commons Procedure
Committee described select committee interest in recent departmental
reports as "patchy at best." However, others observed increased
interest in the performance information provided by departments. A
New Zealand Treasury official commented that the quality of questions
being asked by parliament during the fiscal year 1992 budget process
had noticeably improved. The official credited this improvement to
the new budget format that included a department's output-oriented
performance information. Officials from the New Zealand Audit Office
suggested that the successful use of performance information by
parliament should be viewed in terms of incremental shifts away from
parliament asking questions primarily about the costs of departments'
inputs and toward asking questions about the quantity and quality of
the departments' outputs. Other New Zealand, Australian, and United
Kingdom studies indicated that such incremental improvements in the
use of performance information by their parliaments had occurred.
Canadian and New Zealand studies indicated some parliamentary
dissatisfaction with the quantity and quality of performance
information reported to them. According to a 1992 Auditor General
report, Canadian ministers of parliament found that department
performance reports did not provide the right amount of information;
did not always help them understand what the department was doing, or
how much things cost; and did not provide a reasonable perspective on
performance. New Zealand's 1991 review reported on the views of
department ministers rather than of parliament as a whole. Those
ministers found performance reports to be adequate, but some had
difficulty wading through the quantity of information provided or
finding information on efficiency.
Several studies by the countries suggested that institutional
constraints, such as the lack of staff, expertise, and time to
evaluate all the performance information that was being provided,
precluded the effective use of performance reports by parliaments.
Use of information by the countries' parliaments could be improved by
enhancing the quality and presentation of the information. For
example, New Zealand and Canadian studies found that ministers of
parliament would value simpler reports that highlighted significant
concerns. United Kingdom and New Zealand studies suggested the need
for more feedback from their parliaments on the format and content of
performance reports to ensure that departmental reporting is meeting
their parliaments' information needs.
--------------------
\9 GAO issued a report on selected state experiences in relating
program performance with program costs. See Performance Budgeting:
State Experiences and Implications for the Federal Government
(GAO/AFMD-93-41, Feb. 17, 1993).
RESULTS-ORIENTED MANAGEMENT
REFORMS INCLUDED RESOURCE
FLEXIBILITY AND INCENTIVES FOR
LINE MANAGEMENT
============================================================ Chapter 4
In addition to results-oriented management reforms designed to
increase the accountability of line management for achieving desired
results, the four countries we selected implemented reforms that were
intended to provide line management with flexibility over resources
and incentives to manage their programs more effectively and
efficiently. Table 4.1 summarizes the four countries' approaches to
increasing managerial flexibility and providing incentives for more
effective and efficient management. To provide flexibility and
incentives to line management, central management departments and
central management within line departments sought to (1) simplify
management rules and regulations; (2) devolve greater decisionmaking
authority over financial and human resources;\1 and (3) provide
incentives in the form of shared productivity gains and market-type
mechanisms, such as increased competition and user-charging.
Although evaluations of these reforms by the four countries suggested
that a substantial degree of implementation had occurred, the
evaluations also suggested that some departments were slow to devolve
authority within their organizations, which resulted in fewer
incentives to increase efficiency. Moreover, although evaluations
suggested that the four countries were satisfied with the progress
they had made, they continued to grapple with issues, such as
acceptable levels of risk and the desirable scope and degree of
devolution that should occur in departments.
Table 4.1
Approaches to Providing Managerial
Flexibility and Incentives in the Four
Countries
Co Competitio
un Efficienc Carry n/ HRM
tr Operating y forwa User- Revenue contractin simplificatio
y budget dividend rd charging retention g out n
-- ---------- --------- ----- ---------- ---------- ---------- -------------
Au Consolidat Departmen 6% Department Department Department Reduced the
st ed ts s charge s retained s not number of job
ra operating required for user-fee required classificatio
li costs for to save services revenue to to ns and the
a department 1.25% of provided fund purchase levels of
s. Shift operating to other operations central supervision
from budgets department . government and increased
staff- annually s. services. the span of
year to for a 3- Encouraged managerial
operating year to control.
cost period. contract
controls. for
commercial
services.
Ca Consolidat NA\a 2% Department Department Department Reduced the
na ed s charge s retained s not number of job
da operating for user-fee required classificatio
costs for services revenue to to ns and the
department provided fund purchase number of
s. Shift to other operations certain executive
from department . central levels.
staff- s. government Simplified
year to services. the
operating reassignment
cost of staff to
controls. other jobs
and the
firing of
poor
performers.
Ne Consolidat NA\a NA Department Department Government Chief
w ed s charge s retained privatized executives
Ze operating for user-fee or gained
al costs for services revenue to dismantled responsibilit
an each class provided fund certain y for
d of outputs to other operations central negotiating
within a department . government employment
department s. service conditions
s.\b department with unions
s. and staff.
Department Some
s free to departments
choose reduced the
service number of job
providers. classificatio
ns.
Un Consolidat Departmen Unlim Department Department Department Replaced
it ed ts i- s charge s retained s and detailed,
ed operating required ted\d for user-fee agencies central civil
Ki costs for to services revenue to compete service rules
ng department increase provided fund against with
do s. Shifted efficienc to other operations the simplified
m from y by 2% department . private rules and
staff- per year s. sector for principles to
year to for a 3- provision serve as the
operating year of basis for
cost period.\c commercial departments'
controls. services. own staff
handbooks.
-----------------------------------------------------------------------------------
\a Across-the-board budget cuts occurred but were not planned in
advance, and they differed from year to year depending on the
government's budget situation.
\b Output classes are comparable to programs in U.S. departments.
Transfers of funds between output classes limited to 5 percent.
\c Was 1.5 percent until 1994.
\d Was 0.5 percent until 1993.
Source: Country reports and evaluations.
--------------------
\1 In this report, devolution is the transfer of decisionmaking
capacity from central management agencies to line agencies or from
central management within an organization to line management. In
this chapter we discuss devolution in terms of providing line
agencies and line managers more authority to make decisions regarding
how their resources are allocated and how staff are managed.
DEVOLVED AUTHORITY OVER
SPENDING PROVIDED INCENTIVES
FOR EFFECTIVE AND EFFICIENT
MANAGEMENT
---------------------------------------------------------- Chapter 4:1
Results-oriented management reforms in the four countries called for
line managers to have authority over spending decisions within
overall funding constraints in order to effectively and efficiently
manage their programs. Central management controls over line-item
expenditures were replaced by tighter controls over aggregate
expenditures, and detailed regulations were replaced with general
principles and greater individual responsibility for decisions. The
following sections contain descriptions of the approaches to
flexibility and incentives the four countries took. Although the
four countries did not uniformly evaluate the costs and benefits of
these approaches, in some cases, evaluations by the countries
described improved operations as a result of the spending flexibility
and incentives.
LUMP SUM OPERATING BUDGETS
AND COST CONTROLS PROVIDED
FLEXIBILITY FOR EFFICIENT
SPENDING
-------------------------------------------------------- Chapter 4:1.1
In each of the four countries, reviews of government performance
recommended significant reforms to the operating budgets of
departments. These reforms were aimed at providing departments with
more flexibility to allocate resources and to adapt to changing
priorities while controlling the growth of expenditures. An
Australian government official described the government's budgeting
problem as central budget and department officials spending 95
percent of their time micromanaging the details of departments'
operating expenditures, which accounted for only 10 percent of
overall government expenditures. In the four countries, operating
budgets detailed how much departments could spend on such expenses as
travel, office equipment, and salaries. Those budgets also allowed
departments little flexibility to shift funds from one category to
another to meet operating needs. In addition, Australian, Canadian,
and United Kingdom departments were still constrained by staff
ceilings that could not be exceeded.
According to officials from the four countries, this detailed central
control over departmental operating funds and staff levels was in
itself costly, ineffective in containing costs, and led to
inefficient resource decisions by departments. For example, a United
Kingdom Treasury official noted that attempts to control costs by
reducing staff numbers produced perverse incentives to contract work
out, even if the tasks could be performed for less by the government.
To address this problem, each of the four countries implemented
operating budgets in which departments were given a lump sum of funds
to spend on their operations.\2 Operating budgets generally included
salaries, office space, contracts for services, utility bills, other
related administrative spending, and minor capital. We observed that
although the specific terms of flexibility varied among the four
countries, departments were generally free to decide how to allocate
funds across these categories.\3 Operating budget flexibility in the
four countries did not apply to the nonoperating costs of
departments, such as grants, aid to individuals, or major capital
expenditures, which were budgeted separately. In addition to
flexibility in how funds were spent, the four countries eliminated
staff ceilings so that departments could decide how to staff their
programs to achieve program goals and objectives within the limits of
their operating budgets.
In Australia, Canada, and the United Kingdom, government policy
explicitly called for departments to devolve operating budgets from
the centers of departments to line mangers to give line managers more
flexibility over their operations. For example in the United
Kingdom, the Department of the Environment divided its overall
operating budgets into individual program operating budgets over
which line managers exercised control. In New Zealand, the focus of
reform was to devolve responsibility for operating budgets to the
chief executives of departments. Several New Zealand officials we
spoke to said that some devolution had occurred or was to occur in
their departments.
According to Australian and United Kingdom reviews of their reforms
and interviews with government officials, operating budget reforms
such as spending flexibility within overall funding constraints, the
elimination of staff ceilings, and forward year budget projections
have improved effectiveness and efficiency. For example, according
to a 1988 United Kingdom review, in some cases, budget reform enabled
budget holders to save money or make better use of money and
encouraged forward planning of activities and spending and setting
priorities. A United Kingdom Treasury official said that because
departments were allowed to choose the mix of resources to be
purchased within overall annual limits, departments could allocate
any efficiency savings to address operating priorities, such as
improving the appearance of public offices. Australian departments,
such as the Department of Immigration, Local Government and Ethnic
Affairs, made similar observations: "The [operating budget] reforms
have enabled the agency to achieve outyear savings from applying
innovative approaches to issues. These savings were not available to
the agency prior to the reforms."
United Kingdom and Australian officials also noted improved control
of the growth of operating budgets. A United Kingdom Treasury
official said that operating budget controls were more effective than
other types of controls in reducing the rate of expenditure growth.\4
Exclusive use of staff controls resulted in costs growing 2 percent
faster than inflation during the early 1980s. Under operating budget
control, despite pay increases that exceeded inflation, operating
budget growth slowed. An Australian review described reduced growth
in operating budgets since the implementation of its reforms and
attributed the improved control to the requirement that departments
estimate the costs of decisions for 3 years forward and justify any
changes to those estimates.
--------------------
\2 In this report, the term "operating budget" is generally used to
describe flexible budgeting in the four countries. In the United
Kingdom and Australia, operating budgets were called "running costs."
In Canada, the term operating budget is used. In New Zealand the
term "appropriations to outputs" is used. Such outputs corresponded
roughly to programs within a department. For example, "national
archival services" was an output within the Department of Internal
Affairs. For information on the use of lump sum budgeting in the
United States, see Budget Object Classification: Origins and Recent
Trends (GAO/AIMD-94-147, Sept. 13, 1994).
\3 In Canada and Australia, departments must account for the cost of
benefits associated with salaries when transferring funds from
nonsalary to salary costs. For example, if benefits are 20 percent
of salaries, a department would have to give up $1.20 in salary costs
to pay an additional $1.00 in salary. Conversely, a department would
get a $.20 credit by giving up $1.00 in salary for nonsalary items.
In New Zealand, spending flexibility was allowed within an operating
budget for a class of outputs, but the transfer of operating funds
from one class of output to another within a department was limited
to 5 percent.
\4 For related information on the United States, see GAO/AIMD-94-147.
EFFICIENCY DIVIDEND PROVIDED
INCENTIVE FOR SAVINGS IN
AUSTRALIA AND THE UNITED
KINGDOM
-------------------------------------------------------- Chapter 4:1.2
To control overall program costs, departments in the four countries
were responsible for running their operations within their operating
budgets. As an additional inducement to control costs, Australian
and United Kingdom departments were required to return an efficiency
dividend to the government. Efficiency dividends represented an
annual across-the-board reduction of operating budgets arising from
general efficiency improvements that government departments were
expected to achieve as a result of their country's governmentwide
management reforms with no decrease in the quantity or quality of
outputs.\5
Australia and the United Kingdom projected their budgets 3 years in
advance and included the efficiency dividend in their projections.
Departments were generally expected to live within these projected
budgeted amounts. According to a review of Australia's reforms,
senior managers surveyed responded that the 3-year forward budget
projections improved the predictability of the forward year budgets.
--------------------
\5 Reductions to budgets resulting from the efficiency dividend were
taken after budget increases for new policy initiatives or wages were
accounted. In 1993, the Australian efficiency dividend was a
1.25-percent reduction of a department's operating budget. In the
United Kingdom, it was a 1.5-percent reduction until 1994. See
Budget Issues: Assessing Executive Order 12837 on Reducing
Administrative Expenses (GAO/AIMD-94-15, Nov. 17, 1993) for
information on U.S. experiences with across-the-board efficiency
cuts.
INCENTIVES FOR INEFFICIENT
YEAR-END SPENDING REDUCED
-------------------------------------------------------- Chapter 4:1.3
In the four countries, government reviews found some instances in
which departments said their inability to carry forward unspent
budgeted funds from one year to the next created incentives for
inefficient year-end spending. To address this problem, Australia
and Canada allowed their departments to carry forward 6 percent and 2
percent of unspent budgeted funds, respectively.\6 The United Kingdom
allowed its departments to carry forward an unlimited amount of
unspent funds into the next year. According to a United Kingdom
Treasury official, this changed from 0.5 percent in 1994 in order to
promote more responsible funds management. The United Kingdom
Treasury limited participation in the carry-forward program to
departments that were willing to negotiate a 3-year running cost
agreement and to arrange for satisfactory management planning and
control.
According to United Kingdom and Australian reviews of their
carry-forward programs, departments that were surveyed reported
benefits. The United Kingdom review found that almost all
departments responding to a survey reported lowering their year-end
spending on low-priority items and identified specific instances of
how they used the authority to fund ongoing operations. Common uses
identified were ongoing funding for information technology
strategies, consultants, surveys, and training. In addition, users
of the carry-forward provision reported benefits such as less rush to
process invoices for payment within the financial year, flexibility
to withhold payments to contractors pending specific performance,
freedom to make more businesslike expenditure decisions, and ability
to make longer term planning. According to the Australian review,
departments that used the carry-forward program reported improvements
to operational effectiveness and efficiency. One Australian
department commented that the carry-forward program created
incentives for line managers to be prudent and helped end the `spend
it or lose it' attitude; another said it allowed for better planning
at the end of the year.
However, the Australian review also suggested that year-end spending
was not always inefficient. Rather, some staff commented that
managers could prudently delay the purchase of lower priority items
until the end of the year to be able to fund the purchase of
unanticipated, higher priority items. Other staff commented that the
carry-forward provision would not deter year-end spending in
divisions if a year-end surplus of funds in one division was taken
away and given to another division with a year-end shortage.
--------------------
\6 A New Zealand review acknowledged the perceived problem but
suggested the government should be cautious about allowing
departments to retain year-end surpluses because it would undercut
the government's fundamental principle that money is appropriated
annually for specific purposes.
MARKET-TYPE MECHANISMS
PROVIDED INCENTIVES FOR
EFFECTIVE AND EFFICIENT
PROVISION OF CENTRALIZED
GOVERNMENT SERVICES
-------------------------------------------------------- Chapter 4:1.4
According to the government reports we reviewed, the four countries
also sought to create incentives for more effective and efficient
management by introducing market-type mechanisms to the provision of
some centralized government services, such as accommodation,
procurement, information services, and training, to other
departments. Market-type mechanisms included charging for services
and allowing departments to retain the revenues, opening up
government-provided services to competition, and allowing agencies to
choose between government and private sector service providers. For
example, we reported in a September 1994 report that the introduction
of market-type mechanisms to government buildings--or real
property--management in Australia, Canada, Sweden, and the United
Kingdom contributed to more effective and efficient provision of real
property services to client agencies and improved customer
satisfaction.\7 In these countries, real property organizations (1)
faced competition from the private sector, (2) began managing their
real property assets more strategically to maximize return on
investment and better meet customers' mission needs, and (3)
separated their policy oversight and development roles from their
roles as providers of building services to government agencies.
--------------------
\7 Real Property Management: Reforms in Four Countries Promote
Competition (GAO/GGD-94-166, Sept. 30, 1994).
USER-CHARGING
------------------------------------------------------ Chapter 4:1.4.1
The four countries implemented user-charging for internal government
services to improve the allocation of these services.\8 According to
reports prepared by the four countries, services for which
departments charged other departments fees were commercially
oriented, such as real property management, audit services, legal
services, training, publications, and technical advice.
--------------------
\8 The four countries also expanded user-charging for services
provided directly to the public or to businesses. According to
Australian and Canadian government documents, the purpose of expanded
user-charging was to better regulate demand for government services
and to shift the cost of providing specific services to the
beneficiaries and away from the general taxpayer.
RETAINING REVENUES FROM
USER CHARGES AND ASSET
SALES
------------------------------------------------------ Chapter 4:1.4.2
Another form of flexibility adopted by the four countries for
commercially oriented departments and agencies was the authority to
fund their operations from revenues collected, such as user fees or
asset sales or rentals. This replaced systems in which
fee-collecting departments and agencies were funded entirely through
annual appropriations and all revenues collected were turned over to
the Treasury.
DEMONOPOLIZING INTERNAL
GOVERNMENT SERVICES
------------------------------------------------------ Chapter 4:1.4.3
Along with user-charging and revenue retention, the four countries
demonopolized the provision of certain central government services,
such as real estate, purchasing, accounting, and transportation, and
subjected the government service providers to competition from the
private sector or other government providers on the basis of cost and
quality. According to a New Zealand Treasury official, centralized
departments no longer provided services such as real estate,
supplies, or pensions. Rather, departments were to obtain these
services on their own within their operating cost budgets.
Australia, Canada, and the United Kingdom were gradually allowing
departments to purchase services from providers other than central
government service providers. Under its "market testing" reform, the
United Kingdom implemented multiyear plans to subject a large number
of government services to competition.
U.S. BUDGET PROVISIONS
SIMILAR TO COUNTRIES'
BUDGETARY REFORMS
-------------------------------------------------------- Chapter 4:1.5
Direct comparisons between the four countries' management reforms and
current U.S. management provisions were outside the scope of this
report. Nevertheless, some of the countries' reforms resemble
current U.S. budgetary provisions, such as those described below.
Operating Budgets. The United States has generally moved away from
appropriations for items of expense, such as salaries, equipment, and
travel, and toward appropriations for organizations and programs.
However, agencies may be asked by congressional committees to account
for deviations from their budget requests, which typically are
expressed in terms of items of expense.
Budgetary Flexibility. Appropriations acts or other statutes may
specify an amount or percentage of funds that an agency may transfer
between appropriations accounts without requiring further
congressional action. Similarly, within an appropriations account,
agencies generally may reprogram a percentage or amount of funds from
one item of expense, such as salaries, to another, such as computer
equipment, without obtaining congressional approval.
Carry-Forward of Unspent Budgeted Funds. Very few discretionary
appropriations accounts--budget accounts that receive budgetary
resources through appropriations acts--contain annual funding only.
To better meet the needs of program managers, most discretionary
accounts contain some multiyear or no-year funding authority, thus
allowing carry-over of budgetary resources across fiscal years, and
subsequent obligation, without further congressional action.
Market-Type Mechanisms. All executive departments are authorized to
charge user fees to provide a wide variety of common administrative
services and retain those fees in revolving funds to pay for
operating expenses. These funds are allowed to charge for the direct
costs of service provision and to also collect certain indirect
costs, such as equipment depreciation. All fund receipts are
typically available until spent and do not expire at the end of a
fiscal year. Also, OMB Circular A-76 seeks to promote efficiency by
encouraging competition between the federal workforce and the private
sector for providing commercial services needed by government
agencies.
In light of the four countries' experiences with similar reforms,
U.S. agencies may wish to reexamine these existing U.S. provisions
as they consider proposals for waivers from administrative
requirements as provided for under GPRA.
MANAGERIAL FLEXIBILITY INCLUDED
SIMPLIFICATION AND DEVOLUTION
OF HUMAN RESOURCE MANAGEMENT
---------------------------------------------------------- Chapter 4:2
The four countries sought to give line management greater flexibility
to recruit, assign, and pay staff. To accomplish this, the countries
simplified personnel rules and devolved personnel authority from
central personnel agencies to departments and from central personnel
functions within departments to line managers. This devolution was
accompanied by a shift in the role of central personnel agencies away
from regulating and controlling all personnel actions and toward
promulgating simplified human resource management principles and
monitoring adherence to those principles. Also, within departments,
the function of central personnel managers shifted from controlling
personnel decisions to providing human resource management services
to line managers.
To improve line management's control over human resources, the four
countries simplified their civil service systems and replaced
elaborate, uniform personnel rules with simpler, broader personnel
principles. For example, according to a 1991 government paper on
Canada's Public Service 2000 reforms, Canada's human resource reforms
emphasized creating a simpler personnel system that provided managers
with greater flexibility. Canada sought to simplify its human
resource system through government reform legislation passed in 1992
that significantly reduced the number of job classifications
throughout the public service and reduced the number of executive
management levels below the deputy minister from six to three. In
addition, the reform legislation gave managers greater authority to
reassign their employees to other jobs and introduced simpler
procedures for firing poor performers. According to government
reports, the United Kingdom replaced mandatory personnel rules with
less detailed guiding principles to serve as the basis for
departments' and agencies' own staff handbooks. The new role of the
central personnel function in the United Kingdom was to develop
individual arrangements for organizations that fit within a unified,
rather than uniform, system.
Along with simplification of civil service rules, each of the four
countries began devolving responsibility for many personnel
functions, such as hiring, firing, and setting pay, from central
personnel agencies to line departments and agencies. Both New
Zealand and Australia transferred responsibility for most of their
personnel functions from their central personnel management agencies
to departments. In both countries, the central personnel management
agencies' new role was to oversee the performance of departments in
carrying out the personnel functions according to central guidelines.
In the United Kingdom, functions such as recruitment, setting pay
based on performance, training, and promotion were gradually
transferred to selected departments and agencies. For example, the
government gave agencies with greater than 20,000 employees authority
to establish their own pay grade systems. Within the Canadian Public
Service, some organizations negotiated "separate employer status,"
which enabled them to establish their own job classification systems
and negotiate with unions.
Comprehensive evaluations of these human resource management
simplification and decentralization reforms were not available at the
time of our review for Canada, New Zealand, or the United Kingdom.
However, all four countries recognize that a number of critical
policy and implementation issues remain unresolved. For example, the
Australian government continues to struggle with striking the
appropriate balance between establishing the flexibility to deal with
poor performers and ensuring that standardized processes exist to
protect employees from arbitrary actions. New Zealand departments
faced questions about the degree to which responsibility for human
resource actions, such as recruitment and hiring, should be placed
with line managers to promote flexibility and responsiveness or
centralized within departments to promote efficiency. Nevertheless,
in New Zealand, public sector employees responding to a government
survey suggested that these reforms had enabled managers to
manage--that is, "to recruit, retain and manage human resources more
efficiently." Specifically, the reforms
"enabled departments to respond to specific skill shortages,
increased the pool of potential employees, enabled better
targeting of resources through performance contracts, and
allowed departments to develop specific human resource policies
to better suit their needs."\9
According to a 1992 government evaluation of Australia's public
sector management reforms, Australian staff reported that of the
major public service reforms implemented, those related to human
resource management had the greatest positive effect on their own
work.\10
--------------------
\9 Review of State Sector Reforms. Steering Group, [New Zealand],
Nov. 29, 1991, p. 90.
\10 The Australian Public Service Reformed. Australia's human
resource management reforms included emphasizing merit over seniority
in promotions; enhancing staff mobility and career opportunities; and
devolving authority over staffing functions, such as recruitment,
retirement, and promotions, from a central management agency to
departments. Performance-based pay was not in place at the time of
the evaluation.
CENTRAL DEPARTMENTAL MANAGEMENT
IMPEDED THE DEVOLUTION OF
AUTHORITY TO LINE MANAGERS
---------------------------------------------------------- Chapter 4:3
While progress had been made in devolving authority over resources
from central management agencies to departments and in simplifying
complex central personnel regulations, the countries each reported
that more effort was needed to achieve similar progress within the
departments themselves. A common theme in the countries we selected
was that some departments failed to simplify or eliminate
self-imposed rules or were slow to devolve authority because they
feared the risks associated with devolved decisionmaking. Also,
devolved decisionmaking by itself could be ineffective if line units
were not given incentives to find efficiencies in the form of shared
savings.
Officials in or reviews by the four countries noted hesitancy by
departments to devolve decisionmaking authority to line management or
the existence of internal department rules that worked against
devolution. A Canadian official noted that once authority had been
given to a department, department officials were sometimes hesitant
to use it or to delegate it to other levels of management. In the
United Kingdom, a 1988 review of the Financial Management Initiative
found that much progress had been made with devolution of budget
authority--more than 7,000 line managers had their own budgets, which
accounted for about three quarters of the civil service's running
costs. However, the reviewers found some departments created their
own restrictions that prevented managers from moving money from one
item to another within their budgets. New Zealand and Australian
reviews noted similar uneven devolution of authority within
departments.
Australian, New Zealand, and United Kingdom evaluations of their
reforms suggested that another problem departments faced in devolving
authority to line management was the tendency to respond to initial
implementation difficulties by taking back the authority. An example
of this problem was provided by a New Zealand official. According to
the official, the government gave department chief executives the
flexibility to purchase real estate services from the private sector
at the same time that downsizing had resulted in significant vacant
government office space. Some members of parliament were concerned
that departments were not making enough effort to use the vacant
government space and temporarily recentralized the real estate
function. Eventually, the government decided to return authority for
real estate functions to department chief executives but added
responsibility for coordinating real estate decisions to their
performance agreements. The official emphasized that it was the New
Zealand government's view that holding individuals responsible for
their decisions was more effective than centralizing control or
creating detailed rules, which could result in inefficient
decisionmaking.
The Australian Department of Finance promoted risk management as the
means to improve purchasing effectiveness and efficiency in a
devolved decisionmaking environment. According to government
reports, risk management involves the evaluation of purchasing
controls in terms of their costs and benefits and determines an
acceptable level of risk. The government considered the more common
practice of risk avoidance--treating all risks as equally
unacceptable--as not cost-effective. Recognizing that occasional
abuses would occur with the implementation of risk management,
Australian authorities increased the penalties for misuse of funds.
The effectiveness of devolution was also tempered by a lack of
incentives for line managers with operating budgets to save funds if
they did not benefit from the savings. Australian managers suggested
that departments created disincentives to save funds when unexpended
year-end funds were taken away from one program and used to fund
another program. The United Kingdom's assessment of its provision
allowing departments to carry forward unspent end-of-year funds found
that although departments centrally managed unspent funds in some
cases, passing the funds down to the line management that generated
the under-spending was the approach most likely to maximize
efficiency. Nine out of the 16 departments surveyed that commented
on their use of the carry-forward provision passed the funds down to
the line unit that generated them. One department requested bids for
how line units would use such funds and awarded the funds to the unit
that would provide the best financial return.
CONFUSION BETWEEN DEVOLUTION
AND DECENTRALIZATION LED TO
INEFFICIENCIES IN SOME
AUSTRALIAN DEPARTMENTS
---------------------------------------------------------- Chapter 4:4
According to government studies in the four countries, managers
generally welcomed the increased authority to make decisions about
spending, personnel, and program operations that were formerly made
by central authorities. However, an Australian study found some
problems. The study found that in some cases, for centralized
"corporate services" functions such as budgeting, procurement, and
personnel, departments misunderstood the devolution concept and
decentralized the performance of these functions to line management
instead of maintaining the centralized function and devolving the
authority to make decisions. This misunderstanding led some to
question the efficiency of the devolution concept.
An Australian review made the following distinction between
devolution and decentralization.
"Devolution is the transfer of decision-making capacity from
higher levels in the organisation to lower levels, i.e. it is
about who is best placed in an organisation to make decisions.
Decentralisation is the redistribution of functions or tasks
from central units in the organisation to more widely dispersed
units, i.e. it is about where in an organisation functions are
best carried out."\11
The review concluded that some departments had confused
decentralization with devolution. According to the review,
"inappropriate decentralisation can result in loss of career
paths and specialised skills, loss of critical mass and
economies of scale. Put simply, great[er] devolution of
responsibility can occur without any decentralisation of
functions."\12
Also according to the review, the Department of Prime Minister and
Cabinet experienced such confusion. This department decentralized
many of its administrative functions, such as personnel, along with
devolution of authority for those functions. The department found
that decentralization of administrative functions led to
inefficiencies and a loss of expertise in these functions by central
management. Subsequently, the department shifted its approach to
devolving authority over personnel decisions to line management,
while retaining personnel administration as a centralized function.
"[T]he first phase of devolution was characterized by
decentralisation of administration (e.g. of corporate services
functions) as well as devolution of decision-making. Following
the diseconomies and other dysfunctions to which this gave rise,
the balance shifted away from decentalisation and towards
devolution proper."\13
On the basis of case studies, the review reported key factors that
were critical to the successful devolution of authority within
departments. (See table 4.2.)
Table 4.2
Devolution of Corporate Services
Functions Within Australian Departments:
Critical Success Factors
Critical success
factor Description
------------------ ----------------------------------------
Top management Strong commitment and communication
commitment about the benefits of devolution from
the chief executive down through the
management ranks
Communication Strong vertical communication throughout
management ranks to staff and horizontal
information-sharing among those with
devolved responsibilities
Training Comprehensive formal and on-the-job
training in devolved functions
Effective Networked personnel and financial
management information systems to automate
information previously centralized services. Such
systems systems can increase productivity and
provide a means for meeting
accountability and reporting
requirements
Focus on clients Creating a provider/client relationship
between central service provider and
line management. User-charging for
centralized corporate services
instrumental to making central service
providers more client focused
Evaluation Formal and informal evaluation of
devolution efforts to help identify root
causes of problems
------------------------------------------------------------
Source: Devolution of Corporate Services, No. 6. A Joint
Publication of the Management Advisory Board and its Management
Improvement Advisory Committee. Canberra: Australian Government
Publishing Service, Apr. 1992.
--------------------
\11 The Australian Public Service Reformed, p. 89.
\12 The Australian Public Service Reformed, p. 105.
\13 The Australian Public Service Reformed, p. 104.
INVESTMENT APPROACHES SUPPORTED
RESULTS-ORIENTED MANAGEMENT
REFORMS
============================================================ Chapter 5
The experiences of Australia, Canada, New Zealand, and the United
Kingdom in attempting to bring about a results-oriented management
culture provide insights about investment approaches that U.S.
agencies may wish to consider as they implement results-oriented
management under GPRA. First, the countries had to invest
significantly in accounting and performance information systems and
training. Second, the four countries invested in time, allowing a
decade or more for their results-oriented management reforms and
their incremental implementation. In addition, the countries'
central management departments or other high-level management groups
studied the implementation of the reforms and provided guidance and
training to line managers implementing the reforms.
COUNTRIES INVESTED IN
INFORMATION SYSTEMS AND
TRAINING
---------------------------------------------------------- Chapter 5:1
Each of the countries we reviewed took steps to equip managers to
operate in an environment of devolved decisionmaking. The countries
invested in accounting and performance information systems to support
management in collecting and reporting performance information and
exercising their authority over resources. The management reforms
also required significant human investments, such as skills training
for managers to equip them to meet their performance objectives and
exercise new authority.
INVESTMENTS IN ACCRUAL
ACCOUNTING SYSTEMS
-------------------------------------------------------- Chapter 5:1.1
To implement commercial reforms, such as user-charging, revenue
retention, and competition, and to provide managers and oversight
groups with better cost information for decisionmaking, Australia,
New Zealand, and the United Kingdom introduced accrual accounting
systems to supplement existing cash accounting systems.\1 In
Australia and the United Kingdom, accrual accounting was being
implemented incrementally, starting with commercially oriented
agencies that charged for their services, such as government printing
offices, real property agencies, and consulting services, according
to government officials and reviews. In contrast, New Zealand
introduced accrual accounting governmentwide and produced
commercial-style accounts based on generally accepted accounting
principles for each department and for the government as a whole.
According to Australian, New Zealand, and United Kingdom reviews, the
introduction of accrual accounting supported more accurate pricing of
government services for commercially oriented agencies and provided a
tool for improved measurement of financial performance. Government
policy called for all United Kingdom executive agencies to produce
accrual accounts within 2 years of becoming agencies. A 1993 review
of executive agencies reported that the development of accrual
accounts encouraged a more businesslike approach and provided better
information for agencies to achieve and demonstrate efficiency
improvements. For example, using accrual accounting, Companies
House, the executive agency charged with handling incorporations and
dissolutions, set businesslike financial performance targets, such as
achieving a 6 percent annual rate of return on average net assets
employed.
--------------------
\1 Under cash accounting, revenues and expenses are recognized when
cash is received or disbursed. Under accrual accounting, revenues
and expenses are recognized when earned or incurred, regardless of
when cash is received or paid. Accrual accounting provides
information on the current cash budget needs for funding future
payments, such as asset maintenance and replacement, pensions, debt
service, and lease commitments.
DEVELOPING INFORMATION
SYSTEMS
-------------------------------------------------------- Chapter 5:1.2
Australia and the United Kingdom highlighted the need to develop
information systems that supported results-oriented management
reforms. According to an evaluation of Australia's reforms, most
Australian departments had made progress in the development and use
of financial management information systems. However, many
Australian departments commented on the need to shift their
management information systems from their current focus on inputs,
administrative activity, and outputs to a greater focus on outcomes
and qualitative performance information. Australian officials also
noted the need to use information technology to disseminate program
performance information from headquarters to field offices. Under
the Financial Management Initiative, all United Kingdom departments
were directed to develop management information systems that could
inform managers of the cost of the resources allocated to them and
inform them of their performance in terms of outputs produced against
targets.
Government evaluations of reforms in Australia and the United Kingdom
pointed out that commercial reforms, such as user-charging and
competition, required the development of new information systems
capable of determining the full costs of operations, including all
depreciation and overhead. For example, United Kingdom agencies that
sought to fund their operations through the collection of user fees
instead of appropriations found the process difficult and
time-consuming, partly because they lacked the needed financial and
management information systems to manage their revenues and expenses.
INVESTMENTS IN TRAINING
-------------------------------------------------------- Chapter 5:1.3
The need for investments in information systems in the four countries
was accompanied by the need for investment in the training of staff.
The four countries identified the need to recruit and train staff in
such areas as performance measurement and monitoring, program
evaluation and budgeting, contracting, human resource management,
customer service, and other commercial skills associated with greater
managerial discretion over inputs.
Various evaluations pointed to managers' lack of experience and
skills in the development and use of performance measures and in
program evaluation. Two Australian evaluations of its reforms cited
the skills deficit as a barrier to the evaluation of program and the
development of performance measures--particularly measures of
effectiveness. Some United Kingdom officials suggested that despite
wide use of performance measures in executive agencies, the
government was concerned about the lack of expertise in setting and
scrutinizing performance targets because there were no absolute or
independent standards against which to set performance targets and
assess achievement. A New Zealand academic expressed a related
concern that both civil servants and politicians needed to develop
the analytical skills to assess the new performance information.
Canadian and Australian evaluations discussed the importance of
training in the management of operating budgets, contracting for
services, managing human resources, improving customer service, and
other commercial skills. According to a government background paper
on Canada's Public Service 2000 reforms, line managers would require
substantial training as central managers devolved responsibility for
personnel, financial, and administrative systems to line managers.
Australian staff surveyed cited training as one of the factors that
most contributed to the successful implementation of reforms in their
work areas, according to a government evaluation. To address
management skills, Australia developed the Middle Management
Development Program, which emphasized improving skills in managing
human resources and took account of the impact of public sector
reforms ranging from the introduction of program management to
extensive devolution of financial and human resource management
functions.\2
Better customer service was a central element to the United Kingdom's
and Canada's reforms. A United Kingdom government consultant
commented that for customer service reforms to work, government
organizations would need to inculcate service values and quality
practices through the recruitment, training, and development of
staff. A survey of United Kingdom Executive Agency chief executives
by Price Waterhouse, a major accounting firm, suggested that the lack
of staff experience with customer service was one of the key
obstacles to providing better customer service. Under Canada's
Public Service 2000 initiative, some departments had begun to provide
customer service training. For example, one department offered
client-service training to 8,000 front-line staff.
--------------------
\2 Subsequent to our review, the Brookings Institution reported that
Australia invested 5 percent of its personnel budget in training
compared to 1.3 percent in the United States and that training was a
very important contributor to Australia's management reforms. See
Kettl, Donald F., Reinventing Government? Appraising the National
Performance Review, a Report of the Brookings Institutions's Center
for Public Management, Aug. 19, 1994, p. 20.
COUNTRIES MADE LONG-TERM,
INCREMENTAL CHANGES TO BECOME
MORE RESULTS-ORIENTED
---------------------------------------------------------- Chapter 5:2
As described in chapter 1, each of the four countries invested a
decade or more in results-oriented management reforms designed to
shift the managerial culture of the public service away from a focus
on inputs toward a focus on results. Although their strategies for
change shifted over time, the four countries maintained a long-term
goal of instilling a results-oriented managerial culture in their
civil service.
The four countries' experiences in attempting to bring about cultural
change corresponded closely to our recent work on private sector
efforts. We found that changing organizational culture in the
private sector was a long-term process that could take 5 to 10 years
to accomplish.\3
In Australia, Canada, and the United Kingdom, we observed that the
implementation of managerial flexibility progressed incrementally
because some departments and agencies were in a better position to
devolve authority over resources and decision-making to line managers
than were others. By comparison, implementation of results-oriented
management reforms in New Zealand proceeded rapidly, with most
departments issuing required performance and financial reports and
operating with greater managerial flexibility within about 3 years.
Government officials said New Zealand's public service is currently
digesting and assimilating the major wave of innovation and change
from the past few years. In Australia, because of the unique
characteristics of departments, devolution occurred more rapidly in
some departments than in others. The United Kingdom and Canada gave
greater authority and responsibility to specific functions within
departments that could operate in a semiautonomous manner within the
parent department.
Australian survey evidence suggested that devolution had progressed
to varying degrees within departments. Departmental views suggested
that this variation was appropriate from their perspective given the
unique characteristics of departments. For example the Social
Security Department remarked "there has been very little that the
Department has found cannot be devolved to the operational level." In
contrast, the Defense Department commented that devolution needed to
proceed gradually to accommodate the unique operating characteristics
of the different units within the department.
According to United Kingdom and Canadian descriptions of their
reforms, implementation of results-oriented management reforms
proceeded incrementally, beginning with departmentwide reforms and
followed by a narrower focus on functions within departments. The
Financial Management Initiative reform in the United Kingdom and
Increased Ministerial Accountability and Authority reform in Canada
introduced greater management flexibility and responsibility for
performance to departments as a whole. In both countries, these
reforms were followed by the introduction of results-oriented
management reforms to selected "executive" functions within
departments. These functions were restructured as executive agencies
in the United Kingdom and special operating agencies in Canada.
Executive agencies had become the dominant form of organization in
the United Kingdom, growing from 5 agencies with 6,050 civil servants
as of May 1989, to 92 agencies with 343,480 civil servants--62
percent of the civil service--as of 1993. According to a 1993
government report, executive agencies may eventually cover as much as
81 percent of the civil service. Between 1990 and 1993, Canada had
established 14 special operating agencies, and 4 additional agencies
were pending approval.
According to government guidance to departments, in selecting
candidates within departments for executive agency status, the United
Kingdom government looked first for discrete entities that operated
independently within their departments and whose performance would
clearly benefit from greater managerial flexibility. Before
designating an agency, the government first determined whether the
function should have been privatized, contracted out, or abolished.
If none of these options were chosen, the function was set up as an
executive agency. The first executive agencies were small and
homogeneous, with their tasks and clients already well-defined, and
with services run in a semi-independent manner within their
departments. At the time of our review, the functions of the United
Kingdom's executive agencies and Canada's special operating agencies
ran the gamut from direct services provided to citizens, to services
provided to a parent department, to services provided on a
competitive basis to government departments, to regulation.\4 We
observed that the common element among these agencies was that they
were service operations with well-defined clients that could be set
up on a semicontractual basis within their parent departments.
Executive agencies in the United Kingdom and special operating
agencies in Canada individually developed with their parent and
central management departments the specific results-oriented
management framework for providing greater accountability for results
along with managerial flexibility. In the United Kingdom, the
"Framework Document" for an agency typically set out its mission,
goals, objectives, performance measurement and reporting
requirements, and flexibility in areas such as human resource
management and procurement. Framework documents for Canadian special
operating agencies set out similar terms. According to Canadian and
United Kingdom government reports on establishing these agencies, the
terms contained in agency framework documents were unique for each
agency. As agencies established a track record for performance,
departments were to provide them with greater managerial flexibility.
--------------------
\3 Organizational Culture: Techniques Companies Use to Perpetuate or
Change Beliefs and Values (GAO/NSIAD-92-105, Feb. 27, 1992).
\4 Examples of agencies providing such functions included the United
Kingdom's Social Security Benefits agency, the United Kingdom's
Defence Operational Analysis agency, Consulting and Audit Canada, and
the United Kingdom's Medicines Control agency, respectively.
CENTRAL MANAGEMENT DEPARTMENTS
OR OTHER HIGH-LEVEL GROUPS
GUIDED IMPLEMENTATION OF
REFORMS
---------------------------------------------------------- Chapter 5:3
We observed that central management departments in the four countries
facilitated the guidance and training of line department managers to
implement their results-oriented management reforms. Central
management departments in each of the countries issued guidance for
line managers on various aspects of their reforms, including
strategic and operational planning, measuring performance against
objectives, assessing client satisfaction, and using operating
budgets. In addition to issuing guidance, Australian Department of
Finance officials took on marketing and training roles. The
Department published a management reform circular that provided
updates on reform implementation, training opportunities, recent
publications on management subjects, and other management news.
Finance department officials also visited departments to explain the
flexibility available to line managers and facilitate the strategic
planning, objective-setting, and performance measurement processes.
In each of the countries, central management departments or other
high-level management groups evaluated their management reforms from
the line manager's perspective and provided meaningful feedback on
best practices and areas of weakness. In Australia, evaluations by
the Department of Finance, the Parliament's Standing Committee on
Finance and Public Administration, and the Management Improvement
Advisory Committee provided feedback from line managers and from the
departments as a whole on implementation of all aspects of their
management reforms and published case studies of best practices. The
United Kingdom, Canada, and New Zealand conducted similar high-level
assessments drawing heavily from the line managers' experiences with
implementing the reforms.
OVERVIEW OF GOVERNMENT PERFORMANCE
AND RESULTS ACT
=========================================================== Appendix I
GPRA requires federal agencies to develop, no later than the end of
fiscal year 1997, strategic plans covering a period of at least 5
years that include the agency's mission statement, identify the
agency's goals, and describe how the agency intends to achieve those
goals through its activities and through its human, capital,
information, and other resources. Under GPRA, agency strategic plans
are the starting point for agencies to set goals for programs and
measure the performance of the programs in achieving those goals.
In addition, GPRA requires agencies to submit, beginning in fiscal
year 1999, annual program performance plans to OMB and program
performance reports to the President and Congress. Program
performance plans are to describe how agencies are to meet their
program goals through daily operations and establish target levels of
performance for program activities. In these plans, agencies are to
define target levels in objective, measurable terms so that actual
achievement can be compared against the targets. Agencies'
individual performance plans are to provide information to OMB for an
overall federal government performance plan that OMB is to develop
and submit annually to Congress with the president's budget. In
their program performance reports, agencies are to show (1) program
achievements compared to the targets specified in the performance
plans; and (2) when a target has not been met, an explanation of why
the target was not met and what actions would be needed to achieve
the unmet goals.
GPRA also allows agencies to propose in their annual performance
plans that OMB waive certain administrative requirements. These
administrative waivers are intended to provide federal managers with
more flexibility to structure agency systems to better support
program goals. Under GPRA, the administrative requirements eligible
for waiver would be nonstatutory and involve only budgeting and
spending within agencies. In return, agencies would be held
accountable for achieving higher performance.
Finally, GPRA requires a 2-year test of performance budgeting in not
less than five agencies, at least three of which have had experience
developing performance plans. Under the test, performance budgets
are to provide Congress with information on the direct relationship
between proposed program spending and expected program results and
the anticipated effects of varying spending levels on results.
GPRA calls for phased implementation so that selected agencies can
develop experience from implementing its requirements before
implementation is required for all agencies. As of January 25, 1995,
OMB had selected over 70 agencies or programs to pilot strategic
planning, performance planning, performance measurement, and
performance reporting. OMB will be selecting agencies from among the
initial pilots to pilot managerial flexibility and test performance
budgeting in fiscal years 1995 and 1998, respectively. Although GPRA
does not call for governmentwide implementation of strategic planning
and performance planning until fiscal years 1998 and 1999,
respectively, OMB and the administration's NPR have strongly endorsed
these reforms and have encouraged all agencies to develop their
strategic and performance plans as soon as possible.
SUGGESTED READINGS: MANAGING FOR
RESULTS IN FOREIGN COUNTRIES
========================================================== Appendix II
The following are suggested readings on efforts by Australia, Canada,
New Zealand, and the United Kingdom to manage their governments for
results. While the list is not comprehensive, these publications
provide an overview of the approaches undertaken by and experiences
of these four countries.
AUSTRALIA
-------------------------------------------------------- Appendix II:1
The Australian Public Service Reformed: An Evaluation of a Decade of
Management Reform. Prepared for the Commonwealth Government's
Management Advisory Board with Guidance from its Management
Improvement Advisory Committee. Task Force on Management
Improvement. Canberra: Australian Government Publishing Service,
Dec. 1992.
Devolution of Corporate Services, No. 6. A Joint Publication of the
Management Advisory Board and its Management Improvement Advisory
Committee. Canberra: Australian Government Publishing Service, Apr.
1992.
Financial Management Improvement Program: Diagnostic Study.
Australian Public Service Board and Department of Finance. Prepared
in Collaboration with W. D. Scott & Co. Canberra: Australian
Government Publishing Service, Feb. 1984.
Financial Management Improvement Program: FMIP Report. Australian
Public Service Board and Department of Finance in Cooperation with
Departments and Authorities. Canberra: Australian Government
Publishing Service, June 1986.
Financial Management Improvement Program: 1988 FMIP Report.
Department of Finance in Cooperation with Departments and Agencies.
Canberra: Australian Government Publishing Service, Dec. 1988.
Funnell, Sue. Effective Reporting in Program Performance Statements.
Prepared for the Department of Finance. Performance Improvement Pty.
Ltd., Australia, May 1993.
Keating, Michael. "Managing for Results in the Public Interest."
Australian Journal of Public Administration, Vol. 49, No. 4 (Dec.
1990).
---, and Malcolm Holmes. "Australia's Budgetary and Financial
Management Reforms," published in Governance, 1989.
Not Dollars Alone: Review of the Financial Management Improvement
Program. Report of the House of Representatives Standing Committee
on Finance and Public Administration, Parliament of the Commonwealth
of Australia. Canberra: Australian Government Publishing Service,
Sept. 1990.
Performance Information and the Management Cycle, No. 10. A Joint
Publication of the Management Advisory Board and its Management
Improvement Advisory Committee. Canberra: Australian Government
Publishing Service, Feb. 1993.
Promoting Value for Money: The Role of the Department of Finance,
The Views of the Client Agencies. Department of Finance. Canberra:
Australian Government Publishing Service, Apr. 1991.
CANADA
-------------------------------------------------------- Appendix II:2
"Attributes of Well-Performing Organizations: A Study by the Office
of the Auditor General of Canada to the House of Commons," extract
from the 1988 Annual Report. Ottawa, Ontario, Dec. 1988.
"Canada's Public Service Reform, and Lessons Learned from Selected
Jurisdictions," Report of the Auditor General of Canada to the House
of Commons, 1993. Minister of Supply and Services Canada, Nov. 23,
1993, pp. 157-185.
"Constraints to Productive Management in the Public Service," Report
of the Auditor General of Canada to the House of Commons, 1983.
Minister of Supply and Services Canada, 1983, pp. 51-86.
The Historical and International Background of Special Operating
Agencies. Consulting and Audit Canada, Oct. 1992.
"Information for Parliament, Departmental Reporting," Report of the
Auditor General of Canada to the House of Commons 1992. Minister of
Supply and Services Canada, Nov. 24, 1992, pp. 163-180.
Into the 90s: Government Program Evaluation Perspectives. Office of
the Comptroller General. Communications and Consultations Division,
Treasury Board of Canada, Jun. 1991.
A Manager's Guide to Operating Budgets. Communications and
Coordination Directorate, Treasury Board of Canada, 1992.
"International Developments," Optimum: The Journal of Public Sector
Management, Vol. 22-2 (1991/92).
Public Service 2000: The Renewal of the Public Service of Canada.
Minister of Supply and Services Canada, Dec. 1990.
Standards for Service: A Guide to the Initiative. Treasury Board
Secretariat, [Canada], July 1993.
Tellier, Paul M. Public Service 2000: First Annual Report to the
Prime Minister on the Public Service of Canada. Minister of Supply
and Services Canada, June 30, 1992.
Your Guide to Measuring Client Satisfaction. Communications and
Coordination Directorate, Treasury Board of Canada, Apr. 1992.
NEW ZEALAND
-------------------------------------------------------- Appendix II:3
Ball, Ian. "Making Ministries More Accountable: The New Zealand
Experience." Presented to the International Consortium on
Governmental Financial Management Conference. Arlington, VA (Oct.
1993).
Boston, Jonathan, et al., eds. Reshaping the State: New Zealand's
Bureaucratic Revolution. Oxford: Oxford University Press, 1991.
Goldman, Frances and Edith Brashares. "Performance and
Accountability: Budget Reform in New Zealand," Public Budgeting and
Finance (Winter 1991).
"Government Management," Treasury Briefs to the Incoming Government.
[New Zealand], 1987.
New Zealand Public Sector Reform. State Services Commission, 1993.
Review of State Sector Reforms. Steering Group, [New Zealand], Nov.
29, 1991.
Scott, Graham, Peter Bushnell, and Nikitin Sallee. "Reform of the
Core Public Sector: New Zealand Experience," Governance, Vol. 3,
No. 2 (Apr. 1990).
Sherwood, Frank P. "Really Comprehensive Administrative Reform: The
Case of New Zealand." Thinking Differently About Governmental Reform
in Florida. Florida Center for Public Management Monograph Series,
Publication No. 81392. Florida State University, Mar. 1992.
UNITED KINGDOM
-------------------------------------------------------- Appendix II:4
The Citizen's Charter, First Report: 1992. Presented to Parliament
by the Prime Minister and the Chancellor of the Duchy of Lancaster by
Command of Her Majesty. London: HMSO, Nov. 1992.
The Citizen's Charter, Second Report: 1994. Presented to Parliament
by the Prime Minister and the Chancellor of the Duchy of Lancaster by
Command of Her Majesty. London: HMSO, Mar. 1994.
Competing for Quality: Buying Better Public Services. Presented to
Parliament by the Chancellor of the Exchequer by Command of Her
Majesty. London: HMSO, Nov. 1991.
Executive Agencies: A Guide to Setting Targets and Measuring
Performance. (preliminary draft) HM Treasury, Nov. 1991.
Executive Agencies: A Guide to Setting Targets and Measuring
Performance. London: HMSO, Apr. 1992.
Executive Agencies: Survey Report, Facts and Trends. ed. 6, Price
Waterhouse, Mar. 31, 1993.
Executive Agencies: Survey Report 1994, Facts and Trends. ed. 8,
Price Waterhouse, May 16, 1994.
The Financial Management Initiative. National Audit Office, Nov.
1986.
Finer, Elliot. "The Next Steps Program: Executive Agencies in the
United Kingdom," Optimum: The Journal of Public Sector Management,
Vol. 22-2 (1991/92), pp. 23-30.
Fry, Geoffrey K. "The Thatcher Government, The Financial Management
Initiative, and the `New Civil Service'," Public Administration, Vol.
66 (Spring 1988).
Gray, Andrew, et al. "The Management of Change in Whitehall: The
Experience of the FMI," Public Administration, Vol. 69 (Spring
1991).
Jenkins, Kate, Karen Caines, and Andrew Jackson. "Improving
Management in Government: The Next Steps," Report to the Prime
Minister. London: HMSO, 1988.
"Making the Most of the Next Steps: The Management of Ministers'
Departments and Their Executive Agencies," Report to the Prime
Minister. London: HMSO, May 1991.
Next Steps: Agencies in Government, Review 1993. Presented to
Parliament by the Chancellor of the Duchy of Lancaster by Command of
Her Majesty. London: HMSO, Dec. 1993.
The Next Steps Initiative. Report by the Comptroller and Auditor
General. London: HMSO, June 6, 1989.
Top Management Systems. Report by the Cabinet Office (MPO)/Treasury
Financial Management Unit Submitted January 1985. (June 1985).
MAJOR CONTRIBUTORS TO THIS REPORT
========================================================= Appendix III
J. Christopher Mihm, Assistant Director, (202) 512-3236
Elizabeth H. Curda, Evaluator-in-Charge
Donna M. Leiss
Dorothy L. Self
Kiki Theodoropoulos
RELATED GAO PRODUCTS
============================================================ Chapter 1
Government Reform: Goal-Setting and Performance
(GAO/AIMD/GGD-95-130R, Mar. 27, 1995).
Managing for Results: State Experiences Provide Insights for Federal
Management Reforms (GAO/GGD-95-22, Dec. 21, 1994).
Budget Object Classification: Origins and Recent Trends
(GAO/AIMD-94-147, Sept. 13, 1994).
Management Reforms: Examples of Public and Private Innovations to
Improve Service Delivery (GAO/AIMD/GGD-94-90BR, Feb. 11, 1994).
Budget Issues: Assessing Executive Order 12837 on Reducing
Administrative Expenses (GAO/AIMD-94-15, Nov. 17, 1993).
Improving Government: Actions Needed to Sustain and Enhance
Management Reforms (GAO/T-OCG-94-1, Jan. 27, 1994).
Management Reform: GAO's Comments on the National Performance
Review's Recommendations (GAO/OCG-94-1, Dec. 3, 1993).
Improving Government: Measuring Performance and Acting on Proposals
for Change (GAO/T-GGD-93-14, Mar. 23, 1993).
Federal Performance Management: Agencies Need Greater Flexibility in
Designing Their Systems (GAO/GGD-93-57, Feb. 24, 1993).
Performance Budgeting: State Experiences and Implications for the
Federal Government (GAO/AFMD-93-41, Feb. 17, 1993).
Program Performance Measures: Federal Agency Collection and Use of
Performance Data (GAO/GGD-92-65, May 4, 1992).
Government Management Issues (GAO/OCG-93-3TR, Dec. 1992).
Information Management and Technology Issues (GAO/OCG-93-5TR, Dec.
1992).
Program Evaluation Issues (GAO/OCG-93-6TR, Dec. 1992).
The Chief Financial Officers Act: A Mandate for Federal Financial
Management Reform (GAO/AFMD-12.19.4, Sept. 1991).
Service to the Public: How Effective and Responsive Is the
Government? (GAO/T-HRD-91-26, May 8, 1991).