Managing For Results: Critical Issues for Improving Federal Agencies'
Strategic Plans (Letter Report, 09/16/97, GAO/GGD-97-180).

Pursuant to a congressional request, GAO reviewed individual agencies'
draft strategic plans, as required by the Government Performance and
Results Act of 1993, focusing on: (1) summarizing the overall results of
GAO's reviews of those plans; and (2) identifying, on the basis of those
reviews, the strategic planning issues most in need of sustained
attention.

GAO noted that: (1) a significant amount of work remained to be done by
executive branch agencies if their strategic plans are to fulfill the
requirements of the Results Act, serve as a basis for guiding agencies,
and help congressional and other policymakers make decisions about
activities and programs; (2) although all 27 of the draft plans included
a mission statement, 21 plans lacked 1 or more of 5 other required
elements; (3) overall, one-third of the plans were missing two required
elements; and just over one-fourth were missing three or more of the
required elements; (4) GAO's reviews of agencies' draft strategic plans
also revealed several critical strategic planning issues that are in
need of sustained attention if agencies are to develop the dynamic
strategic planning processes envisioned by the Results Act; (5) most of
the draft plans did not adequately link required elements in the plans;
(6) these linkages are important if strategic plans are to drive the
agencies' daily activities and if agencies are to be held accountable
for achieving intended results; (7) furthermore, 19 of the 27 draft
plans did not attempt to describe the linkages between long-term
strategic goals and annual performance goals; (8) long-term strategic
goals often tended to have weaknesses; (9) although the Results Act does
not require that all of an agency's strategic goals be results oriented,
the intent of the Act is to have agencies focus their strategic goals on
results to the extent feasible; (10) many agencies did not fully develop
strategies explaining how their long-term strategic goals would be
achieved; (11) most agencies did not reflect in their draft plans the
identification and planned coordination of activities and programs that
cut across multiple agencies; (12) the questionable capacity of many
agencies to gather performance information has hampered, and may
continue to hamper, efforts to identify appropriate goals and
confidently assess performance; (13) the draft strategic plans did not
adequately address program evaluations; and (14) evaluations are
important because they potentially can be critical sources of
information for ensuring that goals are reasonable, strategies for
achieving goals are effective, and that corrective actions are taken in
program implementation.

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

 REPORTNUM:  GGD-97-180
     TITLE:  Managing For Results: Critical Issues for Improving Federal 
             Agencies' Strategic Plans
      DATE:  09/16/97
   SUBJECT:  Congressional/executive relations
             Strategic planning
             Interagency relations
             Agency missions
             Program evaluation
             Public administration
             Information resources management
             Financial management systems
             Internal controls
IDENTIFIER:  GPRA
             Government Performance and Results Act
             
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Cover
================================================================ COVER


Report to Congressional Requesters

September 1997

MANAGING FOR RESULTS - CRITICAL
ISSUES FOR IMPROVING FEDERAL
AGENCIES' STRATEGIC PLANS

GAO/GGD-97-180

Agencies' Strategic Plans

(410165)


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

  AID - Agency for International Development
  DOD - Department of Defense
  DOT - Department of Transportation
  EPA - Environmental Protection Agency
  FEMA - Federal Emergency Management Agency
  GPRA - Government Performance and Results Act
  GSA - General Services Administration
  HHS - Department of Health and Human Services
  NSF - National Science Foundation
  OMB - Office of Management and Budget
  OPM - Office of PErsonnel Management
  SBA - Small Business Administration
  SSA - Social Security Administration
  USDA - United States Department of Agriculture
  VA - Department of Veterans Affairs

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


B-277715

September 16, 1997

The Honorable Richard K.  Armey
Majority Leader
House of Representatives

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

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

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

There has been a groundswell movement in recent years toward
performance-based management in public sector organizations.  The
federal government, as well as some state, local, and foreign
governments, has grappled with how best to improve effectiveness and
service quality while limiting costs.\1 As a result, those
governments have implemented reform agendas that have tended to
include a common recognition that improved public management was a
critical part of the answer to meeting demands for a government that
performed better while economizing on resources. 

The Government Performance and Results Act of 1993, commonly referred
to as "GPRA" or "the Results Act," was enacted as the centerpiece of
a statutory framework Congress has put in place to improve federal
management and provide a greater focus on results.  The Results Act
seeks to shift the focus of government decisionmaking and
accountability away from a preoccupation with the activities that are
undertaken--such as grants and inspections made--to a focus on the
results of those activities--such as real gains in employability,
safety, responsiveness, or program quality.  In crafting the Results
Act, Congress understood that the management changes required to
effectively implement the Act would not come quickly or easily. 

A key requirement of the Results Act is that agencies are to develop
strategic plans in consultation with Congress and to submit these
plans in final form to Congress and the Office of Management and
Budget (OMB) by September 30, 1997.  On June 12, 1997, you requested
that we review and evaluate the latest available version of the draft
strategic plans that were submitted to Congress for consultation by
cabinet departments and selected independent agencies.  As you
requested, those reviews of individual agencies' draft plans (1)
assessed the draft plans' compliance with the Act's required elements
and their overall quality, (2) determined if the plans reflected the
key statutory requirements for each agency, (3) identified whether
the plans reflected discussions about crosscutting activities and
coordination with other agencies having similar activities, (4)
determined if the draft plans addressed major management challenges,
and (5) provided a preliminary assessment of the capacity of the
departments and agencies to provide reliable information about
performance. 

In developing those reports, we noted that Congress anticipated that
it may take several planning cycles to perfect the process and that
strategic plans would be continually refined as various planning
cycles occur.  We also recognized that developing a strategic plan is
a dynamic process and that agencies, with input from OMB and
Congress, were continuing to improve their plans.  A list of our
reports, prepared in response to your request, on the draft strategic
plans of 27 cabinet departments and selected independent agencies and
related work appears at the end of this report. 

This report responds to your separate request that we (1) summarize
the overall results of our reviews of those plans; and (2) identify,
on the basis of those reviews, the strategic planning issues most in
need of sustained attention. 


--------------------
\1 See, for example, Managing for Results:  Experiences Abroad
Suggest Insights for Federal Management Reform (GAO/GGD-95-120, May
2, 1995); Managing for Results:  State Experiences Provide Insights
for Federal Management Reforms (GAO/GGD-95-22, Dec.  21, 1994); and
Government Reform:  Goal-setting and Performance
(GAO/AIMD/GGD-95-130R, Mar.  27, 1995). 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :1

This summary report is based on our analysis of the information
contained in our reviews of 27 agencies' draft strategic plans.  To
do those 27 reviews and the related reports, we used the Results Act
supplemented by OMB's guidance on developing the plans (Circular
A-11, part 2) as criteria to determine whether draft plans complied
with the requirement for the six specific elements that are to be in
the strategic plans.  To make judgments about the overall quality of
the plans, we used our May 1997 guidance for congressional review of
the plans.\2 We recognized in each instance that the plans were
drafts and that our assessment thus represented a snapshot at a given
point in time.  To make judgments about the planning issues needing
attention, we also relied on other related work, including our recent
report on governmentwide implementation of the Results Act and our
guidance for congressional review of Results Act implementation, as
tools.\3


--------------------
\2 Agencies' Strategic Plans Under GPRA:  Key Questions to Facilitate
Congressional Review (GAO/GGD-10.1.16, May 1997). 

\3 See The Government Performance and Results Act:  1997
Governmentwide Implementation Will Be Uneven (GAO/GGD-97-109, June 2,
1997); GAO/GGD-10.1.16, May 1997; and Executive Guide:  Effectively
Implementing the Government Performance and Results Act
(GAO/GGD-96-118, June 1996). 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

At the time of our reviews of agencies' draft plans, we found that a
significant amount of work remained to be done by executive branch
agencies if their strategic plans are to fulfill the requirements of
the Results Act, serve as a basis for guiding agencies, and help
congressional and other policymakers make decisions about activities
and programs.  Although all 27 of the draft plans included a mission
statement, 21 plans lacked 1 or more of 5 other required elements. 
For example, two plans did not contain long-term strategic goals that
are to be the basis for directing agencies toward the achievement of
their missions, and six did not describe approaches or strategies for
achieving those goals and objectives.  Overall, one-third of the
plans were missing two required elements; and just over one fourth
were missing three or more of the required elements. 

Our reviews of agencies' draft strategic plans also revealed several
critical strategic planning issues that are in need of sustained
attention if agencies are to develop the dynamic strategic planning
processes envisioned by the Results Act.  First, most of the draft
plans did not adequately link required elements in the plans.  For
example, some of the draft plans did not consistently describe the
alignment between an agency's long-term strategic goals and
objectives and the strategies planned to achieve those goals and
objectives.  As we reported, these linkages are important if
strategic plans are to drive the agencies' daily activities and if
agencies are to be held accountable for achieving intended results. 
Furthermore, 19 of the 27 draft plans did not attempt to describe the
linkages between long-term strategic goals and annual performance
goals.  We have reported that this linkage is critical for
determining whether an agency has a clear sense of how it will assess
progress toward achieving its intended results. 

Second, long-term strategic goals often tended to have weaknesses. 
Although the Results Act does not require that all of an agency's
strategic goals be results oriented, the intent of the Act is to have
agencies focus their strategic goals on results to the extent
feasible.  However, several plans contained goals that were not as
results oriented as they could have been.  In addition, several plans
also contained goals that were not expressed in a manner that would
allow future assessments of whether they were being achieved. 
Further, in three plans, long-term goals were not developed for major
functions or activities, as required by the Results Act. 

Third, many agencies did not fully develop strategies explaining how
their long-term strategic goals would be achieved.  For example, we
found that each of the plans could be strengthened if the sections on
strategies included, among other things, specific actions, planned
accomplishments, and implementation schedules.  Also, the plans for
most of the 27 agencies did not reflect strategies for addressing key
management challenges that could affect the agencies' ability to
achieve strategic goals. 

Fourth, most agencies did not reflect in their draft plans the
identification and planned coordination of activities and programs
that cut across multiple agencies.  We recently reported to you on
our work that suggested that mission fragmentation and program
overlap are widespread throughout the federal government.\4 We noted
that interagency coordination is important for ensuring that
crosscutting program efforts are mutually reinforcing and efficiently
implemented.  However, our reviews indicated that 20 of the draft
strategic plans lacked evidence of interagency coordination. 

Fifth, our work suggests that the questionable capacity of many
agencies to gather performance information has hampered, and may
continue to hamper, efforts to identify appropriate goals and
confidently assess performance.  We have reported that the lack of
reliable data to measure the costs and results of agency operations
has been a long-standing problem for agencies across the federal
government.\5 Our work also has shown that agency officials with
experience in performance measurement cited ascertaining the accuracy
and quality of performance data as 1 of the top 10 challenges to
performance measurement.\6

Finally, the draft strategic plans did not adequately address program
evaluations.  For example, 16 plans did not discuss program
evaluations, and the discussions of program evaluations in the
remaining 11 plans lacked critical information, such as descriptions
of how evaluations were used in setting strategic goals and schedules
for future evaluations.  Evaluations are important because they
potentially can be critical sources of information for ensuring that
goals are reasonable, strategies for achieving goals are effective,
and that corrective actions are taken in program implementation. 


--------------------
\4 Managing for Results:  Using the Results Act to Address Mission
Fragmentation and Program Overlap (GAO/AIMD-97-146, Aug.  29, 1997). 

\5 High-Risk Areas:  Actions Needed to Solve Pressing Management
Problems (GAO/T-AIMD/GGD-97-60, Mar.  5, 1997). 

\6 Managing for Results:  Analytic Challenges in Measuring
Performance (GAO/HEHS/GGD-97-138, May 30, 1997). 


   BACKGROUND
------------------------------------------------------------ Letter :3

The Results Act is the centerpiece of a statutory framework Congress
put in place during the 1990s to address long-standing weaknesses in
federal operations, improve federal management practices, and provide
greater accountability for achieving results.  Under the Results Act,
strategic plans are the starting point and basic underpinning for
results-oriented management.  The Act requires that an agency's
strategic plan contain six key elements:  (1) a comprehensive agency
mission statement; (2) agencywide long-term goals and objectives for
all major functions and operations; (3) approaches (or strategies)
and the various resources needed to achieve the goals and objectives;
(4) a description of the relationship between the long-term goals and
objectives and the annual performance goals; (5) an identification of
key factors, external to the agency and beyond its control, that
could significantly affect the achievement of the strategic goals;
and (6) a description of how program evaluations were used to
establish or revise strategic goals and a schedule for future program
evaluations.\7

In addition to the Results Act, the statutory framework includes the
Chief Financial Officers (CFO) Act, as expanded and amended by the
Government Management Reform Act of 1994; and information technology
reform legislation, in particular the Clinger-Cohen Act of 1996 and
the Paperwork Reduction Act of 1995.  Congress enacted the CFO Act to
remedy decades of serious neglect in federal financial management by
establishing chief financial officers across the federal government
and requiring the preparation and audit of annual financial
statements.  The information technology reform legislation is based
on the best practices used by leading public and private sector
organizations to manage information technology more effectively. 
Under the information technology reform legislation, agencies are to
better link their planned and actual use of technology to their
programs' missions and goals to improve performance. 

Congress has demonstrated its commitment to the Results Act and
reinforced to executive agencies the importance it places on the full
and complete implementation of the Act.  One such prominent
demonstration occurred on February 25, 1997, when the Speaker of the
House, the Majority Leader of the Senate, and other senior members of
the House and Senate sent a letter to the Director of OMB.  The
letter underscored the importance that the congressional Majority
places on the implementation of the Results Act, noted a willingness
on the part of Congress to work cooperatively with the
administration, and established expectations for congressional
consultations with agencies on their draft strategic plans. 

Under the Results Act, those consultations are to be an integral part
of strategic planning.  For example, consultations can help to create
a basic understanding among the stakeholders of the competing demands
that confront agencies and how those demands and available resources
require careful and continuous balancing.  In the House, the
consultation effort was led by teams consisting of staff from various
committees that focused on specific agencies.  In an August 1997
letter, the House Majority Leader provided the Director of OMB with
an overview of recent congressional consultations and highlighted
some recurring themes, such as the need for interagency coordination. 
Although the consultation process in the Senate has been less
structured than the one in the House, a number of consultations have
been held there as well. 

In addition to consulting with agencies, several House and Senate
authorizing committees also held hearings on draft strategic plans in
July 1997, which further underscored congressional interest in
agencies creating good strategic planning processes that support
performance-based management.  For example, these hearings included
those held by the Subcommittee on Water and Power, House Committee on
Resources; the House Committee on Science; the Subcommittee on Human
Resources, House Committee on Government Reform and Oversight; the
House Committee on Banking and Financial Services; the Subcommittee
on Forests and Forest Health, House Committee on Resources; and the
Senate Committee on Indian Affairs. 

The Senate and House appropriations committees have been expanding
their focus on the Results Act as well.  For example, the Senate
Appropriations and Governmental Affairs committees held a joint
hearing on the status of Results Act implementation, with particular
emphasis on agencies' strategic planning efforts.  The Senate
Appropriations Committee has included comments on the Results Act in
its reports on the fiscal year 1998 appropriations bills.  The report
language has discussed the Committee's views on the status and
quality of individual agencies' efforts to implement the Results Act
and expressed the need for continuing consultations, among other
issues.  In the House, the Appropriations Committee has included a
standard statement in its appropriations reports that strongly
endorses the Results Act.  This standard statement notes that each
appropriations subcommittee "takes (the annual performance plan)
requirement of the Results Act very seriously and plans to carefully
examine agency performance goals and measures during the
appropriations process."


--------------------
\7 For a detailed discussion of the Results Act, see appendix I. 


   MOST PLANS LACKED SOME REQUIRED
   ELEMENTS
------------------------------------------------------------ Letter :4

A significant amount of work remains to be done by executive branch
agencies before their strategic plans can fulfill the requirements of
the Results Act, serve as a basis for guiding agencies, and help
congressional and other policymakers make decisions about activities
and programs.  Although all 27 of the draft plans included a mission
statement, 21 plans lacked 1 or more of the other required elements. 
Specifically, of the 27 draft strategic plans: 

  -- 2 did not include agencywide strategic goals and objectives,

  -- 6 did not describe approaches or strategies for achieving those
     goals and objectives,

  -- 19 did not describe the relationship between long-term goals and
     objectives and annual performance goals,

  -- 6 did not identify key factors that are external to the agency
     and beyond its control that could affect the achievement of the
     goals and objectives, and

  -- 16 did not discuss program evaluations that the agency used to
     establish or revise goals and objectives or provide a schedule
     of future program evaluations. 

Moreover, while all but six of the plans were missing at least one
required element, one-third were missing two required elements.  Just
over one-fourth of the plans failed to cover at least three of the
required elements. 

Because most of the draft plans did not contain all six required
elements, Congress did not have access to critical pieces of
information for its consultations with the agencies on their draft
strategic plans; and, if these elements are not included in the final
plans, federal managers will not have a clear strategic direction
upon which to base their daily activities.  For example, agencies
whose plans lacked strategic goals and strategies for achieving those
goals will not have a solid foundation upon which to build the
performance measurement and reporting efforts that are required by
the Results Act.  The incomplete or inadequate coverage of the six
required elements in the plans is an indication of the amount of
additional work necessary to fulfill the Act's minimum requirements
that agencies had to undertake prior to the submission of strategic
plans to Congress on September 30, 1997. 


   CRITICAL STRATEGIC PLANNING
   ISSUES MOST IN NEED OF
   SUSTAINED ATTENTION
------------------------------------------------------------ Letter :5

Many agencies showed progress in developing comprehensive mission
statements upon which they can build strategic goals and strategies
for achieving those goals.  A mission statement is important because
it focuses an agency on its intended purpose.  It explains why the
agency exists and tells what it does and is the basic starting point
of successful planning efforts.  However, our reviews of draft
strategic plans for 27 agencies found several critical strategic
planning issues that are in need of sustained attention to ensure
that those plans better meet the needs of agencies, Congress, and
other stakeholders and that agencies shift their focus from
activities to results.  These issues were: 

  -- the lack of linkages among required elements in the draft plans,

  -- the weaknesses in long-term strategic goals,

  -- the lack of fully developed strategies to achieve the goals,

  -- the lack of evidence that agencies' plans reflect coordination
     with other federal agencies having similar or complementary
     programs,

  -- the limited capacity of agencies to gather performance
     information, and

  -- the lack of attention to program evaluations. 


      MOST PLANS LACKED CRITICAL
      LINKAGES
---------------------------------------------------------- Letter :5.1

The majority of the draft strategic plans lacked critical linkages
among required elements in the plans.  We have noted in our Executive
Guide and other recent reports that for strategic plans to drive an
agency's operations, a straightforward linkage is needed among its
long-term strategic goals, strategies for achieving goals, annual
performance goals, and day-to-day activities.  First, as prior work
has shown, a direct alignment between strategic goals and strategies
for achieving those goals is important for assessing an agency's
ability to achieve those goals.  Second, we have noted that the
linkage between long-term strategic goals and annual performance
goals is important because without this linkage, agency managers and
Congress may not be able to judge whether an agency is making annual
progress toward achieving its long-term goals.\8


--------------------
\8 See GAO/GGD-96-118, June 1996; and GAO/GGD-10.1.16, May 1997, as
well as our reports on agencies' draft strategic plans. 


         LINKAGE BETWEEN GOALS AND
         STRATEGIES
-------------------------------------------------------- Letter :5.1.1

In several draft strategic plans, the agencies' presentation of
information on strategic goals, objectives, and strategies made it
difficult to determine which strategy was supposed to achieve which
goal or objective and what unit or component within the agency was
supposed to carry out the strategy.  For example, in the Small
Business Administration's (SBA) plan, objectives were listed as a
group under goals, followed by strategies, which were also listed as
a group.  This presentation does not convey how specific strategies
would lead to achieving specific goals.  In another example, the
Federal Emergency Management Agency (FEMA) listed several areas of
focus and operational objectives under each of its five strategies,
but if did not establish linkages among them or between the
strategies and the agency's strategic objectives.  Accordingly,
although an affiliation between specific strategies and objectives
may exist, it was not readily apparent from these agencies' draft
strategic plans. 

In contrast, the Department of Education's plan linked each strategic
goal to a set of objectives that were, in turn, linked to a set of
strategies.  For example, the strategic goal to "build a solid
foundation for learning" had as one of its objectives, "every eighth
grader masters challenging mathematics, including the foundations of
algebra and geometry." Two of the strategies listed under this
objective were to develop and use a national, voluntary test in
mathematics as a means to encourage schools, school districts,
states, businesses, and communities to move toward improving math
curricula and instruction, among other things; and to increase public
understanding and support of mastering mathematics by the end of
eighth grade through partnerships with key education, mathematics,
and professional organizations. 


         LINKAGE BETWEEN STRATEGIC
         GOALS AND PERFORMANCE
         GOALS
-------------------------------------------------------- Letter :5.1.2

As noted in our section on required elements, 19 of 27 draft plans
did not describe the linkages between long-term strategic goals and
annual performance goals.\9 As we have reported, without this
linkage, it may not be possible to determine whether an agency has a
clear sense of how it will assess the progress made toward achieving
its intended results.  However, some agencies made good attempts at
providing this linkage in their draft plans.  For example, the
Department of Education, the General Services Administration (GSA),
and the Postal Service\10 used a matrix to illustrate the linkages
among their strategic goals, objectives, and the measures that are to
be reflected in their annual performance goals. 


--------------------
\9 An annual performance goal is defined in the Results Act as the
target level of performance expressed as a tangible, measurable
objective against which actual achievement is to be compared.  We
have noted that an annual performance goal is to consist of two
parts:  (1) the performance measure that represents the specific
characteristic of the program used to gauge performance and (2) the
target level of performance to be achieved during a given fiscal
year. 

\10 Unlike executive branch agencies, the Postal Service is not
required to submit its strategic plan to OMB and is not subject to
the provisions of OMB's Circular No.  A-11, part 2. 


         LINKAGE BETWEEN COMPONENT
         GOALS AND AGENCYWIDE
         GOALS
-------------------------------------------------------- Letter :5.1.3

Our work on the draft plans found that clearly aligning required
strategic planning elements is especially important in those cases
where agencies, as allowed under OMB guidance, chose to submit a
strategic plan for each of their major components and a strategic
overview that under the guidance is to show the linkages among these
plans, instead of a single agencywide plan.  A few agencies,
including the Departments of Agriculture (USDA), Labor, and the
Interior, used this approach.  USDA, Labor, and Interior are large
agencies with disparate functions that are implemented by a number of
subagencies.  For example, USDA has 18 subagencies working in 7
different mission areas, such as farm and foreign agricultural
services and food safety and inspection service.  None of the three
agencies adequately linked component-level goals to the agencywide
strategic goals.  For example, their plans did not consistently
demonstrate how the components' goals and objectives would contribute
to the achievement of agencywide goals.  Furthermore, Labor's
overview plan did not contain agencywide goals, even though the
Secretary set forth agencywide goals in recent congressional
testimony. 


      STRATEGIC GOALS OFTEN TENDED
      TO HAVE WEAKNESSES
---------------------------------------------------------- Letter :5.2

Leading organizations we have studied set long-term strategic goals
that were an outgrowth of a clearly stated mission.\11 Setting
long-term strategic goals is essential for results-oriented
management, because such goals explain in greater specificity the
results organizations are intending to achieve.  The goals form a
basis for an organization to identify potential strategies for
fulfilling its mission and for improving its operations to support
achievement of that mission.  Congress recognized both the importance
and difficulty of setting results-oriented strategic goals.  Under
the Results Act, all of an agency's strategic goals do not need to be
explicitly results oriented, although the intent of the Act is to
have agencies focus on results to the extent feasible. 

Although most agencies attempted to articulate agencywide strategic
goals and objectives in their plans, many of those goals and
objectives tended to be weak.  We often found that the draft plans
contained goals and objectives that were not as results oriented as
they could have been.  For example, one of the Department of Veterans
Affair's (VA) goals, to "improve benefit programs," could be more
results oriented if VA identified the purpose of the benefit programs
(e.g., to ease veterans' transition to civilian life).  In contrast,
GSA's goals and objectives reflect a positive attempt to define the
results that it expects from its major functions.  For example, one
of the goals in the draft strategic plan states that GSA will become
the space/supplies/telecommunications provider of choice for all
federal agencies by delivering quality products and services at the
best value. 

In several plans, agencies expressed goals and objectives in a manner
that would make them difficult to measure or difficult to assess in
the future.  Although strategic goals need not be expressed in a
measurable form, OMB guidance says goals must be expressed in a
manner that allows for future assessment of whether they are being
achieved.  One example of an objective that was not measurable as
written is the Social Security Administration's (SSA) goal "to
promote valued, strong, and responsive social security programs
through effective policy development and research." This goal
recognized that program leadership cannot be achieved without a
strong policy and research capability--the lack of which we have
criticized SSA for in the past.  Yet, the goal itself and the
supporting discussion in the draft strategic plan were difficult to
understand and the results SSA expects were unclear.  In addition,
the goal was not stated in a manner that allows for a future
assessment of its achievement. 

Three plans were missing goals for major functions and operations
that are reflected in statute or are otherwise important to their
missions.  The Department of Health and Human Services (HHS) stated
in its draft plan that the plan's goals relate to those activities
that have HHS priority over the next 6 years and that the goals did
not cover every HHS activity.  However, we found that the plan made
no mention of a major function--that is, HHS' responsibilities for
certifying medical facilities, such as clinical laboratories and
mammography providers.  The section on goals in the Agency for
International Development's (AID) draft plan also did not fully
encompass the agency's major functions, because the section did not
specifically address some programs, such as assistance to Eastern
Europe and the former Soviet Union and Economic Support Funds, which
represent about 60 percent of AID's budget.  In addition, the Postal
Service's draft plan did not contain goals and objectives for two
major functions:  providing mail delivery service to all communities
and providing ready access to postal retail services. 


--------------------
\11 GAO/GGD-96-118, June 1996. 


      STRATEGIES OFTEN NOT FULLY
      DEVELOPED
---------------------------------------------------------- Letter :5.3

In our reports on draft strategic plans, we noted that strategies
should be specific enough to enable an assessment of whether they
would help achieve the goals in the plan.  In addition, the
strategies should elaborate on specific actions the agency is taking
or plans to take to carry out its mission, outline planned
accomplishments, and schedule their implementation.  However, many of
the strategies in the plans we reviewed lacked descriptions of
approaches or actions to be taken or failed to address management
challenges that threatened agencies' ability to meet long-term
strategic goals. 


      PLANS FREQUENTLY LACKED
      DESCRIPTIONS OF APPROACHES
---------------------------------------------------------- Letter :5.4

Incomplete and underdeveloped strategies were a frequent problem with
the draft plans we reviewed.  For example, the draft plan for the
Department of State did not specifically identify the actions needed
to meet the plan's goals but rather often focused on describing the
Department's role in various areas.  For example, the Department's
first strategy, "maintaining effective working relationships with
leading regional states through vigorous diplomacy, backed by strong
U.S.  and allied military capability to react to regional
contingencies," did not describe how the Department planned to
maintain effective working relationships or coordinate with the other
lead agency, the Department of Defense (DOD), identified in the
strategy. 

In some cases, such as in the plans of Justice and Energy, strategies
frequently read more like goals or objectives, rather than approaches
for achieving goals.  Justice's strategy to promote compliance with
the country's civil rights laws and Energy's strategy to maintain an
effective capability to deter and/or respond to energy supply
disruptions did not describe what actions the agencies planned to
take to implement their related goals.  Instead, their labelled
strategies sounded like additional goals and objectives in that they
discussed what the agencies expected to achieve.  In other cases,
such as in the plans of HHS and Commerce, strategies read like
program justifications.  Under strategies for addressing alcohol
abuse, HHS' draft plan states that "[t]he National Institutes of
Health conducts research and develops and disseminates information on
prevention and treatment effectiveness." Under strategies for
providing technical leadership for the nation's measurement and
standards infrastructure, the Commerce plan stated that the
"laboratories of the National Institute of Standards and Technology
provide companies, industries, and the science and technology
community with the common language needed in every stage of technical
activity." Without fully developed strategies, it will be difficult
for managers, Congress, and other stakeholders to assess whether the
planned approach will be successful in achieving intended results. 


         KEY MANAGEMENT CHALLENGES
         OFTEN NOT ADDRESSED
-------------------------------------------------------- Letter :5.4.1

One purpose of the Results Act is to improve the management of
federal agencies.  Therefore, it is particularly important that
agencies develop strategies that address management challenges that
threaten their ability to meet long-term strategic goals as well as
this purpose of the Act.  However, we found that most of the plans
did not adequately address the major management challenges and
high-risk areas that we and others have identified.\12 For example,
in our recent high-risk report series, we noted that DOD has
long-standing management problems in six high-risk areas, including
financial management, information technology, infrastructure, and
inventory management.\13

However, DOD's draft plan generally paid little--and in one case,
no--attention to high-risk management issues.  We also placed
Medicare, one of the largest federal entitlement programs, on our
high-risk list, because of Medicare's losses each year due to
fraudulent and abusive claims.  For example, the recent audit of
financial statements performed by the Inspector General of HHS
disclosed improper payments of $23.2 billion nationwide, or about 14
percent of total Medicare fee for service benefit payments.  However,
HHS' draft plan did not address the long-standing problem the agency
has with Medicare claims processing. 

Another management-related issue that presents a challenge to
agencies is ongoing and proposed restructuring of federal activities,
which will likely require adjustments to agencies' management
practices, processes, and systems.  For example, the administration
has ongoing efforts to integrate (1) the Department of State, the
U.S.  Information Agency, and the Arms Control and Disarmament Agency
into one agency with the intent to better serve the U.S.  national
interests and foreign policy goals in the 21st century; and (2)
certain shared administrative functions of State and AID.  However,
State's draft plan did not discuss how State planned to integrate
these agencies into its organizational structure or address
substantive support requirements for the reorganization. 


--------------------
\12 Since 1990, we have produced a list for Congress of areas that
were identified, on the basis of GAO work, as highly vulnerable to
waste, fraud, abuse, and mismanagement. 

\13 High-Risk Series:  An Overview (GAO/HR-97-1, Feb.  1997). 


         INFORMATION TECHNOLOGY
-------------------------------------------------------- Letter :5.4.2

For many years, we have reported on federal agencies' chronic
problems in developing and modernizing their information systems. 
Given the government's ever-increasing dependency on computers and
telecommunications to carry out its work, agencies must make dramatic
improvements in how they manage their information resources in order
to achieve mission goals, reduce costs, and improve service to the
public.  Moreover, without reliable information systems, agencies
will not be able to gather and analyze the information they need to
measure their performance, as required by the Results Act.  Yet most
of the 27 plans did not cover strategies for improving the
information management needed to achieve their strategic goals or
provided little detail on specific actions that agencies planned to
take in this critical area. 

In its draft plan, for example, DOD--which receives 15 percent of the
federal budget--did not explicitly discuss how it plans to correct
information technology investment problems.  These problems led us to
place its Corporate Information Management initiative on our
high-risk list, because DOD continues to spend billions of dollars on
automated information systems with little sound analytic
justification.  Without such discussions, Congress will not be able
to assess the agencies' planned approaches for upgrading information
technology to improve the agencies' performance. 

Furthermore, we have identified as high risk two technology-related
areas that represent significant challenges for the federal
government:  resolving the need for computer systems to be changed to
accommodate dates beyond the year 1999, which is referred to as the
"year 2000 problem"; and providing information security for computer
systems.  Yet most of the plans did not contain discussions of how
agencies intend to address the year 2000 problem, and none of the
plans addressed strategies for information security.  For example,
the draft plan of the Office of Personnel Management (OPM) did not
discuss the year 2000 problem even though many of its critical
information systems are date dependent and exchange information with
virtually every federal agency.  In another example, DOD's draft plan
did not specifically address information security even though DOD
recognizes that information warfare capability is one of a number of
areas of particular concern, especially as it involves
vulnerabilities that could be exploited by potential opponents of the
United States. 

OMB's guidance stated that agencies' strategies for achieving goals
should include a description of the process for communicating goals
throughout an agency and for holding managers and staff accountable
for achieving the goals.  However, a few of the plans that we
evaluated, such as those for Education and SSA, indicated that
agencies had developed, or are planning to develop, approaches for
communicating goals to employees or for holding managers and staff
accountable for achieving results.  We noted that assigning clear
expectations and accountability to employees so that they see how
their jobs relate to the agency's mission and goals can be useful in
implementing a strategic plan.  It is especially important that
managers and staff understand how their daily activities contribute
to the achievement of their agencies' goals and that they are held
accountable for achieving results. 


         NOTEWORTHY PROGRESS
-------------------------------------------------------- Letter :5.4.3

In contrast to the lack of strategies in most plans for addressing
management weaknesses, we found that a few plans had operational
strategies that indicated agencies are beginning to consider
management, financial, and information technology weaknesses that
need to be corrected to ensure that management practices, processes,
and systems support the achievement of agency goals.  For example,
Education took an important step toward implementing results-oriented
management by outlining in its draft strategic plan changes needed in
activities, processes, and operations to better support its mission. 
To illustrate, Education's plan contained core strategies for the
goal that schools are safe, disciplined, and drug-free.  These
strategies included proposals for new legislation, public outreach,
improved data systems, and interagency coordination.  Energy and
Education were among those agencies that included agencywide
strategies to address needed process and operational realignments
that would better enable them to achieve their missions.  For
example, Energy's plan discussed strategies that emphasize changing
contracting approaches to focus on results, contractor
accountability, and customer satisfaction. 


      LITTLE EVIDENCE REGARDING
      INTERAGENCY COORDINATION
---------------------------------------------------------- Letter :5.5

As we recently reported, a focus on results, as envisioned by the
Results Act, implies that federal programs contributing to the same
or similar results should be closely coordinated to ensure that goals
are consistent and, as appropriate, program efforts are mutually
reinforcing.\14 This means that federal agencies are to look beyond
their organizational boundaries and coordinate with other agencies to
ensure that their efforts are aligned. 

Our work has underscored the need for such coordination efforts. 
Uncoordinated program efforts can waste scarce funds, confuse and
frustrate program customers, and limit the overall effectiveness of
the federal effort.  Our recent report to you provided further
information on mission fragmentation and program overlap in the
federal government.\15 We have often noted that the Results Act
presents to Congress and the administration a new opportunity to
address mission fragmentation and program overlap. 

OMB and Congress recognize that the Results Act provides an approach
for addressing overlap and fragmentation of federal programs.  OMB's
guidance stated that agencies' final submission of strategic plans
should contain a summary of agencies' consultation efforts with
Congress and other stakeholders, including discussions with other
agencies on crosscutting activities.  During its Summer Review of
1996, OMB provided feedback to agencies where it found little sign of
significant interagency coordination to ensure consistent goals among
crosscutting programs and activities.  This feedback also underscored
the need for such coordination.  In an August 1997 letter to heads of
selected independent agencies and members of the President's
Management Council, OMB reiterated the importance of interagency
coordination and stated that during the 1997 Fall Budget Review, it
intended to place a particular emphasis on reviewing whether goals
and objectives for crosscutting functions or interagency programs
were consistent among strategic plans. 

Congress has also shown active interest in using the Results Act to
better ensure that crosscutting programs are properly coordinated. 
The February 25, 1997, letter from congressional Majority leaders to
the Director of OMB outlined the leaderships' interest in agencies'
strategic plans addressing how the agencies were coordinating their
activities (especially for crosscutting programs) with other federal
agencies working on similar activities.  In addition, the staff teams
in the House of Representatives, which were to coordinate and
facilitate committee consultations with executive branch agencies,
often have asked agencies about crosscutting activities and programs. 

Despite this interest, we found that 20 of the 27 draft plans lacked
evidence of interagency coordination as part of the agency and
stakeholder consultations and that some of the plans--including those
from some agencies that are involved in crosscutting program areas
where interagency coordination is clearly implied--lacked any
discussion of coordination.  For example: 

  -- According to Energy, it does not have any crosscutting programs
     because its functions are unique.  However, our review of draft
     strategic plans indicated areas of potential overlap concerning
     Energy's programs.  For example, Energy's science mission was to
     maintain leadership in basic research and to advance scientific
     knowledge.  The National Science Foundation's (NSF) mission
     included promoting the progress of science and enabling the
     United States to uphold a position of world leadership in all
     aspects of science, mathematics, and engineering.  NSF's plan
     also did not discuss the possible overlap between the two
     missions.  Another area of potential overlap for Energy included
     environmental and energy resources issues addressed by Energy as
     well as the Environmental Protection Agency (EPA) and other
     agencies.  Similarly, nuclear weapons production issues involve
     Energy and DOD. 

  -- The draft plan for HHS did not address coordination of alcohol
     and drug abuse prevention and treatment programs, even though
     these programs are located in several of its subagencies and in
     15 other federal agencies.  These other agencies include VA,
     Education, Housing and Urban Development, and Justice. 

  -- In the June 27, 1997, consultation with congressional staff on
     OPM's draft plan, OPM officials said that they had not yet
     involved stakeholders, including other federal agencies, in
     developing their strategic plan.  Among the organizations with
     which OPM must work to achieve its desired results are the
     Interagency Advisory Group of federal personnel directors, the
     Personnel Automation Council, the National Partnership Council,
     the Security Policy Board and Security Policy Forum, the Federal
     Bureau of Investigation, the Equal Employment Opportunity
     Commission, the Federal Labor Relations Authority, and the Merit
     Systems Protection Board. 

Even if an agency's draft plan recognized the need to coordinate with
others, it generally contained little information about what
strategies the agency pursued to identify and address mission
fragmentation and program overlap.  For example: 

  -- State's draft plan recognizes several crosscutting issues but
     does not clearly address how the agency will coordinate those
     issues with other agencies.  State and over 30 agencies and
     offices in the federal government are involved in trade policy
     and export promotion, about 35 are involved in global programs,
     and over 20 are involved in international security functions. 

  -- Treasury's draft plan listed as a strategy that it will
     "continue participating in productive Federal, State, and local
     anti-drug task forces" but did not provide any detail about
     which bureaus or other federal agencies would participate in
     those task forces or what their respective responsibilities
     would be. 

  -- Even though it recognized the roles of other organizations,
     Labor's draft plan did not discuss how the agency's programs
     could fit in with a broader national job training strategy and
     the coordination required to develop and implement such a
     strategy.  In 1995, we identified 163 employment training
     programs spread across 15 federal agencies, including Labor.\16

  -- Commerce's draft plan did not indicate how its emphasis on
     restructuring export controls to promote economic growth
     complements or contrasts with the strong emphasis of State's
     Office of Defense Trade Controls and the U.S.  Nuclear
     Regulatory Commission, which are both responsible for licensing
     exports overseas on safeguarding against proliferation of
     dual-use technology. 


--------------------
\14 GAO/GGD-97-109, June 2, 1997. 

\15 GAO/AIMD-97-146, August 29, 1997. 

\16 Multiple Employment Training Programs:  Major Overhaul Needed to
Create a More Efficient, Customer-Driven System (GAO/T-HEHS-95-70,
Feb.  6, 1995). 


      MANY AGENCIES' CAPACITY TO
      GATHER PERFORMANCE
      INFORMATION IS QUESTIONABLE
---------------------------------------------------------- Letter :5.6

To efficiently and effectively operate, manage, and oversee
activities, we have reported that agencies need reliable information
on the performance of agency programs, the financial condition of
programs and their operations, and the costs of programs and
operations.  For example, agencies need reliable data during their
planning efforts to set realistic goals and later, as programs are
being implemented, to gauge their progress toward achievement of
those goals.  However, our prior work indicated that agencies often
lacked information and that even when this information existed, its
reliability was frequently questionable.\17

On the basis of our recent report on implementing the Results Act, we
found that some agencies lacked results-oriented performance
information to use as a baseline for setting appropriate improvement
targets.  Our survey of federal managers done for that report
suggested that those agencies were not isolated examples of the lack
of performance information in the federal government.  In this
survey, we found that fewer than one-third of managers in the
agencies reported that results-oriented performance measures existed
for their programs to a great or very great extent.  The existence of
other types of performance measures also was reported as low.  For
example, of the managers reporting the existence of such measures to
a great or very great extent, 38 percent reported the existence of
measures of output, 32 percent reported the existence of customer
satisfaction measures, 31 percent reported the existence of measures
of product or service quality, and 26 percent reported the existence
of measures of efficiency.\18

Our prior work also suggests that even when information existed, its
reliability was frequently questionable.  In our report on the
Department of Transportation's (DOT) draft plan, we stated that we
had identified information resources and database management as one
of the top management issues facing DOT.  For example, the Federal
Aviation Administration, which is a component of DOT, may rely on
source data that are incomplete, inconsistent, and inaccurate for an
aviation safety database that is under development.  In our report on
the draft HHS strategic plan, we stated that the agency had only
limited data on the Medicaid program, some of which were of
questionable accuracy.  Some of these data problems stemmed from data
originating in the 50 states and the District of Columbia, which did
not all use identical definitions for data categories. 

In addition to HHS, other agencies will likely have difficulties
collecting reliable data from parties outside the federal government. 
Some agencies, such as Education, HHS, and EPA, planned to use or to
strengthen partnerships with outside parties; thus, those agencies
will also need to rely on those parties to provide performance data. 
During our recent review of analytic challenges that agencies faced
in measuring their performance, agency officials with experience in
performance measurement cited ascertaining the accuracy and quality
of performance data as 1 of the top 10 challenges to performance
measurement.\19 The fact that data were largely collected by others
was the most frequent explanation for why ascertaining the accuracy
and quality of performance data was a challenge.  In our report on
implementing the Results Act, we also reported on the difficulties
agencies were experiencing with their reliance on outside parties for
data.\20

These experiences suggest that agencies face many challenges in
gathering reliable information and that it is important that agencies
follow through with the implementation of the CFO Act, the
Clinger-Cohen Act, and the Paperwork Reduction Act.  These
experiences also suggest that coherent strategies for using or
strengthening partnerships with outside parties would also include a
strategy for data collection and verification plans.  To Education's
credit, its draft plan recognized that improvements were needed in
these areas.  For example, Education's plan identified core
strategies for improving the efficiency and effectiveness of
operations through the use of information technology, such as
development of an agencywide information collection and dissemination
system.  As another example, EPA's draft plan discusses the agency's
initiative to draft "core performance measures" with the
environmental commissioners of state governments. 


--------------------
\17 GAO/GGD-97-109, June 2, 1997. 

\18 GAO/GGD-97-109, June 2, 1997. 

\19 GAO/HEHS/GGD-97-138, May 30, 1997. 

\20 GAO/GGD-97-109, June 2, 1997. 


      PROGRAM EVALUATIONS NOT
      ADEQUATELY ADDRESSED IN MOST
      PLANS
---------------------------------------------------------- Letter :5.7

As we noted in our guide on assessing strategic plans, program
evaluations are a key component of results-oriented management.\21 In
combination with an agency's performance measurement system,
evaluations can provide feedback to the agency on how well an
agency's activities and programs contributed to achieving strategic
goals.  For example, evaluations can be a potentially critical source
of information for Congress and others in assessing (1) the
appropriateness and reasonableness of goals; (2) the effectiveness of
strategies by supplementing performance measurement data with impact
evaluation studies; and (3) the implementation of programs, such as
identifying the need for corrective action. 

In our recent report on the analytic challenges facing agencies in
measuring performance, we stated that supplementing performance data
with impact evaluations may help provide agencies with a more
complete picture of program effectiveness.\22 A recurring source of
the programs' difficulty in both selecting appropriate outcome
measures and in analyzing their results stemmed from two features
common to many federal programs:  the interplay of federal, state,
and local government activities and objectives and the aim to
influence complex systems or phenomena whose outcomes are largely
outside government control.  Evaluations can play a critical role in
helping to address the measurement and analysis difficulties agencies
face.  Furthermore, systematic evaluation of how a program was
implemented can provide important information about why a program did
or did not succeed and suggest ways to improve it. 

In that report, we also said that evaluation offices can provide
analytical support for developing a performance measurement system. 
When asked where they needed assistance in performance measurement,
agency officials were most likely to report that they could have used
more evaluation help with creating quantifiable, measurable
performance indicators and developing or implementing data collection
and verification plans.  Under the Results Act, program managers may
wish to turn to their evaluation offices for formal program
evaluations and for assistance in developing and using a performance
measurement system.  However, we have also reported that a 1994
survey found a continuing decline in evaluation capacity in the
federal government. 

Although the Results Act requires agencies to discuss program
evaluations in their strategic plans, 16 of the draft plans we
reviewed did not contain such a discussion.  Of the 11 plans that did
contain a section on evaluations, most of those sections lacked
critical information specified in OMB guidance, such as a discussion
of how evaluations were used to establish strategic goals or a
schedule of future evaluations.  Given the importance of evaluation
for results-based management and the continuing decline in evaluation
capacity, it is important that agencies' strategic plans
systematically address this issue. 


--------------------
\21 GAO/GGD-10.1.16, May 1997. 

\22 GAO/HEHS/GGD-97-138, May 30, 1997. 


   CONCLUSION
------------------------------------------------------------ Letter :6

It is clear that much work remains to be done if strategic plans are
to be as useful for congressional and agency decisionmaking as they
could be.  We found that agencies' draft strategic plans were very
much works in progress.  This situation suggests that agencies are
struggling with the first step of performance-based management--that
is, adopting a disciplined approach to setting results-oriented goals
and formulating strategies to achieve the goals. 

As agencies continue their strategic planning efforts and prepare for
the next step of performance-based management--measuring performance
against annual performance goals--it is important that the agencies,
working with Congress and other stakeholders, address those strategic
planning issues that appear to need particularly sustained attention. 
Our past work has shown that leading organizations focus on strategic
planning as a dynamic and continuous process and not simply on the
production of a strategic plan.  They also understand that
stakeholders, particularly Congress in the case of federal agencies,
are central to the success of their planning efforts.  Therefore, it
is important that agencies recognize that strategic planning does not
end with the submission of a plan in September 1997 and that a
constant dialogue with Congress is part of a purposeful and
well-defined strategic planning process. 

Authorization, appropriation, budget, and oversight committees each
have key interests in ensuring that the Results Act is successful,
because once fully implemented, it should provide valuable data to
help inform the decisions that each committee must make.  In that
regard, Congress can continue to express its interest in the
effective implementation of the Results Act through iterative
consultations with agencies on their missions and goals.  Congress
can also show its interest by continuing to ask about the status of
agencies' implementation of the Act during congressional hearings and
by using performance information that agencies provide to help make
management in the federal government more performance based. 


   AGENCY COMMENTS AND OUR
   EVALUATION
------------------------------------------------------------ Letter :7

On September 3, 1997, we provided a draft of this report to the
Director of OMB for comment.  We did not provide a draft to
individual agencies discussed in this report, because the drafts of
the reports we prepared on individual agency plans in response to
your request were provided to the relevant agency for comment.  Those
comments were reflected, as appropriate, in the final versions of
those reports. 

On September 10, 1997, a senior OMB official provided us with
comments on this report.  He generally agreed with our observations
and said that the report was a useful summary of the 27 reports we
issued on agencies' draft strategic plans.  The official also said
that by identifying areas of widespread compliance or noncompliance
with requirements of the Results Act, the report can be used to focus
on those parts of plans that may require further work. 

The senior OMB official did, however, raise an issue regarding
program evaluations and the Results Act.  He said that many strategic
goals and objectives included in strategic plans will not require a
program evaluation to help determine whether the goal was achieved. 
Thus, the absence of a schedule for future program evaluations should
not be the basis for a categorical conclusion that a plan is
deficient for this requirement.  He also said that process
evaluations can be useful in defining why a program is not working;
they may be less instructive on why a program is succeeding.  In his
view, process evaluations are more aligned with the strategies
section of a strategic plan than with determinations of whether
strategic goals and objectives are being achieved.  In addition, the
OMB official said that an evaluation of program impact is beyond the
scope of the Results Act and that agencies are not required or
expected to define their goals or objectives in terms of impact. 

We note that the Results Act establishes two approaches for assessing
an agency's performance:  annual measurement of program performance
against performance goals outlined in a performance plan and program
evaluations to be conducted by the agency as needed.  Although the
Act gives agencies wide discretion in determining the need for
program evaluations, the Act also requires that agencies report to
Congress and other stakeholders in their strategic plans on their
planned use of evaluations to assess achievement of goals. 
Therefore, although program evaluations may not be necessary for
determining whether every strategic goal in the strategic plan is
achieved, a fuller discussion of how evaluations will, or will not,
be used to measure performance is critical.  Without this discussion,
Congress and other stakeholders will not have assurances that
agencies, as intended by the Act, systematically considered the use
of program evaluations, where appropriate, to validate program
accomplishments and identify strategies for program improvement. 
Thus, in cases where an agency concludes that program evaluations are
not needed, we continue to believe that the agency's plan would be
more helpful to Congress if it contained such a statement and the
reasons for the agency's conclusion. 

Moreover, the Senate report that accompanied the Results Act
described program evaluations in broad terms, specifically "including
evaluations of
.  .  .  operating policies and practices when the primary concern is
about these issues rather than program outcome." In this context,
program evaluations are to be used to assess both the extent to which
a program achieves its results-oriented goals (outcome evaluations)
and the extent to which a program is operating as it was intended
(process evaluation.) Understanding how a program's operations
produced, or did not produce, desired outcomes is critical
information for agencies' senior managers and Congress to consider as
decisions are being made about programs and strategic goals. 

Although the Act does not explicitly mention impact evaluations, it
does require programs to measure progress toward achieving goals and
explain why a performance goal was not met.  Impact evaluations can
be employed when external factors are known to influence the
program's objectives in order to isolate the program's contribution
to achievement of its objectives.  Given the complexity of
crosscutting federal programs as well as state and local programs, we
continue to believe that in some circumstances, impact evaluations
could be useful in helping to provide a more accurate picture of
program effectiveness than might be portrayed by annual performance
data alone or by other types of evaluations. 


---------------------------------------------------------- Letter :7.1

As arranged with your offices, unless you publicly announce its
contents earlier, we plan no further distribution of this report
until 30 days after its issue date.  At that time, we will send
copies of this report to the Minority Leader of the House; Ranking
Minority Members of your Committees; other appropriate congressional
committees; and the Director, Office of Management and Budget.  We
also will make copies available to others on request. 

If you or your staffs have any questions concerning this report,
please contact me on (202) 512-2700.  The major contributors to this
letter are listed in appendix II. 

Johnny C.  Finch
Assistant Comptroller General


OVERVIEW OF THE GOVERNMENT
PERFORMANCE AND RESULTS ACT
=========================================================== Appendix I

The Government Performance and Results Act (GPRA) is the primary
legislative framework through which agencies will be required to set
strategic goals, measure performance, and report on the degree to
which goals were met.  It requires each federal agency to develop, no
later than by the end of fiscal year 1997, strategic plans that cover
a period of at least 5 years and include the agency's mission
statement; identify the agency's long-term strategic 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 annual goals for programs and to measure the
performance of the programs in achieving those goals. 

Also, GPRA requires each agency to submit to the Office of Management
and Budget (OMB), beginning for fiscal year 1999, an annual
performance plan.  The first annual performance plans are to be
submitted in the fall of 1997.  The annual performance plan is to
provide the direct linkage between the strategic goals outlined in
the agency's strategic plan and what managers and employees do
day-to-day.  In essence, this plan is to contain the annual
performance goals the agency will use to gauge its progress toward
accomplishing its strategic goals and identify the performance
measures the agency will use to assess its progress.  Also, OMB will
use individual agencies' performance plans to develop an overall
federal government performance plan that OMB is to submit annually to
Congress with the president's budget, beginning for fiscal year 1999. 

GPRA requires that each agency submit to the president and to the
appropriate authorization and appropriations committees of Congress
an annual report on program performance for the previous fiscal year
(copies are to be provided to other congressional committees and to
the public upon request).  The first of these reports, on program
performance for fiscal year 1999, is due by March 31, 2000; and
subsequent reports are due by March 31 for the years that follow. 
However, for fiscal years 2000 and 2001, agencies' reports are to
include performance data beginning with fiscal year 1999.  For each
subsequent year, agencies are to include performance data for the
year covered by the report and 3 prior years. 

In each report, an agency is to review and discuss its performance
compared with the performance goals it established in its annual
performance plan.  When a goal is not met, the agency's report is to
explain the reasons the goal was not met; plans and schedules for
meeting the goal; and, if the goal was impractical or not feasible,
the reasons for that and the actions recommended.  Actions needed to
accomplish a goal could include legislative, regulatory, or other
actions or, when the agency found a goal to be impractical or
infeasible, a discussion of whether the goal ought to be modified. 

In addition to evaluating the progress made toward achieving annual
goals established in the performance plan for the fiscal year covered
by the report, an agency's program performance report is to evaluate
the agency's performance plan for the fiscal year in which the
performance report was submitted.  (For example, in their fiscal year
1999 performance reports, due by March 31, 2000, agencies are
required to evaluate their performance plans for fiscal year 2000 on
the basis of their reported performance in fiscal year 1999.) This
evaluation will help to show how an agency's actual performance is
influencing its plans.  Finally, the report is to include the summary
findings of program evaluations completed during the fiscal year
covered by the report. 

Congress recognized that in some cases not all of the performance
data will be available in time for the March 31 reporting date.  In
such cases, agencies are to provide whatever data are available, with
a notation as to their incomplete status.  Subsequent annual reports
are to include the complete data as part of the trend information. 

In crafting GPRA, Congress also recognized that managerial
accountability for results is linked to managers having sufficient
flexibility, discretion, and authority to accomplish desired results. 
GPRA authorizes agencies to apply for managerial flexibility waivers
in their annual performance plans beginning with fiscal year 1999. 
The authority of agencies to request waivers of administrative
procedural requirements and controls is intended to provide federal
managers with more flexibility to structure agency systems to better
support program goals.  The nonstatutory requirements that OMB can
waive under GPRA generally involve the allocation and use of
resources, such as restrictions on shifting funds among items within
a budget account.  Agencies must report in their annual performance
reports on the use and effectiveness of any GPRA managerial
flexibility waivers that they receive. 

GPRA called for phased implementation so that selected pilot projects
in the agencies could develop experience from implementing GPRA
requirements in fiscal years 1994 through 1996 before implementation
is required for all agencies.  When this part of the pilot phase
concluded at the end of fiscal year 1996, a total of 68 pilot
projects representing 28 agencies were project participants.  OMB
also was required to select at least five agencies from among the
initial pilot agencies to pilot managerial accountability and
flexibility for fiscal years 1995 and 1996; however, we found that
the pilot did not work as intended.  OMB did not designate as pilot
projects any of the 7 departments and 1 independent agency that
submitted a total of 61 waiver proposals because, among other
reasons, changes in federal management practices and laws that
occurred after the Act was enacted affected agencies' need for the
managerial flexibility waivers. 

Finally, GPRA required OMB to select at least five agencies, at least
three of which have had experience developing performance plans
during the initial GPRA pilot phase, to test performance budgeting
for fiscal years 1998 and 1999.  Performance budgets to be prepared
by pilot projects for performance budgeting are intended 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.  However, we found
that the performance budgeting pilots are likely to be delayed. 
According to OMB, few agencies currently have either sufficient
baseline performance or financial information or the ability to use
sophisticated analytic techniques to calculate the effects that
marginal changes in funding can have on performance. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix II


   GENERAL GOVERNMENT DIVISION,
   WASHINGTON, D.C. 
-------------------------------------------------------- Appendix II:1

L.  Nye Stevens, Director, Federal Management and Workforce Issues,
(202) 512-8676
J.  Christopher Mihm, Acting Associate Director, (202) 512-3236
Donna Byers, Project Manager
Allan C.  Lomax, Senior Evaluator
Dorothy L.  Self, Evaluator
Kiki Theodoropoulos, Senior Evaluator





RELATED GAO PRODUCTS
============================================================ Chapter 0


   AGENCIES' DRAFT STRATEGIC PLANS
---------------------------------------------------------- Chapter 0:1

The Results Act:  Observations on the Draft Strategic Plan of the
Department of Agriculture (GAO/RCED-97-169R, July 10, 1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
Department of Commerce (GAO/GGD-97-152R, July 14, 1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
Department of Defense (GAO/NSIAD-97-219R, Aug.  5, 1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
Department of Education (GAO/HEHS-97-176R, July 18, 1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
Department of Energy (GAO/RCED-97-199R, July 11, 1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
Department of Health and Human Services (GAO/HEHS-97-173R, July 11,
1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
Department of Housing and Urban Development (GAO/RCED-97-224R, Aug. 
8, 1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
Department of the Interior (GAO/RCED-97-207R, July 21, 1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
Department of Justice (GAO/GGD-97-153R, July 11, 1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
Department of Labor (GAO/HEHS-97-172R, July 11, 1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
Department of State (GAO/NSIAD-97-198R, July 18, 1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
Department of Transportation (GAO/RCED-97-208R, July 30, 1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
Treasury (GAO/GGD-97-162R, July 31, 1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
Department of Veterans Affairs (GAO/HEHS-97-174R, July 11, 1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
U.S.  Agency for International Development (GAO/NSIAD-97-197R, July
11, 1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
Environmental Protection Agency (GAO/RCED-97-209R, July 30, 1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
Federal Emergency Management Agency (GAO/RCED-97-204R, July 22,
1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
General Services Administration (GAO/GGD-97-147R, July 7, 1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
National Aeronautics and Space Administration (GAO/NSIAD-97-205R,
July 22, 1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
National Science Foundation (GAO/RCED-97-203R, July 11, 1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
Nuclear Regulatory Commission (GAO/RCED-97-206R, July 31, 1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
Office of Management and Budget (GAO/GGD-97-169R, Aug.  1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
Office of Personnel Management (GAO/GGD-97-150R, July 11, 1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
U.S.  Postal Service (GAO/GGD-97-163R, July 31, 1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
Small Business Administration (GAO/RCED-97-205R, July 11, 1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
Social Security Administration (GAO/HEHS-97-179R, July 22, 1997). 

The Results Act:  Observations on the Draft Strategic Plan of the
U.S.  Trade Representative (GAO/NSIAD-97-199R, July 18, 1997). 

The Results Act:  Observations on Federal Science Agencies
(GAO/T-RCED-97-220, July 30, 1997). 

Financial Management:  Indian Trust Fund Strategic Plan
(GAO/T-AIMD-97-138, July 30, 1997). 

The Results Act:  Observations on Draft Strategic Plans of Five
Financial Regulatory Agencies (GAO/T-GGD-97-164, July 29, 1997). 

National Labor Relations Board:  Observations on the NLRB's July 8,
1997, Draft Strategic Plan (GAO/T-HEHS-97-183, July 24, 1997). 

The Results Act:  Observations on the Forest Service's May 1997 Draft
Strategic Plan (GAO/T-RCED-97-223, July 23, 1997). 

Results Act:  Observations on the Department of Energy's August 15,
1997, Draft Strategic Plan (GAO/RCED-97-248R, Sept.  2, 1997). 


   OTHER RELATED GAO PRODUCTS
---------------------------------------------------------- Chapter 0:2

Managing for Results:  Using the Results Act to Address Mission
Fragmentation and Program Overlap (GAO/AIMD-97-146, Aug.  29, 1997). 

Managing for Results:  The Statutory Framework for Improving Federal
Management and Effectiveness (GAO/T-GGD/AIMD-97-144, June 24, 1997). 

The Results Act:  Comments on Selected Aspects of the Draft Strategic
Plans of the Departments of Energy and the Interior
(GAO/T-RCED-97-213, July 17, 1997). 

Managing for Results:  Prospects for Effective Implementation of the
Government Performance and Results Act (GAO/T-GGD-97-113, June 3,
1997). 

The Government Performance and Results Act:  1997 Governmentwide
Implementation Will Be Uneven (GAO/GGD-97-109, June 2, 1997). 

Managing for Results:  Analytic Challenges in Measuring Performance
(GAO/HEHS/GGD-97-138, May 30, 1997). 

Agencies' Strategic Plans Under GPRA:  Key Questions to Facilitate
Congressional Review (GAO/GGD-10.1.16, May 1997). 

Performance Budgeting:  Past Initiatives Offer Insights for GPRA
Implementation (GAO/AIMD-97-46, Mar.  27, 1997). 

Measuring Performance:  Strengths and Limitations of Research
Indicators (GAO/RCED-97-91, Mar.  21, 1997). 

Managing for Results:  Enhancing the Usefulness of GPRA Consultations
Between the Executive Branch and Congress (GAO/T-GGD-97-56, Mar.  10,
1997). 

Managing for Results:  Using GPRA to Assist Congressional and
Executive Branch Decisionmaking (GAO/T-GGD-97-43, Feb.  12, 1997). 

Executive Guide:  Effectively Implementing the Government Performance
and Results Act (GAO/GGD-96-118, June 1996). 


*** End of document. ***