Results Act: Observations on the General Services Administration's Annual
Performance Plan (Letter Report, 05/11/98, GAO/GGD-98-110).

GAO reviewed the General Services Administration's (GSA) fiscal year
(FY) 1999 annual performance plan, which was submitted to Congress as
required by the Government Performance and Results Act of 1993.

GAO noted that: (1) GSA's performance plan has several performance goals
for each of its strategic goals; (2) some of its performance goals and
measures are objective and quantified and provide a way to compare
actual to planned performance; (3) in addition, the plan contains some
goals and measures that involve comparisons of GSA and the private
sector; (4) however, for the most part, the plan falls short of meeting
the criteria set forth in the Results Act and related guidance; (5) it
does not adequately provide a clear picture of expected performance
across the agency because: (a) like the goals in its strategic plan,
many performance goals, and related measures, are not quantifiable or
results oriented; (b) performance plan goals are not always linked to
the specific program activities and funding in its budget; and (c) also
like the strategic plan, the performance plan does not discuss GSA's
coordination efforts for many crosscutting activities; (6) GAO also
found that the performance plan generally does not have an explicit
discussion of the strategies and resources that will be needed to
achieve goals or the external factors that will affect accomplishment of
the goals; and (7) although the plan includes a discussion of how GSA
plans to verify performance data that provides partial confidence that
performance information will be credible, it does not discuss the
actions GSA has taken or will take to address known data limitations.

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

 REPORTNUM:  GGD-98-110
     TITLE:  Results Act: Observations on the General Services 
             Administration's Annual Performance Plan
      DATE:  05/11/98
   SUBJECT:  Strategic planning
             Agency missions
             Reporting requirements
             Program evaluation
             Internal controls
             Accountability
             Interagency relations
             Congressional/executive relations
IDENTIFIER:  GPRA
             Government Performance and Results Act
             
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Cover
================================================================ COVER


Report to the Administrator, General Services Administration

May 1998

RESULTS ACT - OBSERVATIONS ON THE
GENERAL SERVICES ADMINISTRATION'S
ANNUAL PERFORMANCE PLAN

GAO/GGD-98-110

Observations on GSA's Performance Plan

(240298)


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

  FASAB - Federal Accounting Standards Advisory Board
  GSA - General Services Administration
  IG - Inspector General
  OMB - Office of Management and Budget

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


B-279768

May 11, 1998

The Honorable David J.  Barrum
Administrator
General Services Administration

Dear Mr.  Barrum: 

This report provides our observations on the General Services
Administration's (GSA) fiscal year 1999 annual performance plan,
dated March 5, 1998, that was submitted to Congress as required by
the Government Performance and Results Act of 1993 (Results Act).  As
you know, we were asked by the leadership in the House of
Representatives to review and evaluate this plan as well as plans
developed by other agencies.  These requesters were the Speaker of
the House; the House Majority Leader; and the Chairmen of the House
Committees on the Budget, Appropriations, and Government Reform and
Oversight.  Although this work will contribute to an overall
evaluation of the performance plans submitted by the 24 agencies that
have Chief Financial Officers, which will be provided to our
congressional requestors, we agreed with key congressional staff that
it would be useful to provide further details about our observations
to you. 

To do our review, we used the criteria in the Results Act; the Office
of Management and Budget's (OMB) guidance on developing the plan
(Circular A-11, part 2); our February 1998 guidance for congressional
review of the plans (GAO/GGD/AIMD 10.1.18); our evaluator's guidance
for assessing annual performance plans (GAO/GGD-10.1.20); and the
December 17, 1997, letter to the OMB Director from several
congressional leaders.  Where appropriate, we also incorporated
findings from our past work and the work of the GSA Inspector General
(IG).  Appendix I contains a compilation of the various types of
guidance available for assessing the plan, including the Results Act,
GAO reports, and OMB documents.  We did our work in March and April
1998 in accordance with generally accepted government auditing
standards.  We sent a draft of this report to you for review and
comment.  On April 9, 1998, GSA officials provided oral comments on
that draft, which are discussed at the end of this letter. 


   BACKGROUND
------------------------------------------------------------ Letter :1

As one of the federal government's principal real estate and business
agents, GSA has diverse activities and programs that have
governmentwide implications.  Its real estate portfolio, supply
procurement and distribution activities, travel and transportation
services, telecommunication and computer services, and property
management and disposal functions involve huge sums of money and
extensive interaction with both the federal and private sectors.  In
many respects, GSA is comparable to a large, diversified commercial
business.  If GSA were a private sector company, it would rank high,
in terms of sales, on the Fortune 500 list of the largest U.S. 
companies. 

GSA spends billions of dollars to provide many of the facilities,
goods, and services that federal agencies need to carry out their
missions.  Through various revolving or trust fund-type arrangements,
GSA buys most of these goods and services from private vendors and
resells them to agencies.  Additionally, GSA arranges for federal
agencies to purchase billions of dollars' worth of goods and services
directly from private vendors through its governmentwide supply,
travel and transportation, automated data processing, and
telecommunications contracts.  Furthermore, when it was established
in 1949, GSA was envisioned, primarily but not exclusively, as a
policymaking body with the option of delegating its authority to
other agencies while maintaining comprehensive accountability to
Congress for economy and efficiency. 

In recent years, public sector organizations have faced demands to be
more effective and less costly, coupled with a growing movement
toward a performance-based approach to management.  Congress enacted
the Results Act in 1993 in conjunction with the Chief Financial
Officers Act and information technology reform legislation, such as
the Clinger-Cohen Act of 1996, to address these twin demands and to
instill performance-based management in the federal government.  The
Results Act seeks to shift the focus of government decisionmaking and
accountability away from a preoccupation with activities--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.  Under the Results Act, agencies
like GSA are to develop strategic plans, annual performance plans,
and annual performance reports.\1 GSA and other agencies submitted
the first cycle of the strategic plans to Congress in September 1997. 
Like other agencies, GSA submitted its first performance plan to OMB
in the fall of 1997.  OMB used these draft performance plans to
develop and submit the first federal government performance plan to
Congress in February 1998 with the President's fiscal year 1999
budget.  Agencies submitted their final performance plans to Congress
after the submission of the President's budget.  Appendix II provides
a more detailed discussion of the Results Act's planning and
reporting requirements. 


--------------------
\1 Agencies are required to submit annual program performance reports
to the President and Congress that review, among other things, the
agencies' success in achieving the performance goals established in
their previous year's performance plans.  The reports on fiscal year
1999's performance are due by March 31, 2000. 


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

GSA's performance plan has several performance goals for each of its
strategic goals.  Some of its performance goals and measures are
objective and quantified and provide a way to compare actual to
planned performance.  In addition, the plan contains some goals and
measures that involve comparisons of GSA and the private sector. 
However, for the most part, the plan falls short of meeting the
criteria set forth in the Results Act and related guidance.  It does
not adequately provide a clear picture of expected performance across
the agency because (1) like the goals in its strategic plan, many
performance goals, and related measures, are not quantifiable or
results oriented; (2) performance plan goals are not always linked to
the specific program activities and funding in its budget; and (3)
also like the strategic plan, the performance plan does not discuss
GSA's coordination efforts for many crosscutting activities.  We also
found that the performance plan generally does not have an explicit
discussion of the strategies and resources that will be needed to
achieve goals or the external factors that will affect accomplishment
of the goals.  Although the plan includes a discussion of how GSA
plans to verify performance data that provides partial confidence
that performance information will be credible, it does not discuss
the actions GSA has taken or will take to address known data
limitations. 


   GSA'S PLAN DOES NOT PROVIDE A
   CLEAR PICTURE OF INTENDED
   PERFORMANCE ACROSS THE AGENCY
------------------------------------------------------------ Letter :3

We found that overall, GSA's performance plan does not provide a
clear picture of expected performance across the agency.  First, most
of the performance goals and related measures are not quantifiable or
results oriented.  Second, GSA's performance plan goals are not
always linked to the specific program activities and funding in its
budget.  Finally, the performance plan does not adequately discuss
its coordination with other agencies on GSA's many crosscutting
activities. 


      DEFINING EXPECTED
      PERFORMANCE
---------------------------------------------------------- Letter :3.1

GSA's performance plan does not provide a succinct and concrete
statement of expected performance for subsequent comparison with
actual performance.  Despite the expectations of the Results Act and
related OMB guidance that annual performance goals be quantifiable,
in our view, only 9 of the 31 performance goals in the plan have
measures and targets that decisionmakers can use to gauge progress. 
For example, the performance goal of improving energy systems is
expressed in quantifiable and time-bound terms and has a specific
unit of measurement, a baseline, and numerical targets.  Likewise,
the performance goal on keeping GSA's prices competitive has measures
that are expressed in percentages or costs with baselines and
accompanying targets.  However, for the remaining 22 performance
goals, 16 lack measures and targets needed to gauge performance; and
6 had a mix of some quantifiable measures and some still under
development or had measures that are not specific enough to gauge
performance. 

Furthermore, some of the performance measures do not appear to
provide meaningful information as they relate to their stated goal. 
For example, the measure tracking the percentage of repair and
alteration or new construction projects that are completed on or
ahead of schedule seems unrelated to its goal of ensuring that its
prices for primary products and services are competitive with those
in the private sector.  In addition, the plan has some goals that
relate to space management but has no measures that relate to cost
effectively managing its space--one of GSA's primary functions. 

Finally, the goals as written in the performance plan are typically
more activity or output oriented rather than results oriented as
envisioned by the Results Act.  For example, for the performance goal
to "continue enhancement of financial, administrative and expert
services contracts for Governmentwide asset management," GSA set
forth the following "measures":  awarding master contracts for
payment systems; developing contracts for temporary services;
completing the Management, Organization, Business Improvement
Schedule; and developing a program for sale of receivables.  These
activities may be initially important to GSA in achieving its
strategic goals and accomplishing its mission.  However, these
measures appear to us to be activities rather than measures, and the
accompanying narrative provides no information that describes what
these activities are or what outcomes they aim to achieve so that
decisionmakers can understand their importance and gauge progress
over time. 


      CONNECTING MISSION, GOALS,
      AND ACTIVITIES
---------------------------------------------------------- Letter :3.2

Contrary to the Results Act and OMB guidance, GSA's performance plan
does not always show clear connections between the performance goals
and the specific program activities and funding in its budget. 
Without such a linkage, decisionmakers cannot relate the performance
goals in the plan to the program activities in the budget. 
Furthermore, they cannot readily assess how GSA intends to allocate
its anticipated budgetary resources among its performance goals. 
Although the plan identifies a specific "funding" and "activity"
category for most performance goals, the activity does not generally
correspond to the specific program activities used in the agency's
budget request.  For example, the performance goal to improve energy
systems in federal buildings to meet or exceed the federal energy
consumption standards for 2005 identifies the "Federal Buildings
Fund" as the funding and "energy" as the activity, but the
President's budget for the Federal Buildings Fund does not have an
energy program activity.  Also, for some performance goals, the plan
shows that "multiple" activities are involved but does not
specifically identify the activities. 

Furthermore, because the plan does not identify the funding level for
most of the activities named in the plan or the program activities in
the budget request, the reader cannot determine how much funding GSA
proposes to use to meet its performance goals.  In addition, contrary
to the criteria in the Results Act, some program activities assigned
large levels of funding in the budget, such as construction and
acquisition of facilities and construction of lease purchase
facilities, are not linked to specific performance goals.  We believe
the plan would be more useful if the activity and funding identified
with each performance goal could be easily linked to GSA's budget
request. 

The plan includes GSA's mission statement and gives abbreviated
versions of its strategic goals presented in its strategic plan, but
they are not identified as such.  Further, although none of the
strategic goals were revised for the performance plan, we noted that
GSA appears to have dropped two of the five objectives related to the
fourth strategic goal but provides no rationale for this revision. 
Consequently, it may be difficult for the reader to judge whether the
performance goals in the annual performance plan are related to and
consistent with GSA's strategic plan, as envisioned by the Results
Act and OMB guidance. 

In addition, we noted that like the strategic plan, the performance
plan does not address major management problems we and the GSA's IG
have identified in recent years.  These include data reliability,
which will be discussed in more detail later; insufficient management
controls; and impediments to businesslike asset management in the
real property area.  In a January 29, 1998, memorandum to agencies,
the Director of OMB said that "performance goals for corrective steps
for major management problems should be included for problems whose
resolution is mission-critical, or which could materially impede the
achievement of program goals." As we reported in January 1998,\2 our
work has shown over the years that major management problems at GSA
have significantly hampered GSA's and its stakeholder agencies'
abilities to accomplish their missions. 


--------------------
\2 Managing for Results:  Agencies' Annual Performance Plans Can Help
Address Strategic Planning Challenges (GAO/GGD-98-44, Jan.  30,
1998). 


      RECOGNIZING CROSSCUTTING
      EFFORTS
---------------------------------------------------------- Letter :3.3

Although GSA's performance plan recognizes the crosscutting nature of
its activities, it does not adequately explain how it will coordinate
its crosscutting functions with the federal community.  OMB Circular
A-11, Sec.  220.8, states that the annual performance plan should
identify performance goals that reflect activities being mutually
undertaken to support programs of an interagency, crosscutting
nature.  Because GSA is an agency with governmentwide policysetting,
oversight, and operational functions, its major activities
collectively affect the whole federal community. 

Some of GSA's specific performance goals are crosscutting in nature. 
For example, according to the plan, three of the performance goals
under the goal to "promote responsible asset management" involve
"collaboration among many federal agencies brought together by GSA"
and "measurement of the results of policy initiatives will require
collection of other agencies' costs." However, although the
discussion of some of the efforts contain references to coordination
with other federal agencies, the plan does not discuss how GSA will
coordinate these efforts.  In another example, GSA's performance goal
to improve access to quality child care for all federal employees
does not explain exactly how GSA is coordinating with the federal
community for this wide-reaching goal.  In the
excel-at-customer-service section, GSA generally describes what it is
doing to better understand its customers' needs.  These actions
include face-to-face meetings with customers or their agency
representatives and working with interagency groups and councils. 
However, it is difficult to relate these actions to the specific
crosscutting aspects of the goals in this section of the plan. 


   GSA'S PLAN DOES NOT ADEQUATELY
   DISCUSS HOW STRATEGIES AND
   RESOURCES WILL HELP GSA ACHIEVE
   ITS GOALS
------------------------------------------------------------ Letter :4

GSA's performance plan does not explicitly discuss the
strategies--how it will use its operational processes, skills, and
technologies--and resources (human, capital, information, or other
resources) that will be needed to achieve its goals.  Without this
discussion, decisionmakers cannot determine if GSA has a sound
approach for achieving its goals and using its resources wisely. 


      CONNECTING STRATEGIES TO
      PERFORMANCE GOALS
---------------------------------------------------------- Letter :4.1

GSA's performance plan for the most part does not present clear and
reasonable strategies for achieving its intended performance goals. 
The Results Act and OMB Circular A-11 state that the performance plan
should briefly describe the agency's strategies to accomplish its
performance goals.  Specifically, we found that the narrative
accompanying each objective and specific performance goal provides
descriptive information on GSA activities.  However, the narrative
does not describe how GSA intends to meet the performance goals in
the plan. 

For example, two of the three measures under the performance goal to
increase market share for primary services are (1) the combined
market share for information technology solutions and network
services and (2) market share for fleet.  Target percentages for
fiscal years 1998 and 1999 are listed.  The accompanying narrative,
however, gives little indication of how GSA intends to increase its
market share in these areas.  GSA makes general statements about
leveraging its competitive pricing with broad market penetration and
government downsizing--"as the government downsizes agencies are
looking to GSA to provide cost effective solutions to the workload
needs and requirements." However, it offers no information on its
specific approach or strategy for how it plans to leverage prices or
take advantage of downsizing to increase its market share for its
vehicle fleet. 

Although the Results Act does not require that the performance plan
specifically discuss the impact of external factors on achieving
performance goals, we believe that a discussion of such factors would
provide additional context regarding anticipated performance.  In its
September 1997 strategic plan, GSA identified four external
factors--economic conditions, social policy, changes in technology
and the marketplace, and legislative framework--that could likely
affect its overall performance.  GSA's performance plan does not
explicitly discuss these factors or their impact on achieving the
performance goals.  In addition, other external factors that we have
reported on over the years--such as the lengthy prospectus
authorization process and budget scorekeeping rules that favor
operating leases over ownership--are not mentioned in the performance
plan. 


      CONNECTING RESOURCES TO
      PERFORMANCE GOALS
---------------------------------------------------------- Letter :4.2

GSA's performance plan does not adequately discuss the resources it
will use to achieve the performance goals.  The Results Act and OMB
Circular A-11 specify that the performance plan should briefly
describe the human, capital, information, or other resources it will
use to achieve its performance goals.  Most of the performance goals
in GSA's performance plan contain a subheading entitled "Human,
Capital, Information, or Other Resources"; however, the information
under these subheadings, which typically said "no additional
resources required," falls short of the Results Act criterion that
the plan briefly describe the resources needed to achieve performance
goals. 

We found that only 3 of the 31 performance goals specified any amount
of budgetary resources associated with the achievement of the
performance goal.  Even in these three cases, there is no explanation
of specifically how the funds will be used.  We also noted that two
goals made a limited reference to staffing issues.  For example, for
the performance goal to implement capital planning for information
technology to comply with the Clinger-Cohen Act, the plan identifies
the type of staff (project managers, planners, budget analysts, and
executives) that will be involved.  However, the plan does not
contain any information on how GSA intends to use its resources to
achieve its performance goals. 


   GSA'S PLAN PROVIDES PARTIAL
   CONFIDENCE THAT PERFORMANCE
   INFORMATION WILL BE CREDIBLE
------------------------------------------------------------ Letter :5

We found that GSA's performance plan partially meets the Results Act
criteria related to including information on verifying and validating
performance data.  Although GSA included information on the general
approaches it will use to ensure that performance information is
reliable, the plan makes no reference to ongoing controls and
procedures that are in place to ensure data integrity.  A succinct
discussion of some of these procedures and controls would provide
decisionmakers with better insights into, and confidence in, what is
being done to prevent the use of unreliable data.  Also, we found
that the plan does not contain a discussion of actions GSA will take
or has taken to address known data limitations.  The Results Act does
not require a discussion of data limitations in the performance plan;
however, an explanation of such limitations can provide
decisionmakers with a context for understanding and assessing
agencies' performance and the costs and challenges agencies face in
gathering, processing, and analyzing needed data.  This discussion on
data limitations can help identify the actions needed to improve the
agency's ability to measure its performance. 


      VERIFYING AND VALIDATING
      PERFORMANCE
---------------------------------------------------------- Letter :5.1

GSA's performance plan partially discusses how the agency will ensure
that its performance information is sufficiently verified and
validated.  Specifically, we found that the plan highlights the
importance of having credible data.  It also meets the intent of the
Results Act by identifying actions that GSA believes will identify
data problems.  These include audits of its financial records and
systems by an independent accounting firm and top level quarterly
meetings to review the financial and programmatic results of its
various business lines.  However, we believe that the performance
plan would be greatly improved if GSA were to also highlight some of
the specific controls it may use for its major systems to verify and
validate performance information on an ongoing basis.  Such controls
could include periodic data reliability tests, computer edit
controls, and supervisory reviews of data used to develop performance
measures. 

Various financial audits and management reviews are certainly useful
steps to identifying data problems that require management attention;
but they are no substitute for effective front-end procedures,
practices, and controls to ensure data reliability--a critical
component of performance measurement.  GSA has had financial and
program audits on an ongoing basis for many years.  However, despite
these efforts, the agency has a history of data problems as shown by
our work and that of the IG (this work is discussed later in more
detail).  A succinct discussion of the major procedures and controls
that are in place to ensure credible data, at least for the more
important systems, would be more helpful to decisionmakers in
assessing the reliability of the data being used to gauge
performance. 


      RECOGNIZING DATA LIMITATIONS
---------------------------------------------------------- Letter :5.2

GSA's performance plan does not discuss known data limitations that
could raise questions about the validity of the performance measures
GSA plans to use.  For several years, our work and that of the IG
have identified several data reliability problems at GSA.  Our work
showed that GSA lacked the timely, accurate, and reliable program
data needed to effectively manage and oversee its various activities
and programs.  Between 1994 and 1997, IG audits of the internal
controls over the production of reliable data to support various GSA
performance measures found problems.  Specifically, of the eight
audits conducted, controls designed to produce reliable data to
support various GSA performance measures were found to be at moderate
risk in three, high risk in one, and low risk in the other four.  In
February 1998, the IG reported on reviews of two additional
performance measures; one was low risk, and the other was removed
from the Fiscal Year 1997 Annual Report as a result of issues raised
during the IG review. 

In addition, the IG reported in its October 31, 1997, Semiannual
Report to Congress that many of the 87 major systems GSA uses to
support its functions are old and incorporate inefficient
technologies compared with today's advanced systems.  Modification
and maintenance of these old systems have become complex and costly. 
Finally, the independent audit of GSA's 1996 and 1997 financial
statements noted data problems related to property account
classifications for construction projects and access controls over
the Federal Supply Service's information systems.  Also, the
independent auditors reported that although the Public Buildings
Service has addressed certain deficiencies in its internal control
structure, attention to improving internal controls in its business
and financial processes is required to assess, improve, and report
the results of program performance.  Despite such evidence that
suggests data reliability is still a major problem, the performance
plan is silent on this critical issue.  At a minimum, it would have
been helpful if the plan had an explicit discussion of current data
reliability problems and how GSA plans to address them. 


   CONCLUSIONS
------------------------------------------------------------ Letter :6

GSA's performance plan falls short of meeting the criteria set forth
in the Results Act and related OMB guidance.  It is not a stand-alone
document that provides a clear road map of what GSA wants to
accomplish, how it plans to get there, and what results it expects to
achieve.  The plan does not fully meet the Results Act criteria for
objective, measurable, and quantifiable goals and measures and lacks
clear connections between the performance goals and the specific
program activities in GSA's budget.  The performance plan also lacks
an adequate explanation of how it will coordinate its crosscutting
functions with the federal community.  In addition, it often does not
contain meaningful discussions on the strategies and resources GSA
plans to use to meet its goals and achieve intended results and on
the questions surrounding data reliability.  We recognize that this
is the first performance plan developed under the Results Act, and,
as such, there is a large learning process in understanding what
constitutes a good plan.  However, this and future plans can be
significantly improved if they follow the criteria set forth in the
Results Act and related guidance more closely. 


   RECOMMENDATIONS
------------------------------------------------------------ Letter :7

We recommend that the GSA Administrator take steps to ensure that
GSA's fiscal year 2000 performance plan (1) conforms with the
criteria in the Results Act and related OMB guidance and (2) gives
decisionmakers a better framework for gauging GSA's performance. 
Specifically, in developing the next plan, we recommend that the
Administrator take steps to

  -- refine GSA's performance goals to make them more quantifiable
     and results oriented;

  -- clarify how GSA's performance goals link to specific program
     activities in GSA's budget;

  -- explain how GSA has coordinated its crosscutting functions with
     the federal community;

  -- discuss GSA strategies to be used and resources needed to
     achieve its performance goals and their intended results, as
     well as external factors that could affect its overall
     performance; and

  -- discuss specific controls for verifying and validating data used
     to measure performance, recognize existing data limitations, and
     explain GSA efforts to overcome those limitations. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :8

On April 9, 1998, we obtained oral comments from GSA's Chief
Financial Officer, Director of the Office of Performance Management,
and Managing Director for Planning on a draft of this report.  They
said that GSA generally agreed with our analysis and will implement
our recommendations when it prepares the fiscal year 2000 performance
plan. 


---------------------------------------------------------- Letter :8.1

As you know, 31 U.S.C.  720 requires that the head of a federal
agency submit a written statement of actions taken on our
recommendations to the Senate Committee on Governmental Affairs and
the House Committee on Government Reform and Oversight not later than
60 days after the date of this report.  A written statement must be
sent to the Senate and House Committees on Appropriations with the
agency's first request for appropriations made more than 60 days
after the date of this report.  We would appreciate receiving a copy
of the statement. 

We are sending copies of this report to each of the individual
requesters of our work in this area; the Chairmen and Ranking
Minority Members of other Committees that have jurisdiction over GSA
activities; and the Director, Office of Management and Budget. 
Copies will be made available to others on request. 

Major contributors to this report are listed in attachment III.  If
you or your staff have any questions concerning this report, please
contact me at (202) 512-8387. 

Sincerely yours,

Bernard L.  Ungar
Director, Government Business
 Operations Issues


ANNUAL PERFORMANCE PLAN GUIDANCE
=========================================================== Appendix I

This appendix contains a compilation of guidance on annual
performance plans, including the Results Act, GAO reports, and OMB
documents, and is arranged by the major issues discussed in this
report. 


      DEFINING EXPECTED
      PERFORMANCE
------------------------------------------------------- Appendix I:0.1

The Government Performance and Results Act (Results Act), 31 U.S.C. 
1115(a)(1), 1115(a)(2), 1115(a)(4), 1115(a)(5), 1115(b), and 1115(c). 

Senate Committee on Governmental Affairs Report accompanying the
Results Act (Senate Report 103-58, June 16, 1993), pp.  15-16,
"Performance Plans"; p.  29, "Performance Goals"; pp.  29-30,
"Performance Indicators"; and p.  30, "Alternative Forms of
Measurement."

OMB Circular A-11, secs.  220.1, 220.4, 220.10(a), 220.10(b),
220.10(c), 220.14, 220.16, 220.17, 221.4(a), 221.4(b), and 221.4(d). 

OMB Checklist for Agency Annual Performance Plans (Nov.  24, 1997),
pp.  1-2, "Coverage of Program Activities"; pp.  3-4, "Annual
Performance Goals"; p.  4, "Performance Indicators"; and p.  5,
"Alternative Form of Measurement."

The Government Performance and Results Act:  1997 Governmentwide
Implementation Will Be Uneven (GAO/GGD-97-109, June 2, 1997), pp. 
55-57, 61-63, and 71-72. 

Executive Guide:  Effectively Implementing the Government Performance
and Results Act (GAO/GGD-96-118, June 1996), pp.  24-26. 

Implementation of the Government Performance and Results Act (GPRA),
A Report on the Chief Financial Officer's Role and Other Issues
Critical to the Governmentwide Success of GPRA, Chief Financial
Officers Council, GPRA Implementation Committee, May 1995. 

Agencies' Annual Performance Plans Under The Results Act:  An
Assessment Guide to Facilitate Congressional Decisionmaking
(GAO/GGD/AIMD-10.1.18; Feb.  1998, Version 1), pp.  10-11. 

The Results Act:  An Evaluator's Guide to Assessing Agency Annual
Performance Plans (GAO/GGD-10.1.20; Apr.  1998, Version 1), pp. 
14-19. 


      CONNECTING MISSION, GOALS,
      AND ACTIVITIES
------------------------------------------------------- Appendix I:0.2

Results Act, 5 U.S.C.  306(c), 31 U.S.C.  1115(a), and 31 U.S.C. 
1115(c). 

Senate Committee on Governmental Affairs Report accompanying the
Results Act (Senate Report 103-58, June 16, 1993), pp.  15-16,
"Performance Plans"; p.  29, "Performance Goals"; and p.  31,
"Coverage of Program Activities."

OMB Circular A-11, secs.  210.2(c), 210.4, 220.3, 220.4, 220.5,
220.6, 220.7, 220.8, 220.9(a), 220.9(b), 220.9(d), 220.9(e),
220.10(c), 221.3, 221.4(b). 

OMB Checklist for Agency Annual Performance Plans (Nov.  24, 1997),
pp.  1-2, "Coverage of Program Activities"; pp.  3-4, "Annual
Performance Goals"; p.  7, "Mission Statement and General Goals and
Objectives"; and p.  8, "Budget Account Restructuring."

The Government Performance and Results Act:  1997 Governmentwide
Implementation Will Be Uneven (GAO/GGD-97-109, June 2, 1997), pp. 
90-93. 

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

Integrating Performance Measurement into the Budget Process, Chief
Financial Officers Council, GPRA Implementation Committee
Subcommittee Project, September 22, 1997. 

Agencies' Annual Performance Plans Under The Results Act:  An
Assessment Guide to Facilitate Congressional Decisionmaking
(GAO/GGD/AIMD-10.1.18; Feb.  1998, Version 1), pp.  12-14. 

The Results Act:  An Evaluator's Guide to Assessing Agency Annual
Performance Plans (GAO/GGD-10.1.20; Apr.  1998, Version 1), pp. 
19-29. 


      RECOGNIZING CROSSCUTTING
      EFFORTS
------------------------------------------------------- Appendix I:0.3

OMB Circular A-11, secs.  220.8, 220.10(b), and 221.4(c). 

OMB Checklist for Agency Annual Performance Plans (Nov.  24, 1997),
p.  8, "Cross-cutting Programs."

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

The Government Performance and Results Act:  1997 Governmentwide
Implementation Will Be Uneven (GAO/GGD-97-109, June 2, 1997), pp. 
53-55. 

Agencies' Annual Performance Plans Under The Results Act:  An
Assessment Guide to Facilitate Congressional Decisionmaking
(GAO/GGD/AIMD-10.1.18; Feb.  1998, Version 1), p.  15. 

The Results Act:  An Evaluator's Guide to Assessing Agency Annual
Performance Plans (GAO/GGD-10.1.20; Apr.  1998, Version 1), p 29-30. 


      CONNECTING STRATEGIES TO
      RESULTS
------------------------------------------------------- Appendix I:0.4

Results Act, 31 U.S.C.  1115(a)(3) and 31 U.S.C.  9703. 

Senate Committee on Governmental Affairs Report accompanying Results
Act (Senate Report 103-58, June 16, 1993), pp.  15-16, "Performance
Plans"; pp.  17-18, "Managerial Flexibility Waivers"; and pp.  34-36,
"Section 5.  Managerial Accountability and Flexibility."

OMB Circular A-11, secs.  220.10(b), 220.12(a), 220.12(b), 220.12(c),
and 221.4(b). 

OMB Checklist for Agency Annual Performance Plans (Nov.  24, 1997),
p.  6, "Means and Strategies"; p.  8, "Tax Expenditures and
Regulation"; and p.  8, "External Factors."

The Government Performance and Results Act:  1997 Governmentwide
Implementation Will Be Uneven (GAO/GGD-97-109, June 2, 1997), pp. 
63-66. 

Business Process Reengineering Assessment Guide, Version 3
(GAO/AIMD-10.1.15, Apr.  1997). 

Privatization:  Lessons Learned by State and Local Governments
(GAO/GGD-97-48, Mar.  14, 1997). 

Executive Guide:  Effectively Implementing the Government Performance
and Results Act (GAO/GGD-96-118, June 1996), pp.  18-21 and 24-26. 

Agencies' Annual Performance Plans Under The Results Act:  An
Assessment Guide to Facilitate Congressional Decisionmaking
(GAO/GGD/AIMD-10.1.18; Feb.  1998, Version 1), pp.  17-18. 

The Results Act:  An Evaluator's Guide to Assessing Agency Annual
Performance Plans (GAO/GGD-10.1.20; Apr.  1998, Version 1), pp. 
32-36. 


      CONNECTING RESOURCES TO
      STRATEGIES
------------------------------------------------------- Appendix I:0.5

Results Act, 31 U.S.C.  1115(a)(3). 

Senate Committee on Governmental Affairs Report accompanying Results
Act (Senate Report 103-58, June 16, 1993), pp.  15-16, "Performance
Plans"; and pp.  29-30, "Performance Indicators."

OMB Circular A-11, secs.  220.1, 220.9(a), 220.9(e), 220.10(c),
220.11(a), 220.11(b), 220.11(c), 220.12(a), 220.12(d), and Part 3. 

OMB Checklist for Agency Annual Performance Plans (Nov.  24, 1997),
p.  5, "Future Year Performance"; p.  5, "Performance Goals Funded By
Prior Year Appropriations"; and p.  6, "Means and Strategies."

OMB Capital Programming Guide, v.  1.0 (July 1997). 

Executive Guide:  Measuring Performance and Demonstrating Results of
Information Technology Investments (GAO/AIMD-97-163, Sept.  1997). 

The Government Performance and Results Act:  1997 Governmentwide
Implementation Will Be Uneven (GAO/GGD-97-109, June 2, 1997), pp. 
90-97. 

Year 2000 Computing Crisis:  An Assessment Guide (GAO/AIMD-10.1.14,
Sept.  1997). 

Assessing Risks and Returns:  A Guide for Evaluating Federal
Agencies' IT Investment Decision-making, Version 1 (GAO/AIMD-10.1.13,
Feb.  1997). 

Information Technology Investment:  Agencies Can Improve Performance,
Reduce Costs, and Minimize Risks (GAO/AIMD-96-64, Sept.  30, 1996). 

Executive Guide:  Effectively Implementing the Government Performance
and Results Act (GAO/GGD-96-118, June 1996), pp.  18-21 and 39-46. 

Transforming the Civil Service:  Building the Workforce of the
Future--Results of a GAO-Sponsored Symposium (GAO/GGD-96-35, Dec. 
26, 1995). 

Federal Accounting Standards Advisory Board (FASAB) Volume 1 Original
Statements:  Statements of Federal Financial Accounting Concepts and
Standards, Statement of Federal Financial Accounting Standards No. 
1, Objectives of Federal Financial Reporting (GAO/AIMD-21.1.1, Mar. 
1997), pp.  11-62. 

FASAB Volume 1 Original Statements:  Statements of Federal Financial
Accounting Concepts and Standards, Statement of Federal Financial
Accounting Standards No.  4, Managerial Cost Accounting Standards
(GAO/AIMD-21.1.1, Mar.  1997), pp.  331-394. 

Agencies' Annual Performance Plans Under The Results Act:  An
Assessment Guide to Facilitate Congressional Decisionmaking
(GAO/GGD/AIMD-10.1.18; Feb.  1998, Version 1), pp.  19-20. 

The Results Act:  An Evaluator's Guide to Assessing Agency Annual
Performance Plans (GAO/GGD-10.1.20; Apr.  1998, Version 1), pp. 
36-38. 


      VERIFYING AND VALIDATING
      PERFORMANCE
------------------------------------------------------- Appendix I:0.6

Results Act, 31 U.S.C.  1115 (a)(6). 

Senate Committee on Governmental Affairs Report accompanying Results
Act (Senate Report 103-58, June 16, 1993), p.  30, "Verification and
Validation."

OMB Circular A-11, secs.  220.7, 220.13, and 221.5. 

OMB Checklist for Agency Annual Performance Plans (Nov.  24, 1997),
p.  7, "Verification and Validation."

Executive Guide:  Information Security Management (GAO/AIMD-98-21,
Nov.  1997). 

Executive Guide:  Effectively Implementing the Government Performance
and Results Act (GAO/GGD-96-118, June 1996), pp.  27-29. 

GPRA Performance Reports (GAO/GGD-96-66R, Feb.  14, 1996) pp.  6-8
and 11. 

FASAB Volume 1 Original Statements:  Statements of Federal Financial
Accounting Concepts and Standards (GAO/AIMD-21.1.1, Mar.  1997). 

Budget and Financial Management:  Progress and Agenda for the Future
(GAO/T-AIMD-96-80, Apr.  23, 1996). 

Agencies' Annual Performance Plans Under The Results Act:  An
Assessment Guide to Facilitate Congressional Decisionmaking
(GAO/GGD/AIMD-10.1.18; Feb.  1998, Version 1), p.  22. 

The Results Act:  An Evaluator's Guide to Assessing Agency Annual
Performance Plans (GAO/GGD-10.1.20; Apr.  1998, Version 1), pp. 
41-43. 


      RECOGNIZING DATA LIMITATIONS
------------------------------------------------------- Appendix I:0.7

OMB Circular A-11, sec.  221.5. 

OMB Checklist for Agency Annual Performance Plans (Nov.  24, 1997),
p.  7, "Verification and Validation."

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

The Government Performance and Results Act:  1997 Governmentwide
Implementation Will Be Uneven (GAO/GGD-97-109, June 2, 1997), pp. 
61-75. 

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

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

Executive Guide:  Effectively Implementing the Government Performance
and Results Act (GAO/GGD-96-118, June 1996), pp.  27-29. 

GPRA Performance Reports (GAO/GGD-96-66R, Feb.  14, 1996). 

Block Grants:  Issues in Designing Accountability Provisions
(GAO/AIMD-95-226, Sept.  1, 1995). 

Agencies' Annual Performance Plans Under The Results Act:  An
Assessment Guide to Facilitate Congressional Decisionmaking
(GAO/GGD/AIMD-10.1.18; Feb.  1998, Version 1), p.  23. 

The Results Act:  An Evaluator's Guide to Assessing Agency Annual
Performance Plans (GAO/GGD-10.1.20; Apr.  1998, Version 1), pp. 
43-47. 


THE RESULTS ACT'S PLANNING AND
REPORTING REQUIREMENTS
========================================================== Appendix II

The Results Act is designed to improve the efficiency and
effectiveness of federal programs by establishing a system to set
goals for program performance and to measure results.  Specifically,
the Act requires executive agencies to prepare multiyear strategic
plans, annual performance plans, and annual performance reports. 


   MULTIYEAR STRATEGIC PLANS
-------------------------------------------------------- Appendix II:1

The Results Act requires virtually every executive agency to develop
strategic plans covering a period of at least 5 years forward from
the fiscal year in which it is submitted and to update those plans at
least every 3 years.  Agencies' first strategic plans were to be
submitted to Congress and the Director of OMB by September 30, 1997. 
The strategic plans are to (1) include the agencies' mission
statements; (2) identify long-term general goals and objectives; (3)
describe how the agencies intend to achieve those goals through their
activities and through their human, capital, information, and other
resources; and (4) explain the key external factors that could
significantly affect the achievement of those goals.  Under the Act,
strategic plans are the starting point for agencies to set annual
performance goals and to measure program performance in achieving
those goals.  Consequently, strategic plans are also to include a
description of how long-term general goals will be related to annual
performance goals as well as a description of the program evaluations
that agencies used to establish their long-term general goals and a
schedule for subsequent evaluations.  As part of the strategic
planning process, agencies are required to consult with Congress and
solicit the views of other stakeholders--those governmental and
nongovernmental entities potentially affected by, or interested in,
the agencies' activities. 


   ANNUAL PERFORMANCE PLANS
-------------------------------------------------------- Appendix II:2

Building on the decisions made as part of the strategic planning
process, the Results Act requires executive agencies to develop
annual performance plans covering each program activity set forth in
the agencies' budgets.  The first annual performance plans, covering
fiscal year 1999, were to be submitted to OMB in the fall of 1997 and
to Congress after the President's budget in 1998.  The Results Act
requires that each agency prepare an annual performance plan that
shall: 

"(1) establish performance goals to define the level of performance
to be achieved by a program activity;

"(2) express such goals in an objective, quantifiable, and measurable
form unless authorized to be in an alternative form .  .  .  ;

"(3) briefly describe the operational processes, skills and
technology, and the human, capital, information, or other resources
required to meet the performance goals;

"(4) establish performance indicators to be used in measuring or
assessing the relevant outputs, service levels, and outcomes of each
program activity;

"(5) provide a basis for comparing actual program results with the
established performance goals; and

"(6) describe the means to be used to verify and validate measured
values."\3

The Act authorizes agencies to apply for managerial flexibility
waivers in their annual performance plans.  Agencies' authority to
request waivers of nonstatutory administrative procedural
requirements and controls is intended to provide federal managers
with more flexibility to structure agency systems to better support
performance goals.  An example of increased flexibility would be to
allow an organization to recapture unspent operating funds because of
increased efficiencies and then to use these funds to purchase new
equipment or expand employee training.  Another example might involve
delegating more authority to line managers to make procurement
decisions. 

OMB is to use the performance plans that agencies submit to develop
an overall federal government performance plan.  OMB is to submit
this governmentwide plan each year to Congress with the President's
budget.  According to the Senate Committee report accompanying the
Act, the overall federal government performance plan is to present to
Congress a single, cohesive picture of the federal government's
annual performance goals for the fiscal year.\4 The first overall
plan was due with the President's fiscal year 1999 budget. 


--------------------
\3 31 U.S.C.  1115. 

\4 S.  Rep.  No.  58, 103d Cong.  1st Sess.  (1993). 


   ANNUAL PERFORMANCE REPORTS
-------------------------------------------------------- Appendix II:3

Finally, the Results Act requires each executive agency to prepare
annual reports on program performance for the previous fiscal year. 
The first performance reports for fiscal year 1999 are due to
Congress and the President no later than March 31, 2000; subsequent
reports are due by March 31 for the years that follow.  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 is to explain in the report
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.  According to the Senate
committee report on the Act, actions needed to accomplish a goal
could include legislative, regulatory, or other actions.  If an
agency finds a goal to be impractical or not feasible, it is to
include a discussion of whether the goal should be modified. 

In addition to evaluating the progress made toward achieving its
annual goals, 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.  Thus, in their fiscal year 1999
performance reports that are 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 is to help show how an agency's actual performance is
influencing its performance plan.  The report also is to include (1)
the summary findings of program evaluations completed during the
fiscal year covered by the report and (2) the use and effectiveness
of any of the Results Act managerial flexibility waivers that an
agency received. 

Agencies also are to include baseline and trend data in annual
performance reports to help ensure that their reports are complete
and that performance is viewed in context.  Such data can show
whether performance goals are realistic given the past performance of
an agency.  Such data can also assist users of reports to draw more
informed conclusions than they would if they compared only a single
year's performance against an annual goal, because users of reports
can see improvements or declines in an agency's performance over
prior years.\5 For fiscal years 2000 and 2001, agencies' reports are
to include data on the extent to which their performance achieved
their goals, 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.  Congress recognized that in some
cases not all the performance data will be available in time for the
required reporting date.  In such cases, agencies are to provide
whatever data are available with a notation as to their incomplete
status.  Subsequent annual performance reports are to include the
complete data as part of the trend information. 


--------------------
\5 GPRA Performance Reports (GAO/GGD-96-66R, Feb.  14, 1996). 


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

GENERAL GOVERNMENT DIVISION,
WASHINGTON, D.C. 

Gerald Stankosky, Assistant Director
John Mortin, Assistant Director
Bill Dowdal, Evaluator-in-Charge
David Sausville, Senior Evaluator

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

Joan Hawkins, Assistant Director
Franklin Deffer, Assistant Director
Laura Castro, Senior Evaluator


*** End of document. ***