Managing for Results: Answers to Hearing Questions on Quality Management
(Correspondence, 09/10/1999, GAO/GGD-99-181R).
Pursuant to a congressional request, GAO provided information on quality
management in the federal government, focusing on: (1) whether a
vigorous quality management program should be implemented in addition to
the strategic planning framework mandated by the Government Performance
and Results Act; (2) whether the Office of Management and Budget (OMB)
has the necessary resources and institutional knowledge to implement a
quality management initiative; (3) whether the National Partnership for
Reinventing Government (NPR) initiative should be located in an agency
like OMB; (4) whether there were other quality management programs that
were initiated by previous administrations; (5) how information in
agency strategic plans, annual performance plans, and performance
reports can be used to identify and facilitate improvements in the
quality processes; (6) whether agencies can successfully integrate total
quality management and the Results Act to address management problems;
(7) how Congress can best use agencies' strategic and performance plans
to identify the degree to which agencies have implemented quality
management; and (8) how the Results Act provides for employee
involvement.
GAO noted that: (1) GAO's work concerning high-performing organizations
provides useful insight; (2) leaders in successful organizations
integrate the implementation of separate organizational improvement
efforts; (3) regardless of whether these reforms are self-initiated or
mandated by legislation, agency top leadership needs to meld these
various reforms into a coherent, unified effort; (4) there are serious
questions about whether OMB would have the institutional knowledge and
resources needed to implement a quality management initiative; (5)
historically, OMB has been reluctant to become heavily involved in some
management initiatives because of the small size of its staff and its
view that federal agencies themselves are responsible and accountable
for making management improvements; (6) prior to NPR, previous
administrations undertook a series of related quality management
efforts; (7) in February 1986, President Reagan issued an Executive
Order that formally established a governmentwide effort to improve the
productivity, quality, and timeliness of government products and
services; (8) the President's Quality Award Program, begun in 1988, has
given awards to federal government organizations for: (a) improving
their overall performance and capabilities; and (b) demonstrating a
sustained trend in providing high-quality products and services that
results in the effective use of taxpayer-dollars; (9) the information in
agency strategic plans, annual performance plans, and performance
reports can be an important tool to identify and facilitate improvements
in quality processes; (10) no serious effort to fundamentally improve
the performance of federal agencies can succeed without addressing
long-standing management challenges and program risks; (11) GAO noted
that it has long advocated that congressional committees of jurisdiction
hold augmented oversight hearings on each of the major agencies; (12)
information on missions, goals, strategies, resources, and results could
provide a consistent starting point for each of these hearings; and (13)
the Results Act does not have a specific requirement for employee
involvement, other than to identify the development of strategic and
annual performance plans and performance reports as inherently
governmental functions that must only be done by federal employees.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: GGD-99-181R
TITLE: Managing for Results: Answers to Hearing Questions on
Quality Management
DATE: 09/10/1999
SUBJECT: Total quality management
Strategic planning
Public administration
Performance measures
Accountability
IDENTIFIER: GAO Total Quality Management System
President's Quality Award Program
National Partnership for Reinventing Government
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United States General Accounting Office
General Government Division Washington, D.C. 20548 B-283613
September 10, 1999 The Honorable George V. Voinovich, Chairman
Subcommittee on Oversight of Government Management, Restructuring,
and the District of Columbia Committee on Governmental Affairs
United States Senate Subject: Managing for Results: Answers to
Hearing Questions on Quality Management Dear Mr. Chairman: This
letter responds to your request for information following your
July 29th hearing on quality management. The enclosure contains
our responses to questions we received from your Subcommittee
dated August 23, 1999. Our responses are based primarily on our
previously issued work on management reform, and we therefore did
not obtain agency comments on a draft of this letter. We are
sending copies of this letter to Senator Richard J. Durbin,
Ranking Minority Member, Subcommittee on Oversight of Government
Management, Restructuring, and the District of Columbia, Senate
Committee on Governmental Affairs. We will make copies available
to others upon request. If you have any questions concerning this
letter, please contact me at (202) 512-8676. Sincerely yours, J.
Christopher Mihm Associate Director, Federal Management and
Workforce Issues Page 1 GAO/GGD-99-
181R Answers to Hearing Questions on Quality Management Enclosure
Responses to Subcommittee Questions Following July 29, 1999,
Quality Management Hearing 1. Should a vigorous quality
management program be implemented governmentwide in addition to
the strategic planning framework mandated by the Results Act? We
have not done work to specifically identify whether a
governmentwide quality management program, separate from the
statutory and management initiatives already under way, is needed.
However, our work concerning high-performing organizations
provides useful insight. First, as noted in our statement for the
hearing, leaders in successful organizations integrate the
implementation of separate organizational improvement efforts.1
Regardless of whether these reforms are self-initiated, such as
Total Quality Management (TQM), or mandated by legislation, such
as the Results Act, agency top leadership needs to meld these
various reforms into a coherent, unified effort. Second, high-
performing organizations understand and can articulate how their
day-to-day performance contributes to results and improved
customer satisfaction--a key tenet of quality management.
Consequently, any effort to improve governmentwide performance
also needs to pay attention to the day-to-day processes and
strategies that agencies employ to achieve mission-related
results. Effective implementation of the Results Act requires
such attention. Our work that looks at agencies' fiscal year 2000
performance plans has shown that agencies need to improve how
their human capital and management resources and strategies are
linked to achieving mission-related results.2 Understanding and
then articulating how these resources and strategies can best be
mobilized to produce results is crucial if agencies are to improve
their performance. The fiscal year 1999 program performance
reports, due to Congress by March 31, 2000, under the Results Act,
will provide valuable evidence concerning the degree to which
agencies have considered and understand how their processes and
strategies lead to results. Each agency, in its report, is to
compare the agency's actual performance against the goals
established in its annual performance plan. In cases where a goal
has not been met, the agency is to explain why and discuss the
plans and schedules for achieving the established performance
goals. Agencies that lack a clear understanding of the
relationships among the agency's 1 Management Reform: Using the
Results Act and Quality Management to Improve Federal Performance
(GAO/T-GGD-99-151, July 29, 1999). 2 Managing for Results:
Opportunities for Continued Improvements in Agencies' Performance
Plans (GAO/GGD/AIMD-99-215, July 20, 1999). Page 2
GAO/GGD-99-181R Answers to Hearing Questions on Quality Management
Enclosure Responses to Subcommittee Questions Following July 29,
1999, Quality Management Hearing resources, processes, products
and services, and results will not likely be in a position to
successfully meet this requirement. 2. Does the Office of
Management and Budget (OMB) have the necessary resources and
institutional knowledge to implement a quality management
initiative? While we have not examined this issue directly, we
would note that in 1990 OMB's governmentwide TQM leadership
functions and its staffing devoted to TQM were moved into the
Federal Quality Institute (FQI), which at the time was part of the
Office of Personnel Management (OPM). As a result, there are
serious questions about whether OMB would have the institutional
knowledge and resources needed to implement a quality management
initiative. The degree to which OMB provides management
initiatives with the necessary resources and commitment has been a
perennial question, and we have found that the effectiveness of
OMB's leadership with regard to management issues has been uneven.
OMB's challenge is to carry out its central management leadership
responsibilities in a manner that leverages the opportunities of
the budget process, while at the same time ensuring that
management issues receive appropriate attention in an environment
driven by budget and policy decisions. 3. I consider the National
Partnership for Reinventing Government (NPR) the Clinton
Administration's quality management initiative. Its stated goals
are making government work better and cost less, with an emphasis
on customer service. However, NPR lacks institutional leadership
that transcends one person or one administration. Given that,
would it make more sense to locate an initiative like NPR in an
agency like OMB? As your question suggests, management initiatives
must have sustained support from the political and career
leadership to be successful. As long as top leadership support
exists, a variety of organizational arrangements can be used to
implement management reforms. Absent top leadership support, a
management initiative is unlikely to be sustained and successful,
regardless of where responsibility for leading the initiative is
housed. In response to our 1996 report on NPR's Reinvention Labs,
administration officials noted that OMB's historical role, its
budget responsibilities, and its statutory management
responsibilities often compete with exercising a role as a "change
agent" seeking to foster Page 3 GAO/GGD-99-181R Answers
to Hearing Questions on Quality Management Enclosure Responses to
Subcommittee Questions Following July 29, 1999, Quality Management
Hearing innovation.3 Historically, OMB has been reluctant to
become heavily involved in some management initiatives because of
the small size of its staff and its view that federal agencies
themselves are responsible and accountable for making management
improvements. In this context, we have found that effective
collaboration with the agencies-through such approaches as task
forces and interagency councils-has emerged as an important
central leadership strategy in developing policies that are
sensitive to implementation concerns and the need to secure
consensus and consistent follow-through within the executive
branch. OMB's work with interagency councils has been successful
in fostering communication across the executive branch, building
commitment to reform efforts, tapping talents that exist within
agencies, keeping management issues in the forefront, and
initiating important improvement projects. 4. Can you identify
any other quality management programs that were initiated by
previous administrations? What became of them? Prior to NPR,
previous administrations undertook a series of related quality
management efforts. In February 1986, President Reagan issued an
Executive Order that formally established a governmentwide effort
to improve the productivity, quality, and timeliness of government
products and services. This effort was continued with OMB
Circular A-132, which until 1989 mandated a governmentwide TQM
effort and provided guidelines for the development and
implementation of a productivity and quality improvement process
in the executive branch. An OMB official recalled that agencies
viewed the reporting requirements of this initiative as too
burdensome, and consequently emphasis on this particular TQM
program waned. The Federal Quality Institute was also established
in 1988 to serve as a source of information, training, and
consulting services for agencies engaged in TQM. As noted
earlier, in 1990 OMB's governmentwide leadership functions and
resources devoted to TQM implementation were consolidated into
FQI. In 1995, Congress eliminated FQI's funding, and its
responsibilities were shifted within OPM. The Federal Quality
Consulting Group, FQI's successor, is a federal franchise activity
within the Treasury Department that offers federal agencies
consulting and facilitation services. 3 Management Reform: Status
of Agency Reinvention Lab Efforts (GAO/GGD-96-69, Mar. 20, 1996).
Page 4 GAO/GGD-99-181R Answers to Hearing
Questions on Quality Management Enclosure Responses to
Subcommittee Questions Following July 29, 1999, Quality Management
Hearing Additionally, the President's Quality Award Program (PQA),
begun in 1988, has given awards to federal government
organizations for (1) improving their overall performance and
capabilities and (2) demonstrating a sustained trend in providing
high-quality products and services that results in the effective
use of taxpayer dollars. OPM manages the program, and its award
criteria are closely aligned with the Malcom Baldrige National
Quality Award criteria used to recognize private sector
organizations. The PQA award criteria have evolved to become more
results-oriented and now include a distinct category for producing
results in areas such as customer focus and human resources. This
adaptation reflects quality management's overall evolution from a
focus primarily on quality and employee issues to a broader,
results-oriented focus. Since 1988, the PQA program has
recognized federal organizations 85 times, including most recently
9 organizations last July. 5. How can the information in agency
strategic plans, annual performance plans, and performance reports
be used to identify and facilitate improvements in quality
processes? The information in agency strategic plans, annual
performance plans, and performance reports can be an important
tool to identify and facilitate improvements in quality processes.
The connection between what agencies do on a daily basis and the
results that those activities are intended to achieve are key
elements of all three Results Act products. The information in
these documents can be crucial in identifying performance gaps,
targeting improvement opportunities, and tracking progress. 6.
How can agencies successfully integrate total quality management
and the Results Act to address some of the more long- standing
management problems? No serious effort to fundamentally improve
the performance of federal agencies can succeed without addressing
long-standing management challenges and program risks. The
Results Act and quality management, with their shared focus on
using sound performance data to make decisions, can provide an
integrated approach to improving both the overall results agencies
seek to achieve and the processes that contribute to those
results. Measurable goals for resolving mission-critical
management problems are important to ensuring that the agencies
have the institutional capacity to achieve their more results-
oriented programmatic goals. Our assessment of the fiscal year
2000 annual Page 5 GAO/GGD-99-181R Answers to Hearing
Questions on Quality Management Enclosure Responses to
Subcommittee Questions Following July 29, 1999, Quality Management
Hearing performance plans showed that agencies are not
consistently addressing management challenges and program risks in
their plans. Agencies that did address the challenges and risks in
their plans used a variety of approaches, including setting goals
and performance measures that were linked to the management
challenges and program risks. These agencies also discussed the
strategies and processes that are to be used to address the
program risks. Using the annual performance plans to identify
strategies and processes for addressing management challenges and
program risks is a clear illustration of how quality management's
focus on processes can be used to complement the Results Act in
addressing program risks. For example, the Department of
Transportation's (DOT) lack of controls over its financial
activities impairs its ability to manage programs and exposes the
department to potential waste, fraud, mismanagement, and abuse.
DOT's performance plan identifies financial accounting as a
management challenge and addresses key weaknesses that need to be
resolved before DOT can obtain an unqualified audit opinion.
Importantly, DOT's corporate management strategies include efforts
to receive an unqualified audit opinion, enhance the efficiency of
the accounting operation, and implement a pilot of the improved
financial systems environment. 7. How can Congress best use the
information in agencies' strategic plans, performance plans, and
performance reports to identify the degree to which agencies have
quality management and related initiatives in place? In our recent
report summarizing our reviews of agencies' fiscal year 2000
annual performance plans, we noted that we have long advocated
that congressional committees of jurisdiction hold augmented
oversight hearings on each of the major agencies.4 Information on
missions, goals, strategies, resources, and results could provide
a consistent starting point for each of these hearings. Such
hearings also would further underscore for agencies the importance
that Congress places on creating high- performing executive
organizations. Performance planning under the Results Act should
allow for more informed decisions about such issues as * whether
the agency is pursuing the right goals and making progress toward
achieving them; * whether the federal government is effectively
coordinating its responses to pressing national needs; 4
GAO/GGD/AIMD-99-215, July 20, 1999. Page 6
GAO/GGD-99-181R Answers to Hearing Questions on Quality Management
Enclosure Responses to Subcommittee Questions Following July 29,
1999, Quality Management Hearing * whether the federal government
is achieving an expected level of performance for the budgetary
and other resource commitments that have been made; * the degree
to which the agency has the best mix of programs, initiatives, and
other strategies to achieve results; * the progress the agency is
making in addressing mission-critical management challenges and
program risks; * the efforts under way to ensure that the
agency's human capital strategies are linked to strategic and
programmatic planning and accountability mechanisms; and * the
status of the agency's efforts to use information technology to
achieve results. 8. One of the keys to the success of Ohio's
Quality Services through Partnership initiative was employee
involvement. How does the Results Act provide for employee
involvement? The Results Act does not have a specific requirement
for employee involvement, other than to identify the development
of strategic and annual performance plans and performance reports
as inherently governmental functions that must only be done by
federal employees. Nevertheless, the involvement of managers and
employees throughout the organization is important because if
agencies are to implement and sustain major management reforms, a
cultural transformation must occur at agencies that requires them
to more effectively manage, develop, and involve their most
important assettheir human capital. This cultural transformation
requires employees to understand the importance of, and the
connection between, their individual performance and achieving
overall agency goals. Employees who are unsure about the
direction their agency is taking will not be able to effectively
focus on achieving those goals. When we surveyed federal managers
at the GS-13 level and above in late 1996 and early 1997, over
half of the managers said that they had no involvement in many of
the activities related to their agency's implementation of the
Results Act. However, members of the Senior Executive Service
(SES) reported higher levels of involvement in key Results Act-
related activities. For example, 72 percent of the SES managers
reported that they had been involved in establishing long-term
strategic goals for their agency. On the other hand, only 35
percent of non- SES managers reported being involved in
establishing strategic goals. At the request of the Subcommittee,
we are conducting the survey again to see whether the level of
involvement has increased over the last 3 years. Page 7
GAO/GGD-99-181R Answers to Hearing Questions on Quality Management
Page 8 GAO/GGD-99-181R Answers to Hearing Questions on Quality
Management Page 9 GAO/GGD-99-181R Answers to Hearing Questions
on Quality Management Page 10 GAO/GGD-99-181R Answers to
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