Results Act: Observations on USDA's Draft Strategic Plan (Correspondence,
07/10/97, GAO/RCED-97-196R).
Pursuant to a congressional request, GAO reviewed the Department of
Agriculture's (USDA) draft strategic plan, focusing on: (1) whether it
fulfills the requirements of the Government Performance and Results Act
and provided GAO's views on its overall quality; (2) whether it reflects
USDA's key statutory authorities; (3) whether it reflects interagency
coordination for crosscutting programs, activities, or functions that
are similar or complementary to other federal agencies; (4) whether it
addresses management problems GAO has previously identified; and (5) the
adequacy of USDA's data and information systems for providing
information for measuring results.
GAO noted that: (1) overall, USDA's draft strategic plan does not
fulfill the requirements of the Results Act; (2) the draft plan in many
cases does not include the six elements required by the Results Act and
generally lacks some key attributes necessary for a quality strategic
plan; (3) USDA's overall mission and goals are contained in the
Department-wide strategic overview; (4) the overview refers the reader
to the subagency plans for information on the six required elements; (5)
however, only one of the subagency plans GAO reviewed contains all six
required elements; (6) USDA's draft strategic plan also falls short in
several other areas necessary for achieving the purposes of the Results
Act; (7) among other things, the draft strategic plan lacks an emphasis
on externally focused goals and objectives, adequate, quantifiable
performance measures, and good linkages between the subagencies' goals
and the Department's overall goals; (8) USDA's draft strategic plan
reflects consideration of the key statutes authorizing the Department's
programs; (9) however, USDA's draft strategic plan does not generally
contain clear linkages between the stated goals and objectives and the
Department's relevant major statutory responsibilities; (10) GAO could
not determine, from the information presented in the draft plan, the
extent to which interagency coordination with federal agencies, both
within and outside the Department, occurred in the strategic plan's
formulation; (11) similarly, it is unclear whether an assessment of
duplicative and overlapping functions was performed in developing the
subagencies' goals and objectives; (12) USDA's Department-wide strategic
overview acknowledges the roles of USDA subagencies that carry out
similar or complementary functions, but it does not recognize the role
of other federal agencies; (13) on the other hand, many of the subagency
plans generically recognize the role of other federal agencies in
accomplishing their missions; (14) USDA's draft strategic plan addresses
some but not all of the high-risk issues and management problems GAO has
previously identified; (15) generally, information on how USDA will
address these high-risk issues and management problems, such as the need
to reduce losses in the farm loan program, is included as goals and
objectives in the subagency plans; and (16) USDA is not yet in a
position to provide reliable data to measure some of its performance
goals because many of its information, accounting, and financial
management systems are inadequate, and long-standing problems with these
systems have not been corrected.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: RCED-97-196R
TITLE: Results Act: Observations on USDA's Draft Strategic Plan
DATE: 07/10/97
SUBJECT: Strategic planning
Agency missions
Congressional/executive relations
Financial management
Management information systems
Interagency relations
Internal controls
Agricultural industry
Agricultural programs
IDENTIFIER: Food Stamp Program
USDA Conservation Reserve Program
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Cover
================================================================ COVER
September 1997
GAO/RCED-97-196R
USDA's Draft Strategic Plan
(150731)
Abbreviations
=============================================================== ABBREV
BOP - Federal Bureau of Prisons
CFO - Chief Financial Officers
DEA - Drug Enforcement Administration
DOJ - Department of Justice
FBI - Federal Bureau of Investigation
INS - Immigration and Naturalization Service
NPR - National Performance Review
OMB - Office of Management and Budget
USDA - x
CIO - x
Letter
=============================================================== LETTER
B-277376
July 10, 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
Subject: Results Act: Observations on USDA's Draft Strategic Plan
On June 12, 1997, you asked us to review the draft strategic plans
submitted by the cabinet departments and selected major agencies for
consultation with the Congress as required by the Government
Performance and Results Act of 1993 (the Results Act). This letter
is our response to that request concerning the draft strategic plan
for the U.S. Department of Agriculture (USDA).
OBJECTIVES, SCOPE, AND
METHODOLOGY
------------------------------------------------------------ Letter :1
Specifically, you asked us to review USDA's draft plan and assess (1)
whether it fulfills the requirements of the Results Act and to
provide our views on its overall quality; (2) whether it reflects
USDA's key statutory authorities; (3) whether it reflects interagency
coordination for crosscutting programs, activities, or functions that
are similar or complementary to other federal agencies; (4) whether
it addresses management problems we have previously identified; and
(5) the adequacy of USDA's data and information systems for providing
reliable information for measuring results.
We obtained the May 1997 draft strategic plan that USDA provided to
congressional committees. USDA's draft strategic plan includes a
Department-wide strategic overview as well as the 30 plans for the
mission areas, subagencies, and staff offices that make up the
Department. We reviewed the Department-wide strategic overview and
the 16 subagency plans that are directly related to accomplishing
USDA's mission and implementing its programs. These 16 subagency
plans cover the seven primary mission areas of USDA: Farm and
Foreign Agricultural Services; Food, Nutrition, and Consumer
Services; Food Safety; Marketing and Regulatory Programs; Natural
Resources and Environment; Research, Education, and Economics; and
Rural Development.\1
It is also important to recognize that USDA's final plan is not due
to the Congress and the Office of Management and Budget (OMB) until
September 1997. Furthermore, the Results Act anticipated that it
might take several planning cycles to perfect the process and that
the final plan would be continually refined as future planning cycles
occur. Thus, our findings reflect a snapshot status of the draft
strategic plan at this time. We recognize that developing a
strategic plan is a dynamic process and that USDA, OMB, and
congressional staff are continuing to revise the draft.
Our overall assessment of USDA's draft strategic plan was generally
based on our knowledge of USDA's operations and programs, our
numerous reviews of the Department, and other existing information
available at the time of our assessment. Specifically, the criteria
we used to determine whether USDA's draft strategic plan complied
with the requirements of the Results Act were the Results Act,
supplemented by OMB's guidance on developing the plans (OMB Circular
A-11, Part 2). To make judgments about the overall quality of the
plan and its components, we used our May 1997 guidance for
congressional review of the plans (GAO/GGD-10.1.16). To determine
whether the plan contained information on interagency coordination
and addressed management problems previously identified by GAO, we
relied on our general knowledge of USDA's operations and programs,
and the results of our previous reports. In determining whether
USDA's draft strategic plan reflects the Department's major statutory
responsibilities, as you requested, we coordinated our review with
the Congressional Research Service and reviewed material in USDA's
1998 budget explanatory notes for an overview of the Department's
primary functions and activities. To determine whether USDA had
adequate systems in place to provide reliable information on
performance, we reviewed the Department-wide plan for financial
management and the subagency plans for the Chief Financial Officer
and the Chief Information Officer. We also relied on the results of
our previous reports and those from USDA's Office of Inspector
General.
--------------------
\1 The Rural Development mission area has one combined plan for all
three component subagencies.
BACKGROUND
------------------------------------------------------------ Letter :2
With an operating budget of about $57 billion, USDA is one of the
largest civilian agencies. USDA administers over 200 programs that
cover a wide range of issues related to food and agriculture. Among
other things, USDA's programs support farmers' incomes, stabilize
domestic markets, promote U.S. exports, manage national forests,
conserve agricultural lands, provide access to food for low-income
households, improve the nutritional status of the American people,
ensure a safe food supply, and support research for the development
of new agricultural products and processes. The programs are
administered by 18 subagencies in seven mission areas.
The diverse nature of USDA's programs raises a number of challenges
in developing a comprehensive and exhaustive strategic plan that
adequately addresses all the responsibilities falling under the
Department's purview. To best address the wide range of program
activities and functions that support its mission and respond to the
Results Act, USDA chose to develop as its draft strategic plan a
Department-wide strategic overview that is accompanied by the 30
plans for the mission areas, subagencies, and staff offices that
constitute the Department. The Department-wide strategic overview
lays out the overall mission and goals for the Department, and the
subagency plans provide greater detail on the missions and the goals
of the individual subagencies, as well as reflect the multifaceted
and multidimensional nature of the subagencies that together make up
the Department.
USDA's Department-wide strategic overview defines the common mission
for the Department as follows: "To enhance the quality of life for
the American people by supporting production agriculture; promoting a
safe, affordable, nutritious, and accessible food supply; caring for
agricultural, forest, and range lands; supporting sound development
of rural communities; providing economic opportunities for farm and
rural residents; and expanding global markets for agricultural and
forest products and services." The Department-wide strategic overview
presents four overall goals for accomplishing the Department's
mission: (1) expand economic and trade opportunities for
agricultural producers and other rural residents; (2) ensure a safe,
affordable, nutritious, and accessible food supply; (3) provide
sensible management of natural resources; and (4) promote good
government by providing USDA's services efficiently and effectively.
The Results Act requires that an agency's strategic plan contain the
following six critical components: (1) a comprehensive 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 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.
For the purpose of this report, we consider USDA's draft strategic
plan to be a combination of the Department-wide strategic overview
and the included subagency plans.
RESULTS IN BRIEF
------------------------------------------------------------ Letter :3
Overall, USDA's draft strategic plan does not fulfill the
requirements of the Results Act. The draft plan in many cases does
not include the six elements required by the Results Act and
generally lacks some key attributes necessary for a quality strategic
plan. USDA's overall mission and goals are contained in the
Department-wide strategic overview; the overview refers the reader to
the subagency plans for information on the six required elements.
However, only one of the subagency plans we reviewed contains all six
required elements. USDA's draft strategic plan also falls short in
several other areas necessary for achieving the purposes of the
Results Act. Among other things, the draft strategic plan lacks an
emphasis on externally focused goals and objectives; adequate,
quantifiable performance measures; and good linkages between the
subagencies' goals and the Department's overall goals.
USDA's draft strategic plan reflects consideration of the key
statutes authorizing the Department's programs. However, USDA's
draft strategic plan does not generally contain clear linkages
between the stated goals and objectives and the Department's relevant
major statutory responsibilities. The Results Act does not require
agencies' strategic plans to contain a statement of statutory
authorities. However, we believe that including such linkages may
facilitate a better understanding of the diversity and complexity of
USDA's overall mission, goals, and objectives.
We could not determine, from the information presented in the draft
plan, the extent to which interagency coordination with federal
agencies, both within and outside the Department, occurred in the
strategic plan's formulation. Similarly, it is unclear whether an
assessment of duplicative and overlapping functions was performed in
developing the subagencies' goals and objectives. USDA's
Department-wide strategic overview acknowledges the role of USDA
subagencies that carry out similar and/or complementary functions,
but it does not recognize the role of other federal agencies. On the
other hand, many of the subagency plans generically recognize the
role of other federal agencies in accomplishing their missions.
However, there is little evidence in either the Department-wide
strategic overview or the subagency plans to suggest that the
subagencies coordinated with other agencies--within or outside of
USDA--when developing their goals and objectives.
USDA's draft strategic plan addresses some but not all of the
high-risk issues and management problems we have previously
identified. Generally, information on how USDA will address these
high-risk issues and management problems, such as the need to reduce
losses in the farm loan program, is included as goals and objectives
in the subagency plans. However, USDA's draft strategic plan does
not address some management issues, such as the need to reform milk
marketing orders, improve the management of agricultural trade
programs, and strengthen financial controls under credit reform.
USDA is not yet in a position to provide reliable data to measure
some of its performance goals because many of its information,
accounting, and financial management systems are inadequate, and
long-standing problems with these systems have not been corrected.
Moreover, many of the performance measures to be used by USDA's
subagencies have not yet been developed sufficiently so that we can
determine whether the data needed to measure performance are already
available or will be available in the future.
USDA'S STRATEGIC PLAN DOES NOT
YET FULFILL THE REQUIREMENTS OF
THE RESULTS ACT
------------------------------------------------------------ Letter :4
A significant amount of work still needs to be done before USDA's
draft strategic plan can fulfill the requirements of the Results Act.
USDA's draft strategic plan does not contain all six elements
required by the Results Act. In addition, the draft strategic plan
does not represent a comprehensive strategy to accomplish USDA's
mission because it lacks some of the key attributes necessary for a
quality strategic plan. USDA's Draft Plan Does Not Contain All Six
Required Elements
USDA's Department-wide strategic overview provides a mission
statement for USDA and lays out four general goals and their related
subgoals. Each subgoal contains some information on the subagencies
within USDA that provide support for accomplishing the goal and some
of the major initiatives to be undertaken under the goal. The
Department-wide strategic overview refers to the subagency plans for
information on strategies for achieving the goals; the relationships
between long-term goals and annual performance goals; key factors
external to the subagency that could affect the achievement of the
goals; and the use of program evaluations to establish goals and to
modify them in the future.
However, our review of the 16 subagency plans for the seven mission
areas shows that, except for one plan, none of the subagency plans
contain all six key elements required by the Results Act. The only
subagency plan that contains all six elements is the plan for the
Food and Consumer Service. Overall, the Food and Consumer Service's
plan provides a good starting point to begin the strategic planning
process for this subagency. The 15 subagency plans not providing
information for all six elements contain two elements each--a mission
statement and goals and objectives--but the information provided for
the other four key elements varied as follows:
-- Seven of the 15 subagency plans do not provide information on
the resources needed to achieve goals and objectives.
-- None of the 15 subagency plans provide sufficient information on
the relationships between the long-term goals and annual
performance goals; most plans indicate that this information is
being developed.
-- Seven of the 15 subagency plans do not provide information on
external factors beyond the control of the subagency that could
affect the achievement of the goals.
-- Thirteen of 15 subagency plans allude to the fact that program
evaluations may be used to modify goals and objectives in the
future, but none describe the general scope and methodology for
the evaluations, key issues that would be addressed during the
evaluations, or the timing for the evaluations.
While many of the subagency plans include sections that should have
covered information on the required elements, the information
actually provided is incomplete and often not relevant or directly
linked to the goals and objectives stated in the plans. Merely
having a subheading for a required element does not ensure that the
requirements of the Results Act have been satisfied. For example,
almost all of the 16 subagency plans include a section that discusses
the external environment facing the subagency, but only about half of
the plans provide any indication of how these external factors could
affect the subagency's ability to accomplish specific goals and
objectives. Because external factors can influence the achievement
of a goal directly and significantly, not including a discussion of
these factors could invalidate the assumptions underlying a goal.
Similarly, providing a schedule of future program evaluations is
important not because it is required but rather because without these
evaluations a subagency cannot have the confidence that it has set
the right goals and that its strategies will be effective in
achieving these goals.
OBSERVATIONS ON THE OVERALL
QUALITY OF THE PLAN
---------------------------------------------------------- Letter :4.1
Collectively, the Department-wide overview and the subagency plans
are not yet sufficient to provide a comprehensive strategy for USDA
or to achieve the purposes of the Results Act, such as improved
management, program effectiveness, and public accountability and
confidence in the agency, for the following reasons:
-- As stated previously, many of the subagency plans are
incomplete. We found a significant amount of variation in the
level of completeness of the subagency plans. Until these plans
are complete, they cannot provide an overall guide to help
subagencies set priorities and allocate resources consistent
with these priorities.
-- Some of the subagency plans provide incomplete descriptions of
the strategies to be used to achieve goals and objectives. The
general goals and objectives should elaborate how the subagency
is carrying out its mission, outline planned accomplishments,
and schedule their implementation. Without fully descriptive
strategies, it is unclear how the subagencies will achieve their
stated goals and objectives. For example, the Rural Development
plan states, as one of its objectives, that it will develop
demographic, natural resource, infrastructure, or program data
on rural communities and analyze these data to determine
barriers and opportunities. However, the strategy to carry out
this objective only states that the Rural Development mission
area will identify data sources and describe the methodology for
analysis.
-- Some subagency plans contain goals and objectives with results
that are beyond the subagency's span of influence. For example,
the Foreign Agricultural Service's plan ties the accomplishment
of many of its goals and objectives to an increase in the value
of U.S. exports. The achievement of this performance goal
depends on a number of external factors, some of which may be
more significant than the subagency's programs and functions.
At a minimum, these external factors should be recognized in the
subagency plans and linked to particular goals.
-- Only a few subagency plans include clear linkages between the
subagencies' goals and objectives and the contributions of these
goals and objectives to the Department's major goals. These
linkages are important because the goals and objectives set out
the long-term programmatic policy and goals of the Department as
a whole and are important for providing direction and guidance
to the staff toward actions that fulfill the overall mission of
the Department. For example, the plans for the Agricultural
Research Service and Cooperative State Research, Education, and
Extension Service contain good linkages between the subagency
goals and the contributions of these goals to USDA's overall
goals.
-- USDA's strategic plan lacks a clear emphasis on externally
focused goals. For example, two subagency plans--the
Agricultural Marketing Service plan and the Grain Inspection,
Packers and Stockyards Administration plan--fail to include any
goals and objectives that are logically related to accomplishing
the subagencies' missions. In addition, less than half of the
goals stated in four other subagency plans were directly related
to their missions. While the Results Act does not preclude the
development of agency goals that are process oriented, the
formulation of goals that relate to the accomplishment of an
agency's mission are important because the process of
formulating goals provides an opportunity for the agency to
identify programs that are essential to the accomplishment of
its mission as well as those activities that can be eliminated,
reduced in scope, or transferred to another agency.
-- Some of the goals and objectives in the subagency plans are not
measurable and may preclude a future assessment of whether the
goals have been or are being achieved. While not all the goals
must be stated in a quantitative fashion, some of the goals in
the subagency plans are stated so broadly that they are
inherently unmeasurable, either directly or through the use of
performance measures. This problem was particularly evident in
the four subagency plans related to the Research, Education, and
Economics mission area. Some of the stated goals and objectives
may be difficult to measure as stated in the subagency plans,
while the results of others may not be easily assessed in the
short-term.
-- Many of the performance measures are either missing, not useful,
or incomplete, making a comprehensive assessment of performance
and results difficult. For example, the Forest Service's plan
contains no performance measures, while the Animal and Plant
Health Inspection Service's plan provides performance measures
for only a few objectives. Although some of the subagency plans
provide information on performance measures, the information is
not sufficient to show the relationship between the subagency's
strategic goals and the performance goals to be included in its
annual performance plans.
KEY STATUTORY AUTHORITIES ARE
REFLECTED IN USDA'S STRATEGIC
PLAN
------------------------------------------------------------ Letter :5
USDA's draft strategic plan reflects consideration of the key
statutes authorizing USDA's programs. However, the Department-wide
strategic overview and the subagency plans do not generally contain
clear linkages between the stated goals and objectives and USDA's
relevant major statutory responsibilities. The Results Act does not
require a statement of major statutory responsibilities to be
included with the agency's goals and objectives.\2 Nonetheless, we
believe that including such linkages in the subagency plans may
facilitate a better understanding of the diversity and complexity of
USDA's overall mission and goals and objectives. For example, the
Animal and Plant Health Inspection Service--a subagency within the
Marketing and Regulatory Programs mission area--provides some links
between its stated goals and its statutory authorities. As a result,
it was clear why a seemingly unrelated goal, such as ensuring the
humane care and treatment of pets, was included as a goal for a
subagency within USDA. Such linkages may also help ensure that the
subagency is stating goals and objectives that are related to its
mission and statutory authorities. For example, we found that the
plans for the Agricultural Marketing Service and the Grain
Inspection, Packers and Stockyards Administration--two other
subagencies within the Marketing and Regulatory Programs mission
area--provide no links between the stated goals and objectives and
the key statutory authorities.
--------------------
\2 OMB Circular A-11 suggests that an agency's mission statement may
include a brief discussion of the agency's enabling or authorizing
legislation; this suggestion, however, does not extend to the
statement of goals and objectives.
USDA'S STRATEGIC PLAN DOES NOT
CONTAIN ADEQUATE INFORMATION ON
INTERAGENCY COORDINATION
------------------------------------------------------------ Letter :6
USDA's draft strategic plan provides little evidence to suggest that
interagency coordination occurred to address the issues of
duplication and overlap when preparing the plan. Although the
Department-wide strategic overview provides information on the role
of various USDA subagencies in accomplishing each of the Department's
four overall goals, it does not acknowledge the role of other
government agencies that support and/or complement these goals. Our
previous work has shown that a number of USDA's programs and
functions are similar and/or complementary to those of other
agencies. For example, USDA's strategic overview does not
acknowledge the role of the Food and Drug Administration or the
Centers for Disease Control in supporting USDA's efforts to ensure a
safe food supply. Similarly, there is no reference to the role of
the Environmental Protection Agency, Bureau of Land Management, or
the Fish and Wildlife Service in helping USDA achieve its natural
resource management and conservation goals. In addition, although
USDA is a significant participant in governmentwide initiatives
relating to trade policy and promotion and food security--together
with the U.S. Trade Representative, Agency for International
Development, and Department of State--the roles of these agencies are
not acknowledged in the Department-wide strategic overview.
The subagency plans generally acknowledge the role of other federal
agencies--both within and outside of USDA--as being necessary for the
subagencies to accomplish their stated missions. However, the
subagency plans do not provide information to determine to what
extent coordination with other agencies has occurred or whether an
assessment of duplicative and overlapping functions was performed in
developing the subagencies' goals and objectives. Instead, the roles
of other agencies are usually not linked to the goals and objectives
stated in the subagency plans and often ignored completely. For
example, the Farm Service Agency's and the Natural Resources
Conservation Service's plans both fail to recognize that the success
of the Conservation Reserve Program depends on each subagency's
successfully carrying out its respective responsibilities.
USDA'S STRATEGIC PLAN ADDRESSES
SOME PREVIOUSLY IDENTIFIED
MANAGEMENT PROBLEMS
------------------------------------------------------------ Letter :7
USDA's draft strategic plan addresses some of the high-risk issues
and major management problems we have previously identified, but it
does not address all of them. Some of the program-specific issues
that we have raised in the past are generally included in the goals
and objectives of the subagency plans and include the following:
-- In 1991, and again in 1997, we reported our concerns that the
growing concentration in the meatpacking industry could lead to
an increase in greater use of anticompetitive practices, such as
price-fixing, by buyers.\3
The Grain Inspection, Packers and Stockyards Administration's plan
includes an objective to monitor the performance and structure of the
livestock, meat, and poultry industries and to investigate
anticompetitive practices to ensure that dominant firms do not
adversely affect competition in these markets.
-- In 1995, we reported that controls and procedures for
authorizing and monitoring retailers that participate in the
Food Stamp Program have not deterred nor prevented fraudulent
activities.\4 The Food and Consumer Service plan includes an
objective to improve program integrity in order to increase
claims collections and reduce the incidence of fraudulent
activity.
-- In 1992, and again in 1994, we reported that USDA's farm loan
programs were highly vulnerable to waste, abuse, and
mismanagement, resulting in billions of dollars in losses to the
federal government.\5 The Farm Service Agency's plan includes
one objective to reduce losses from the farm loan program.
-- Since 1981, we have issued a series of reports about our
concerns with the federal crop insurance program, including the
lack of compliance with program requirements, inadequate
controls over companies' claim adjustment practices, and
actuarial soundness of premium rates.\6 The Risk Management
Agency's plan includes objectives to (1) improve the
effectiveness of the subagency's compliance function, (2)
implement a process to ensure that underwriting principles and
alternative reinsurance agreements are reevaluated periodically,
and (3) continually improve the actuarial soundness and overall
effectiveness of insurance programs.
-- Since 1996, we and the Office of Inspector General have
identified shortcomings in the Forest Service's accounting and
financial data and information systems.\7 The Forest Service's
plan includes an objective to develop a sound financial system
that will meet federal accounting standards and provide overall
financial accountability.
On the other hand, we noted some important omissions in the
Agricultural Marketing Service's and Foreign Agricultural Service's
plans. The Agricultural Marketing Service's plan does not include a
goal or objective to reform the milk marketing order system. Since
1988, we have reported a number of times on the need to reform this
system because it is outdated.\8 Because this program was created in
1937, when the structure of the dairy industry was significantly
different than it is today, milk marketing orders have resulted in
excess production and the inequitable treatment of some producers.
To address these concerns, the Federal Agriculture Improvement and
Reform Act of 1996 requires USDA to make reforms to the milk
marketing order system. It is unclear why USDA did not include this
issue either as a goal or an objective in the plan, especially when
the subagency is currently in the process of developing options to
implement the mandated reforms, which must be completed in 1999.
Similarly, the Foreign Agricultural Service's plan does not recognize
the numerous problems we have identified in agricultural trade
programs.\9 In the past, we have concluded that these programs have
been poorly managed, lack internal controls, and need greater
accountability. However, the draft strategic plan does not provide a
clear strategy on how these problems will be addressed.
In addition, we have identified significant Department-wide problems
in information technology, accounting, and financial management, but
USDA's draft strategic plan does not adequately recognize and address
some of these problems. For example, with regard to information
technology issues, we have reported that although USDA has spent
nearly $8 billion on information technology resources over the past
10 years, it has not effectively planned or managed these investments
and, as a result, has wasted millions of dollars.\10
To address this issue, the strategic plan for the Chief Information
Officer (CIO) contains general goals and outlines actions for
improving the acquisition and management of information technology.
However, the CIO's strategic plan lacks quantifiable performance
measures, time frames and milestones, and resources needed to
accomplish these goals, as well as an explanation of how these goals
are specifically linked to the subagencies' plans.
Similarly, with regard to financial management issues, USDA has a
long-standing history of deficiencies in its accounting and financial
management systems, including nonintegrated financial systems;
inaccurate reporting; and ineffective controls leading to disclaimed,
adverse, or qualified Inspector General audit opinions on financial
statements. To address these issues, USDA has developed a
Department-wide financial management plan that recognizes and
addresses some of the Department's major weaknesses in its accounting
and financial management systems. However, we found that this plan
does not provide clear strategies on how USDA will address credit
reform issues. We believe that this is a critical financial
management issue for USDA because the Department makes billions of
dollars in loans every year. While the plan identifies a methodology
for strengthening the subagency's controls for establishing and
reestimating loan subsidy costs, as required by the Federal Credit
Reform Act of 1990 and the Statement of Federal Financial Accounting
Standards, No. 2, Accounting for Direct Loans and Loan Guarantees,
it does not provide a clear strategy for eliminating the material
weaknesses identified in the Inspector General's financial audit
reports on credit reform.
Furthermore, we have reported in the past that USDA has not allocated
adequate resources to fully comply with the Chief Financial Officers
(CFO) Act and Government Management Reform Act.\11 These resource
limitations are not recognized in USDA's strategic plan and will
continue to preclude USDA from generating reliable financial data.
--------------------
\3 Packers and Stockyards Administration: Oversight of Livestock
Market Competitiveness Needs to be Enhanced (GAO/RCED-92-36, Oct.
16, 1991); Packers and Stockyards Programs: USDA's Response to
Studies on Concentration in the Livestock Industry (GAO/RCED-97-100,
Apr. 23, 1997).
\4 Food Assistance: Reducing Food Stamp Benefit Overpayments and
Trafficking (GAO/RCED-95-198, June 23, 1995).
\5 Farmers Home Administration: Billions of Dollars in Farm Loans
Are at Risk (GAO/RCED-92-86, Apr. 3, 1992); Debt Settlements: FmHA
Can Do More to Collect on Loans and Avoid Losses (GAO/RCED-95-11,
Oct. 18, 1994).
\6 Analysis of Certain Operations of the Federal Crop Insurance
Corporation (CED-81-148, July 30, 1981); Crop Insurance: Overpayment
of Claims by Private Companies Costs the Government Millions
(GAO/RCED-88-7, Nov. 20, 1987); Crop Insurance: Additional Actions
Could Further Improve Programs' Financial Condition (GAO/RCED-95-269,
Sept. 28, 1995); Crop Insurance: Opportunities Exist to Reduce
Government Costs for Private-Sector Delivery (GAO/RCED-97-70, Apr.
17, 1997).
\7 Forest Service (GAO/AIMD-97-11R, Dec. 20, 1996); Forest Service's
Financial Data Limitations (GAO/RCED-96-198R, June 19, 1996); Forest
Service Decision-Making: A Framework for Improving Performance
(GAO/RCED-97-71, Apr. 29, 1997).
\8 Milk Marketing Orders: Options for Change (GAO/RCED-88-9, Mar.
21, 1988); Milk Pricing: New Method for Setting Farm Milk Prices
Needs to Be Developed (GAO/RCED-90-8, Nov. 3, 1989); Federal Dairy
Programs: Information on Dairy Pricing and Related 1995 Farm Bill
Issues (GAO/RCED-95-97BR, Mar. 27, 1995).
\9 Farm Bill Export Options (GAO/GGD-96-39R, Dec. 15, 1995); U.S.
Department of Agriculture: Foreign Agricultural Service Could
Benefit From Better Strategic Planning (GAO/GGD-95-225, Sep. 28,
1995); Agricultural Trade: Significance of High-Value Products as
Agricultural Exports (GAO/GGD-93-120, Aug. 10, 1993).
\10 USDA Information Management: Extensive Improvements Needed in
Managing Information Technology Investments (GAO/T-AIMD-97-90, May
14, 1997).
\11 Agriculture's CFO Act Implementation (GAO/AIMD-95-238R, Sept.
29, 1995).
USDA DOES NOT CURRENTLY HAVE
ADEQUATE SYSTEMS TO PROVIDE
RELIABLE INFORMATION FOR
MEASURING RESULTS
------------------------------------------------------------ Letter :8
Given the long history of problems with USDA's information,
accounting, and financial management systems, we believe that USDA
does not have adequate systems at this time to develop reliable
information for measuring subagencies' performance and results.
Therefore, until the problems we have identified in the past (some of
which are stated above) are corrected, USDA will not be able to
produce reliable data, which are essential for the development of
useful performance measures. In addition, the CFO Act requires the
development of cost information to enable the systematic measurement
of performance and the integration of program, accounting, and budget
systems.
Moreover, as part of the financial audit required by the CFO Act, the
Inspector General has reported on inadequate controls over USDA's
performance measures data. For example, the Inspector General found
that the Forest Service did not have sufficient internal controls
over recording and compiling performance measures data and as a
result could not ensure that accurate and reliable measures were
reported in the subagency's annual report. The Inspector General
attributed these weaknesses to the Forest Service's lack of adequate
reviews, policies, and procedures to ensure that the data are
reliable.
In addition, USDA's draft strategic plan has not yet been developed
sufficiently to identify all of the data needed to measure
performance. This is because (1) not all goals and objectives in the
draft plans are stated in a manner that is measurable and (2) while a
few subagencies have developed useful performance indicators, many of
the subagency plans either have no performance indicators or have
incomplete ones. We also noted this concern in our June 1997 report
on governmentwide implementation of the Results Act.\12 We reported
that the lack of results-oriented performance information to use as a
baseline complicates agencies' efforts to set appropriate targets.
USDA, in particular, had to eliminate some performance measures
because it did not have a way to collect data for these measures.
--------------------
\12 The Government Performance and Results Act: 1997 Governmentwide
Implementation Will Be Uneven (GAO/GGD-97-109, June 2, 1997).
AGENCY COMMENTS
------------------------------------------------------------ Letter :9
We provided copies of a draft of this report to USDA for review and
comment. We met with USDA's Acting Chief Financial Officer and other
officials, who told us that overall the Department has made
significant progress in developing a strategic plan that meets the
requirements of the Results Act. While they agreed that additional
work is needed, they emphasized that the strategic planning process
is an iterative process that is evolving, and they expect that USDA's
strategic plan will continue to improve with each planning cycle.
However, USDA expressed two principal concerns with the draft report.
First, the officials disagreed with our statement that the plan does
not adequately address information technology issues that we have
previously identified. We continue to believe that while the draft
strategic plan for the Chief Information Officer discusses general
goals and outlines actions for improving the acquisition and
management of information technology, it lacks specificity in terms
of performance indicators, time frames, and resources. Moreover, it
is not clear how the goals discussed in the Chief Information
Officer's plan are specifically linked to the subagency plans. We
have added language to our comments on USDA's draft strategic plan to
clarify our concerns. Second, USDA stated that the Foreign
Agricultural Service was not aware of any outstanding recommendations
by us relating to management problems. We believe that a number of
issues and recommendations relating to management problems at the
Foreign Agricultural Service have not yet been adequately addressed
by the subagency. Our concerns and recommendations have been stated
in various reports, including our 1995 report entitled U.S.
Department of Agriculture: Foreign Agricultural Service Could
Benefit from Better Strategic Planning (GAO/GGD-95-225, Sept. 28,
1995). USDA also provided us with some technical comments that have
been incorporated into the report, as appropriate.
---------------------------------------------------------- Letter :9.1
As arranged with your offices, unless you publicly announce its
contents earlier, we plan no further distribution of this report
until 30 days from its issue date. At that time, we will send copies
of this letter to the Ranking Minority Members of your Committees;
the Chairmen and Ranking Minority Members of the Senate Committee on
Agriculture, Nutrition, and Forestry and the House Committee on
Agriculture; the Secretary of Agriculture; and the Director, Office
of Management and Budget. Copies will also be made available to
others upon request.
Please contact me at (202) 512-5138 if you or any of your staff have
any questions concerning this report. Major contributors to this
report are Stephen M. Cleary, Eileen M. Cortese, Anu K. Mittal,
and Dale A. Wolden.
Robert A. Robinson
Director, Food
and Agriculture Issues
*** End of document. ***