Budget Process: Comments on S.261--Biennial Budgeting and Appropriations
Act (Testimony, 04/23/97, GAO/T-AIMD-97-84).
Pursuant to a congressional request, GAO discussed the provisions of S.
261, focusing on: (1) state experiences with biennial budgeting; and (2)
provisions regarding GAO, the Budget Enforcement Act, and the Government
Performance and Results Act (GPRA).
GAO noted that: (1) in 1996, when GAO last looked at this data, 8 states
had biennial legislative cycles and hence necessarily biennial budget
cycles; (2) the 42 states with annual legislative cycles present a mixed
picture in terms of budget cycles; (3) 27 describe their budget cycles
as annual, 12 describe their budget cycles as biennial, and 3 describe
their budget cycles as mixed; (4) perhaps significant is the fact that
most states that describe their budget cycles as biennial or mixed are
small and medium sized; (5) of the 10 largest states in terms of general
fund expenditures, Ohio is the only with an annual legislative cycle and
a biennial budget; (6) a few preliminary observations can be made from
looking at the explicit design of those states which describe their
budget cycle as "mixed" and the practice of those which describe their
budget cycle as "biennial"; (7) in general, budgeting for those items
which are predictable is different than for those items subject to great
volatility whether due to the economy or changes in federal policy; (8)
existing provisions of law requiring GAO to assist the Congress are
sufficiently broad to encompass requests such as those envisioned in
Section 8 of S. 261; (9) the bill explicitly modifies the rules for the
pay-as-you-go scorecard in the Senate by specifying three time periods
during which deficit neutrality is required: (a) the biennium covered by
the budget resolution; (b) the first 6 years covered by the budget
resolution; and (c) the 4 fiscal years after those first six; (10) S.
261 makes a number of changes to GPRA, most designed to make the
requirements of GPRA consistent with the proposed biennial budget cycle,
but others which seek to make substantive revisions to GPRA; (11) other
changes in timelines proposed in S. 261 also appear consistent with GPRA
requirements; (12) S. 261 also proposes several substantive changes to
GPRA, including revised requirements for agency performance plans and
new requirements for preliminary agency performance plans and
governmentwide performance reports; (13) this bill proposes adding
several new requirements to the annual agency performance plans
currently required by GPRA beyond changing them to a biennial cycle,
including: (a) adding an executive summary focusing on the most
important goals of an agency, but limited to a maximum of 10 goals; and
(b) requiring that the Congress be consulted during the preparation of *
--------------------------- Indexing Terms -----------------------------
REPORTNUM: T-AIMD-97-84
TITLE: Budget Process: Comments on S.261--Biennial Budgeting and
Appropriations Act
DATE: 04/23/97
SUBJECT: Budgeting
Fiscal policies
State budgets
Future budget projections
Multiple-year budget authority
Budget controllability
Proposed legislation
Budget administration
Reporting requirements
******************************************************************
** This file contains an ASCII representation of the text of a **
** GAO report. Delineations within the text indicating chapter **
** titles, headings, and bullets are preserved. Major **
** divisions and subdivisions of the text, such as Chapters, **
** Sections, and Appendixes, are identified by double and **
** single lines. The numbers on the right end of these lines **
** indicate the position of each of the subsections in the **
** document outline. These numbers do NOT correspond with the **
** page numbers of the printed product. **
** **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced. Tables are included, but **
** may not resemble those in the printed version. **
** **
** Please see the PDF (Portable Document Format) file, when **
** available, for a complete electronic file of the printed **
** document's contents. **
** **
** A printed copy of this report may be obtained from the GAO **
** Document Distribution Center. For further details, please **
** send an e-mail message to: **
** **
** **
** **
** with the message 'info' in the body. **
******************************************************************
Cover
================================================================ COVER
Before the Committee on Governmental Affairs, United States Senate
For Release on Delivery
Expected at
10 a.m.
Wednesday,
April 23, 1997
BUDGET PROCESS - COMMENTS ON S.
261--
BIENNIAL BUDGETING AND
APPROPRIATIONS ACT
Statement of Susan J. Irving
Associate Director, Budget Issues
Accounting and Information Management Division
GAO/T-AIMD-97-84
GAO/AIMD-97-84T
(935229)
Abbreviations
=============================================================== ABBREV
BEA - Budget Enforcement Act
CFO - Chief Financial Officer
DOD - Department of Defense
GPRA - Government Performance and Results Act
IRS - Internal Revenue Service
OMB - Office of Management and Budget
PAYGO - pay-as-you-go
============================================================ Chapter 0
Mr. Chairman and Members of the Committee:
Thank you for inviting me back to join you as you consider changing
the budget process from an annual to a biennial cycle. When I
appeared before you last July I presented testimony on some of the
broad issues involved in such a shift.\1 As you requested, I will
first briefly summarize state experiences and then focus on
provisions regarding GAO, the Budget Enforcement Act (BEA), and for
the Government Performance and Results Act (GPRA). I would ask also
that my July 1996 statement be included in the record along with this
statement.
--------------------
\1 Budget Process: Issues in Biennial Budget Proposals
(GAO/T-AIMD-96-136, July 24, 1996). Our other testimony on biennial
budget proposals includes Budget Policy: Biennial Budgeting for the
Federal Government (GAO/T-AIMD-94-4, October 7, 1993); Budget
Process: Some Reforms Offer Promise (GAO/T-AIMD-94-86, March 2,
1994); and Budget Process: Biennial Budgeting for the Federal
Government (GAO/T-AIMD-94-112, April 28, 1994).
S. 261 PROVISIONS AND GENERAL
OBSERVATIONS
---------------------------------------------------------- Chapter 0:1
S. 261 would change the cycle for the President's budget, for the
budget resolution, for enactment of appropriations, and for
authorizations to a biennial cycle. The President would be required
to submit a 2-year budget at the beginning of the first session of a
Congress; this budget would contain proposed levels for each of the 2
fiscal years in the biennium and planning levels for the 4 years
beyond that. The budget resolution and reconciliation instructions
would also establish binding levels for each year in a given
biennium--and for the sum of the 6-year period.
The bill requires appropriations to be enacted every 2 years. It
contains a two-pronged mechanism to ensure this. First, it provides
for a point of order against appropriation bills not covering 2
years. Second, if that does not work, S.261 provides for an
automatic second-year appropriation at the level of the first year of
the biennium. During the first year of the biennium, authorizations
and revenue legislation would be expected to wait until completion of
the budget resolution and appropriations bills. At the beginning of
the second session of the Congress the President would submit a
"mid-biennium review."
This second year then would be devoted to authorizations, which would
be required to cover at least 2 years; to revenue legislation, which
also would be required to cover at least 2 years; and to oversight of
federal programs. S. 261 would also change some reporting
requirements in GPRA and add some new reports. Attached to this
testimony are two illustrations of the proposed timelines for both
budget and GPRA reports.
As we read the legislation, it does not direct changes in the period
of availability of appropriated funds. The bill consistently refers
to each fiscal year within a biennium. Although appropriations bills
must cover a 2-year period, the bill seems to require separate
appropriations for each of the 2 fiscal years within the biennium.
It would seem, therefore, that appropriations committees could--as
they do today--provide funds available for one, 2 or more years.
This serves to remind us that there is a distinction between the
frequency with which the Congress makes appropriations decisions and
the period for which funds are available to an agency. Even in
today's annual appropriations cycle, the Congress has routinely
provided multiple-year or no-year appropriations for accounts or for
projects within accounts when it seemed to make sense to do so. As I
noted in my previous testimony, about two-thirds of budget accounts
on an annual appropriation cycle contain multiple-year or no-year
funds. In addition, for those entities for which the Congress has
recognized a programmatic need to have appropriations immediately
available at the beginning of the fiscal year (such as grants to
states for Medicaid), the Congress has accommodated this need with
advance appropriations. The second year of the proposed biennium
seems, in effect, to provide advance appropriations to all programs.
Whether a biennial budget and appropriations cycle truly saves time
for agency officials and reduces the time members of the Congress
spend on budget and appropriations issues will depend heavily on how
mid-biennium changes are viewed. Will there be a presumption against
supplementals? Will changes in the second year be limited to
responses to large and significant, unforeseen or unforeseeable
events? Even with an annual cycle the time lag between making
initial forecasts and budget execution creates challenges. Indeed,
increased difficulty in forecasting was one of the primary reasons
states gave for shifting from biennial to annual budget cycles.\2
Even in this era of discretionary spending caps, the Congress has
demonstrated the need to address changing conditions among the
numerous budget accounts and program activities of the federal
government. Although in the aggregate there may be little change,
individual agencies or accounts have seen significant changes from
year to year. Some statistics may give an indication of the extent
of that change. While total current appropriations grew by only 0.9
percent between 1994 and 1995, more than half of all budget accounts
that received current appropriations had net changes greater than
plus or minus 5 percent. More recently, between 1996 and 1997,
almost 55 percent of budget accounts with current appropriations
experienced changes of more than plus or minus 5 percent although
total current appropriations declined by about 0.5 percent. Because
these are account-level statistics, it is possible that annual
changes at the program activity level may have been even greater.
Dramatic changes in program design or agency structure, such as those
considered in the last Congress and those being considered now, will
make budget forecasting more difficult. For biennial budgeting to
exist in reality rather than only in theory, the Congress and the
President will have to reach some agreement on how to deal with the
greater uncertainty inherent in a longer budget cycle and/or a time
of major structural change.
You also asked me to review the information on state experiences with
biennial budgeting and to comment on any issues I thought pertinent
in considering S. 261, with particular attention to (1) the
requirement directing that "during the second session of each
Congress, the Comptroller General shall give priority to requests
from Congress for audits and evaluations of Government programs and
activities" and (2) issues involved in the integration of GPRA into a
biennial budget cycle. Let me turn now to these areas.
--------------------
\2 GAO/T-AIMD-96-136, p. 11.
STATE EXPERIENCES WITH BIENNIAL
BUDGETING
---------------------------------------------------------- Chapter 0:2
Advocates of biennial budgeting often point to the experience of
individual states. In looking to the states it is necessary to
disaggregate them into several categories. In 1996, when we last
looked at this data, 8 states had biennial legislative cycles and
hence necessarily biennial budget cycles.\3 As the table below shows,
the 42 states with annual legislative cycles present a mixed picture
in terms of budget cycles: 27 describe their budget cycles as
annual, 12 describe their budget cycles as biennial, and 3 describe
their budget cycles as mixed. The National Association of State
Budget Officers reports that those states that describe their system
as "mixed" have divided the budget into two categories: that for
which budgeting is annual and that for which it is biennial.
Table 1
States With an Annual Legislative Cycle
States with an States with a States with a
annual budget biennial budget mixed budget
cycle cycle cycle
---------------- ---------------- ---------------- ----------------
Alaska Mississippi Connecticut Arizona
Alabama New Jersey Hawaii Kansas
California New Mexico Indiana Missouri
Colorado New York Maine
Delaware Oklahoma Minnesota
Florida Pennsylvania Nebraska
Georgia Rhode Island New Hampshire
Iowa South Carolina Ohio
Idaho South Dakota Virginia
Illinois Tennessee Washington
Louisiana Utah Wisconsin
Maryland Vermont Wyoming
Massachusetts West Virginia
Michigan
----------------------------------------------------------------------
Connecticut has changed its budget cycle from biennial to annual and
back to biennial. In the last 3 decades, 17 other states have
changed their budget cycles: 11 from biennial to annual, 3 from
annual to mixed, and 3 from annual to biennial.
Translating state budget laws, practices, and experiences to the
federal level is always difficult. As we noted in our review of
state balanced budget practices,\4 state budgets fill a different
role, may be sensitive to different outside pressures, and are
otherwise not directly comparable. In addition, governors often have
more unilateral power over spending than the President does.
However, even with those caveats, the state experience may offer some
insights for your deliberations. Perhaps most significant is the
fact that most states that describe their budget cycles as biennial
or mixed are small and medium sized. Of the 10 largest states in
terms of general fund expenditures, Ohio is the only one with an
annual legislative cycle and a biennial budget. According to a State
of Ohio official, every biennium two annual budgets are enacted, and
agencies are prohibited from moving funds across years. In addition,
the Ohio legislature typically passes a "budget corrections bill."\5
A few preliminary observations can be made from looking at the
explicit design of those states that describe their budget cycles as
"mixed" and the practice of those that describe their budget cycles
as "biennial." Different items are treated differently. For example,
in Missouri, the operating budget is on an annual cycle while the
capital budget is biennial. In Arizona, "major budget units"--the
agencies with the largest budgets--submit annual requests; these
budgets are also the most volatile and the most dependent on federal
funding. In Kansas, the 20 agencies that are on a biennial cycle are
typically small, single-program or regulatory-type agencies that are
funded by fees rather than general fund revenues. In general,
budgeting for those items that are predictable is different from
budgeting for those items subject to great volatility whether due to
the economy or changes in federal policy.
--------------------
\3 The following states have biennial legislative cycles: Arkansas,
Kentucky, Montana, North Carolina, North Dakota, Nevada, Oregon, and
Texas.
\4 Balanced Budget Requirements: State Experiences and Implications
for the Federal Government (GAO/AFMD-93-58BR, March 26, 1993).
\5 Ohio has also created a Controlling Board that under certain
circumstances, can authorize transfer of funds between items and
across fiscal years within an agency. The Board also receives an
appropriation that it can allocate to meet unforeseen contingencies.
The Board is a joint, bipartisan committee of legislators chaired by
the Director of Ohio's Office of Management and Budget.
PROVISION REGARDING GAO
---------------------------------------------------------- Chapter 0:3
Section 8 of S. 261 directs that "During the second session of each
Congress, the Comptroller General shall give priority to requests
from Congress for audits and evaluations of Government programs and
activities."
GAO has long advocated regular and rigorous congressional oversight
of federal programs. Such oversight should examine both the design
and effectiveness of federal programs and the efficiency and skill
with which they are managed. Indeed, much of GAO's work is
undertaken with such oversight purposes in mind. For example,
financial management is one area in which GAO assists the Congress
with its oversight responsibilities. The Chief Financial Officers
(CFO) Act of 1990, as amended, directs that 24 major agencies have
audited annual financial statements beginning with fiscal year 1996.
It also requires the preparation of annual governmentwide financial
statements and calls for GAO to audit these statements beginning with
fiscal year 1997. As you know, there have been serious problems with
financial management processes in many agencies. We have been both
auditing these agencies and working with them to improve the quality
of their financial management. Careful management of taxpayer funds
is critical to ensuring proper accountability and keeping the faith
of the American people. These annual audited financial statements
can serve as an important oversight tool.
Good evaluation often requires a look at a program over some period
of time or a comparison of several approaches. This means that in
order for the results of audits and evaluations to be available for
the second year of the biennium, it is important for the committees
and GAO to work together in the first year--or even in the prior
biennium--to structure any study. As part of our planning process,
we strive to maintain an ongoing dialogue with Members and staff to
identify areas of current and emerging interest so that the work is
completed and we are ready to report when the results will be most
useful. It is important to our ability to assist you that we
understand your areas of concern and be able to accumulate a body of
knowledge and in-depth analysis in those areas.
Mr. Chairman, GAO stands eager to assist the Congress in the
performance of its oversight responsibilities at all times. Many of
you and your colleagues in the House and the Senate currently use us
in this way.
Let me note just a few examples.
-- Our work on the Internal Revenue Service (IRS) Tax System
Modernization program has uncovered major flaws, such as the
lack of basic elements needed to bring it to a successful
conclusion. We have worked closely with this Committee, other
IRS oversight committees, and the Appropriations Committees in
an effort to move IRS toward (1) formulating a much needed
business strategy for maximizing electronic filings, (2)
implementing a sound process to manage technology investments,
(3) instituting disciplined processes for software development
and acquisition, and (4) completing and enforcing an essential
systems architecture including data and security
subarchitectures.
-- Our work regarding aviation safety and security has noted that
serious vulnerabilities exist in both domestic and international
aviation systems. Recent experiences during 1996 have served to
raise the consciousness of the Congress, the Administration, and
the public of the need to expand the existing margin of safety.
Recent proposals have merit and would fundamentally reinvent the
Federal Aviation Administration, but challenges remain,
including key questions about how and when the recommendations
would be implemented, how much it will cost to implement them,
and who will pay the cost.
-- GAO reviews of the Supplemental Security Income program have
highlighted several long-standing problem areas: (1)
determining initial and continuing financial eligibility for
beneficiaries, (2) determining disability eligibility and
performing continuing disability reviews, and (3) inadequate
return-to-work assistance for recipients who may be assimilated
back into the work force.
-- We have reported on long-standing serious weaknesses in the
Department of Defense's (DOD) financial operations that continue
not only to severely limit the reliability of DOD's financial
information but also have resulted in wasted resources and
undermined its ability to carry out its stewardship
responsibilities. No military service or other major DOD
component has been able to withstand the scrutiny of an
independent financial statement audit.
These, and other areas included in our High-Risk Series,\6 which we
prepare for each new Congress, are examples of our efforts to assist
the Congress in its oversight responsibilities. In fiscal year 1996,
almost 80 percent of GAO's work was done at the specific request of
the Congress. GAO testified 181 times before 85 committees and
subcommittees, presented 217 formal congressional briefings, and
prepared 908 reports to the Congress and agency officials.
Existing provisions of law requiring GAO to assist the Congress are
sufficiently broad to encompass requests such as those envisioned in
Section 8 of S. 261. However, the decision about whether to modify
the existing provisions to add a more specific requirement is
appropriately a decision for the Congress to make.
--------------------
\6 High-Risk Series: An Overview (GAO/HR-97-1, February 1997).
BUDGET ENFORCEMENT ACT ISSUES
---------------------------------------------------------- Chapter 0:4
Before turning to the interrelationship of this proposal and GPRA,
let me note a few BEA-related issues that would need to be addressed
should S. 261 be enacted.
The bill explicitly modifies the rules for the pay-as-you-go (PAYGO)
scorecard in the Senate by specifying three time periods during which
deficit neutrality is required: the biennium covered by the budget
resolution, the first 6 years covered by the budget resolution, and
the 4 fiscal years after those first 6 years. That is, it retains
the form of the current rules. The bill, however, is silent on the
existence of discretionary spending limits. It does specify that in
the Senate, the joint explanatory statement accompanying the
conference report on the budget resolution must contain an allocation
to the Appropriations Committee for each fiscal year in the biennium.
One might infer from this that if discretionary caps are to be
extended, they will continue to be specified in annual terms.
However, this bill does not extend the caps.
Other issues regarding the interaction of S. 261 and BEA (assuming
its extension) also need to be considered. Would biennial budgeting
change the timing of BEA-required sequestration reports? How would
sequestrations be applied to the 2 years in the biennium and when
would they occur? For example, if annual caps are maintained and are
exceeded in the second year of the biennium, when would the
Presidential Order causing the sequestration be issued? Would the
sequestration affect both years of the biennium? These questions may
not necessarily need to be answered in this bill, but they will need
to be considered if BEA is extended under a biennial budgeting
schedule.
There are a number of other smaller technical issues on which we
would be glad to work with your staff should you wish.
THE GOVERNMENT PERFORMANCE AND
RESULTS ACT
---------------------------------------------------------- Chapter 0:5
Let me turn now to the interaction between this proposal and the
Government Performance and Results Act (GPRA). S. 261 makes a
number of changes to GPRA--most designed to make the requirements of
GPRA consistent with the proposed biennial budget cycle, but others
that seek to make substantive revisions to GPRA. I'll discuss each
separately.
GPRA is part of a statutory framework for addressing long-standing
management challenges and helping the Congress and the executive
branch make the difficult trade-offs that the current budget
environment demands. The essential elements of this framework
include, in addition to GPRA, the CFO Act, as amended, and
information technology reform legislation, including the Paperwork
Reduction Act of 1995 and the Clinger-Cohen Act. These statutes
collectively form the building blocks to improved
accountability--both for the taxpayer's dollar and for results.
GPRA, the centerpiece of this statutory framework, is intended to
promote greater confidence in the institutions of government by
encouraging agency managers to shift their attention from traditional
concerns, such as staffing and workloads, toward a single overriding
issue: results. GPRA requires agencies to set goals, measure
performance, and report on their accomplishments. It also defines a
set of interrelated activities and reporting requirements, which are
designed to make performance information more consistently available
for congressional oversight and resource allocation processes.
Specifically, GPRA requires:
-- strategic plans to be issued for virtually all executive
agencies by September 30, 1997. The plans are to cover at least
a 5-year period; be updated at least every three years; and
describe the agency's mission, its outcome-related goals and
objectives, and how the agency will achieve its goals through
its activities and available resources.
-- annual performance plans that include performance indicators for
the outputs, service levels, and outcomes of each program
activity in an agency's budget. The first performance plans are
to cover fiscal year 1999 and will be submitted to the Congress
in February 1998, along with a governmentwide plan prepared by
the Office of Management and Budget (OMB).
-- annual performance reports that compare actual performance to
goals and indicators established in annual performance plans,
and that explain the reasons for variance and what actions will
be taken to improve performance. The first reports, covering
fiscal year 1999, will be issued to the President and the
Congress no later than March 31, 2000.
The Congress recognized that implementing GPRA will not be easy.
Accordingly, GPRA incorporates several critical design
features--phased implementation, pilot testing, and iterative
planning and reporting processes--designed to temper immediate
expectations and allow for an orderly but well-paced transition.
Following the completion in 1996 of about 70 pilot projects, OMB has
been working with federal agencies to ensure that the first strategic
plans are submitted to the Congress by the end of September and
performance plans 5 months later with the President's fiscal year
1999 budget submission. S. 261 capitalizes on these initial GPRA
implementation efforts by making the effective date of its proposed
changes--March 31, 1998--after the first strategic plans and
performance plans have been completed and submitted to the Congress.
Other changes in timelines proposed in S. 261 also appear consistent
with GPRA requirements. For example, S. 261 requires strategic
plans in September 2000 consistent with its proposed biennial cycle.
This should pose no problem for agencies, which under, current GPRA
provisions, are expected to complete updates by this date of the
plans submitted in September 1997. Similarly, changing the
governmentwide performance plan to the year 2000 merely updates GPRA
timelines to reflect the biennial timelines proposed by S. 261.
S.261 also proposes several substantive changes to GPRA, including
revised requirements for agency performance plans and new
requirements for preliminary agency performance plans and
governmentwide performance reports. Although it would be important
to adjust the timelines in GPRA should the Congress shift to a
biennial budget process, the proposals for substantive changes can be
considered separately. As a group, they raise the question of
whether the Congress wishes to make changes in GPRA during the first
implementation cycle. Individually, they raise other issues--which I
will discuss below.
This bill proposes adding several new requirements to the annual
agency performance plans currently required by GPRA beyond changing
them to a biennial cycle, including (1) adding an executive summary
focusing on the most important goals of an agency, but limited to a
maximum of 10 goals and (2) requiring that the Congress be consulted
during the preparation of these plans. The bill also adds a new
reporting requirement for draft preliminary performance plans. While
the change to a biennial cycle is consistent with the overall goals
of S. 261, the bill is silent as to whether performance goals and
indicators associated with each program activity would be required
for each fiscal year. However, as I noted earlier, because the bill
appears to require separate appropriations for each year of the
biennium, annual performance goals and indicators, as now required
for GPRA performance plans, would presumably still be required.
Requiring an executive summary within annual performance plans makes
sense. However, it is worth considering whether limiting an agency's
performance goals to a fixed number--10 in S. 261--could prove
unnecessarily restraining. OMB guidance to date has largely
refrained from specifying form and content standards for GPRA
documents, allowing agencies substantial discretion while emphasizing
the need for clarity and completeness. We generally agree with that
approach, at least in the formative years of GPRA. Further, we have
endorsed OMB pilot projects on accountability reports, which seek to
integrate a wide range of required reports. A decision to
incorporate fixed form and content rules in statutory language might
better be delayed until after several years' experience. While we
agree with the premise of S. 261 that performance goals should be
reduced to a "vital few,"\7 it may make sense to give agencies the
flexibility to define the absolute number shown in their plans within
the circumstances of their program activities.
As noted above, S. 261 proposes two additional changes to GPRA's
requirements regarding the preparation of performance plans. First,
it adds a requirement that agencies consult the Congress in the
preparation not only of their strategic plans but also of their
performance plans. Second, it also adds a new reporting requirement:
agencies would be required to submit preliminary drafts of
performance plans for the upcoming biennium to their committees of
jurisdiction in March of each even-numbered year.
We have strongly endorsed the need for the Congress to be an active
participant in GPRA\8 and are currently assisting the Congress in its
ongoing consultations on the development of agency strategic plans.
Currently, GPRA requires congressional consultation for strategic
plans but not for annual performance plans. As essential components
of the President's budget development process, an Administration is
likely to see biennial performance plans as documents captured under
the established policy of administrative confidentiality prior to
formal transmission of the President's budget to the Congress.
Moreover, because these biennial plans would accompany the
President's budget submission, they would likely become the basis for
extensive discussions, both as authorizing committees prepare their
views and estimates to submit to the Budget Committees and as part of
the budget and appropriations process.
The new requirement that agencies submit preliminary drafts of
performance plans for the upcoming biennium to their committees of
jurisdiction raises related but not identical issues. Currently,
GPRA performance plans are expected to explicitly establish goals and
indicators for each program activity in an agency's budget request,
thus allowing the Congress to associate proposed performance levels
with requested budget levels. The proposal in this bill appears to
require a similar level of specification almost a year before the
President submits a budget for that period. It is unlikely that
agencies would be able to provide any degree of specificity with this
draft plan. The lengthening of the budget cycle might raise one
additional question about the cycle for performance plans: Should
there be updates in mid-biennium? Currently, GPRA allows but does
not require updated performance plans, but that decision was made on
the assumption of an annual cycle. Whether performance plans should
be updated is part of two larger issues: (1) What is Congress' view
about changes in mid-biennium? and (2) Should GPRA be substantively
changed during its initial phase-in cycle?
Finally, S. 261 proposes that a biennial governmentwide performance
report be submitted as part of the President's biennial budget
request. This report would compare "actual performance to the stated
goals" as expressed in previous governmentwide performance plans.
This proposal raises both substantive and operational questions. The
underlying premise of GPRA is that the day-to-day activities of an
agency should be directly tied to its annual and strategic goals.
GPRA performance reports are to be linked, just as the goals and
indicators of performance plans are linked, to an agency's
activities. A governmentwide performance report would need to be
fundamentally different. If the Congress wishes to require such a
report, careful consideration should be given both to its likely
content and to its timing. As to content, the question arises:
Would a governmentwide report become a report on selected national
indicators, and how would they be selected? If the governmentwide
performance report is envisioned not as a rollup of agency reports
but rather as a broad report on how well government has performed,
then the question arises as to whether it is tied most appropriately
to the President's budget, as proposed in S. 261, or to a narrative
discussion associated with the consolidated financial statement
required by the CFO Act of 1990, as amended.
--------------------
\7 Executive Guide: Effectively Implementing the Government
Performance and Results Act (GAO/GGD-96-118, June 1996).
\8 Managing for Results: Achieving GPRA's Objectives Requires Strong
Congressional Role (GAO/T-GGD-96-79, March 6, 1996).
CONCLUSION
---------------------------------------------------------- Chapter 0:6
Mr. Chairman, we have previously testified that the decision to
change the entire budget process to a biennial one is fundamentally a
decision about the nature of congressional oversight. Biennial
appropriations would be neither the end of congressional control nor
the solution to many budget problems.
Whether a biennial cycle offers the benefits sought will depend
heavily on the ability of the Congress and the President to reach
agreement on how to respond to the uncertainties inherent in a longer
forecasting period and on the circumstances under which changes
should be made in mid-biennium. If biennial appropriations bills are
changed rarely, the planning advantages for those agencies that do
not now have multiyear or advance appropriations may be significant.
Whether a biennial cycle would in fact reduce congressional workload
and increase the time for oversight is unclear. A great many policy
issues present themselves in a budget context--one thinks of welfare
reform and farm policy. It will take a period of adjustment and
experimentation and the results are likely to differ across programs.
Finally, we are pleased to see so much thought go into the
integration of GPRA into this process. GPRA represents a thoughtful
approach to systematizing serious and substantive dialogue about the
purposes of government programs and how they operate. Today, I have
raised some issues that I think need careful attention should you
decide to move to a biennial budget process while GPRA is being
implemented. I have tried to differentiate between those changes
necessary for consistency with a biennial cycle and those which
represent substantive changes to GPRA independent of such a change.
We, of course, stand ready to assist you as you proceed.
SCHEDULE OF KEY EVENTS AS PROPOSED
BY
S. 261
=========================================================== Appendix I
Date Budget event GPRA event
------------------------- ------------------------- --------------------------
No later than first President submits budget With President's budget:
Monday in February 2001 with proposals for FY biennial governmentwide
2002-03 and out-year performance plan;
information for FY 2004- governmentwide performance
07 report
Agencies should submit
biennial performance plans
2/15/01 CBO report to Budget
Committees
Within 6 weeks after Committees submit views Views and estimates "may"
budget submission and estimates to Budget reflect review of
Committees performance plans and
performance reports of
agencies within
committee's jurisdiction
3/31/01 Agency performance reports
to the Congress
No later than 4/1/01 Biennial budget
resolution reported
No later than 5/15/01 Biennial budget
resolution adopted
5/15/01 House may begin
considering biennial
appropriations bills
No later than 6/10/01 House Appropriations
Committee reports last
biennial appropriations
bill
No later than 6/30/01 The Congress completes
action on biennial
appropriations
No later than 8/1/01 The Congress completes
action on reconciliation
legislation
10/1/01 FY 2002 begins
February 2002 Mid-biennium review
submitted by OMB
2/15/02 CBO report to Budget
Committees
3/31/02 Agencies submit annual
performance reports for
previous fiscal year [in
this example, FY 2001]
Agencies submit
preliminary performance
plan covering next
biennial period [in this
example, FY 2003-04]
Last day of session Authorizations completed
for
next biennium [FY 2004-
05]
--------------------------------------------------------------------------------
Note: Assumes GPRA strategic plans in September 2000; new GPRA
provisions are in boldface.
PROPOSED TIMELINES
========================================================== Appendix II
(See figure in printed
edition.)
RELATED GAO PRODUCTS
=========================================================== Appendix 1
Performance Budgeting: Past Initiatives Offer Insights for GPRA
Implementation (GAO/AIMD-97-46, March 27, 1997).
Managing for Results: Using GPRA to Assist Congressional and
Executive Branch Decisionmaking (GAO/T-GGD-97-43, February 12, 1997).
High-Risk Series: An Overview (GAO/HR-97-1, February 1997).
High-Risk Series: Quick Reference Guide (GAO/HR-97-2, February
1997).
Budget Process: Issues in Biennial Budget Proposals
(GAO/T-AIMD-96-136, July 24, 1996).
Budget Issues: History and Future Directions (GAO/T-.Al.MD-95-214,
July 13, 1996).
Budget Process: Evolution and Challenges (GAO/T-AIMD-96-129, July
11, 1996).
Managing for Results: Key Steps and Challenges In Implementing GPRA
In Science Agencies (GAO/T-GGD/RCED-96-214, July 10, 1996).
Correspondence to Chairman Horn, Information on Reprogramming
Authority and Trust Funds (GAO/AIMD-96-102R, June 7, 1996).
Executive Guide: Effectively Implementing the Government Performance
and Results Act (GAO/GGD-96-118, June 1996).
Budget and Financial Management: Progress and Agenda for the Future
(GAO/T-AIMD-96-80, April 23, 1996).
Managing for Results: Achieving GPRA's Objectives Requires Strong
Congressional Role (GAO/T-96-79, March 6, 1996).
GPRA Performance Reports (GAO/GGD-96-66R, February 14, 1996).
Financial Management: Continued Momentum Essential to Achieve CFO
Act Goals (GAO/T-AIMD-96-10, December 14, 1995).
Budget Process: Issues Concerning the Reconciliation Act
(GAO/AIMD-95-3, October 7, 1995).
Budget Account Structure: A Descriptive Overview (GAO/AIMD-95-179,
September 18, 1995).
Budget Issues: Earmarking in the Federal Government
(GAO/AIMD-95-216FS, August 1, 1995).
Budget Structure: Providing an Investment Focus in the Federal
Budget (GAO/T-AIMD-95-178, June 29, 1995).
Managing for Results: Status of the Government Performance and
Results Act (GAO/T-GGD/AIMD-95-193, June 27, 1995).
Managing for Results: Experiences Abroad Suggest Insights for
Federal Management Reforms (GAO/GGD-95-120, May 2, 1995).
Correspondence to Chairman Wolf, Transportation Trust Funds
(GAO/AIMD-95-95R, March 15, 1995).
Managing for Results: State Experiences Provide Insights for Federal
Management Reforms (GAO/GGD-95-22, Dec. 21, 1994).
Budget Policy: Issues in Capping Mandatory Spending
(GAO/AIMD-94-155, July 18, 1994).
Executive Guide: Improving Mission Performance Through Strategic
Information Management and Technology (GAO/AIMD-94-115, May 1994).
Budget Process: Biennial Budgeting for the Federal Government
(GAO/T-AIMD-94-112, April 28, 1994).
Budget Process: Some Reforms Offer Promise (GAO/T-AIMD-94-86, March
2, 1994).
Budget Issues: Incorporating an Investment Component in the Federal
Budget (GAO/AIMD-94-40, November 9, 1993).
Budget Policy: Investment Budgeting for the Federal Government
(GAO/T-AIMD-94-54, November 9, 1993).
Correspondence to Chairmen and Ranking Members of House and Senate
Committees on the Budget and Chairman of Former House Committee on
Government Operations (B-247667, May 19, 1993).
Performance Budgeting: State Experiences and Implications for the
Federal Government (GAO/AFMD-93-41, February 17, 1993).
*** End of document. ***