Managing for Results: Observations on OMB's September 1997 Strategic Plan
(Testimony, 10/06/97, GAO/T-AIMD/GGD-98-10).
Pursuant to a congressional request, GAO discussed how well the Office
of Management and Budget's (OMB) strategic plan addresses the Government
Performance and Results Act's requirements and some of the challenges
remaining for OMB to address in future planning efforts.
GAO noted that: (1) since its July 1997 draft, OMB has made changes to
the plan based on its continuing planning efforts, congressional
consultations, and comments from others; (2) overall, OMB's September
1997 plan addresses all required elements of the Results Act and
reflects several of the enhancements GAO suggested in its review of the
July draft; (3) specific improvements include: (a) goals and objectives
that show a clearer results-orientation; (b) more clearly defined
strategies for achieving these goals and objectives; and (c) an
increased recognition of some of the crosscutting issues OMB needs to
address; (4) however, additional enhancements to several of the plan's
required elements and a fuller discussion of major management challenges
confronting the federal government could help make the plan more useful
to the Congress and OMB; (5) for example, the plan could provide a more
explicit discussion of OMB's strategies on such subjects as information
technology, high-risk issues, overlap among federal missions and
programs, and strengthening program evaluation; (6) OMB's strategic plan
indicates that the agency will use its annual performance plan, the
governmentwide performance plan, other functional management plans, and
the President's Budget to provide additional information about how it
plans to address some of these and other critical management issues; (7)
GAO will continue to review OMB's plans and proposals as additional
detail concerning objectives, time frames, and priorities is
established; and (8) GAO's intention is to apply an integrated
perspective in looking at these plans, consistent with the intent of the
Results Act, to ensure that OMB achieves the results expected by its
statutory authorities.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: T-AIMD/GGD-98-10
TITLE: Managing for Results: Observations on OMB's September 1997
Strategic Plan
DATE: 10/06/97
SUBJECT: Strategic planning
Program evaluation
Agency missions
Interagency relations
Congressional/executive relations
Public administration
Federal agency reorganization
Intergovernmental relations
IDENTIFIER: Government Performance and Results Act
GPRA
******************************************************************
** 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 Subcommittee on Government
Management, Information and Technology
Committee on Government Reform and Oversight
House of Representatives
For Release on Delivery
Expected at
10:30 a.m.
Monday,
October 6, 1997
MANAGING FOR RESULTS -
OBSERVATIONS ON OMB'S
SEPTEMBER 1997 STRATEGIC PLAN
Statement of Paul L. Posner
Director, Budget Issues
Accounting and Information Management Division
and
J. Christopher Mihm, Acting Associate Director
Federal Management and Workforce Issues
General Government Division
GAO/T-AIMD/GGD-98-10
GAO/AIMD/GGD-98-10T
(935246/410194)
Abbreviations
=============================================================== ABBREV
OMB - Office of Management and Budget
RMO - resource management office
============================================================ Chapter 0
Mr. Chairman and Members of the Subcommittee:
We are pleased to be here today to provide our observations on the
Office of Management and Budget's (OMB) strategic plan submitted to
the Congress on September 30, 1997. As you requested, our testimony
today will discuss how well this strategic plan addresses the
Government Performance and Results Act (the Results Act)
requirements. We will also identify some of the challenges remaining
for OMB to address in future planning efforts.
The Results Act is intended to improve the efficiency and
effectiveness of federal programs by establishing a system to set
goals for program performance and to measure results. Specifically,
the Act requires executive agencies to prepare multiyear strategic
plans, annual performance plans, and annual performance reports. OMB
has a crucial and multifaceted role to play in the successful
implementation of the Results Act. Under the Act, OMB is charged
with overseeing and guiding agencies' strategic and annual
performance planning and reporting. OMB has also prepared its own
strategic plan based on Results Act requirements. OMB's strategic
plan is important as both a statement of the agency's objectives and
to underscore to other federal agencies the importance of effectively
implementing the Results Act.
Our comments today are based on our review of OMB's strategic plan
and our body of work on OMB and the issues the agency is responsible
for addressing. In July 1997, OMB prepared a draft strategic plan,
and we reviewed it to assess whether it met Results Act requirements
and provided information useful for congressional decision-making.\1
On September 30, 1997, we obtained the strategic plan OMB submitted
to the Congress to comply with the Results Act. Our testimony will
provide preliminary observations on the September plan.
Since the July draft, OMB has made changes to the plan based on its
continuing planning efforts, congressional consultations, and
comments from others. Overall, OMB's September plan addresses all
required elements of the Results Act and reflects several of the
enhancements we suggested in our review of the July draft. Specific
improvements include (1) goals and objectives that show a clearer
results-orientation, (2) more clearly defined strategies for
achieving these goals and objectives, and (3) an increased
recognition of some of the crosscutting issues OMB needs to address.
However, additional enhancements to several of the plan's required
elements and a fuller discussion of major management challenges
confronting the federal government could help make the plan more
useful to the Congress and OMB. For example, the plan could provide
a more explicit discussion of OMB's strategies on such subjects as
information technology, high-risk issues, overlap among federal
missions and programs, and strengthening program evaluation.
OMB's strategic plan indicates that the agency will use its annual
performance plan, the governmentwide performance plan, other
functional management plans, and the President's Budget to provide
additional information about how it plans to address some of these
and other critical management issues. To support the needs of this
and other committees, we will continue to review OMB's plans and
proposals as additional detail concerning objectives, time frames,
and priorities is established. Our intention is to apply an
integrated perspective in looking at these plans, consistent with the
intent of the Results Act, to ensure that OMB achieves the results
expected by its statutory authorities.
--------------------
\1 The Results Act: Observations on the Office of Management and
Budget's July 1997 Draft Strategic Plan (GAO/AIMD/GGD-97-169R, Aug.
21, 1997).
BACKGROUND
---------------------------------------------------------- Chapter 0:1
Since its creation in 1970, OMB has had two distinct but parallel
roles. OMB serves as a principal staff office to the President by
preparing the President's budget, coordinating the President's
legislative agenda, and providing policy analysis and advice. The
Congress has also assigned OMB specific responsibilities for ensuring
the implementation of a number of statutory management policies and
initiatives. Most importantly, it is the cornerstone agency for
overseeing a framework of recently enacted financial, information
resources, and performance management reforms designed to improve the
effectiveness and responsiveness of federal departments and agencies.
This framework includes the 1995 Paperwork Reduction Act and the 1996
Clinger-Cohen Act; the 1990 Chief Financial Officers Act, as expanded
by the 1994 Government Management Reform Act; and the 1993 Government
Performance and Results Act.
OMB faces perennial challenges in carrying out these and other
management responsibilities in an environment where its budgetary
role necessarily remains a vital and demanding part of its mission.
OMB's resource management offices (RMOs) have integrated
responsibilities for examining agency management, budget, and policy
issues. The RMOs are supported by three statutory offices whose
responsibilities include developing governmentwide management
policies: the Office of Federal Financial Management, the Office of
Federal Procurement Policy, and the Office of Information and
Regulatory Affairs. In fiscal year 1996, OMB obligated $56 million
and employed over 500 staff to carry out its budget and management
responsibilities.
The Results Act requires a strategic plan that includes six elements:
(1) a comprehensive agency mission statement, (2) long-term goals and
objectives for the major functions and operations of the agency, (3)
approaches or strategies to achieve goals and objectives and the
various resources needed to do so, (4) a discussion of the
relationship between long-term goals/objectives and annual
performance goals, (5) an identification of key external factors
beyond agency control that could significantly affect achievement of
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.
Although OMB's July draft included elements addressing its mission,
goals and objectives, strategies, and key external factors affecting
its goals, we suggested that these elements could be enhanced to
better reflect the purposes of the Results Act and to more explicitly
discuss how OMB will achieve its governmentwide management
responsibilities. Furthermore, the July draft plan did not contain a
discussion of two elements required under the Results Act: (1) the
relationship between the long-term and annual performance goals and
(2) the use of program evaluation in developing goals.
OMB'S STRATEGIC PLAN REFLECTS
THE PURPOSES OF THE RESULTS
ACT, BUT CHALLENGES REMAIN
---------------------------------------------------------- Chapter 0:2
The structural and substantive changes OMB made to its July 1997
strategic plan constitute a significant improvement in key areas. In
general, OMB's revised plan provides a more structured and explicit
presentation of its objectives, strategies, and the influence of
external factors. Each objective contains a discussion of these
common elements, facilitating an understanding of OMB's goals and
strategies. OMB's September plan addresses the six required elements
of the Results Act. At the same time, enhancements could make the
plan more useful to OMB and the Congress in assessing OMB's progress
in meeting its goals.
The September plan's mission statement recognizes both OMB's
statutory responsibilities and its responsibilities to advise the
President, and the goals and objectives are more results-oriented and
comprehensive than in the July draft. For example, the plan contains
a new, results-oriented objective--"maximize social benefits of
regulation while minimizing the costs and burdens of regulation"--for
its key statutory responsibility regarding federal regulation review.
The breadth of OMB's mission makes it especially important that OMB
emphasize well-defined and results-oriented goals and objectives that
address OMB's roles in both serving the President and overseeing the
implementation of statutory governmentwide management policies.
OMB more clearly defines its strategies for reaching its objectives
in the September plan, particularly with regard to some of its
management objectives. For example, in the draft plan, OMB did not
discuss the accomplishments needed to fulfill its statutory
procurement responsibilities. In contrast, the September plan lays
out OMB's long-term goal to achieve a federal procurement system
comparable to those of high performing commercial enterprises. It
says that OMB will identify annual goals to gauge OMB's success, and
discusses the means and strategies (such as working with agencies to
promote the use of commercial buying practices) it will use to
accomplish this goal. OMB also commits to working with the Federal
Acquisition Regulation Council to revise regulations and publish a
best practices document. In the area of regulatory reform, OMB also
commits to improving the quality of data and analyses used in
regulatory decision-making and to developing a baseline measure of
the net benefits for Federal regulations. OMB's clear and specific
description of its strategies for its procurement and regulatory
review objectives could serve as models for developing strategies for
its Results Act and crosscutting objectives.
Although strategies to provide management leadership in certain areas
are more specific, other strategies could benefit from a clearer
discussion of time frames, priorities, and expected accomplishments.
For example, to meet its objective of working within and across
agencies to identify solutions to mission-critical problems, OMB
states it will work closely with agencies and a list of other
organizations to resolve these issues. However, OMB does not
describe specific problems it will seek to address in the coming
years or OMB's role and strategies for solving these issues.
In defining its mission, goals and objectives, and strategies, OMB's
plan recognizes its central role in "managing the coordination and
integration of policies for cross-cutting interagency programs." The
plan states that in each year's budget, major crosscutting and
agency-specific management initiatives will be presented along with
approaches to solving them. The plan also provides a fuller
discussion than was included in the July draft of the nature and
extent of interagency groups that OMB actively works with in
addressing a variety of functional management issues. Specific
functional management areas, such as procurement, financial, and
information management, are incorporated as long-term objectives.
However, OMB's plan could more specifically address how OMB intends
to work with agencies to resolve long-standing management problems
and high-risk issues with governmentwide implications.\2 For example,
in the information management area, OMB's September plan refers to
critical information technology issues, but it does not provide
specific strategies for solving these issues. OMB discusses the
ability of agencies' computer systems to accommodate dates beyond
1999 (the Year 2000 problem) as a potential performance measure and
states how it will monitor agencies' progress. However, the plan
does not describe any specific actions OMB will take to ensure this
goal is met. We have previously reported on actions OMB needs to
take to implement sound technology investment in federal agencies.\3
In a related area, OMB has elsewhere defined strategies and guidance
for agency capital plans that are not explicitly discussed in the
strategic plan.
With respect to programmatic crosscutting issues, questions dealing
with mission and program overlap are discussed only generically as
components of broader objectives (such as working with agencies to
identify solutions or to carry out the Results Act). The Congress
and a large body of our work have identified the fragmented nature of
many federal activities as the basis for a fundamental reexamination
of federal programs and structures. Our recent report identified
fragmentation and overlap in nearly a dozen federal missions and over
30 programs.\4 Such unfocused efforts can waste scarce funds, confuse
and frustrate program customers, and limit overall program
effectiveness. The OMB plan states that the governmentwide
performance plan, which OMB must prepare and submit as part of its
responsibilities under the Results Act, will provide the "context for
cross-cutting analyses and presentations," but provides no additional
specification.
OMB's strategic plan also does not explicitly discuss how goals and
objectives will be communicated to staff and how staff will be held
accountable. For example, OMB's plan states that OMB staff are
expected to provide leadership for and to be catalysts within
interagency groups. Yet, the plan does not explain how OMB's
managers and staff will be made aware of and held accountable for
this or other strategies for achieving OMB's goals. As we noted in
our review of the July draft plan, OMB's staff and managers have a
wide and expanded scope of responsibilities, and many of OMB's goals
depend on concerted actions with other agencies. In particular,
tackling crosscutting issues will also require extensive
collaboration between offices and functions within OMB, which the
plan could discuss in more detail. In this environment,
communicating results and priorities and assigning responsibility for
achieving them are critical.
The September plan more consistently discusses the relationship
between annual and long-term goals as part of a discussion of each of
its objectives. The plan provides useful descriptions of the
performance measures OMB may use to assess its progress in its annual
performance plan. For example, the plan suggests that "clean audit
opinions" could measure how OMB is achieving its objective in the
area of financial management. Such efforts are noteworthy because
some of OMB's activities, such as developing the President's budget
or coordinating the administration's legislative program, present
challenges for defining quantifiable performance measures and
implementation schedules.
Although the September plan provides a more consistent and thorough
treatment of key external factors in achieving its goals, OMB could
explain how it can mitigate the consequences of these factors. For
example, OMB states that its goal of ensuring timely, accurate, and
high-quality budget documents depends on the accuracy and timeliness
of agency submissions of technical budget information. However,
there is a role for OMB in assisting agencies to improve the accuracy
and timeliness of data, particularly for such complex issues as
estimating subsidy costs for loan and loan guarantee programs.
OMB's discussion of program evaluation could provide more information
about how evaluations were used in developing its plan and how
evaluations will be used to assess OMB's and federal agencies'
capacity and progress in achieving the purposes of the Results Act.
In preparing its strategic plan, OMB states that it reviewed and
considered several studies of its operations prepared by OMB, GAO,
and other parties. The plan also states that OMB will continue to
prepare studies of its operational processes, organizational
structures, and workforce utilization and effectiveness. However,
OMB does not indicate clearly how prior studies were used, and OMB
does not provide details on a schedule for its future studies, both
of which are required by the Results Act. OMB officials have said it
would be worthwhile to more fully discuss the nature and dimension of
program evaluation in the context of the Results Act. As we noted in
our review of the July draft plan, evaluations are especially
critical for providing a source of information for the Congress and
others to ensure the validity and reasonableness of OMB's goals and
strategies and to identify factors likely to affect the results of
programs and initiatives.
A clearer discussion of OMB's responses to and plans for future
evaluations could also provide insight into how the agency intends to
address its major internal management challenges. For example, a
critical question facing OMB is whether the approach it has adopted
toward integrating management and budgeting, as well as its
implementation of statutory management responsibilities, can be
sustained over the long term. In view of OMB's significant and
numerous management responsibilities and the historic tension between
the two concepts--of integrating or segregating management and budget
responsibilities--we believe it is important that OMB understand how
the reorganization has affected its capacity to provide sustained
management leadership.\5
In our 1995 review of OMB's reorganization, we recommended that OMB
review the impact of its reorganization as part of its planned
broader assessment of its role in formulating and implementing
management policies for the government.\6 We suggested that the
review focus on specific concerns that need to be addressed to
promote more effective integration, including (1) the way OMB
currently trains its program examiners and whether this is adequate
given the additional management responsibilities assigned to these
examiners and (2) the effectiveness of the different approaches taken
by OMB in the statutory offices to coordinate with its resource
management offices and provide program examiners with access to
expertise. In commenting on our recommendation, OMB agreed that its
strategic planning process offered opportunities to evaluate this
initiative and could address issues raised by the reorganization.
Although OMB's plan states that it will increase the opportunities
for all staff to enhance their skills and capabilities, it does not
describe the kinds of knowledge, skills, and abilities needed to
accomplish its mission nor a process to identify alternatives to best
meet those needs.
In summary, OMB has made significant improvements in its strategic
plan. However, much remains to be done in improving federal
management. We will be looking to OMB to more explicitly define its
strategies to address important management issues and work with
federal agencies and the Congress to resolve these issues.
--------------------
\2 High-Risk Series: An Overview (GAO/HR-97-1, Feb. 1997).
\3 Information Technology Investment: Agencies Can Improve
Performance, Reduce Costs, and Minimize Risks (GAO/AIMD-96-64, Sept.
30, 1996) and High-Risk Series: Information Management and
Technology (GAO/HR-97-9, Feb. 1997).
\4 Managing for Results: Using the Results Act to Address Mission
Fragmentation and Program Overlap (GAO/AIMD-97-146, Aug. 29, 1997).
\5 Managing the Government: Revised Approach Could Improve OMB's
Effectiveness (GAO/GGD-89-65, May 4, 1989).
\6 Office of Management and Budget: Changes Resulting From the OMB
2000 Reorganization (GAO/GGD/AIMD-96-50, Dec. 29, 1995).
-------------------------------------------------------- Chapter 0:2.1
Mr. Chairman, this concludes our statement this morning. We would
be pleased to respond to any questions you or other Members of the
Subcommittee may have.
*** End of document. ***