<DOC>
[105th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:39381.wais]
THE GOVERNMENT PERFORMANCE AND RESULTS ACT: SENSIBLE GOVERNMENT FOR THE
NEXT CENTURY
=======================================================================
HEARING
before the
COMMITTEE ON
GOVERNMENT REFORM
AND OVERSIGHT
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTH CONGRESS
FIRST SESSION
__________
FEBRUARY 12, 1997
__________
Serial No. 105-2
__________
Printed for the use of the Committee on Government Reform and Oversight
39-381 U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1997
____________________________________________________________________________
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COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
J. DENNIS HASTERT, Illinois TOM LANTOS, California
CONSTANCE A. MORELLA, Maryland ROBERT E. WISE, Jr., West Virginia
CHRISTOPHER SHAYS, Connecticut MAJOR R. OWENS, New York
STEVEN H. SCHIFF, New Mexico EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California PAUL E. KANJORSKI, Pennsylvania
ILEANA ROS-LEHTINEN, Florida GARY A. CONDIT, California
JOHN M. McHUGH, New York CAROLYN B. MALONEY, New York
STEPHEN HORN, California THOMAS M. BARRETT, Wisconsin
JOHN L. MICA, Florida ELEANOR HOLMES NORTON, Washington,
THOMAS M. DAVIS, Virginia DC
DAVID M. McINTOSH, Indiana CHAKA FATTAH, Pennsylvania
MARK E. SOUDER, Indiana TIM HOLDEN, Pennsylvania
JOE SCARBOROUGH, Florida ELIJAH E. CUMMINGS, Maryland
JOHN SHADEGG, Arizona DENNIS KUCINICH, Ohio
STEVEN C. LaTOURETTE, Ohio ROD R. BLAGOJEVICH, Illinois
MARSHALL ``MARK'' SANFORD, South DANNY K. DAVIS, Illinois
Carolina JOHN F. TIERNEY, Massachusetts
JOHN E. SUNUNU, New Hampshire JIM TURNER, Texas
PETE SESSIONS, Texas THOMAS H. ALLEN, Maine
MIKE PAPPAS, New Jersey ------
VINCE SNOWBARGER, Kansas BERNARD SANDERS, Vermont
BOB BARR, Georgia (Independent)
------ ------
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
Judith McCoy, Chief Clerk
Phil Schiliro, Minority Staff Director
C O N T E N T S
----------
Page
Hearing held on February 12, 1997................................ 1
Statement of:
Armey, Hon. Richard, House Majority Leader................... 33
Hinchman, James, acting Comptroller General of the United
States, accompanied by Chris Mihm, Assistant Director,
Federal Management Issue Area, General Accounting Office... 11
Koskinen, John, Deputy Director for Management, Office of
Management and Budget...................................... 51
Letters, statements, etc., submitted for the record by:
Armey, Hon. Richard, House Majority Leader, prepared
statement of............................................... 37
Burton, Hon. Dan, a Representative in Congress from the State
of Indiana, prepared statement of.......................... 3
Hinchman, James, acting Comptroller General of the United
States, prepared statement of.............................. 13
Horn, Hon. Stephen, a Representative in Congress from the
State of California, prepared statement of................. 9
Koskinen, John, Deputy Director for Management, Office of
Management and Budget:
Information concerning congressional consultations....... 75
Prepared statement of.................................... 54
Morella, Hon. Constance, a Representative in Congress from
the State of Maryland, prepared statement of............... 68
Sessions, Hon. Pete, a Representative in Congress from the
State of Texas, prepared statement of...................... 48
THE GOVERNMENT PERFORMANCE AND RESULTS ACT: SENSIBLE GOVERNMENT FOR THE
NEXT CENTURY
----------
WEDNESDAY, FEBRUARY 12, 1997
House of Representatives,
Committee on Government Reform and Oversight,
Washington, DC.
The committee met, pursuant to notice, at 10:05 a.m., in
room 2154, Rayburn House Office Building, Hon. Dan Burton
(chairman of the committee) presiding.
Present: Representatives Burton, Shays, Horn, Mica, Davis
(VA), Shadegg, Sanford, Sununu, Sessions, Pappas, Snowbarger,
Barr, Condit, Sanders, Maloney, Barrett, Norton, and Holden.
Staff present: Kevin Binger, staff director; Dan Moll,
deputy staff director; John Rowley, general counsel; Jonathan
Yates, counsel; Kristine Simmons and Jane Cobb, professional
staff members; Judy McCoy, chief clerk; Teresa Austin,
assistant clerk/calendar clerk; Mark Stephenson, minority
professional staff; and Jean Gosa, minority administrative
staff.
Mr. Burton. We have the most important members of the
committee here, so far, so we'll go ahead and start. Good
morning, and welcome to the first Government Reform and
Oversight full committee hearing of the 105th Congress. I am
pleased that the first order of business on our full committee
oversight agenda is the Government Performance and Results Act,
or GPRA.
We will, henceforth, be calling this the Results Act for
simplicity purposes. I want everybody to understand what we're
talking about when you talk about GPRA. People probably think
it's some kind of a disease, and we don't want that to happen,
so we'll call it the Results Act. For some of us this is
familiar territory and for others it's brand new. But for all
of us on both sides of the aisle and at both ends of
Pennsylvania Avenue, the Results Act is the key to reforming
government now and into the next century.
The Government Performance and Results Act requires
agencies to set performance goals and eventually tie their
budgets to their performance. This is a sound business practice
that we should have been employing for a long time. This act
has the force of law to make agencies do what they should be
doing anyway, knowing what their mission is and fulfilling that
mission in the most efficient, cost-effective manner possible.
The subtitle of this hearing is Sensible Government for the
Next Century. And that is exactly what the Results Act is
about--a government that makes sense and is based on
performance and results. I hope this hearing will send a signal
to the administration and to American taxpayers that this
committee is very serious about using the act to make sure
citizens are getting what they expect and pay for from Federal
programs.
Throughout the 104th Congress, Chairman Steve Horn of the
Government Management Subcommittee worked diligently to oversee
the results process. Mr. Horn's efforts have taken the
important first step of educating Members of Congress and the
American people about this act. It is essential that members of
this committee and the other committees in Congress begin to
understand what the Results Act is and what role they must play
if it is to be implemented successfully.
Agencies are required under the law to consult with
Congress on their strategic goals and plans, which must
formally be submitted to Congress in September. Every committee
in the House and Senate needs to take an active and immediate
role in the consultative process. The key to the Results Act is
that it requires a cooperative effort among agencies, Congress
and, most importantly, the people that are affected by these
Federal programs.
To highlight the importance with which the House leadership
regards this Results Act, we will be pleased, before too long,
to welcome the House Majority Leader, Richard Armey, to speak.
Mr. Armey will be here, probably, in about 10 or 15 minutes, so
I will save his introduction for that time. We're happy to have
him and we regret that his minority counterpart, Richard
Gephardt, was unable to join us due to a scheduling conflict.
Following the majority leader, we will welcome the Acting
Comptroller General of the General Accounting Office, Mr. James
Hinchman, who will explain the requirements of the Results Act
and how we in Congress can use it as a vital oversight tool.
Finally, John Koskinen the Deputy Director of the Office of
Management and Budget, will testify regarding the priority the
administration has placed on the Results Act implementation and
the general readiness of agencies to comply with the act.
Since Mr. Armey is not yet here, I would like to now
recognize Mr. Waxman, who isn't here, he's detained at another
meeting--the ranking member of the subcommittee. Mrs. Maloney,
I think, has his statement and one of her own. So we'll now
recognize Mrs. Maloney for her own statement.
[The prepared statement of Hon. Dan Burton follows:]
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Mrs. Maloney. Thank you very much, Mr. Chairman, and thank
you for holding this hearing on the Government Performance and
Results Act. The Results Act is landmark legislation which has
enjoyed wide bipartisan support since its passage in 1993.
The act is approaching a critical period of implementation,
and I am hopeful that bipartisanship will continue. The Results
Act is that latest in a series of laws, such as the Chief
Financial Officers Act and the Inspector General Act, meant to
improve performance and reduce waste, fraud and abuse in the
Federal Government.
It is intended to improve the efficiency and the
effectiveness of the Federal Government and to begin a cultural
change in the Federal workforce by forcing the agencies to
focus on results. Mr. Chairman, I am pleased you are holding
this hearing at a time when government is getting fewer and
fewer resources yet being expected to do at least as much as it
always has. Improving the efficiency and effectiveness of the
Federal Government is more important than ever.
I would just like to add that I am pleased that you are
starting the committee work on this important piece of
legislation. It happens to be the very first piece of
legislation that I managed on the floor of the House of
Representatives in 1993. And it was also a cornerstone in Vice
President Gore's Reinventing Government, which has worked so
far to make government more effective and cost effective and
productive, even as we have moved, really, to the smallest
workforce in many years, since President Kennedy was in office.
It will force our agencies to plan better, to come forward
with their priorities, and it will allow us to analyze their
results. And I--it's a sensible, important bill. I look forward
to working with you on oversight of it. The importance that you
place on it is underscored by the fact that the Majority
Leader, Mr. Armey, will be here. And I look forward to his
testimony. In appreciation of time restraints, I'll put my
formal remarks in the record. Thank you.
Mr. Burton. Without objection, your remarks will be entered
into the record.
And I'd just like to say to Mrs. Maloney that, as you can
see, we are reaching out to the minority right off the bat
because this is one of your pet projects. Now, I'd like to
recognize the chairman of the Government Management,
Information, and Technology Subcommittee, a good friend and a
very fine legislator, Mr. Horn, who held a number of hearings
on the Results Act in the 104th Congress. And I'm sure he'll
continue to be a leader in this Congress as well. Mr. Horn.
Mr. Horn. Thank you very much, Mr. Chairman, for holding
this hearing and your generous comments. I welcome this hearing
as a beginning step in what I think can be a sea change in the
way our government works. The Government Performance and
Results Act may be landmark legislation, in that it can
simplify and de-mystify our processes of government.
It does this by forcing Federal agencies to explain what
they intend to do with the tax dollars we give them and by
measuring whether the agencies then live up to their word. The
goal of this law can be summed up in one word: accountability.
That is, this law creates the ability for government to
actually account for the money it raises in taxes and then
spends on a vast array of programs.
That goal may seem elementary to many Americans. Families
and businesses go through the exercise on a routine basis. But
for the Federal Government this is a startling and even
wrenching exercise. Under this law, every Federal agency must
ask itself some basic common sense questions: What are we
doing? Should we be doing it? Can we do it better? Can we do it
cheaper?
Under this law, every Federal agency must establish clear,
realistic and understandable goals, and they must establish
effective ways to measure performance. Instead of focusing
solely on the bare minimum requirements of complying with the
law, they will be expected to produce real results, and they
will have to produce real balance sheets that can be verified
by outside auditors and understood by ordinary taxpayers.
The Government Performance and Results Act has the
potential to produce enormous change, particularly as it is
connected with other landmark laws such as the Chief Financial
Officers Act. These laws, for the first time, put a premium on
good management. They are the beginning steps in reversing the
Federal Government's long legacy of inattention, indifference,
and, at times, incompetence in managing the Nation's affairs.
But Mr. Chairman, I also want to note that there's another
important fundamental change underway, and it's demonstrated by
this hearing. That change is the commitment we're making here
in Congress to give real life and energy to these laws through
vigorous oversight of Federal agencies. The fact that the
Majority Leader, Mr. Armey, is here today is an illustration of
that commitment.
Tomorrow, the Subcommittee on Government Management,
Information, and Technology, which I chair and Mrs. Maloney
serves as the ranking Democrat, will continue this process with
our opening hearing on the 25 high risk Federal agencies
identified by the General Accounting Office. The subcommittee
will hold extensive hearings on these programs and agencies
over the next 2 years.
In short, Mr. Chairman, there's a lot of work to do. I'm
grateful for your support of this effort, and I thank you.
[The prepared statement of Hon. Stephen Horn follows:]
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Mr. Burton. I thank Mr. Horn. I'd just like to say to all
the Members who are here, including the new Members, that we
will introduce all of you and tell of your backgrounds this
afternoon, at our organizational meeting, but because of time
constraints this morning and because of other meetings that are
being held, we'll hold your very important introductions until
later.
Our next witness, pending the arrival of the majority
leader, is the distinguished Acting Comptroller General of the
General Accounting Office, James Hinchman. GAO has done some
outstanding work tracking the implementation of the Results Act
to date. We look forward to Mr. Hinchman's testimony this
morning on the requirements of the act and how it can serve as
an essential oversight tool for Congress.
Mr. Hinchman has with him an associate. And Mr. Hinchman,
if you'd like to introduce him at this time, I'd appreciate it.
Mr. Hinchman. Thank you, Mr. Chairman. It's a pleasure to
be here this morning.
Mr. Burton. Before you start your statement, would you mind
standing and being sworn in?
Mr. Hinchman. Of course.
Mr. Burton. This is a common practice we have here. Would
you raise your right hand?
[Witnesses sworn.]
Mr. Burton. OK. You may proceed, Mr. Hinchman.
STATEMENT OF JAMES HINCHMAN, ACTING COMPTROLLER GENERAL OF THE
UNITED STATES, ACCOMPANIED BY CHRIS MIHM, ASSISTANT DIRECTOR,
FEDERAL MANAGEMENT ISSUE AREA, GENERAL ACCOUNTING OFFICE
Mr. Hinchman. As I said, thank you, Mr. Chairman. It is a
pleasure to be here this morning. With me is Chris Mihm,
Assistant Director in GAO's Federal Management Issue Area. And
we and GAO, as a whole, are honored to be a part of this
important hearing on the Government Performance and Results Act
and its implementation.
I have a prepared statement. With your permission, I would
like to summarize it briefly, and, if that's acceptable to you,
request that that statement be put in the record.
Mr. Burton. Without objection.
Mr. Hinchman. GAO has, over the past year or so, Mr.
Chairman, done a great deal of work examining management issues
throughout the Federal Government, much of it for this
committee. This work includes our executive guide on
implementing the Government Performance and Results Act. It
also includes the work we now have underway, to report to you
by June 1 on the status of GPRA implementation.
Three important conclusions come out of this work. And I
want to summarize them for you briefly. First, we need better
management in the Federal Government. Our work has consistently
shown that Federal agencies have significant management
problems that undermine their ability to function efficiently
and effectively. Missions are unclear. Planning is inadequate.
There is too little goal-setting and performance measurement.
And too little of what there is is not results-oriented.
Financial management systems do not work. Information
technology is badly managed, as well.
The public will not accept, and we cannot afford, these
poor management practices, particularly in these days of budget
constraint. Part of the solution to the Federal Government's
fiscal problems must be more efficient and effective management
of its programs and activities, and I think there is growing
and broad consensus both in the government and among the
students of its institutions that this is so.
Second, Congress has put in place a sound statutory
framework for addressing these management problems. Much of
that work has been done under the leadership of this committee.
This framework includes the Chief Financial Officers Act, the
Paperwork Reduction Act of 1995, the Clinger-Cohen Act; and its
cornerstone, its centerpiece, is the Government Performance and
Results Act.
At the request of this committee, we studied management
reform in State governments, in foreign governments, in other
public sector institutions, for lessons that can assist in the
successful implementation of the Results Act. The results of
this work are in our executive guide, and they confirm the
soundness that the course that the Congress has established.
Effective management in all of these institutions defines
clear missions and outcomes, measures performance in achieving
outcomes to gauge progress, and uses performance information to
make changes that will improve results. Our work shows that
this is the process that has worked for those successful public
sector institutions that have reformed their management, and it
is precisely the process that the Results Act mandates.
Third, and finally, Congress has an important role to play
in the implementation of the Results Act. For every agency, one
of the first steps in the implementation of the Results Act is
consultation with Congress about its mission and strategic
plan.
These consultations provide the opportunity for Congress to
work with the executive branch to ensure that missions are
focused, that goals are results oriented, and that they have
been clearly established. In our work we have found that
planning efforts that produced focused missions and results
oriented goals virtually always drive improved efficiency and
effectiveness.
We have also urged in the past that congressional
committees of jurisdiction hold regular oversight hearings of
major departments and agencies. Our work for this committee
underscores the importance of sustained leadership in assuring
successful implementation of results oriented management in the
public sector.
These hearings can be used to reinforce Congress's
commitment to improve management in the Federal sector and
ensure that agencies continue to pursue the reforms mandated by
the Results Act. As I said a moment ago, Mr. Chairman, these
are the three correlessants of the large body of work that we
have done for this committee. They support the direction in
which Congress has set the government in the Results Act. And
the test now before us is to assure that it is effectively
implemented. With that, let me conclude, Mr. Chairman, and take
any questions that you or other members of the committee may
have.
[The prepared statement of Mr. Hinchman follows:]
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Mr. Burton. Well, thank you, Mr. Hinchman, for that very
concise summary of your views. Let me just ask a couple of
questions. Then I'll yield to my colleague, Mr. Horn, and then
to Mrs. Maloney.
Can you give us an example of how the Results Act can be
helpful in addressing the problem of overlapping Federal
programs--for instance, job training?
Mr. Hinchman. Yes. I think that there are many examples--
one to which I would return is food safety. The General
Accounting Office did a review and we established that there
are 35 laws affecting food safety in this country, administered
by 12 agencies, and that there is a lack of coordination among
those agencies and overlapping jurisdiction in those laws.
The Results Act provides a framework in which agencies can
focus on the results of their efforts, and by focusing on
results, to identify these areas of overlap and inconsistency,
because they have to focus on the impact that these laws have
on the safety of the food supply. The strategic planning
process provides a framework in which they can begin to
coordinate their efforts and bring greater rationality to the
administration of those food laws.
And I think we are seeing the consequences of that in the
proposals which are now before the Congress to bring greater
rationality to the administration of those food safety laws.
Mr. Burton. Let me ask you, Mr. Hinchman, if I can impose
upon you and Mr. Mihm. The majority leader has arrived, and he
is under severe time constraints.
Mr. Hinchman. Of course.
Mr. Burton. And so if I could get back to questioning you?
Mr. Hinchman. It would be a privilege to yield to him.
Mr. Burton. OK. Thank you. We'd like to now welcome the
good-looking, dynamic leader of the Republican party, Mr.
Armey. I don't know if that's a tan or whether I embarrassed
you, Mr. Leader.
Mr. Armey. Right.
Mr. Burton. But he's a person who's been interested in this
area for a long time. He's been very concerned about reforming
government to make it more effective, more business-like, and
obviously, he's somebody that we all admire in the Republican
party, and I think a lot of our Democrats, as well. So Mr.
Armey, we would love to hear from you this morning.
STATEMENT OF HON. RICHARD ARMEY, HOUSE MAJORITY LEADER
Mr. Armey. Well, thank you, Mr. Chairman. I appreciate your
accommodating me in my new role as chief disrupter of committee
hearings. And I want to thank our colleagues in the GAO for
their graciousness with allowing me to pop in as I do. It is,
of course, an exciting thing for me to see these hearings on
what I call the Results Act.
And Mr. Chairman, I would ask that my longer statement be
made a part of the record. Mr. Chairman, I would ask unanimous
consent that my----
Mr. Burton. Without objection. Thank you, sir.
Mr. Armey. All right. That was a wise move, if you don't
mind my saying. [Laughter.]
Mr. Chairman, the Results Act is a law sponsored by
Republicans and Democrats alike and was signed into law by
President Clinton in August 1993. It is the right tool to give
us a more honest glimpse of how our Federal Government works.
This law will focus on all existing Federal programs, and, for
the first time mandated by statute, measure government
performance and report on results.
It is not an ideological law. It represents an opportunity
for both Democrats and Republicans, the Congress and the
executive branch, to work together to improve the way
Washington works. Whether you want a smaller, more limited
government, or whether you want a larger, more activist
government, we can all agree--nobody wants government to waste
money through inefficiencies, ineffectiveness, fraud, or bad
management.
I expect the 105th Congress to be viewed as the
implementation Congress. With 1997 a critical implementation
year for this new law, our success or failure with the Results
Act could play a large part in defining this Congress. The
Results Act gives us a common sense tool to analyze and solve
problems between the Congress and the executive branch--a way
to help us report to our shareholders and taxpayers on their
inventory and the effectiveness of their expenditures in
government.
In 1996, the Federal Government spent $1.56 trillion.
Eighty-five million families paid taxes in 1996. Washington is,
therefore, spending $18,355 per tax family in our Federal
Government. It is time to take stock of this spending. And I
might add, Mr. Chairman, I just finished my own taxes last
night, and I'm $10,000 over that number and I wonder if I can
get a refund. [Laughter.]
But it is good, at this time when we're all aware of how
much we are giving to the government in taxes, that we put
focus on this. And by that way, I relate this to my own life.
If I pay good money to add insulation to my home, I'm going to
be sure to check the electric bill to see if I've saved any
money.
The Results Act brings this common sense to the government.
It is the ultimate common sense tool to help us ask whether our
taxpayer-funded programs are working. We all want safer
streets, cleaner air, and better schools for our children.
Often, however, we disagree on how to get there. In any given
legislative cycle, we, in the Congress, pass laws after
negotiation and debate. We think problems are solved when we
pass a law.
In reality, the solution has only begun. We only win when,
in fact, our streets are clean, safer, our air is, in fact,
cleaner, our children are, in fact, well-educated. We must
become more active participants in the implementation of the
programs we enact. As the Congress and the Clinton
administration prepare to make difficult decisions to balance
the budget for our children and our Nation's future, we need
credible, objective information about programs and whether or
not they are really working.
My testimony summarizes several areas where Federal
jurisdiction overlaps and is calling out for better
congressional oversight, such as education, Federal food
safety, drug treatment, rural water treatment and job training.
Let's focus on our own lives for a moment.
If we found that services we were paying were not resulting
in what we wanted, we'd take action. You and I don't rely on
blind faith and continue paying in such instances. Take, for
example, a child's medical care. When you take your child to
the doctor, you take extra care that the doctor is qualified
and capable. You monitor each stage of your child's treatment.
This is how we must approach Federal programs, scrutinizing
their implementation at every stage and making sure we get the
desired results. If an education program was created to ensure
that every third grader can read, improving literacy rate
should be one measure of the program's effectiveness. The
Results Act can be such a common sense approach to help
Congress and the executive branch review our existing Federal
Government with a focus on achieving the best results for the
money we are contributing.
The Results Act was passed out of frustration by the 103d
Congress and signed into law by a Democrat President. This
frustration was born out of our not knowing the government's
ability to really affect critical issues in our world today:
saving lives, preventing crime, and getting vital help to the
American people.
Indeed, during this consideration of the Results Act, the
Senate Governmental Affairs Committee pointed to a recent poll
which showed that the Americans believe that 48 cents our of
every tax dollar is wasted. The committee noted that this could
explain the apparent inconsistency between the public's desire
for a wide range of government services on the one hand, and
its disdain for the government and higher taxes on the other.
The committee viewed the Results Act as a way to make clear
what taxpayers are getting for their money. The Results Act
should foster an atmosphere in Federal service where employees
better understand what they do and the results their agency are
trying to achieve. This law was enacted to ensure that every
employee's work would be value added to public service.
I commend you, Mr. Chairman, for holding this hearing
today, and for continuing the momentum that your predecessor,
Bill Clinger, started on this important law. I commend our
colleague, and your subcommittee chairman, Steve Horn, for
continuing to devote his attention to something that will yield
long term results and better government for taxpayers.
I commend the GAO and others, who have encouraged the
Congress to seriously--to take seriously the enactment of this
law, as well as the OMB for working seriously with Congress to
enact this law. And I should point out, it was a topic of
conversation between myself and Frank Raines when he made a
courtesy call to me in January. I also commend the Vice
President for the reforms he's pursuing that are similarly
motivated.
So what is to be done? We need the vital information on
actual performance that the Results Act can provide. For the
success of this new tool, each congressional committee and each
elected Representative must devote more attention to each and
every agency's major plans and objectives. For the Results Act
to succeed, we all must show a new willingness to re-examine
pet projects with an ear toward objective, credible information
about the results of these programs.
Good intentions are not enough; we must pay close attention
to the warning signs of operational disaster or excessive
confusion in a department or agency charged by us to perform
specific tasks. Specifically, Congress can use the Results Act
in a variety of formal and informal settings, both immediately
and in the long-term. Starting now, and moving through August,
committees should be working with their executive branch
departments to clarify what we want from programs, how that
will be accomplished and how we expect to measure progress.
Agencies are required by the law to consult with Congress
as they prepare their 5-year strategic plans due in late
September. Once results-oriented and measurable program goals
are adopted, it is equally important that committees followup,
through oversight hearings, GAO reviews and other means, to
assess whether these goals are being met. Such program by
program assessment should provide a road map to determine how
limited Federal tax dollars can be applied most effectively in
the future.
In conclusion, the Results Act provides this Congress, the
public and the President a management tool that has been widely
used in making private business more effective. The American
people and our children's children deserve a government that is
accountable for results, a government that is a wise steward of
their hard-earned money, and a government that directs
resources to key priority areas, while ensuring the maximum
impact for each and every Federal dollar spent. With your help,
we might just give our children such a better government. And
incidentally, we may just belie Armey's axiom that nobody
spends somebody else's money as wisely as they spend their own.
And with those comments, Mr. Chairman, I want to thank you
for the opportunity to be here. And I guess I'm at your
disposal, like the plumber.
[The prepared statement of Hon. Richard Armey follows:]
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[GRAPHIC] [TIFF OMITTED] T9381.030
Mr. Burton. Well, thank you. We're always pleased to hear
your remarks, and, in particular, Armey's axioms, because we
don't hear them anyplace else. [Laughter.]
But they're always very wise and well thought out. Did I
understand you to say that in the Senate Oversight Committee
hearing, someone estimated that 48 cents out of every tax
dollar is wasted?
Mr. Armey. I think there was a poll that showed the
American people believe that 48 percent out of every tax dollar
is wasted, cited in the committee by one of the Senators.
Mr. Burton. So the American people feel very strongly that
we're wasting a ton of money up here?
Mr. Armey. Well----
Mr. Burton. Let me just ask you, I think our committee has
become aware of the Results Act and the need to push very hard
for more business-like management in government. But a number
of other committees have oversight responsibilities. And I was
wondering how the leadership on our side and, hopefully, the
other side plans to stimulate them, raise their antennae, if
you will, so that they will be a participant in trying to make
sure that we literally force some of these agencies to accept
business-like practices?
Mr. Armey. Well, I appreciate your inquiry. Obviously, as
you know, the government is a very, very big organization, and
we can most effectively, I believe, do this oversight if we
divide that labor among the competing committees by definition
of their jurisdiction.
GAO, once again, has been extremely helpful here. They are
preparing, on a staff by staff basis--the committee staffs--for
the process and procedures they should undertake. And I can
just tell you that it is a high priority of this leadership.
We will, in fact, do everything we can to encourage every
committee. I would think that each committee--it seems almost a
process of natural selection, that committees end up with
people that have an acute interest in the jurisdictional areas
of the committee, so that the committees, themselves, would
find their own interest. We work hard to report a bill out of
committee, and we take a great deal of satisfaction when we see
that signed into law.
And we do that because we have serious intentions for what
good can be done in the lives of the American people. For us in
our separate committees to have the opportunity to go back and
revisit the implementation of that law, to see that our
intentions were, in fact, met, I should think would be a
welcome opportunity for every committee, and I'm going to
encourage them to utilize that opportunity to the fullest
capacity.
Mr. Burton. I thank you, Mr. Leader. I think that
statements from leadership that they utilize their committees
to stimulate the various agencies will be helpful. We'll do our
part, and if we can get the others to help it would be great.
Mr. Horn.
Mr. Horn. Thank you, Mr. Chairman and Mr. Leader. I want to
commend you, not only for your historic Base Closure Act, which
was a good way to get results out of an executive branch that
had never closed anything, but also thank you for that fact
that you included the Debt Collection Act, which I authored and
Mrs. Maloney was co-author, into the omnibus appropriations
bill. Very frankly, that would not have become law without you
making a decision and getting it on a train that was leaving
the station.
And following up on what the chairman opened up on, we know
Congress is a fragmented institution. We know there are very
jealous jurisdictional lines that many have. Now, as one Member
of Congress, to get this effort moving, I would be delighted to
see on one of the walls in your offices, a matrix in which
you've got authorizing committees, appropriation subcommittees,
area to be changed. And that the majority leader's office
coordinate that effort. And very frankly, if you don't, it
won't happen. It will get lost on the cutting room floors of
several committees you and I can think of.
So I know you hate to take on any power. You want to
devolve everything out of Washington, but may I suggest you
save a wall and coordinate this operation.
Mr. Armey. Well, let me, first of all, on the--we are
developing a matrix, and I have--I'm not sure I want to hang it
on my wall, but I would certainly make it available. But you
are absolutely right. I would see this not as an exercise of
power by the majority leader, but as an exercise of service.
And I would be more than happy to undertake that.
I wonder, Mr. Chairman, if I could just take a moment. Mr.
Horn raised the question of base closing, and I just saw
something last week, that this gives me an opportunity to cite
one of my colleagues. Base closing was about bang for your
buck, the effective use of dollars. I set up efficiency
criteria, defense preparedness criteria by which judgments
would be made. And I should mention that, as I reflected back
on that, the chairman of the relevant subcommittee of armed
services was one Mr. Dellums.
Mr. Dellums had, at that time, many bases in his district
that he could have--he could have put many obstacles in the way
of that legislation, but he saw it for what it was--an honest
effort to have a fair appraisal of the true effectiveness of
deployment of resources in the Nation's defense--and he was one
of the first people to hold hearings. He didn't vote for it,
and I understand that. But I always felt that this was a
commendable effort made very early that is perfectly consistent
with what we are doing here.
I saw a report the other day--and I have not talked to Ron
Dellums about this--but it turns out, pursuant to base closing,
every base in his district has been closed. And I think we
ought to pay a little regard to our call. He must have known
that risk, but he said, ``this is a necessary thing to do in
the questions of efficiencies and effectiveness in government.
It's a fair and honorable process.'' And he did not stand in
the way of it.
But if we would all be willing to be that objective and
that committed to an objective that is more important and more
dear than ourselves and our own destinies in our own districts,
I think we could get a great deal of effectiveness. So if I may
tip my hat to Mr. Dellums in this. As a matter of fact, I
think, Mr. Burton, you were on that subcommittee, at the time,
if I'm not mistaken.
Mr. Burton. I believe I was.
Mr. Horn. If I might comment on that. It was also the
ranking Republican had a base closed in Charleston. It was
rather ironic. Both of the key people on that committee had
major facilities closed.
I might add, as a humble freshman in that exercise, after
you had passed the law, we now have every base in Long Beach,
CA closed. We were once headquarters of the Pacific fleet. They
moved to Hawaii, and you saw what happened to them. But we are
now free to look with a very objective eye to the Pentagon.
Mr. Armey. I appreciate that. And Mr. Horn, if you don't
mind, I get nervous about my standing with my colleagues if
these discussions of base closings go on for too long. So--
[laughter.]
Mr. Burton. Are you finished, Mr. Horn? Mrs. Maloney.
Mrs. Maloney. Thank you, Mr. Chairman. Mr. Majority Leader,
the Results Act says, ``When developing a strategic plan, the
agency shall consult with the Congress.''
And Mr. Armey, can you tell us what consulting with
Congress means to the Republican leadership and what do you see
as the role of the minority in the process? And also, the
Results Act, if it is going to work, do you think it's a fair
statement that we need a true consensus of the agencies' plans
and Congress's intent from both sides of the aisle?
Mr. Armey. Yes. I think these are very important questions.
I think underlying your point is a very important point I'd
like to speak to right now. It is absolutely imperative, if
this is to work, for all Members of Congress, majority and
minority, to be involved. I am discussing with Mr. Gephardt a
liaison role from his staff to this process as I have
established for my staff.
We would expect that consult be taken as a rigorous
discussion between the agency and the committee, and the
committee as a whole, regarding what are the goals defined in
the agency's report and the extent to which they comply with
and agree with the intent of Congress at the time the law was
passed, or any amendments made thereto.
In the end, each of these programs is created by an act of
Congress. Both the majority and the minority participate in
that process. We all have a stake in what is actually done in
the implementation, and we ought to work together. I would
encourage you to work with Mr. Burton and encourage you to come
discuss this with me. I do believe we must be inclusive in this
process, in particular, and I am devoted to that effort.
Mrs. Maloney. Thank you. Do you think that the
implementation of the Results Act in Congress may strengthen
the case of those who advocate a 2-year budget cycle, focusing
on appropriations 1 year and oversight the next?
Mr. Armey. No. I really hadn't thought about that. I may,
now that you've prompted me, I'll go give some thought to that.
I don't know what discussions might have been made regarding
that point at the time it was enacted. And it's possible that
could happen. I don't know.
But I do think that the focus should be--I think we should
be very focused on this in terms of the bang for the buck
measurement that we get, the consistency of defining the
activities of an agency with respect to a law relative to the
intent of Congress when the law was passed.
And my own view would be that if the case is going to be
made for 2-year budgeting, it will have to be made on a far
broader basis than that.
Mrs. Maloney. I would like to join the comments of my
colleague, Mr. Horn, in complimenting you on your leadership on
the Base Closing Commission Act. This was a problem that
Congress confronted for years. We could never agree. You came
up with a unique and original approach, and we solved the
problem.
I truly believe that if you never do another thing in your
life, you will have made a tremendous contribution to public
policy enactment in this country. And to really pay you a very
large compliment, I was so impressed with that bill and the
accomplishments of it, that I copied it. I took your bill, and
I copied your bill on another very important issue before this
Congress that we confront, which is campaign finance reform.
And we have a tremendous division between the Republican
party and the Democratic party on how to control the role of
money and spending of money in campaigns. And we can't seem to
agree. I've only been here--this is my third term, and Mr. Horn
and I have probably both been on around 15 different task
forces on campaign finance reform.
So I copied your bill. And I would like to know whether you
would consider having an approach of your bill on campaign
finance this year if the Republican--because even though we're
bipartisan--but if we cannot agree on a campaign finance
proposal, would you support your bill creating a commission, if
a Republican campaign finance plan fails, a Democratic campaign
finance plan fails, would you then support a commission to move
this process forward?
For years we could not close bases in this country. We all
agreed. Bases had to be closed. And you came up with an idea to
take what everybody agreed on and move it. We face the same
problem now. Whether it's the President or Mr. Gingrich or Mr.
Gephardt, everyone says they are for campaign finance. We
cannot agree. Would you support moving the Armey commission
idea forward for campaign finance, so we could get it off of
the discussion table and onto the floor for a serious vote, to
try to move forward in this critical area of our country?
Mr. Armey. Well, let me just respond by first pointing out
that the base closing commission is one of the great ironies in
my life, because I ordinarily do not believe in Congress
referring its work to commissions. And I like to console myself
by reminding people that the Base Closing Commission was
created to keep Congress from continuing to meddle in other
people's business.
Now, insofar as Congress has its own responsibilities, I
think they should do this without a commission. I believe that
we can, if we will work together, through a congenial
legislative process, I think we can, in this Congress, between
ourselves and the Senate, on both sides of the aisle, and the
White House, come up with campaign finance reform.
And I would prefer to see us do our own work. Now, what
I've also learned is don't rule anything out. But the first
thing I want to do is--before I go to a commission--is I want
to have clearly irrefutable evidence that it is, indeed, in
fact, impossible for us to do our job ourselves.
Mrs. Maloney. May I add that the true genius of your last
bill on base closing was that it was not just a commission that
came back with a report, your bill forced a vote. Your bill was
not just a commission. It forced a conclusion or a step toward
a conclusion of a particular problem.
And if we cannot reach a conclusion, I would like to join
you in moving forward with a commission approach, so, at least,
we can get a product that can pass on the floor and move the
project further in an area where everyone agrees something
needs to be done.
Mr. Armey. Well, let's--if you don't mind--let's stay in
touch on that while I--and I hope you will understand--I feel
my obligation is to, first, encourage the Congress, in every
way, to take care of this important job on its own.
Mrs. Maloney. May I underscore that I would go to a
commission only after the Republicans can't pass it, the
Democrats can't. Let's go forward with a commission.
Mr. Burton. Yes. The gentlelady's time has expired. I
understand that Mr. Shays of Connecticut has decided to pass,
so we'll go to Mr. Mica of Florida.
Mr. Shays. I have other questions I could ask you, but--
[laughter.]
Mr. Burton. Mr. Mica.
Mr. Mica. Mr. Chairman, just one quick question, Mr. Armey,
I heard your testimony and read this written testimony, and--
you know--you cite part of the problem: education. We have 760
Federal education programs and 39 different agencies, food
safety programs administered by 12 different agencies, rural
water--8 agencies--job training--15 different agencies--I tried
to consolidate our international trade efforts, which are
disorganized and disjointed among 19 Federal agencies.
My legislation was referred to 11 committees of
jurisdiction. It's almost impossible to change the bureaucracy.
You've got two problems. One, which I just outlined, all the
committees and their vast jurisdiction. Second, the
bureaucracies have now become effective lobbying forces for the
status quo and view the members as only passing stars in the
constellation, something to be ignored.
What about a bureaucracy closure commission, where we take
your same example, which has been cited now in reference to do
something with campaign reform, but for dealing with the
problem we have with closing down some of the bureaucracy and
the duplication?
Mr. Armey. Well, again, let me remind you that this is
within the authority and the responsibility of the Congress. I
believe that what we may learn from the effective
implementation of the Results Act will help us to gather the
information by which we can make the justifiable case for
consolidation of efforts, where we see so many duplications.
But you know, again--I mean--this ridiculous position of
having, apparently, one as sort of a place in the sun for a
commission.
And turning around and saying I'm not all that big on
commissions. I think we should do that job. That is our job.
And I think we are capable of doing that job.
Mr. Mica. Without a bureaucracy closure commission?
Mr. Armey. Without it.
Mr. Mica. Thank you, Mr. Chairman.
Mr. Burton. Mr. Sanders.
Mr. Sanders. Mr. Armey, I'm very impressed by the
discussion today. Mrs. Maloney wants to emulate your efforts
for campaign finance reform. Mr. Mica wants to emulate your
efforts for bureaucracy reform. Do you want to write a new
Constitution for the United States while you're here?
[Laughter.]
I mean, it seems to me, everyone is very impressed.
But I would just say I think that regardless of one's
political persuasion and disagreement about the role of
government in civil life, I don't think any sensible person
feels good about government waste, and we can all acknowledge
that there is bureaucracy, inefficiency, and waste, and we want
to, all of us, make the government more efficient.
But maybe picking up on Mr. Mica's question, next year when
Congress is presented with a governmentwide performance plan
for fiscal year 1999, how do you anticipate that plan will be
used in Congress?
In other words, where do we go with it? Will it, for
example, be referred automatically to all committees with
jurisdiction over agency and program authorizations? How do you
feel that the plan will be used?
Mr. Armey. Well, first of all, let me just say this--and I
mentioned this in my testimony--this is not an ideological
discussion. And I think that one of the reasons base closing
got enacted was it was clearly understood to be non-
ideological.
So we're talking about efficiency. The first thing we must
do is to undertake a period of discovery. And it's almost as if
we're taking an inventory of the government, what is there,
gaining information. Now, as we gather that information, I
would think we would distill from that, in our separate
committees of jurisdiction, amendments to the law, a revision
of the law, very likely some program consolidations or
closures.
One of the things I might say, I was laughing this morning.
I had some experience with this when I was with the university.
Mr. Horn, you may have encountered this, too. I remember as a
department chairman receiving this elaborate set of
instructions from the dean about how I was to define my goals
and come up with empirical bases for measuring achievement of
those goals and so forth.
It's not easy, and it's not going to be something that is
going to be heartily welcomed by everybody that's all of a
sudden steamed at this new effort. So we'll have to encourage
people to do a thorough job, and that's where the consultation
comes in.
We will have to be encouraging to them, because they are
going to feel a bit overwhelmed. In many cases, people will
feel overwhelmed by it. So we'll have to sort of lend a guiding
hand.
Mr. Sanders. But what I'm hearing you say is that you see
this going through the normal legislative process?
Mr. Armey. Yes. I have to say, Mr. Sanders, I am a big fan
of regular order.
Mr. Sanders. Mm-hmm.
Mr. Armey. I'm an economist by trade, and I will tell you
pursuant, of course, to Adam Smith, that all economic progress
comes from division of labor, and division of labor works best
when people mind their own business. So that for everything
that we see, there would be a legitimate jurisdiction and a
committee of jurisdiction.
And we should then have that profession and that expertise
and that interest that has resulted in people joining these
committees, brought to bear on these discoveries so that they
could be measured up and evaluated in a very sober and
business-like fashion.
Mr. Sanders. OK. Thank you very much.
Mr. Burton. We'll now recognize your colleague from Texas,
Mr. Sessions.
Mr. Sessions. Thank you, Mr. Chairman. Mr. Armey, it's
great to see you here. As a freshman of this committee, I must
confess through the last few years, I didn't know that I would
be sitting on this side of the bar and you on that side. It's
good to see you.
Yesterday, we had a press conference where there were fewer
people there than here today, and so I'd like to take this
opportunity to let you know about my thoughts on this
Government Performance and Results Act. Because I think that
throughout the media and, perhaps, in bureaucracy, there is a
sense of fear of this act.
And I had an opportunity, yesterday, to really say that I
thought it was essential that bureaucrats and the management of
the Federal Government look at this as really a cleansing
opportunity, an opportunity to have dialog from not just at the
upper end of management, but down to the lower ends, to where
they could talk about not only the things that are measurable
and within their control, but also an opportunity to look
strategically at how they are going to guide their departments
in the era of lowering and lessening budgets.
What I'd like to hear from you is whether this serious
discussion that's going to begin and whether it's near term,
whether we're going to send the correct signal--which I think
is correct--of this is an opportunity to begin a serious dialog
with the managers of government, with the expectation that they
will present these strategic views and that we will be able to
work hand in hand.
I think that's what it is, but I'm interested in hearing
what you have to say about that, sir.
[The prepared statement of Hon. Pete Sessions follows:]
[GRAPHIC] [TIFF OMITTED] T9381.031
Mr. Armey. Well, let me just say, first of all, I
understand that fear. I related earlier as a department
chairman receiving these complex papers from my dean. And I
tell you, my first reaction is, what is the dean up to? Deans
are not very trustworthy people. [Laughter.]
Every chairman knows that. So there is a tendency to be
defensive. And now we have the GAO working, I think, very
actively here. The OMB is enthusiastic. I mentioned my
discussions with Frank Raines. But we ought to--I always
believe that we ought to take a service model, not a power
model. And we ought to make it clear to folks that we're not
here to hold a hammer over your head, but to work in
partnership with you toward that end of fulfilling what we most
often find to be our mutual shared objectives.
I always kind of laugh. You know, one of our favorite
whipping boys in American political discourse is the
bureaucrat. And I can say ``bureaucrat'' with as much disdain
in my voice as any, but when you get right down to it, these
are decent, hard-working men and women that are trying to
accomplish something. And often, they are drawn to this agency
because of their concern for this area of what von Mieses
called human action, just as we were drawn to this committee
because we had that concern.
And if we undertake our relationship with these folks as
one that is encouraging and not threatening and so forth, we
can put at ease a lot of those concerns. Now, I must say, after
20 years of being a professor, I never got to the point where I
accepted that deans were people that were operating in my own
best interest.
So it's a tough job. I'm sure deans were frustrated, too,
with my doubt and skepticism along the way. But I think we need
to understand that we do not come off hammering. Now, when we
find people who are reluctant to move forward and, therefore--
perhaps, even, we will encounter some that are recalcitrant
about it, I think we have to be assertive.
But I think there's a far, far difference in the
effectiveness of your demeanor when you understand to be
assertive with somebody, as opposed to being angry at someone.
And most people, I think, do understand that most agencies, I
believe, of the Federal Government owe their existence to an
act of Congress, and I'm sure they understand that they can get
caught up in consolidation, and recalcitrance might encourage
that.
So I think we just need to go forward on a business-like
basis with a good deal of respect and appreciation for each
other, and I think we can do a good job.
Mr. Sessions. Thank you. Well, it makes me feel good to
know that as our leader, you're expecting the best from someone
we have no control over but someone that we do have oversight
functions with and that we can work hand in hand.
Mr. Chairman, just really the bottom line to our press
conference yesterday was that I was setting the expectation and
the hopeful expectation that what these strategic plans will
result in is something that is measurable, something that is
realistic, and something that represents the true nature of the
business or the work that these agencies are involved in.
And I believe if they will come hand in hand and work with
us--but it's up to them to make sure that their plan, their
strategic plan and their direction is given to us, then we'll
be able to work very comfortably together.
I thank the majority leader for taking his time today, and
I agree with everything you said, sir. Thank you.
Mr. Burton. Thank you, Mr. Sessions. I guess Ms. Norton
doesn't have any questions? Is that correct? Mr. Barr.
Mr. Barr. Thank you, Mr. Chairman. Mr. Armey, the timetable
for implementation of GPRA and GPRA, itself, I think, is really
an important beginning, but it's really fairly modest in terms
of the long-term goal that we have before us. As Mr. Mica
pointed, just the proliferation of agencies that are
overlapping in their jurisdiction and so forth.
Is it your view--it is mine, but I'd be interested on the
record, Mr. Armey, if it's your view that the time table set
out for implementation of GPRA ought to be adhered to really is
the minimum requirement that we ought to have, and that this
Congress ought to resist efforts, which are starting already in
the executive branch, to soften it and postpone some of the
requirements?
Mr. Armey. Well, yes, it is. First of all, the time table
is set out in the law. And--I hate to harken always back to my
years as a professor----
Mr. Barr. I think you take great delight in doing it, as a
matter of fact. [Laughter.]
Mr. Armey. I don't remember a semester when I didn't have a
host of students who found 100 reasons why they couldn't get
their term paper in on time. And you just have to learn that's
the deadline. I was particularly impressed with the one young
man that had three dead grandmothers in the same semester.
[Laughter.]
That didn't upset me so much as their dying again the next
semester. [Laughter.]
Mr. Barr. That's a very dysfunctional family, apparently.
Mr. Armey. But again, I think a firm insistence that, you
know, deadlines are there and they must be met. And again, we
will have a process of discovery. You know, one of my great
anticipations about the implementation of this law is, what
will we discover. What will we find out? What can we learn?
That will, undoubtedly, generate the basis by which we can
get together on both sides of the committee room and write laws
to improve and make more effective the public--could I say--
apparatus, for accomplishing the goals of the Congress and the
President.
Mr. Barr. I appreciate that and I appreciate your stating
on the record how important that you think it is to adhere to
the time table and the requirements that are currently in
there, and that we ought to resist efforts to soften them or
postpone them.
Thank you, Mr. Armey.
Mr. Armey. Thank you.
Mr. Burton. Mr. Majority Leader, we want to thank you for
taking time out of your very busy schedule to be with us. Your
remarks were very cogent. We appreciate it, and thank you for
being with us.
Mr. Armey. Well, let me thank you. And again, if I can
thank the gentlemen behind me from GAO and OMB for their
graciousness in letting me go. Gentlemen, I hope I didn't say
anything that was too amusing. [Laughter.]
I did the best I could.
Mr. Burton. Well, those Armey axioms are pretty
interesting. Thanks a lot. Could we have Mr. Hinchman and Mr.
Mihm up here, and, also, could we have your opening statement,
Mr. Koskinen, now? The reason for that, if it's possible--it
would help expedite the hearing and make sure that everybody on
the panel gets a chance to question both of you,
simultaneously, if necessary, so we can speed things along.
So right now, we'll recognize you, Mr. Koskinen, for your
opening remarks, and then we'll go to questions. Oh, pardon me.
Before we do that.
[Witness sworn.]
Mr. Burton. Please have a seat.
STATEMENT OF JOHN KOSKINEN, DEPUTY DIRECTOR FOR MANAGEMENT,
OFFICE OF MANAGEMENT AND BUDGET
Mr. Koskinen. Thank you, Mr. Chairman. I seem to spend most
of my time testifying on panels with GAO and, in fact, these
gentlemen.
So this works out just fine. I'm pleased to appear before
this committee to discuss the importance of the Government
Performance and Results Act and to give you an assessment of
our progress in meeting its requirements. I will be brief to
allow time for questions and ask that my written statement be
included in the record.
Mr. Burton. Without objection.
Mr. Koskinen. Thank you. GPRA became law 3\1/2\ years ago
and it will soon take effect governmentwide. This was
bipartisan legislation that the administration strongly
supported. This committee played an important role in passing
this act, and we look forward to continue working with you and
others in the Congress as we carry out this law in the months
ahead.
On behalf of the administration, Mr. Chairman, let me thank
you for holding this hearing, which signifies the importance we
all attach to this very significant legislation. Let me also
express our appreciation for the excellent work GAO has done in
this area over the past several years. We have found it to be
of great assistance, and have enjoyed our working relationship
with them.
At its simplest, GPRA can be reduced to a single question:
What are we getting for the money we are spending? The answer
to this question is important to all of us in government and to
the American public as well. Regaining public confidence
requires that the government not only work better, but that it
be seen as working better.
Let me summarize briefly those aspects of GPRA
implementation that are our most immediate focus. The basic
foundation for what agencies do under GPRA is their strategic
plans. Agencies are required to send their strategic plans to
Congress and OMB by this September 30th. When developing its
strategic plan, an agency is to consult with Congress and
consider the views of stake holders, customers, and other
interested parties.
Since last year, OMB has been encouraging agencies to begin
their congressional consultations. OMB issued guidance over 18
months ago on the preparation and submission of strategic
plans. In the summer of 1996, as a followup, OMB conducted a
comprehensive review of the agencies' strategic planning
efforts and the status of their plans. The reviews' objectives
was to gauge how the agencies were doing and identify any
concerns with the plans themselves or the process being
followed.
Generally, the agency plans reflected a serious effort and
allowed us to conclude that agencies should be able to produce
useful and informative strategic plans by this fall. Their
review also revealed several challenges, including the need to
ensure clear linkage between the general goals and objectives
of these strategic plans and the annual performance goals to be
included in the annual performance plans. We also expect to see
increasing inter-agency discussions on performance goals and
measures for cross-cutting programs, and increased involvement
by the senior leadership of the departments in the completion
of the strategic plans.
The first of the agency annual performance plans, as
opposed to strategic plans, for fiscal year 1999 will be sent
to OMB this September with the agency's budget request. These
annual plans will contain the specific performance goals that
the agency intends to achieve in the fiscal year. A subsequent
iteration of the annual performance plan is sent to Congress
concurrently with the release of the President's budget next
year at this time. The agencies and OMB gained valuable
experience in preparing annual performance plans through the
pilot project phase of GPRA.
GPRA also requires that a governmentwide performance plan
be annually prepared and be made part of the President's
budget, as noted. The first plan will be sent in February 1998,
and will cover fiscal year 1999. We would welcome your views on
those futures that this committee believes would make this
governmentwide plan informative and useful to Congress.
As I noted, we expect agencies to provide useful and
informative strategic and annual performance plans within the
timeline specified by the act. However, as Mr. Armey noted,
preparing a good GPRA plan is not an easy task. No one should
expect the first plans to be perfect. We should view these
plans as the beginning of a process of improvement and
refinement that will evolve over several years. Even as these
performance plans and measures become more refined, we should
always bear in mind that using performance measures in the
budgeting process will never be an exact science or even a
science at all.
Comparing results across program lines will always require
political judgments about relative priorities of, for example,
programs for highways and education. And we should not lose
sight of the fact that performance information will often be
used to adjust the way the programs are managed, rather than to
change the resources provided. Accurate, timely performance
information is important in all these situations, and that is
why the administration is committed to the successful
implementation of GPRA.
As I've said on other occasions, if we are successful over
time, GPRA should disappear. If GPRA works as envisioned,
government managers will absorb it into day-to-day agency
administration and program management. That's why I suggest
that the true measure of the success of GPRA will be the extent
to which the concepts of management and good business practices
set out in this law become the accepted way that the government
works, without reference to any particular statutory framework
or requirements.
This concludes my brief oral statement, Mr. Chairman. I'd
be pleased to take any questions you may have and join in this
panel. Thank you.
[The prepared statement of Mr. Koskinen follows:]
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Mr. Horn [presiding]. Thank you very much for your
testimony. Mr. Hinchman, did you have some other remarks you
want to make in general on this? And then we'll throw it open
to questions.
Mr. Hinchman. Thank you for that offer, Mr. Chairman. I
think that the three central conclusions from our work that I
described are the important message that we have. I think that
they are consistent with what Mr. Armey said and with what my
friend Mr. Koskinen said, as well. So I have nothing more to
add to that.
Mr. Horn. OK. Mr. Shays. Do you have a question? Ms.
Norton. Do you have a question, at all? Mr. Sununu. Do you have
a question? You do? OK. Well, let me pursue some of the things,
here, just in general.
One of the problems you face when you're developing any
strategic plan are the units of measurement, as well as not
just relation to the budget, but how do you know we're being
successful? How would you generalize, both from the Comptroller
General standpoint and the Office of Management and Budget
standpoint, where we are on achieving certain reasonable units
of measurement?
You're familiar, I think, both of you, with the Oregon
experience, when they went out and talked to the citizens, said
what programs do you like, how will you know if we got there
and achieve those goals, and so forth? What's the--give me a
good generalization here as to where you think we are in the
Federal Government on this.
Mr. Hinchman. We have been monitoring both the pilot
projects which OMB is conducting and the implementation in the
24 major agencies that comprise 95 percent of the budget. I
think I would make one point. Progress is further in those
agencies which are engaged in direct delivery of services. For
example, the Social Security Administration, which can measure
the effectiveness of its 800 telephone service and the
timeliness of its check mailing.
Progress is slower in those agencies which work through
third parties, like State and local government, in which the
precise goal of the Federal involvement is less clear, at least
less specifically defined, and in which--I think we have to
say--the agency officials are more concerned about committing
themselves to outcome goals over which they have less control.
On the other hand, I have to say that I think we will get--
as Mr. Koskinen said--we will get both strategic and annual
performance plans from those 24 agencies for fiscal year 1999.
And while some will be better than others, basically the
framework for outcome measurement is going to be there.
Mr. Koskinen. I would agree with that perspective. I would
add that our experience over the last three as we've worked
with the agencies, is that focusing on missions and goals is
complicated, difficult and challenging. But your question goes
right to the heart of it. Trying to figure out what are our
appropriate performance measures is really the intellectually
challenging and stimulating task.
This is true partially because of the wide range of
activities in which the government engages. And besides the
point Mr. Hinchman, we say that when we get to areas like basic
research, and when we get to areas of operations like policy
operations, even OMB, for example, trying to figure out how to
measure successful performance gets to be a very complicated
process. This is why, as I said in my testimony, I think what
we have to expect is that these first plans won't be the last
plans. And they should not be the last plans.
We will find with some performance measures that--we'll
find over time that they don't appear to be appropriate. They
measure the wrong outcomes. We'll find with other performance
measures that the data is either very difficult to obtain or
too expensive to obtain. And we will find with other
performance measures that we get a better understanding of the
utility of those measures over time.
I think your reference to the Oregon benchmark project is
very appropriate. There they had the same experience. Their
measures have gotten better over--with the passage of time. And
I would hope that we would understand that the provision of the
strategic plans in the fall of 1997 and the provision of the
first performance plans in the winter of 1998 will be the start
of a dialog and not the end of it, and that we do need a
partnership, not only in a bipartisan nature in the Congress,
but a partnership between the Congress and the agencies as we
continue to review what are the appropriate, most effective
performance measures.
Mr. Horn. Let me ask one more generality on this, then I'm
going to get down to specific agencies. What have you found
were the ``performance measures'' that really haven't worked
out? Can we generalize from what you've seen in changes when
you've looked at the way some agencies have used ceratin
measurements and just decided, hey, this isn't going to work?
Any of those cases you could describe for the committee?
Mr. Hinchman. The only point that I would make as
generality is the importance of result oriented performance
standards, that there is a temptation to look at outputs or
ever process measures and to shy away from commitment to
measuring actual impact which programs have on the lives of
Americans. And that that's a temptation which has to be
resisted. I think that we will get better at that over time.
That is certainly the experience of GAO. We have been
trying to measure our performance. We currently have a mix of
both outcome and output measures. We hope to evolve toward
completely--complete use of outcome measures, but it's going to
take us some years to do that, I think.
Mr. Koskinen. Our review of the pilot showed that the
biggest problem at the front end as we're dealing with this is,
in fact, the data collection. There may be an agreement that
the measure looks appropriate, but the question is can you
accurately collect timely data. As I said, going back to
something to even something like research, a lot of impacts and
outcomes are longitudinal, so you may be spending the money now
and you won't see the results of that expenditure over a longer
period of time.
As we've told the agencies, that doesn't mean you shouldn't
start measuring now, because if it takes 3 to 5 years to see
the results, 3 to 5 years from now, if we haven't started, we
won't know what the results were. But that's one of the
issues--is in terms of programs with a longitudinal impact.
Another is a point Mr. Hinchman made earlier, and that is how
to obtain data when, in fact, the services are being provided
by third parties, and we're making grants and there are
actually intermediaries who are engaged in the activity. And
what are appropriate measures--and--that they can effectively
collect.
Mr. Horn. In business, one of the measures would be,
obviously, client satisfaction, the attitude that the customer
can do no wrong. And businesses prosper that way. Now, with
government, to what extent have we tried actual surveys of
client satisfaction, the taxpayer, in brief, or anybody we
serve.
Mr. Koskinen. As they say in the trade, I'm glad you asked
that question. A major initiative of the Vice President's
National Performance Review has been directed in that area,
which is focusing on developing customer service standards and
then surveying customers to find out how those standards are
being met, as well as collecting data. So there are not
literally hundreds of standards that have been designed and
developed across the government. And many of them depend upon
government surveys.
Now, one of the interesting ironies is that when you want
to collect survey data, you have to be very careful about
Privacy Act and Paperwork Reduction Act requirements that we do
not want from the Federal Government, to burden the public with
a wide range of data calls and data requests. So that--we are
right now in the process of trying to develop the right
balance.
But I think you're exactly right. A lot of what we do
interfaces directly with the government. Obviously, Social
Security Administration, IRS, Veterans Administration, in the
Customs Service, in INS. And across the board, part of the
effectiveness of that agency has to be the perception and the
satisfaction of the customers of those agencies.
Mr. Horn. Has OMB rejected some of the proposed client
satisfaction criteria?
Mr. Koskinen. At this point, we have not. But as I say, at
this point, the statute provides that we're really focused now
on trying to get the strategic plans done and begin to focus on
the development of the measures. The mechanics of how we
collect that data will then be in the performance plan
discussions. And we are concerned about that in holding
discussions about it.
Mr. Horn. So you're saying it's premature right now to
consider this? When is it not?
Mr. Koskinen. No. Actually, there are surveys that have
been done. And in fact, if you look at annual reports being put
out by agencies, you will see what those results are. The
Social Security Administration has one of the most effective
performance measurement devices.
Mr. Horn. Mm-hmm.
Mr. Koskinen. It puts out an accountability report that
measures all of its range of activities in terms of standards
and goals.
Mr. Horn. Now, is that an in-house or is that contracted?
Mr. Koskinen. My understanding is that--well, I do not know
the answer to that question.
Mr. Horn. Yes. I think we ought to look at should we
contract this out to objective survey people or do we trust a
particular agency and is it simply throwing things in the box
as you leave the field office as to whether you were satisfied
with the people at the counter, sort of like a hotel does.
[Laughter.]
And I'm just curious to what degree we're looking at the
credibility of the data and how we go about it.
Mr. Hinchman. Let me share one success story from SSA that
does rely on external data.
Mr. Horn. Sure.
Mr. Hinchman. I had mentioned earlier that SSA runs a very
large 800 number information system. They get over 60 million
phone calls a year. And when they became more customer focused,
they decided they needed to improve that service. They made a
large investment in that, and then had the quality of that
service tested by an outside firm, which measures, essentially,
the quality of 800 service.
Mr. Horn. Right.
Mr. Hinchman. And there was a study done by that firm,
involved eight respected private sector companies and SSA, and
SSA won.
Mr. Horn. Now, was that merely looking at how rapidly that
phone was answered?
Mr. Hinchman. No.
Mr. Horn. Or was that talking about the end result?
Mr. Hinchman. It was about calling people who had used the
number and asking them about the quality of the service they
received, how quickly the phone was answered, how polite the
people who spoke to them were, how knowledgeable they were, how
quickly their problems were resolved.
Mr. Horn. Yes. Good.
Mr. Koskinen. And in fact, and across the range of those
quality indicators, the 800 number at Social Security did not
answer the fastest.
Mr. Horn. Mm-hmm.
Mr. Hinchman. But nonetheless, the overall satisfaction and
quality of the information made it the most effective 800
number in that comparison.
Mr. Horn. Yes. I think that's probably true. I've checked
myself every once in a while on Social Security. But an agency
we have real problems with, as you know in management--and I
must say the President has a choice now when he nominates
people. This agency, he needs not a good tax accountant, not a
wonderful tax lawyer. What he needs is a manager. And that's
the IRS. This is obviously a basket case agency.
And we've had numerous congressional hearings on this.
They're going through hearings in Ways and Means. Hopefully,
they will be included in the debt collection act that we passed
here last year. And they have not yet agreed to that. But I'm
told by the chairman, Ms. Johnson of Connecticut, that she will
generally follow what was done here. And that's long overdue.
Now, what worries me is when the thousands of citizens I
have heard from on this subject all over America, is that this
is an agency they are frustrated by, in the sense they can't
get through to somebody to solve the problem. And there needs
to be some sort of telephone tree that ends up, maybe, with an
agent somewhere that can answer a question. And you know, the
airlines have worked on this, lots of different groups have
worked on it.
It isn't impossible. Social Security has already done some
of it, and we need to take a real good look at that. Because if
we were ranking agencies in customer satisfaction, that would
be one right at the bottom. And I just wonder what you are
doing about it.
Mr. Koskinen. Well, I think we might disagree with whether
it's a basket case or not. It fairly effectively collects a
trillion-and-a-half dollars a year in finances. But in terms of
being----
Mr. Horn. But it very ineffectively has $100 million
written off. That bothered me. That's what got me started on
the Debt Collection Act.
Mr. Koskinen. As you know, we worked with you very closely
on that act and appreciate your support of it. What has
happened is that the issues of management of the IRS are
receiving the highest level of attention. The Secretary of the
Treasury has set up a modernization management board, chaired
by the deputy secretary, Mr. Summers, that is working on a
regular basis really as a board of directors with the
management of the IRS focused directly on those questions, on
its information technology systems.
As you know, we basically--that board made a decision to
stop a program for document processing which was going to cost
a $1,200,000,000 billion, and it wasn't clear that it was going
to, in fact, work. And over $1 billion was not spent as a
result of that decision. There is a focus on the 800 numbers,
there's a focus on electronic filing, making it easier for
people to file their returns.
And one of the great successes they've had is, in fact,
increasing the speed with which they provide refunds. But
you're right. One of the questions taxpayers legitimately have
is they'd like to be able to get advice promptly and
effectively. And we are focused on that.
And I think you're also correct that we need to focus on
the management internally in the IRS. We've been very
successful and very fortunate to recruit a new chief
information officer from the State of New York, Art Gross, who,
I think, is doing a phenomenal job. And we have high
expectations, but also high demands of the need for improvement
in that agency.
Mr. Horn. Before I yield to the gentlewoman from Maryland,
let me make sure the record shows I said $100 billion, not
million. I think I mushed that a little.
But now, I yield to the gentlewoman from Maryland, Mrs.
Morella.
Mrs. Morella. Thank you, Mr. Chairman. We know that you
always operate in the magnitude of billions. [Laughter.]
Gentlemen, particularly Mr. Hinchman and Mr. Koskinen, I
wanted to ask you about the Government Performance and Results
Act--usually requires agencies to consult with Congress in
preparing their strategic plans. From my experience, agencies
always check in with OMB first before they move forward beyond
that.
And so this happens with testimony before Congress. We find
out. And certainly, with the current budget process. So my
question to you is, whether agencies must clear through OMB
every single document, idea, goal, or mission that is required
by the Government Performance and Results Act?
Mr. Koskinen. No. That's not required.
Mrs. Morella. It's not?
Mr. Koskinen. Some people would like to think of us as all-
powerful and all-encompassing, but the agencies actually have a
lot of dialog with the Congress that does not clear through us.
We clear testimony, but not, generally, materials provided. We
have, as a I noted in my testimony over a 1\1/2\ years ago,
sent out guidance to the agencies which we reaffirmed last
fall, encouraging them--reminding them of the statutory
requirement that they consult with Congress as their plans are
developed, and encouraging them to begin--engage in that
consultation.
So quite the contrary in terms of resisting that, we think
that the statute not only requires it, but that it's an
important part of the development of the strategic plan. The
statute, I think, wisely contemplates that the agency should
consult with Congress. The agency should consult with their
stake holders, whether that be State and local governments or
the public, in the development of their final plans.
And we are encouraging them to do that. We have spent, as a
I noted in my prepared testimony, a significant amount of time
over the last 3 years working with them, reviewing their
processes, trying to provide them my help, assistance and
guidance, drawing to their attention a lot of the good work
that GAO has done in terms of the development of strategic
plans.
So on occasion, we hear that someone has said, well, gee,
OMB won't let us do that. And I'd be delighted if anybody would
refer any difficulties they're having getting consultation with
their agencies. You can call me directly, because our--we're at
the other end of that spectrum. We're encouraging that
consultation.
We think the time now is right, that it needs to be done
this spring and this summer, so that when those plans come in,
as the statute notes, to the extent that the agencies have
consulted and they have not reflected in the plans, views of
anyone they consulted, their cover letters are supposed to
highlight that for both us and for you, so that they--when they
publish these plans, which will be submitted not only to the
Congress, but available to the public, it will be clear where
the agency's plan is going, with the administration's support,
and what views are not--have been made that have not been
reflected, significant views, obviously, in that plan.
So I think it's an important process, and we support it
significantly.
Mrs. Morella. And they don't need to OK it with you? That's
not mandatory?
Mr. Koskinen. No. At this point, they don't have a plan to
OK.
Mrs. Morella. When they do.
Mr. Koskinen. What they need to be discussing with you is
what are their proposed goals and objectives. We have--there is
one case, actually, in the press, if they start to produce
long-term projections about the impacts of what's going to
happen to their performance before they've actually reviewed
that in the budget process, then we actually do not allow that
to happen, only because the reason for the OMB review of budget
numbers and numbers, themselves, is to make sure that when you
get those numbers, they come with the imprimatur and support of
the administration.
That--but that's a level of detail that we're not involved
in at this point. At this point, the agency should be
discussing with you what their views are and your views are of
their goals, their missions, their objectives, and, as Mr. Horn
stated, what are their performance measures going to look like
in terms of categories, not the details or what the numbers are
actually going to be.
Mrs. Morella. They don't need the clearance. Great. How
about, Mr. Hinchman, would you like to get back on this?
Mr. Hinchman. We are doing a review for Mr. Kasich of the
consultation process required by the act. As you, I think,
know, relatively few consultations have taken place so far,
perhaps half a dozen or so, I think, most of them initiated by
Congress and its staff, not by the agencies. As Mr. Koskinen
has indicated, that pace will pick up rapidly over the coming
months. We'll begin to get a better idea of how it's going to
go as we get into a larger volume of activity.
I would add one other note. I think that we have to
recognize that the Office of Management and Budget has a
legitimate concern for ensuring that the President's policies
are reflected in all the communications that occur between
execute agencies and the Congress, and that that concern is not
going to go away.
What I think is important is to also recognize that GPRA is
basically about improving the management of the government. And
a lot of what the government does is about the management of
trillions of dollars of assets and billions of dollars in
expenditures every year, and that we all have a shared
interests beyond the policy issues over which we disagree about
making that management process more effective.
And I would hope that these consultations can provide for
frequent open dialog about how we can improve that management
process and what the goals and outcomes of that management
undertaking ought to be.
Mrs. Morella. Could I ask one more question, and it's
simply that when agencies form their strategic plan and their
mission, how do we ensure that the appropriate group is working
on the process? I mean, by that I mean, is there any kind of a
mechanism that would include a cross-section of employees,
managers, budget experts, policy experts, you know, stake
holders and others that might be appropriate?
Mr. Koskinen. In our guidance to the agencies and in our
reviews with the agencies, we have stressed the importance of
that point. One of my concerns is that if we're not careful in
the implementation of this act, we'll create what I call a GPRA
bureaucracy, and that is, in an agency we'll have a group of
people off on the side, in a planning office or someplace, who
fill in the blanks and provide whatever documents the statute
seems to require, without drawing upon the expertise and the
perspectives of everyone in the organization.
Mr. Hinchman is exactly right, that this statute is not
meant as an abstract exercise in producing neat binders with
blue covers. The purpose of this statute is to improve the
effectiveness of government operations. And one of our pitches
to the agencies has been, what they should focus on is what
data and information do they need to effectively manage their
programs, and to the extent that they can work with us to
define that data, we will guarantee them that that will be
acceptable performance data for the management of those
programs and reporting.
Because, again, as I say, it will be counterproductive if
we have strategic plans to collect artificial information that
no one is actually using in the day-to-day operations of the
agencies, because one of the key utilizations of this
information is not just to make resource allocations, the most
immediate impact of the information is to adjust or change or
modulate the way the program is organized or managed.
If we never allocated a budget dollar differently because
of GPRA performance, it would not mean that the exercise was
for nought. If we do it well, all of that performance
information will be reflected in changes in the way we actually
manage or operate those programs. So it's critical that we
focus on this. And that can only be done effectively, as you
note in your question, if the people focusing on this include
the senior leadership in the agencies as well as the people on
the front lines.
Our responses to the agencies last summer, after our
reviews went to the cabinet secretaries, and noted wherever we
thought it was important, that those senior political
appointees of the agency have to be intimately involved in this
process, just as much as the front line workers.
Mrs. Morella. So the directions are that they--the
assumption is that they will do so?
Mr. Koskinen. Yes.
Mrs. Morella. And not make----
Mr. Koskinen. And we've--we've asked that question of them
and encouraged them to broaden the base of their planning
effort.
Mrs. Morella. Thank you, Mr. Chairman.
[The prepared statement of Hon. Constance Morella follows:]
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Mr. Hinchman. If I could just add one note to that, Mr.
Chairman. In our work with successful public sector reform
efforts, one of the best practices we've identified--and it's
reflected in our executive guide--is involving stake holders.
And there are both internal and external stake holders. And
they all need to be part of the planning process.
Mr. Horn. Before yielding to Mr. Sessions, let me round out
what Mrs. Morella has correctly begun. I think your answer is a
very good one in terms of what the data--what those data ought
to be down the line. And I guess my query is, does OMB plan to
have the agencies, when they come in for future budgets, show
this performance data as part of the budget review process in
OMB, and is it understood that secretaries will sign off on
this? I agree with everything you've said, because I've been
through this, 35 years ago and 25 years ago.
The University of Toronto was the first to have university-
wide planning. I was at the second, in terms of California
State University at Long Beach. And we started from the bottom
up, just exactly as you're talking about. You've got to really
get people involved.
I was amused by my colleague, Mr. Armey's, department
chair. That's what most people do. Say, you have them file a
report at the end of the night. The people who are there
rendering the service are never involved. It's just somebody
writing it out, and it's pieces of paper moving around. And
your comments lead me to believe you're very alert to that
situation and you want involvement. And you want something that
works.
And that's what we're talking about.
Mr. Koskinen. Right.
Mr. Horn. Now, are you going to include it in the budget
process?
Mr. Koskinen. As they say in the trade, you bet. Our hope
is, ultimately, that we would evolve an accountability report,
as we call it. And we've had pilot program experimentation with
that, in which we would pull all of the results of agency
activities and reviews together in one document. And our hope
would be that an agency, ultimately, in the budget process,
would come to OMB and, ultimately, to the Congress, saying,
these are the results of our activities thus far and our
accountability report, and these are our resource requests. And
if we get these resources, these are what our performance plan
show we will be able to receive with those.
And a year later, they would come in with an accountability
report, saying, these are the resources you gave us, these are
the results we got, these are the resources we'd like in the
next cycle.
Mr. Horn. Mm-hmm.
Mr. Koskinen. It will take us some time to get from here to
there. But we started in the fall of 1994 with the 1996 budget
process, asking for as much performance information as the
agencies had in their justifications to us. This last fall, in
the 1998 budget process, we told agencies it would be a very
effective time to start a pilot program for seeing how much
performance information they had. We ran a spring review in
1995, saying for your major key programs, what measures would
you use to judge their effectiveness?
So we've engaged, over the last 2 years, 2\1/2\ years, in
an on-going dialog, trying to bring to bear the focus of the
agencies, not only on the results, but, in fact, as you say,
that these should be involved in the explanations as to what
they're going to be accomplishing with the additional resources
they're asking.
Mr. Horn. Now, does the gentleman from Texas have any
questions he'd like to ask?
Mr. Sessions. Yes. I would. Thank you.
Mr. Horn. Yes.
Mr. Sessions. I would direct to either three of you, is
there any indication that you have when you hear back from
these agencies that there's some reluctance or some unknowing
of about what these strategic directions might be, that you
could direct them to their IGs, Inspector Generals, and/or to
this report that this committee came out with last year, as a
good indication about realistic approaches that need to be made
within their agencies, at least as a starting point?
Or do you find that they do understand this as strategic
direction and that they've got a good handle on it? So it's
just a general question and comment about feedback from these
agencies.
Mr. Koskinen. You've been doing well, Jim.
Mr. Hinchman. Chris, do we have any feedback from the
agencies on that issue? Do you know of any? I'm not aware of
any.
Mr. Mihm. Mr. Sessions, we haven't heard specifically of
agencies referencing the committee report or thinking of going
to their Inspectors General for decisions or questions about
strategic direction. To the broader issue that you're raising,
though, about a lack of strategic direction, that's one of the
major challenges to the implementation of GPRA. It's one of the
opportunities that GPRA affords, is that we've found an awful
lot of agencies where the basic approach of Federal program
management has been an adaptive approach over time, where we've
had new responsibilities overlaid on existing missions, such
that now some agencies have really lost their way.
And in Mr. Hinchman's prepared statement, he talks about a
couple of those. And so, there is a real need as agencies go
through the strategic planning process, to start first with
what is our purpose, what business are we in? And for some
agencies, that's going to be quite a struggle.
Mr. Koskinen. We have not had any feedback that would
indicate a difficulty. We have increasingly encouraged
agencies, though--and will again in a review and an assessment
we're doing this spring--to take a look at their major, what we
call, management challenges. And those challenges come in a lot
of different formats and have been drawn to their attention in
a lot of different ways. And encourage them to take a look at
what are their performance measures going to be for solving or
dealing with those management challenges.
And to the extent that they are significant, they should
be, we think, reflected in their overall strategic planning
effort. But as Mr. Mihm noted, the strategic planning effort
deals with, ultimately, the basic goals and missions and drive
of the agencies. And a lot of the particular IG reports or
other issues are significant, but not clearly sufficient to
cover the wide level of activities going on.
I would note, also, in response to your earlier discussion
with the majority leader, that I very much appreciate your
concern that agencies not come forth with fear and trepidation
and concern that nothing good is going to come out of this for
them. As Woody Hayes once said when he was coach at Ohio State,
why did he like forward passes, ``two out of three things that
happen to you are bad.''
Part of my concern has been that the agencies may, over
time, feel that nothing, everything will be bad with measures,
that it will only be used as a way of justifying fewer
resources. I think to the extent that we can in a bipartisan
way and in a cooperative way--a partnership between the
administration and the Congress--get everybody to understand
our goal here really is to be effective.
We may argue, as noted earlier, about whether the
government ought to be doing one thing or another, but we all
ought to agree, once the government is in an activity, it ought
to be doing it in the most productive way possible. And as I
noted in my prepared testimony, we need to have people
understand that if an agency is not performing well, the answer
may not be fewer resources, the answer may be more resources.
On the other hand, an agency that's continually moving
along may turn out to be a lower priority over time, and we may
decide that the performance isn't good enough and we won't get
increased performance, there just is no way to turn it around
with resources or management changes.
But those dialogs need to be held, and I think, as I say,
your focus on the positive aspects of it are important, because
I think agencies need to understand that this is an important
dialog and, at least, on occasion some good things will happen
as a result of a dialog, as well as some hard questions being
asked.
Mr. Sessions. Good. Thank you. Let me just say this, that
the work that you do is in the best interest of the taxpayer,
should continue. And I think, Mr. Chairman, this committee
should do all we can do to reinforce not only the work you're
going to do, but to present a positive spin to all managers of
the government, that they must comply, but it's up to them what
they present.
And then we will get into an oversight, if necessary, of
the discussion of the priorities. Thank you, Mr. Chairman.
Mr. Horn. Thank you. The gentlewoman from Maryland.
Mrs. Morella. Thanks. Just as a followup, Mr. Koskinen, I
was looking at an article here in the Washington Post, which
quotes Franklin Raines and states that--OK. ``He encouraged
agencies to consult with congressional committees but requested
that all substantive documents related to strategic plans
should be provided to OMB beforehand.''
Is that accurate?
Mr. Koskinen. Well, they've all, actually, been provided to
OMB. I mean, as Mr. Hinchman stated, these plans have been
under review with us for the last 2 years as they've evolved.
And what we've told the agencies is they need to consult with
the Congress, they need to provide the most updated
information. And to the extent that they are providing to you,
we'd like to know what that information is. But at this point,
as I say, they've already submitted the bulk of their material
to us. So we have it under review. So it's not an obstacle.
It's not as if the agencies have been off on their own and
we've never seen it. We've seen the information and our
encouragement to the agencies now is they need to discuss their
basic goals and measures and where they're going with you.
Mrs. Morella. So they've already--what you're saying is
that since they've already presented some of this material to
you, they can move forward?
Mr. Koskinen. Yes. Right.
Mrs. Morella. But they need to present it to you. I mean,
it is a requirement.
Mr. Koskinen. Yes. It's not an obstacle because they've
already done it. But it is part of the normal process, that
they would continue to deal with us.
Mrs. Morella. It is part of the process that they report
it.
Mr. Koskinen. I would renew my offer. If there is ever an
area where someone feels that an agency is not being
forthcoming--and worthy explanation for that, I would be
delighted to make sure that we resolve whatever issue there is
promptly.
Mrs. Morella. Mm-hmm. Mm-hmm.
Mr. Koskinen. I'm not aware of any at this point.
Mrs. Morella. OK. I see that same statement is quoted here
in the memorandum for the heads of executive departments and
agencies, ``All substantive documents related to strategic plan
should be provided to OMB beforehand. And OMB comments ensuring
consistency with national program and budget policies should be
incorporated before the documents are given to Congress.''
That's correct, though? Right?
Mr. Koskinen. That's correct.
Mrs. Morella. Thanks.
Mr. Koskinen. And in fact, I'd be happy to put into the
record that letter which pursues--is pursuant to the guidance
we gave a year earlier encouraging congressional consultation.
As noted, our goal is primarily to make sure that when you get
engaged in a dialog with the agencies, you're engaging with a
dialog with the administration--with the administration's
support, that there's--and that's our role in OMB, is not to
think up new things, it's basically to make sure that when
agencies make presentations to you on major matters like this,
that you're not going to find out later on that that
presentation is disowned because it doesn't reflect the
understanding of the President's priorities or our view of
where we're going to be going with it.
But as I say, at this juncture, all of the agencies are
sharing that material with us. We're giving them feedback. We
expect to have another assessment starting in the next couple
weeks with them of where they are. Our problem is less--our
concern is less what they're doing with those plans. Our real
concern is making sure that they have the consultation with you
and that they complete acceptable and useful plans for
submission to all of us by next September.
[The information referred to follows:]
[GRAPHIC] [TIFF OMITTED] T9381.041
[GRAPHIC] [TIFF OMITTED] T9381.042
Mrs. Morella. OK. Thank you. Thank you.
Mr. Horn. As I understand, where we are on this question
and answer, the consultation can be oral up here.
Mr. Koskinen. Right.
Mr. Horn. And they can talk to us and we can talk to them.
But when the chips are down, what they put in writing is
cleared through OMB.
Mr. Koskinen. That's correct. If they are going to give you
a plan, we should have seen it beforehand.
Mr. Horn. Right. Yes.
Mr. Koskinen. But--but there's nothing that we----
Mr. Horn. So I don't think any of us are deluded that OMB
won't be involved. And I think if Members are concerned about
what the agency suggests that was knocked out, we can ask them.
Mr. Koskinen. You can ask them.
Mr. Horn. And they have to tell us, just as we do, what did
you ask them in money.
Mr. Koskinen. Exactly.
Mr. Horn. And then what did they do to you?
Mr. Koskinen. And at that point, you'll have exactly the
right information you need, which is what the agency suggested
and, for whatever reason, we didn't want to put in, and then we
can have a dialog about that. Our concern is that if we don't
have that process, you'll get agency discussions and you'll
move forward with them only to discover after the fact that
that's been--turned out to be a problem and the administration
is not supporting that position.
But the chairman has it exactly right, that the agencies
are encouraged to have those discussions with you,
freewheeling. They should be talking with you. And we encourage
them to engage you in a dialog in your perspectives of what
those goals and missions and objectives ought to be,
recognizing that the final plans will be agency plans as part
of the administration. But as I say, if you have ideas that are
not reflected, the cover letter for those plans should reflect
that for you.
So they should say, we had congressional consultations and
the Congress said we ought to have a mission statement that
looked like that. We have a mission statement that varies
somewhat, and now you can take a look at the differences. So
the important point is to get all of that out so people
understand exactly where everyone is.
Mr. Horn. Let me go back, as the gentlewoman--let me go
back to a couple of areas. Mr. Hinchman, you mentioned the
report on ``consultation'' that you are preparing for Budget
Chairman Kasich. If you would be good enough to send Mr. Burton
and Mr. Waxman, myself and Mrs. Maloney copies of that, we'd be
most grateful.
Mr. Hinchman. Of course, Mr. Chairman.
Mr. Horn. We'd like to keep up on what's going on here, and
there's no use asking you twice. Just copy us. Now, let me ask
you, Mr. Hinchman, on the basis of what the General Accounting
Office has learned, do you plan to propose any changes to the
legislation when you report on June 1, 1997? Do you have a
number of changes that will be coming to----
Mr. Hinchman. I think that we do not expect to report new
changes. I think our view is that the framework in the statute,
as I said in my testimony, is sound and that we need to try to
make it work. And that it's not time yet to begin thinking
about changes in that structure.
Mr. Horn. OK. Now, one of the concerns that we have is on
the various pilots. Some of them relate to those agencies that
are also on your high risk list, which we will begin discussing
tomorrow. For example, the HUD Office of Chief Financial
Officer. Apparently, the department cannot get an opinion on
its audited financial statements and has serious and pervasive
weaknesses in its internal controls that cause it to be on your
1997 high risk theories. And the EPA Superfund program. There's
another one.
Mr. Hinchman. Mm-hmm.
Mr. Horn. What is your feeling on this in terms of being a
pilot when we have so many problems? Is that good, bad? Does
that just force them to focus more attention on it and solve
the problem? And why haven't they?
Mr. Hinchman. I think, in general, we would say that
participating in the pilot program has been good for agencies,
that those agencies that have been in the pilot program are a
few steps ahead of others in achieving effective implementation
of the requirements of the act. And I think we will see that
when we see the 1999 plans. That is to say that those, in
general, those pilot agencies, will do the better jobs of
meeting the requirements of the act that time around.
With respect to specific cases like HUD, I don't think that
we can expect that participation in the pilot program is going
to solve HUD's problems. HUD has made progress, however, and
I'm hopeful, I like to think that its involvement in the pilot
project has helped focus its thinking on the kind of steps
which will lead to progress. Our high risk report will say that
things are better at HUD than they were 2 years ago.
But you are right. Things are not OK, and there is more
work to be done there.
Mr. Horn. Let me move to the Forest Service. It's also
listed as a pilot for performance plan phase. I'm told its cost
accounting is abysmal.
Mr. Hinchman. Mm-hmm.
Mr. Horn. It doesn't track the cost with associated
revenues on a consistent, logical basis as good cost accounting
practices dictate.
Mr. Hinchman. Mm-hmm.
Mr. Horn. It would seem that the pilot implementation would
require better cost accounting. Have you seen any improvement
in the Forest Service management lately?
Mr. Hinchman. We currently have work underway concerning
Forest Service management. I am not in a position, today, to
say exactly what the outcome of that will be. There is no
question, though, that the Forest Service does have financial
management problems. It is not unique in that regard. I think
that one of the reasons I talk about the Results Act as being
part of a framework of statutes is because I think that solving
our information technology and financial management problems is
a critical part of solving our general management problems.
And we're going to have to rely on those statutes working
together to make the government a well run institution.
Mr. Horn. Do you want to comment on any of these?
Mr. Koskinen. I would just echo Mr. Hinchman's comment that
I think wherever we've had agencies participating in pilots,
it's been a benefit to them as well as to the statute. I think
it has helped focus them, not only on improvements, but
actually on how to measure those improvements, and that's one
of our biggest challenges, is to not just keep coming back
every year saying, well, things are a little better.
We need to have actual measures. And I think the
application of the statute and through the pilot program is a
significant step in the right direction.
Mr. Horn. As you know from the private sector, there have
been experiments with looking at a particular corporate culture
of a firm, a plant, especially when you've merged maybe three
or four unique companies under one conglomerate. Has anybody
looked at that from the point of the Federal Government, where
you think in these pilots, now, that you have a good cross-
section of the government? Do you feel that you have or are
there other ones, perhaps, you should convince to be pilots?
Mr. Koskinen. Well, the great genius of the act was to
allow us to have the pilot program phase and have the agencies
as well as us learn. Now what we're doing is turning the whole
government into a pilot. In September of this year, everyone is
supposed to show up with a strategic plan, has to show up with
a strategic plan, and in February, next year, they will all
show up with a performance plan.
So that at this point, we're out of the pilot phase and
we're into the actual full implementation phase.
Mr. Horn. Mr. Hinchman, back to you. In terms of your
testimony, you stated that the Department of Defense is unable
to properly manage its cost resources, and that the critical
cost data are absent for almost all of the department's non-
cash assets such inventory, equipment, aircraft, missiles.
Mr. Hinchman. Mm-hmm.
Mr. Horn. I'm just curious how they're doing with
implementing the pilot project.
Mr. Hinchman. I think that financial management at the
Department of Defense remains a very big challenge, and I don't
think that we will see that problem fixed in the near term. And
obviously, part of a good financial management system includes
cost accounting systems. And I think we all share the goal of
reaching a point at which financial management, including cost
accounting within the government, meets private sector
standards. DOD is not there today.
Mr. Horn. We found in our hearing last year of what did you
do with the $25 billion, and they said we didn't steal, or
nobody stole, but we just can't find it all. Forty-nine
accounting systems exist in the Department of Defense. Anything
happening to consolidate that? And if you were suddenly made
the Chief Financial Officer of Defense, what would you do?
Mr. Hinchman. I would begin----
Mr. Horn. Besides go to Australia. [Laughter.]
Mr. Koskinen. That's right.
Mr. Horn. What would you do?
Mr. Hinchman. I would begin a strategic planning process to
determine what the goals of that system need to, and begin
developing plans to move toward those goals year by year. I
think it's going to be a long-term process.
Mr. Koskinen. There is--I would note--that there is a
strategic plan in this particular area, to over a reasonably
definable period of time, migrate those systems to five basic
financial accounting systems. It's not easy. It's been a
project underway for some time, but they have begun to make
significant progress. But I think Mr. Hinchman is right. This
is one of the major challenges in the government, is to, in
fact, work with the Department, which is very focused on this,
in bringing its financial system up to date.
Mr. Horn. Well, we know they won't be able to give us a
balance sheet, I think. Both IRS and Defense, for 4 years now,
everybody said they can't possibly meet the law on that. Do you
feel that is still true?
Mr. Hinchman. I believe that we will have financial
statements from the Department of Defense when it's required
under the CFO act. I do not know, at this point, what the
opinion in the statements will be.
Mr. Koskinen. Right.
Mr. Horn. Any reaction on that?
Mr. Koskinen. I think that's correct. We are--we have
actually worked jointly--the Treasury Department, GAO and OMB--
in developing and preparing for the governmentwide financial
statement required under the CFO Acts and Government Management
and Reform Act, and, clearly, we all are working together with
the areas you've discussed and some others, to make sure that
we comply with the statute.
So I think, at this point, we've arrayed all the resources
in the government together in a very cooperative and very
focused effort to see if we can improve these problems.
Mr. Horn. Before I yield to Mr. Sessions, let me ask you
one question while we're on this topic. IRS has had major
problems implementing the new technology down there.
Mr. Koskinen. Yes.
Mr. Horn. We went through this with FAA 3 years ago.
Mr. Koskinen. Uh-huh.
Mr. Horn. Absolute basket case. And we have this throughout
the government, now. What have we learned from these
experiences, either from the OMB side or the Comptroller
General side.
Mr. Koskinen. Well, I won't give you my full half hour
speech that I gave yesterday morning.
Mr. Horn. Give me your executive summary.
Mr. Koskinen. The executive summary is that thanks to the
assistance of this committee and the Governmental Affairs
Committee, we passed the Information Technology Management
Reform Act, now known and referred to as the Clinger-Cohen
Act----
Mr. Horn. Right.
Mr. Koskinen. Which fundamentally changes the way the
government plans for, acquires and manages information
technology. Again, it was--we had the benefit of a lot of
insight and experience and reviews by GAO, in which we drew on
the promising practices or best practices of 10 of the best
private sector companies who use information technology. We
know have Chief Information Officers in every agency. They are
focused on dealing with what we think were the fundamental
weaknesses in the prior system.
Mr. Horn. But what were those weaknesses?
Mr. Koskinen. Fundamental weaknesses are, first of all,
partially driven by the nature of the procurement system. We
tended to design large complicated systems all on one
procurement so that we would be buying systems and planning
them over 8 to 10 to 12-year time horizons. The best private
sector companies buy systems with deliverables no farther out
in time than 12 to 18 months.
A corollary to that means that if you are designing a large
system, you need to, in fact, then buy it in modular or phases,
with testing of each phase to make sure you're moving in the
direction in which you want to go. Another major lessen of the
private sector is that these are not technology questions--the
problems--they are actually management questions.
And the best companies, before anyone automates anything,
ask the question of A, do we need to do this work at all?; B,
if it needs to be done, is there someone else who can do it
better? And probably most functionally and important in dealing
with not only the government's problems, but the private
sector's problems, if we need to do the work and no one else
can do it better, have we restructured and re-engineered the
way the work is done to be able to maximize the impact of
information technology.
A corollary to that is, have we re-engineered the work so
that we can take advantage of off the shelf software and
existing systems, rather than customizing a new system to meet
what is often an idiosyncratic way of doing the work.
Mr. Horn. Yes. Since we knew all that 25 years ago, does
this mean the role of Assistant Secretary for management has
failed in these departments?
Mr. Koskinen. Well, I would tell you that A, people didn't
know this 25 years ago. So I would challenge on that.
Mr. Horn. But we did. On the systems that--look, the
dumbest thing you can do is bring in a computer, which they
will sell to you with all the wonderful things they can do with
it, and not clean up your systems to start with, and ask, are
you doing it, just as you said, and get rid of it. And then you
automate that. The other dumb thing you do--and the FAA did
that regular--is you don't get closure on everybody's great
idea. And there's nobody managing it. It's everybody doing add-
ons. McNamara got into that trouble in the early 1960's with
building a plane that had to do everything, which didn't work.
Mr. Koskinen. I would respectfully note that the government
has no monopoly on these problems, that, in fact, there are
vast numbers of failed systems right now in the private sector.
A study last year showed that over half of the private sector
systems being designed last year and implemented either didn't
work or came in over budget and did not come in on time.
So that these lessons which are straightforward and
understandable are not technological lessons, have not
necessarily been out there in everybody's mind for 25 years,
and the government has not led the failure parade. There are,
as I say, far more dollars that have been spent on failed
systems in the private sector in the last few years than in the
government.
That doesn't mean that we don't need to learn the lessons.
And that's where GAO's reviews were very helpful. They went out
and didn't look at the private sector generally because if they
had done that, they would have seen a lot of failed systems as
well as successes. What they said was what are the best
companies and what are their practices, and what can we learn
from those. And I think the government, if we implement the
Clinger-Cohen Act effectively, can become a state-of-the-art
acquirer, manager and user of information technology. But we'll
continue to need the support of this committee, as well as that
of the agencies, if we're going to do that.
Mr. Horn. Now, when you say effectively implement that act,
you're talking about the CIO, I assume.
Mr. Koskinen. I'm talking, actually, about the CIO being a
catalyst for the agency coming to grips with these problems.
Mr. Horn. Right. Now, are there situations where we have
the CIO also holding other responsibilities, as we have in
Treasury with the Assistant Secretary for management also being
the Chief Financial Officer, something I think is just crazy,
and yet we haven't done anything about it?
Mr. Koskinen. There are those. If you'd like, we could hold
a hearing on this. There's a long discussion going on about
that.
Mr. Horn. No. When you've got a problem and we give you the
authorization to do something about it, it seems to me there's
got to be focus. And why these problems continue is many of
these people aren't really devoting full time to either the CIO
or the CFO. It's like having the Inspector General be chewed
away by some other agency responsibility.
Now, since that's an adverse relationship in many cases is
why we don't do that, I gather. But I must say it bothers me
when we have that kind of overlap.
Mr. Koskinen. Yes. Our premise and assumption has been that
we should not have that overlap. There are three or four cases
where we--on what we call an evaluation mode--have allowed the
agencies to combine the CIO and the CFO. That's primarily where
the CFO both has significant IT background and experience and
where a significant part of the information technology problems
in the agency come within the CFO's jurisdiction, so that
bifurcation did not necessarily look like the most logical way
to proceed.
But in those cases we have told the agencies, we, with GAO,
will be evaluating, at the end of their first year, the
effectiveness of that operation. And virtually all of the other
agencies where we're working, we have a CIO who is free
standing. That, by itself, will not self execute. There are
other issues that need to be addressed that we are working with
the agencies on.
And to make sure that the CIO is a catalyst for reform, a
leader of effective implementation. But much like GPRA,
effective implementation of information technology requires
that the senior program managers and the senior managers of the
agency participate in the basic decisions, that it not be left
to what I call the tekies or the people who are knowledgeable
about systems. They need to be involved, but the basic
questions and the basic failings often times are not
technological issues, they are actually program management
issues.
Mr. Horn. No. I agree with that. Mr. Hinchman, Mr. Mihm, do
you have any reaction to that?
Mr. Hinchman. No. I think that Mr. Koskinen is exactly
right about that. And I think the most important point he
makes, and one that we ought to all take some comfort in is
that the Clinger-Cohen Act, in fact, reflects the lessons that
we have learned both from experience within the government and
in our study of the experiences of others who have run
successful information technology programs. That act embodies
what we know.
Mr. Horn. You've done a fine job on that best practices
series you have, and I think all of us have profited from it.
Mr. Sessions. Gentleman, Mr. Sessions.
Mr. Sessions. Thank you, Mr. Chairman. Mr. Koskinen, I
appreciate you taking our questions and comments as the way
they're intended, and I hope that they can continue to be
positive, but I must confess you'll probably be able to go home
today to your Director and say that you turned in an honest
day's work for an honest day's pay, and that he would not want
to switch places with you.
I'd like to, if I could, to say a couple things. The
chairman was going into to some of the questions that I have
about the IRS. Obviously, many people have known. It's been
widely publicized. Some $4 billion that was spent by the IRS to
begin the development of a new computer program. I heard you
say, probably many of the problems are with program management
within getting these data systems up and working.
My background includes that of being at Bell labs for
several years where I was deeply involved in the intricate
management of programming and those systems. Start with me, if
you can, on some sort of a dialog on where the IRS is in this
general process. Were they in the pilot program? Were they
considered for that? What sort of help is OMB giving them to
get them to direct themselves? Do they have any inward
recollection that the perception is that they are not as
effective and efficient?
I'm not going to ask you to reach the final conclusion that
really begs itself with, do we have a system that we can put on
a sheet of paper to draw a flow chart to with our tax code? But
let's keep this within the confines: Where's the IRS? How
realistic are they? What is your working relationship with
them? And where can we expect any near term advantages or
something that would be considered positive out of this agency?
Mr. Koskinen. I'm happy to respond. And I think that your
point is well taken that this is an important dialog. With
regard to the pay issue, I think if we hold three hearings for
the price of one here, then I'm going to ask for a bonus as it
goes.
But let's deal with the IRS. It's an important question.
First, I think the leadership at the IRS as well as the
Treasury Department, as I said earlier, recognizes that there
are serious issues to be addressed within the IRS. I think
there is no sense of denial. Whatever may have happened in the
past, there is a real attempt to come to grips with these
issues. They are working very carefully with GAO--people on
their systems.
But more significantly, under the leadership of people in
the Treasury, as well as in the IRS, triggered and headed by
the Chief Information Officer, they are looking at their
strategic plan. They are basically saying, what are our goals
over the next 3 to 4 years, what system developments match
those goals, and which system developments are a lower priority
and, therefore, should not have our attention.
Because one of the things they have discovered is that they
have a number of systems that will achieve various goals, but
it's clear there's no capacity there--and because of the huge
undertaking--to do them all at once. And what they need is
exactly what you're saying: Say, where are we going; what are
our major problems; what are the major expectations that people
have that we need the most improvements. Let's focus on those.
Let's make sure that we have a coherent plan for getting from
here to there. And in particular, let us take a hard look at
one of the fundamental pesky questions, and that is, of the
work that needs to be done, how much of it has to be done here,
how much of it can be done somewhere else, how much of it is
out there already in systems or in processes that we could take
advantage of.
And I think that's a big breakthrough for the Internal
Revenue Service that, historically, has prided itself,
appropriately, on doing all of the work internally, developing
all of its systems internally. But as life gets more
complicated and as the alternatives get to be more complex,
that process hasn't stood them in good stead recently. And I
think they recognize that.
So I'm confident that they are addressing the problem, that
they understand the magnitude of it and that they are coming up
with constructive solutions. I mentioned that management--
modernization management board that the Secretary of the
Treasury has set up. We have agreed--from OMB--to support that
process. Steve Kelman, the Administrator of the Office of
Federal Procurement Policy at OMB, and I serve as adjunct
members of that committee.
We are not in a position where we could exercise direct
authority. We attend the meetings, though, and have
participated with them, and have a better dialog now than we've
ever had with the IRS and the Treasury about the problematic
implications of what they're doing and the budgetary
implications of what they're doing. As we've said, we're
prepared to give them one stop shopping. That is, they bring
these issues up in the modernization management board. If we
have OMB perspectives, we will bring them to bear there and
we'll engage in that dialog so they don't have to go through
the process twice.
But the bottom line, much like defense, is--and, as you
know far better than most, with your background--these are very
complicated, difficult problems. Were talking about literally
hundreds of millions of transactions and relationships, and
it's a phenomenal amount of data. And they have major obstacles
to overcome. So I would be the last one to tell you that in the
next year it will all be done.
But I am very confident that in the next year, you will be
able to see measurable progress, that we will develop plans
there, where we will have benchmarks that basically have broken
it down into modules and components that can be monitored, and,
also, that lead more directly and clearly to the achievement of
mission goals and strategic efforts.
Mr. Sessions. So what you're saying is you believe that
their work will result in a document--a blue print--that will
be a guiding principle for them, measurable, realistic, and
it's something that represents the true nature of the business?
Mr. Koskinen. Yes. Over time I think that's exactly right.
Mr. Sessions. Good. Mr. Chairman, thank you for the
questions. Best of luck. I hope that spirit in which you know
that we're involved in this process is one that will translate
throughout the government. And I say this over and over again
because I think that every piece of government, all the
agencies, need to recognize that mission statement orientation
will get them back to the point of what their core business is.
And if the taxpayer needs it supported, then that will be done.
Mr. Chairman, thank you for the question.
Mr. Horn. Well, we thank you for your good questions. Also,
there's only a few more to go and you can all get a decent
meal. [Laughter.]
You'll have put in your day's work before noon, you can
tell the Director.
I want to start with Mr. Hinchman on this. Beginning in
fiscal year 1999, the performance plans required by the Results
Act may include proposals to OMB to waive certain
administrative requirements, including staffing levels,
limitations on compensation or remuneration, and prohibitions
or restrictions on funding transfers among budget
classifications in return for specific individual or
organization accountability to achieve a performance goal.
The expected improvements in performance that would result
are to be quantified as part of the request for the waiver.
Now, the pilot projects for this stage, called pilot projects
for managerial accountability and flexibility, were never
implemented because the OMB did not improve any pilots. Did the
GAO review these pilots? Why, in your opinion, did OMB not
improve any pilots? And what impact does that have, in your
opinion, on the potential success of the Results Act? Mr.
Hinchman, it's all yours. We'll get to your colleague in a
minute.
Mr. Koskinen. In 30 words or less.
Mr. Hinchman. Yes.
Mr. Horn. That's right.
Mr. Hinchman. I think that we do not yet know what the
impact of the waiver provisions in the Results Act are going to
be. I think we didn't find any what OMB felt were some
appropriate opportunities to apply the waiver authority. There
were some situations, I think, where agencies originally sought
waivers and then later concluded that, in fact, authority to do
what they wanted to do existed anyway, or legislation changed
the underlying constraints against which they were working, and
that, as a result, we just haven't had a good test of the
waiver authority.
I don't think that we're in a position to say that OMB has
been unwilling to use that authority is circumstances where it
seems to us to be obviously appropriate. I don't think that our
work suggested OMB is opposed to the waiver authority. As I
said, I think it's just that we haven't yet had an environment
in which we can get a good test of it. And we're going to have
to wait and see what happens.
Mr. Koskinen. Yes. Let me just make clear, we are strong
supporters of the concept of administrative and other
flexibilities, regulatory flexibilities for people if they can
tie it to our performance measures. To some extent, part of the
problem in the act is the success of this committee and the
Congress in generally relieving agencies of a lot of
administrative requirements, a number of them in the
procurement area.
The major procurement reforms that this Congress and this
committee have supported eliminated a lot of potential requests
for waivers. The Office of Personnel Management threw out a lot
of old time regulations and requirements on personnel that,
again, would have been very good subjects for--in contemplation
for waivers.
So when we reached out to the agencies for proposals, we
discovered that part of the reason, beyond that, that we didn't
get very good candidates was, first of all, they wanted waivers
from statutory requirements, which the statute does not allow.
It really talks about administrative waivers. So a lot of their
waivers were from statutory requirements. Or they wanted
waivers from limitations on agencies outside the executive
branch that we did not have the ability and the authority under
the act to grant beyond that.
Also, when we then dwindle down to the precious few, we did
not have what we thought were very--we didn't have a large
number, and the small number that we did have didn't have a
very clear nexus between the relative limited waiver they
wanted and any improvement in performance. And so, our judgment
was that at this point in time, we would not gain anything by
pursuing the relatively small number of applicants for very
minor waivers.
Mr. Horn. Who reviewed the pilots on managerial
accountability and flexibility, and how much time did they
spend with the agencies before deciding the pilot proposals
were unacceptable?
Mr. Koskinen. Those come through OMB. Ultimately, they--the
whole process reports to me. The development of the proposals
and the request for them were generated by inter-agency groups.
So we had a range of people that we taxed for this. The actual
development of this particular number was handled under, at
that time, my supervision by one of our senior career people,
who has, in fact, been the guru of GPRA. And he spent a
significant amount of time trying to generate acceptable
proposals, working with other agencies and OMB to make sure
that we hadn't overlooked any possibilities that would----
Mr. Horn. So these proposals were circulated around the
program areas of OMB?
Mr. Koskinen. OMB.
Mr. Horn. And coordinated.
Mr. Koskinen. We went to the agencies in the program areas,
saying what are their--here's a whole set of possibilities,
which of these are you willing to waive, in terms of the
agencies, and in terms of program managers, to try to, again,
see what was there out there that agencies might find
attractive.
And we sent to the agencies, then, that list, saying here
are a whole set--it wasn't very large by the time we got done--
but here are a range of waivers that you could apply for and
participate in the pilot program for. And as I say, by the time
we got done with it, we got a number of responses back, but a
number of them, most of them were really out of bounds for the
purposes of the statute.
Mr. Horn. Was this a written reaction or did you sit around
a table and go over it with them line by line and say, maybe we
can make a deal on this?
Mr. Koskinen. Yes. Most of it was by document. So we don't
have--we don't have enough people to go to all of the agencies
and have those conversations. But when we had applications,
then we would talk with the agency about that. But----
Mr. Horn. So they submitted it. OMB pursued it, asked their
program pro what they thought, maybe some other agencies, maybe
OPM, whatever?
Mr. Koskinen. Right. And then our final judgment----
Mr. Horn. Then you gave it back in paper, but nobody really
sat down and had a dialog on those?
Mr. Koskinen. About the ones we made? Yes. When we got down
with it all and looked at the final applications we had from
the agencies, our judgment was that it was not worth pursuing
those at this time.
Mr. Horn. Now, did the agencies make any reaction to that
judgment in terms of suggesting improvements or suggesting
changes on their part or was that just the killer?
Mr. Koskinen. I'm not aware of any further conversations
with the agencies.
Mr. Horn. OK. Are you going to encourage any
experimentation with managerial flexibility and accountability
before fiscal year 1999? Or is this it?
Mr. Koskinen. As you know, one of our major initiatives,
only partially growing out of this experience, but out of a
number of other experiences, is to propose a significant number
of performance-based organizations, as we call them, in which
we have pulled together statutory waivers in procurement and
personnel areas. And we, in effect, think that those will serve
very clearly as pilot programs, as it were, for what improved
performance can you get if you eliminate some of the statutory
limitations in procurement and personnel.
And in fact, the proposals that we're developing and the
template require that any of the performance-based
organizations, to obtain those flexibilities, have to enter
into a very clear performance agreement between the head of the
organization and this cabinet secretary, measured on an annual
basis. And the new chief operating officer for the performance-
based organization is there under a term contract and can be
dismissed if performance is not adequate.
So that, as I say, we did not design with the Vice
President and the National Performance Review the concept of
performance-based organizations in response to our differences
here, but we think that we will get more fulsome experimental
results out of these performance-based organizations than
looking at an individual, independent waiver and saying, what
performance improvement do we get from that.
Mr. Horn. Let me ask you now. In terms of encouraging
agencies to propose pilots in this managerial accountability,
flexibility area, what do you plan to include in your report
required under Section 9704C of the act? It's apparently due in
May of this year.
Mr. Koskinen. In May of this year we will give you the
background and experience. GAO has a draft report out, as well,
on their own, and we will share that with you in May as
required.
Mr. Horn. Yes. We'd like to ask formally that OMB provide
the staff on both sides of the aisle here and committee with
copies of all the proposals submitted to OMB for managerial
flexibility and accountability in the pilot phase including any
notes or reasons the proposals were not accepted. We just need
to get a feel for this particular aspect of the process.
So if you and majority and minority staff could work out
what we need in that area, we'd appreciate the chance to review
that on both sides. Because I think there's an interest in
getting focus on managerial flexibility.
Mr. Koskinen. I would commend to you, again--not to over
sell the point----
Mr. Horn. OK.
Mr. Koskinen. Your review and support of the performance-
based organization concept, which, as I say, is really focused
on managerial flexibility in a much broader way than we've been
able to deal with under the statute, or will be able to deal
with under the statute.
Mr. Horn. Let me ask you one last question and then Mrs.
Maloney can have the final word on the subject. In terms of
consultation, which we've talked about, with the authorizing
committees and the agencies, do you have any feelings in terms
of OMB consultation with this committee or others?
Will that process be orchestrated to assure that the
agencies do talk to their congressional counterparts and not
just make it a staff thing, but sit down with Members in, say,
agriculture, if you're in agriculture--this kind of thing--or
you sit down with Government Reform and Oversight and
Governmental Affairs officials.
Mr. Koskinen. We are doing our own strategic planning
exercise, which has been instructive, I think, for all the
staff at OMB. In fact, later this month, as I noted in my
prepared testimony, we're having an agency-wide stand down day
to, in fact, develop the next iteration of our plan. And we
will be here consulting with you as the other agencies are.
We are encouraging the agencies. We obviously can lead them
to water. We cannot necessarily make them drink. But I think,
we need also response from the hill. I think it's very
important, as you noted--this committee did in a conversation
with the majority leader--that the other committees,
themselves, be forthcoming in expressing their interest and
concern in this area, that the, in some cases, as we start to
evolve, it will be just as important for the congressional
committees to be interested and responsive as it is for the
agencies to be willing to consult.
We can manage our end of the process by continuing to
require that. We need some support from the hill across the
spectrum of committee activities and authorizers and
appropriators, for them to both become knowledgeable about the
act and then participate in that dialog.
Mr. Horn. Very good. Mr. Hinchman, do you have any comment
on these last few minutes of discussion?
Mr. Hinchman. No, sir.
Mr. Horn. The distinguished gentlewoman from New York.
Mrs. Maloney. Following up on your last comment on your own
strategic plan, you're required to consult with this committee
on that plan, and when may we expect to receive your
consultation and how do you propose to conduct it?
Mr. Koskinen. We will be up here before summer, well in
advance of our attempt to then finalize our plan. As I say, at
this point, we have an outline. We've had a strategic planning
process that started last summer. The budget process puts us in
the limbo from the first of October until about now, which is
why we're renewing it. I would expect that we would be here--
our plans are to have consultation with you and other stake
holders certainly before the end of May. And we would hope to
do it as early as April.
Mrs. Maloney. OK. The Department of Defense is the largest
Federal agency and has components which are themselves larger
than some agencies. To date, DOD has not provided guidance to
the various services on how to link goals and performance
measures, and GAO has found that many subordinate units are
unsure of how to implement the results law and are waiting for
guidance. And I'd just like you to comment on it. Do you know
when DOD plans to issue this guidance and if it doesn't, how
DOD plans to assure that the services and other units support
the overall DOD plans and goals?
Mr. Koskinen. I don't know the answer to that now. As I
noted, we are about to begin yet another assessment, agency by
agency, of where they are in their strategic planning process.
We had a detailed set of conversations with the Defense
Department last summer, and we will pursue that further this
spring. And one of the questions we will be pursuing is what is
their internal process, who is involved in it, and when will
they begin to have products.
Mrs. Maloney. Thank you very much.
Mr. Koskinen. Thank you.
Mr. Horn. Well, if there are no further questions, then we
thank all three of you for coming up and sharing your thoughts
with us on this very important subject. A lot of these seem to
be very simple laws, in a way, long overdue, but, without
question, they will make a difference in the executive
establishment and hopefully in the congressional establishment.
Because it's going to take two working together to solve a
lot of these problems. And that's why the consultation is so
important between executive branch legislative committees. And
that's why Mr. Armey's role, in particular, in having the war
room to make sure a few things get done around here in the
limited amount of time that we have as elected Members.
And we thank you for your thoughts on that. We welcome any
ideas you have. But we're not talking about amending laws,
we're talking about implementing the law.
Mr. Koskinen. Right.
Mr. Horn. So without any further questions, this hearing is
adjourned.
[Whereupon, at 12:20 p.m., the committee was adjourned.]