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GOVERNMENT PERFORMANCE AND RESULTS ACT: STATUS AND PROSPECTS OF THE
RESULTS ACT
=======================================================================
HEARING
before the
SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
INFORMATION, AND TECHNOLOGY
of the
COMMITTEE ON
GOVERNMENT REFORM
AND OVERSIGHT
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTH CONGRESS
FIRST SESSION
__________
JUNE 3, 1997
__________
Serial No. 105-55
__________
Printed for the use of the Committee on Government Reform and Oversight
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___________________________________________________________________________
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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 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 ELIJAH E. CUMMINGS, Maryland
JOE SCARBOROUGH, Florida DENNIS J. KUCINICH, Ohio
JOHN B. SHADEGG, Arizona ROD R. BLAGOJEVICH, Illinois
STEVEN C. LaTOURETTE, Ohio DANNY K. DAVIS, Illinois
MARSHALL ``MARK'' SANFORD, South JOHN F. TIERNEY, Massachusetts
Carolina JIM TURNER, Texas
JOHN E. SUNUNU, New Hampshire THOMAS H. ALLEN, Maine
PETE SESSIONS, Texas HAROLD E. FORD, Jr., Tennessee
MICHAEL PAPPAS, New Jersey ------
VINCE SNOWBARGER, Kansas BERNARD SANDERS, Vermont
BOB BARR, Georgia (Independent)
ROB PORTMAN, Ohio
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
Judith McCoy, Chief Clerk
Phil Schiliro, Minority Staff Director
------
Subcommittee on Government Management, Information, and Technology
STEPHEN HORN, California, Chairman
PETE SESSIONS, Texas CAROLYN B. MALONEY, New York
THOMAS M. DAVIS, Virginia PAUL E. KANJORSKI, Pennsylvania
JOE SCARBOROUGH, Florida MAJOR R. OWENS, New York
MARSHALL ``MARK'' SANFORD, South ROD R. BLAGOJEVICH, Illinois
Carolina DANNY K. DAVIS, Illinois
JOHN E. SUNUNU, New Hampshire
ROB PORTMAN, Ohio
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
J. Russell George, Staff Director and Chief Counsel
Mark Uncapher, Counsel
Andrea Miller, Clerk
David McMillen, Minority Professional Staff Member
Mark Stephenson, Minority Professional Staff Member
C O N T E N T S
----------
Page
Hearing held on June 3, 1997..................................... 1
Statement of:
Koskinen, John, Deputy Director for Management, Office of
Management and Budget...................................... 7
Stevens, L. Nye, Director, Federal Management and Workforce
Issues, General Government Division, U.S. General
Accounting Office, accompanied by Chris Mihm, Acting
Associate Director for Federal Management Issues........... 20
Letters, statements, etc., submitted for the record by:
Davis, Hon. Danny K., a Representative in Congress from the
State of Illinois, prepared statement of................... 4
Koskinen, John, Deputy Director for Management, Office of
Management and Budget, prepared statement of............... 12
Radanovich, Hon. George P., a Representative in Congress from
the State of California, prepared statement of............. 6
Stevens, L. Nye, Director, Federal Management and Workforce
Issues, General Government Division, U.S. General
Accounting Office, prepared statement of................... 24
GOVERNMENT PERFORMANCE AND RESULTS ACT: STATUS AND PROSPECTS OF THE
RESULTS ACT
----------
TUESDAY, JUNE 3, 1997
House of Representatives,
Subcommittee on Government Management, Information,
and Technology,
Committee on Government Reform and Oversight,
Washington, DC.
The subcommittee met, pursuant to notice, at 9:30 a.m., in
room 2154, Rayburn House Office Building, Hon. Stephen Horn
(chairman of the subcommittee) presiding.
Present: Representatives Horn, Sessions, Davis of Virginia,
and Davis of Illinois.
Also present: Representative Radanovich.
Staff present: Russell George, staff director/counsel; Jane
Cobb, full committee professional staff member; Matt Ryan and
John L. Hynes, professional staff members; Andrea Miller,
clerk; and Mark Stephenson, minority professional staff member.
Mr. Horn. A quorum being present, the Subcommittee on
Government Management, Information, and Technology will come to
order.
This is a third in the series of oversight hearings on the
Government Performance and Results Act of 1993, commonly known
as the Results Act. Governments around the world are struggling
to provide services more efficiently, effectively, and at a
lower cost to their taxpayers.
Over the past decade, Federal management reform efforts in
the United States have stressed the need to measure results as
viewed by the client, the American taxpayer. As we have learned
in previous hearings, the Government Performance and Results
Act has enormous potential to focus the energies of the Federal
Government, making programs more efficient and effective and
restoring confidence in Government. In essence, the act
requires Federal agencies to ask and to repeatedly answer some
very basic questions: What is the agency's mission? What are
its goals? And how will the agency achieve them? How can the
agency's performance be measured? How should that information
be used to make improvements?
The Results Act envisions a major overhaul of Federal
activities and it therefore requires vigilant oversight. In
order to establish one aspect of this oversight, the act
directed the Office of Management and Budget and the General
Accounting Office to assess and report on the ability of the
agencies to implement Results Act requirements.
The act specifies that the Office of Management and Budget,
OMB, shall report on the benefits, cost and usefulness of the
plans, and reports prepared by the pilot agencies. These pilots
are essential to effective implementation of the act. From them
we must experiment with and learn about three aspects of
Federal management reform: performance goals, managerial
accountability and flexibility, and performance budgeting.
The law called for a minimum of 10 performance measurement
pilot agencies. But instead of 10 or another relatively small
manageable number, we have 72. This is troublesome. It looks
very much as though the executive branch attention to this law
is being spread too thin. The pilots were meant to provide
concrete experiences with success and failure in the
implementation of this act. I am afraid that in this case
quantity has become the enemy of quality.
OMB was also directed to identify significant difficulties
experienced by pilot agencies in preparing plans and reports
and to set forth any recommended changes to be made in the
Results Act. OMB issued its report on May 19th. The General
Accounting Office issued its comprehensive analysis of the
pilot agencies yesterday.
The Results Act provides a unique opportunity to view the
Federal Government on a comprehensive basis. In this context,
the executive branch should seek to identify and set the
priorities for the services that must be provided, the
activities that must be carried out, and the measurement of the
results that are achieved.
Congress considers the statutory requirements and timetable
of the Results Act extremely important. The act was
deliberately crafted to allow experimentation before mandating
requirements. For example, the pilot stage allowed agencies to
ask for relief from burdensome regulations in return for a
promise of greater accountability. It is unclear if this stage
has been implemented.
Also of concern is the quality and reliability of the
information provided to Congress in the performance reports. In
order to succeed, performance reports must be based from
information derived from accurate data and can be independently
verified. The data must be comparable not only from year to
year, but also between agencies performing similar functions.
Such data must also be consistently accumulated and reported.
If there are too many goals and objectives, the risk is that
few of those goals and objectives will be obtained. If there
are too many performance measures to be tracked, both the
agencies and the congressional committees will sink under the
weight of data and the Results Act will have failed.
There is no shortage of failures in the dust bin of Federal
management initiatives. From zero based budgeting to managing
by objectives, these previous efforts have failed because there
was little commitment to make them work. As chairman of this
subcommit- tee, I am afraid we are heading down the same road
with the Re- sults Act. I am surprised and disappointed by
OMB's scattered re- port. No doubt it follows the letter of the
law. It is less clear to me that what we are seeing so far
follows the spirit of the law.
It is worth recalling what we are about here. The
leadership in Congress has made an extraordinary commitment to
this effort. We are serious about changing the management
culture of the Federal Government. The culture needs to be much
more service oriented. The highest levels of the legislative
and executive branches of the Federal Government need to work
in partnership to identify and to solve the problems involved
in implementing the Results Act. Only then will we be on the
way to attaining the goals of the act and only then will the
public believe the changes are finally taking place in the
culture of the Federal Government.
The Results Act presents a unique opportunity to change
from a compliance-based system of accountability to a results-
based system. If it works well, we will be able to ensure that
the Federal Government's stewardship over resources and its
services to the American people are efficient and affordable.
If we are to be successful, a sample of the customers of
Federal programs, the taxpayers, will need to be consulted in
the development and measurement of goals and objectives.
This morning, we will hear from John Koskinen, who serves
as Deputy Director for Management at the Office of Management
and Budget and L. Nye Stevens, who is Director of Federal
Management and Workforce Issues at the General Accounting
Office. Each will report on his office's review of pilot agency
efforts to implement the principles of the Results Act.
We welcome both of you, but I first want to yield to the
gentleman from Texas, Mr. Sessions, for any opening that he
might have.
Mr. Sessions. Good morning, Mr. Chairman, and thank you so
much. I also would like to thank Mr. Koskinen, Mr. Stevens, and
Mr. Mihm for being here this morning. And as you all know, I
view the Results Act as being critical to the success of
Government and I am dedicated to that success also of seeing it
implemented properly.
We are here today I hope to learn more about the progress
agencies are making in consultation with Congress and other
stakeholders in preparing their strategic programs. Both OMB
and GAO have prepared reports on this status, and I know that
my staff and many of the committee staff, under the dedicated
leadership of the majority leader and also our Chairman Horn,
are working hard to ensure those strategic plans are up to
snuff. The responsibility for the success of the Results Act
falls upon a lot of people.
But I believe that today we are here because we have to
call on those people who were at the apex of the executive
branch to point us in the right direction, to give us
information, and to evaluate the process, and the progress that
we are making to come to this critical stage. I hope that today
we will be able to ascertain where we are and how closely we
are getting to that target, to hit the center of the target.
And so I am delighted to have each one of you here today.
Mr. Chairman, as always, I support and concur with the
words that you have given. This is important and this is
serious business. Thank you, sir.
Mr. Horn. Well, I thank you.
[The prepared statement of Hon. Danny K. Davis and Hon.
George P. Radanovich follow:]
[GRAPHIC] [TIFF OMITTED] 45062.001
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[GRAPHIC] [TIFF OMITTED] 45062.003
Mr. Horn. The gentlemen before us know the usual routine.
If you would rise, raise your right hands.
[Witnesses sworn.]
Mr. Horn. We will just simply go down the agenda and in
alphabetical order, John Koskinen, Deputy Director for
Management, Office of Management and Budget, one of our most
frequent witnesses before this committee. Welcome, John.
STATEMENT OF JOHN KOSKINEN, DEPUTY DIRECTOR FOR MANAGEMENT,
OFFICE OF MANAGEMENT AND BUDGET
Mr. Koskinen. Thank you, Mr. Chairman. I'm happy to be
here. I still am looking--is this on?
Mr. Horn. Is that microphone on?
Mr. Koskinen. Let me borrow your microphone. Oh, I see.
Mr. Sessions. You are catching on very early.
Mr. Koskinen. You can tell I've been here before.
Mr. Horn. You do know they are part of the legislative
branch. Their microphones work, but go ahead.
Mr. Koskinen. We'll talk to you about this in the budget
process during infrastructure support.
I'm pleased to appear before the committee this morning to
discuss implementation of the Government Performance and
Results Act of 1993 and to provide an assessment of our
progress to date in meeting its major requirements.
This committee was one of the leaders in the passage of the
act, and we look forward to continuing to work with you and the
entire Congress as implementation proceeds.
As a Government, we face major challenges. This is a time
of great fiscal constraint. Tight budget resources demand that
every dollar is counted. During a period of much public
skepticism about the Government's ability to do things right,
the Government must not only work better, but be shown as
working better, if we are to regain public confidence. GPRA, if
successfully implemented, will help this effort to improve
public confidence in the efforts of its Government.
To be successful, implementation will also have to be a
bipartisan effort. Recently, the House majority leader and
other Members of the congressional leadership have facilitated
the consultation process GPRA requires between Congress and the
agencies by coordinating meetings between agencies and the
appropriate congressional staff to discuss the agencies'
strategic plans. We look forward to continuing this cooperative
consultive process during the next few weeks.
Let me now summarize the conclusions of our report on GPRA
and discuss those aspects of the act and its implementation
that are our most immediate focus.
Looking at strategic plans, the act requires that Federal
agencies submit a strategic plan to Congress and OMB not later
than September 30, 1997. There is no more important element in
performance-based management than strategic plans. These plans
set the agency's strategic course, its overall programmatic and
policy goals, indicate how these goals will be achieved, and
are the foundation and framework for implementing all other
parts of GPRA.
The act requires agencies, when preparing their strategic
plan, to consult with Congress and solicit and consider the
views and suggestions of stakeholders, customers, and other
potentially interested or affected parties. OMB has issued
strong guidance supporting congressional consultation.
The administration is currently undertaking a strategic
assessment of agency goals and commitments. A focus of that
assessment is the agencies' implementation of GPRA and the
preparation of the strategic plans and the annual performance
plans that are due in September.
As a general matter, the agency plans reflect a serious
effort and allow us to conclude that agencies should be able to
produce useful and informative strategic plans by this fall.
OMB's reviews of agency efforts have also reviewed several
challenges.
Last summer, in our previous review, most agencies were
only beginning to link the general goals and objectives of
their plans with the annual performance goals they would be
including in their annual performance plan. Further interagency
coordination on programs or activities that are cross-cutting
in nature is also necessary. The efforts of the Office of
National Drug Control Policy provide a useful model for how
such coordination across agencies with overlapping
responsibilities might be carried out.
Looking at the annual performance plans, pursuant to the
statute, the first plans will be sent to OMB this September
with the specific performance goals that the agency intends to
achieve in the fiscal year.
The agencies and OMB gained valuable experience in
preparing annual performance plans through the pilot project
phase of GPRA. OMB has initiated a review of the performance
goals that agencies proposed to include in its annual
performance plans for fiscal year 1999. And of the joint
collaboration with the agencies, OMB has prepared guidance on
the preparation and submission of annual performance plans for
fiscal year 1999. And we expect agencies to produce useful and
informative annual performance plans for that year.
The act requires that a governmentwide performance plan be
annually prepared by OMB and be made part of the President's
budget. The governmentwide performance plan is based on the
agency annual performance plans that are submitted at the same
time. The first governmentwide plan will be sent to Congress in
February 1998, and will cover fiscal year 1999. In this regard,
we would welcome your views on those features that you believe
would make the plan informative and useful to Congress.
The agency's program performance report is the annual
concluding element of GPRA. The first program performance
reports, for fiscal year 1999, are to be sent to the President
and Congress by March 31, 2000.
Some agencies are experimenting with different formats for
performance reporting in the accountability report pilot
program authorized by the Government Management and Reform Act
that this committee played a pivotal role in achieving passage
of. These variations include various information on the
agency's performance as well as other statutorily required
information such as the agency's audited financial statement
and the Federal Managers' Financial Integrity Act report.
Turning for a minute to the pilot projects, GPRA required
that at least 10 departments or agencies be designated as pilot
projects for performance plans and program performance reports.
Pilot projects were designated in all 14 cabinet departments
and an equal number of independent agencies. The 28
designations included over 70 individual pilots in the
departments and agencies and covered approximately a quarter of
the entire Federal civilian work force.
Historically, the expansion of the pilots from the minimum
of 10 required by the statute has been viewed as an important
advance under the act. Therefore, I was disappointed to hear,
Mr. Chairman, that you think the result of this has been that
we have spread the process too thin.
Our experience has shown us that, in fact, one of the
reasons that as many people are actually using performance
information in advance of the act--as is demonstrated by the
GAO report--is because of the fact that more people were
actually involved in the pilots than the act required. One of
the major lessons to be learned from the pilots is to expand
the number of people in the Government who are focused on the
formulation of performance goals and measures, and the actual
achievement of those measures. Therefore, we continue to think
that, in terms of the overall implementation of the act, our
ability to involve more Federal agencies or more Federal
employees was a net gain.
The most important conclusion reached on completion of the
performance measurement pilot projects is that, without these
pilots and the time given to agencies by the act across the
Government to gain experience in performance-based management,
there would be little prospect for a successful implementation
of the act governmentwide. In addition, the scope and dimension
of these pilots confirmed that virtually every activity done by
government can be measured in some manner, although not
perfectly.
The pilot project process also indicates that the first
years of full-scale implementation of GPRA will be the start of
the dialog about performance and performance measures, not the
end of it. Measures will be modified. Better and more
appropriate goals will be defined. Performance data will
increase in both volume and quality. Over time, the overall
quality of agency plans and reports should improve
significantly.
The second set of pilot projects called for by the act are
those for managerial accountability and flexibility. While
agency nominations for these pilot projects were solicited and
received, as the chairman noted, no pilot projects were
designated.
Two initiatives begun after passage of GPRA reduced the
universe of waivers. The Work Force Restructuring Act
effectively prevented OMB from approving any FTE ceiling waiver
requests at the time when these pilot project nominations were
solicited and reviewed. Such FTE waivers would have been an
important component of many proposed pilots.
At the same time, the administration was eliminating and
simplifying many requirements affecting the operations of
Federal agencies. The Federal Personnel Manual was eliminated
by OPM, and thousands of pages and instructions and
requirements disappeared. Procurement regulations were
substantially streamlined. With far fewer requirements in
place, waiver demand was lessened as well. In this context, we
concluded that too few waivers would be authorized to designate
any pilot project, and have that pilot serve as a credible test
of the managerial accountability and flexibility provisions of
GPRA.
While no flexibility pilot projects were designated,
waivers were given to a range of agencies and the collaboration
among the four central management agencies, both in defining a
process for reviewing and deciding on waivers and identifying
possible waivers, forms a good foundation for governmentwide
implementation of this aspect of the GPRA.
GPRA also requires that not less than five departments or
agencies be designated as performance budgeting pilots for
fiscal years 1998 and 1999. These pilots are to develop budgets
that display the varying levels of performance resulting from
different budgeted amounts. OMB has notified the chairmen of
the Senate Committee on Governmental Affairs and the House
Committee on Government Reform and Oversight that we plan to
defer the start of the performance budgeting pilot projects by
1 year.
This deferral does not affect the content requirements for
agency strategic plans and performance plans, nor the date for
OMB's report on the pilots to the Congress. It simply reflects
our judgment that, as the agencies work this summer and this
fall on providing what we feel need to be informative
performance plans for fiscal year 1999, it does not serve the
implementation of the act, or us, or the Congress to have
several of them at the same time trying to develop performance
budgeting pilots. Therefore, our strategy is to work with the
agencies in the spring and designate at least five pilots which
will start for fiscal year 2000. And, as noted, our report to
Congress will be well within the statutory deadline. And we
think we will end up with a better set of pilot projects
without diverting the attention to the agencies at the time
we're talking now to these pilots.
Congress also asked that OMB address a number of specific
issues in our May report. Section six of the act required us to
include in our May report any recommended changes in the
various provisions of the act. The experience to date in
implementing GPRA has not identified any provisions that
require change.
As noted earlier, we expect agencies to provide useful and
informative, strategic, and annual performance plans within the
time line specified by the act. Even as performance measures
become more refined, however, we should always bear in mind
that using performance measures in the budgeting process will
never be an exact science.
For example, an underperforming program may benefit from
additional resources, not fewer. Comparing results across
program lines will always require political judgments about the
relative priorities, for example, of programs for highways and
education. We should not lose sight of the fact that
performance information will often be used to adjust the way
programs are managed rather than to change the resources
provided.
Accurate, timely performance information is important in
all of these situations, and this is why the administration is
committed to the successful implementation of the act.
This concludes my statement, Mr. Chairman, and I will be
pleased to answer any questions you may have after Mr. Stevens'
testimony.
Mr. Horn. We thank you very much for that very succinct
statement.
[The prepared statement of Mr. Koskinen follows:]
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Mr. Horn. Our next witness is L. Nye Stevens, Director,
Federal Management and Workforce Issues, General Government
Division, U.S. General Accounting Office. Mr. Mihm has been
before us many times, but I wonder, Mr. Stevens, or Mr. Mihm,
if you will identify yourself as to title and role in this
particular project.
Mr. Stevens. Yes. Mr. Mihm is our Acting Associate Director
for Federal Management Issues and has been the supervisor of a
fairly large staff, most of which are sitting behind him, that
has prepared the report on GPRA that was due this week.
Mr. Horn. I wondered why we had such a crowd this morning.
Management did not attract them; does it? Please proceed.
Mr. Stevens. Yes, sir. Mr. Chairman, I'll try to be equally
brief and summarize my points and submit the full statement for
the record, if that's all right with you.
Mr. Horn. Absolutely.
STATEMENT OF L. NYE STEVENS, DIRECTOR, FEDERAL MANAGEMENT AND
WORKFORCE ISSUES, GENERAL GOVERNMENT DIVISION, U.S. GENERAL
ACCOUNTING OFFICE, ACCOMPANIED BY CHRIS MIHM, ACTING ASSOCIATE
DIRECTOR FOR FEDERAL MANAGEMENT ISSUES
Mr. Stevens. As required, we were to report to Congress
this week on implementation of the Results Act and its
prospects for governmentwide implementation for the future. We
did release that report yesterday, and it provides an
assessment of the progress and challenges that agencies face
and are going to continue to face in implementing the act.
Our work shows that, to this point, the experience with the
provisions of the act has been mixed and, as a result, when it
goes into full governmentwide effect this fall, we can expect
to see highly uneven implementation in the executive agencies
as a whole.
The most positive finding of the report is that the
experiences of some of the pilot agencies, and some nonpilot
agencies, show that improvements are possible when an agency
adopts a disciplined approach to three important management
practices: First, setting results-oriented goals; second,
measuring agency performance against those goals; and, third,
using performance information to improve effectiveness.
Our report identifies a number of organizations, such as
the Coast Guard, the Veterans Health Administration, the Social
Security Administration, that have made tangible and important
performance improvements by adopting such an approach. And
these are real improvements. These are improvements in safety,
environmental conditions, and the Government's responsiveness
to its customers.
Nevertheless, despite the existence of a number of positive
examples, we have not been overwhelmed by great numbers of
them. As a result, the prospects for effective implementation
are fairly limited in many agencies when the law comes into
effect on a governmentwide basis in less than 4 months.
While the strategic and annual performance plans will be
submitted, meeting the letter of the law that you referred to,
Mr. Chairman, in your statement, our work suggests that these
plans will not be of a consistently high quality or as useful
to congressional and agency decisionmaking as they could be.
Although some performance improvements are noteworthy, the
reported examples of substantial performance improvements were
relatively few, and many agencies did not appear to be well
positioned to provide in 1997 a results oriented answer to the
fundamental Results Act question, which is, What are we
accomplishing?
For example, the Department of Housing and Urban
Development's public housing management assessment program did
not collect important information that is needed to manage and
assess its results. It had information on the numbers of
outstanding work orders at public housing authorities and
uncollected rents there, but the system they used did not
measure other factors, such as the quality of the housing
itself that are essential for assessing the results that
housing authorities are achieving as well as for comparing or
determining which housing authorities are performing well and
which ones are performing poorly.
In our view, the situation at HUD appears to be typical.
Our survey of Federal managers, which was a governmentwide
survey we carried out for this report, showed that many
agencies do not appear to be well positioned to answer the
fundamental question of whether or not their programs have
produced real results.
And I'll refer here, Mr. Chairman, to a couple of charts
that are to my left. They're also reprinted on page 6 and 8 of
the prepared statement.
The first chart shows only 32 percent of Federal managers
said that they had the types of performance pressures that
would demonstrate whether the programs were achieving their
intended results. And even in similar numbers, about a third
said they have measures that address customer satisfaction and
service quality.
Although percentages are low, significantly more managers
did report the existence of results oriented and other
performance measures to a great extent currently than they
recollected the situation to be 3 years ago. So it's a
situation in which there's more today than there was then but
still not a lot by an absolute standard.
Of course it's not sufficient merely to measure
performance. If the Results Act is to have a lasting impact in
contrast to many of the management improvement initiatives that
you mentioned, Mr. Chairman, in your opening statement such as
PPBS and MBO and CBB, it's important that performance
information actually be used to make decisions and to improve
the management of Federal programs.
In our survey, we asked Federal managers about the extent
to which results oriented performance information was actually
used. And that's reflected in the second chart, the one closest
to you, Mr. Chairman. As that chart shows, it's on page 8 of
the statement, managers reported that the use of such
information was very limited. It's still a very infrequent
occurrence. Only about a fifth of the managers and supervisors
we contacted reported that results-oriented performance
information was used to help save agency budget, and an even
smaller proportion said it was used to make actual changes in
legislation, program design, or in funding decisions.
However, similar to the situation with performance
measures, Federal managers did report some positive change in
what they recollected the situation was 3 years ago. There has
been some progress.
Our work has shown that agencies are confronting five key
challenges that have limited the effective implementation of
the Results Act and its prospects for the future. These
challenges, which are detailed in our report, really represent
an unfinished agenda for the Results Act.
The first challenge is that of establishing clear agency
missions and strategic goals, especially in the very frequent
case, where program efforts are overlapping and fragmented. One
example of this is the Department of Education programs that
provide loans and grants to students to help finance their
higher education. We found that although the student loan and
Pell grant programs provided the majority of Federal financial
aid to students for post-secondary education, there are another
22 smaller programs that were targeted to specific segments of
the population, such as prospective students from disadvantaged
families.
These 22 programs were collectively funded at the $1.1
billion level for fiscal year 1995. We concluded that the
consolidation of some of these smaller grant programs, either
with larger grants or with each other, would have no adverse
impact on students' access to post-secondary education. And the
Federal Government over a 5-year period could save about 10
percent in administrative costs, or about $550 million, not an
inconsequential amount at all.
The second major unmet challenge is that of limited or
indirect influence that the Federal Government has in
determining whether a result is actually achieved. And it
complicates the difficult task of measuring the discrete
Federal contribution to a specific result. Measuring the
Federal contribution is particularly difficult in regulatory
programs on which we're going to be issuing a separate report
very shortly in research and development programs and in those
that are delivered through third parties such as financial
institutions or State and local governments.
For example, determining the impact of economic development
of which, by the way, there are 342 in the catalog of domestic
Federal assistance and has been a daunting task because of the
numerous external forces including broad national economic
trends and assistance that communities may receive from State
and local government and the private sector that also
contribute to economic development. Separating out the effects
of Federal efforts in that area can be extremely difficult as
we observed in our review last year of development programs
because it first requires documentation that there's been some
improvement; second, linkage of the specific program elements
to the actual economic changes; and third, a measurement of the
growth stemming from other influences on the economy in order
to isolate the impact that could be attributed to the economic
development programs that we're evaluating.
The third major challenge to the effective implementation
of the act is the lack of the results-oriented performance
information in many agencies, as you pointed out in your own
statement, Mr. Chairman, which hampers efforts to identify
appropriate goals and confidently assess performance.
Even when the data exists, we have consistently found that
the quality of the data is often questionable due to several
factors, including the need very often to rely on third parties
to provide it.
For example, the Department of Veterans Affairs told us
that some of their results-oriented measures for the loan
guarantee programs such as simple things as the average time it
took to process loans, that these measures were new and that
the base line data just weren't available for them.
Consequently, they did not have data on past performance to use
in setting the 1998 targets, and they had to say this is going
to be provided later.
The fourth challenge centers on the need to instill within
the agencies an organizational culture that focuses on results,
and this I must say still remains a work in progress in the
Federal Government. For example, when we ask Federal managers
in our survey about the extent to which they and their
supervisors had the authority they needed to help the agencies
accomplish their strategic goals, they did not perceive that
they had more such authority than they recalled having 3 years
ago. We reported in April, as Mr. Koskinen mentioned, that the
managerial accountability and flexibility project did not work
as had been intended.
And then finally, Mr. Chairman, there's a fifth challenge
to the effective implementation of the act and that's the need
to link agencies' performance plans directly to the budget
process. Reaching agreement between Congress and the executive
branch on the changes that are needed in the program activity
structure is quite likely and is going to be a time-consuming,
very difficult process to do that and one that, in our view, is
going to take more than one budget cycle to resolve.
Just in closing, I would point out that the--solving these
challenges is going to raise some significant policy issues for
the administration and Congress to resolve, some of which are
going to be very difficult. However, we believe that the
success or failure of the Government Performance and Results
Act should not be judged on whether contentious policy issues
are fully resolved; rather, that judgment of its success or
failure should turn on the extent to which the information
produced through the required goal-setting and performance
measurement practices--once these practices are successfully
implemented--helps inform policy decisions and improve program
management. That's the ultimate objective.
Thank you, Mr. Chairman. We'll respond to any questions you
have.
Mr. Horn. We thank you, Mr. Stevens.
[The prepared statement of Mr. Stevens follows:]
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Mr. Horn. And now I now yield 10 minutes to Mr. Sessions,
the gentleman from Texas, who spent a lot of time on this
subject, so we are going to have you lead the questioning.
Mr. Sessions. Thank you, Mr. Chairman.
Mr. Koskinen, I would like to first start, if I could, with
you and have you provide us, if you can, an evaluation of those
plans that were submitted and talk with me specifically about
who fell within the criteria that you think are good plans,
ones that met your expectation, and then on the reverse side,
some of those which you feel will require some additional work.
Mr. Koskinen. I think the short answer is they all require
additional work. The statute didn't contemplate--and we didn't
either--that they would be done by now. Our goal, in fact, is
to continue to work with the agencies, as we are this spring,
and the assessments through the summer, to ensure that we get
the best possible plans to you and the public in September.
We've made it clear to the agencies that we support
congressional consultation, and we expect that those plans will
evolve to some substantial extent as a result of consultations
not only with Congress, but other stakeholders and interested
parties.
Clearly, some agencies have broader background and
experience and are farther ahead. An agency like Social
Security, for instance, has in effect been producing strategic
plans and performance measures for 6 or 7 years. And if you
look at their annual accountability report, it also is a model
of what we're trying to drive toward. Because in one document--
produced in a timely manner--they talk about their mission,
what they're trying to accomplish, the measures of customer
service and delivery of the benefits, how they've done against
those measures, and what their audited financial statements
show. So they clearly are an agency that is doing very well.
But I would stress that at this time we don't think any
agency is complete. And we have been pleased to have the active
involvement, particularly in the House, of the majority
leader's teams working with the agencies and us to try to get
the best plans we can. I think Mr. Stevens and GAO are correct.
This is a massive undertaking and it's going to take the best
efforts of all of us to have us succeed.
Mr. Sessions. OK. So you would probably describe this as
maybe a scrubbing process. They get them to you, their first
view, you try and scrub it, you go back and work with them.
You talked about stakeholders. Is that GAO? Are they one of
the stakeholders that you work with?
Mr. Koskinen. No, actually the stakeholders, the agencies
we're working with are, in fact, the interested constituents
and parties in--affected by their programs or interested in
them. The stakeholder they all have, obviously, is the
Congress. The statute provides for that. Our guidance requires
that there be an active consultation by every agency with its
oversight committees, authorizers, and appropriators. We have
worked for the last 2 or 3 years with GAO in terms of jointly
sharing information. But obviously we understand that GAO is a
part of the legislative branch, not the executive branch.
Mr. Sessions. All right. What is your relationship with GAO
in the scrubbing process, then?
Mr. Koskinen. In terms of the scrubbing process, as you
refer to it, I would refer to it as the review and dialog with
the agencies, we have not been in communication with GAO on an
agency-by-agency basis. We have utilized the reports GAO has
issued to help inform the process.
As I think I testified about a year ago, GAO did a very
good review of the pilot performance projects that talked about
the lessons learned. We thought that was a good enough report
and valuable enough that we actually distributed it to a large
number of people in the executive branch because we thought the
lessons GAO discovered were important for all of the agencies
to undertake. But on an agency-by-agency basis, we're not
engaged in any communications with GAO.
Mr. Sessions. OK. How about an engagement with your
organization, then, inasmuch as you are the one receiving the
plans and them working with you? I am trying to find out--you
are here before us.
Mr. Koskinen. Yes.
Mr. Sessions. I am trying to determine the honest attempt
on both sides to get closer to what Congress is after.
Mr. Koskinen. Right. We started actually over 3 years ago
but when I, the 3 years I've been here, we've actually been
working on an almost continuous basis with the agencies. In the
fall of 1994, in that budget process for the fiscal 1996
budget, we asked the agencies to provide as much performance
information as they had to begin to take a look at what
performance measures would look like.
We did a review with them in the spring of 1995 of their
core programs. We said, ``If you looked at your basic programs,
what would be the right performance measures for those?''
In the summer of 1996, we did a full-scale review of the
agencies' strategic planning processes. And, as noted in my
testimony, we discovered, of course, that they were facing some
significant challenges.
We're in the process right now of concluding a spring
assessment of a range of management initiatives, but the focal
point is on GPRA as a general matter. Each of our program
examining divisions has worked and is working with the agencies
to, in fact, critique, provide guidance on and feedback on each
specific agency plan. So that, as I say, this has been an over
a 3-year undertaking, and we continue to believe that we're
going to have to work up until the end of August to make sure
that we get you the best plans we can.
Mr. Sessions. Right. OK. Well, with that in mind, and I do
understand from your testimony that you have given here that
there are a lot of changes that are in process.
Mr. Koskinen. Right.
Mr. Sessions. That you are trying to take full advantage of
those, but we did talk about the 3 years. Do you believe that,
as your responsibility and your testimony that you are giving
to us today, that you are going to be on target to present
plans that I think not only meet the law but also the spirit of
the law, in other words, not just written compliance but also
an in-depth observation from each one of those agencies about
their mission?
Mr. Koskinen. Yes.
Mr. Sessions. You believe sitting there today that you are
going to be on target and they will all be?
Mr. Koskinen. I think GAO is right. We might disagree where
the bell shaped curve starts in terms of the spread. There are
going to be some again that reflect years of experience with
this that will be at one end of the bell shaped curve and will
be outstanding plans. There are going to be some at the other
end of the bell shaped curve, a small number, who will be
agencies who are still struggling, that these will be
acceptable plans, they will meet the spirit, but the agencies
will be the first to tell you that they are, in fact, the front
end of that experience, and they will continue to evolve.
The bulk of the plans will be, I think, comfortably in the
middle of that bell shaped distribution curve. They will be in-
depth analyses of missions, of goals, of objectives, will
indicate performance measures that will be used, and will, in
fact, start us on down the road.
But I might just note that our goal in this process is not
a neat document. If all we accomplish in this process is very
good strategic planning documents and that's it, we will have
failed. The goal in this process is in fact to have agencies
and the Congress use the information generated about the
results achieved by programs to make management decisions as
well as budgetary decisions. And I would just say, it takes a
lot of people to tango, but it takes at least two. And that is,
it's going to take the Congress as well as the agencies.
Mr. Stevens noted, I think very appropriately, that one of
the challenges they have identified is the ability to link
performance plans to the budget process.
Mr. Sessions. Yes.
Mr. Koskinen. Now that's a challenge not just to the
agencies, that's a challenge to the Congress because our
present budgetary accounting system clearly does not track in
many cases program-by-program. There are a lot of line items
and detailed and disaggregation of budgetary resources that in
fact make it very confusing, if not impossible, to figure out
what the costs are and resources are devoted to a particular
program.
So we have I think a lot of work to do jointly together if
this act is actually going to achieve its goal, which is in
fact to improve the performance of the Federal Government.
Mr. Sessions. This all gets down to accountability, and I
can assure you this Congress is going to look very carefully at
the accountability factor, because in fact we have asked those
agencies to describe those areas, that methodology, and what
their plan of action is going to be. So very good.
Mr. Mihm, if I might direct my question, the same one to
you perhaps, and that is, from the evaluation that you have had
as an independent arm for your analysis of the plans you have
seen, or Mr. Stevens, whichever is most comfortable with
responding.
Mr. Mihm. We found, Mr. Sessions, on the whole, the
agencies that have the most direct relationship between the
product and service that they provide and the ultimate customer
are those that have the easiest time doing GPRA, and, as a
result, they're the furthest along and the furthest down the
bell shaped curve that Mr. Koskinen talked about.
So, for example, Social Security Administration where it's
pretty easy--or relatively, I should be careful--are they
getting the right check to the right individual on the right
time? It's easier than it would be for an intergovernmental
program run by the Department of Education to figure out what's
our result, what's the relationship that we do and our ultimate
result.
So it really turns on the success that the agency is having
in both its strategic planning and its annual planning. Its
performance measurement efforts really turn on the degree to
which there's a direct relationship between what it does and
the ultimate user of its product or service.
Mr. Sessions. Good. I have got about 1 minute remaining.
Let me say this. I hope that both of you go back, Mr. Koskinen,
that you give a pat on the back to those agencies that have
gotten their plans in on time, and I hope you will let them
know in writing that they were close, and those that were not
close, that you have gone back to them and said it requires
more work. But I hope that that is in writing to them, because,
as we go through this appropriation process, not just this
year, but next year, that will be an important trail marker for
those agency heads to understand that we really were serious
about what we are trying to do. And I think it helps your job
out.
Mr. Koskinen. That's right.
Mr. Sessions. Thank you, Mr. Chairman.
Mr. Horn. I thank you and now recognize for 10 minutes Mr.
Davis, the Member from Illinois.
Mr. Davis of Illinois. Thank you very much, Mr. Chairman,
and with your permission I would like to submit a statement for
the record.
Mr. Horn. Without objection. Is that an opening statement?
Mr. Davis of Illinois. Yes.
Mr. Horn. It will be put with the other opening statements
at the beginning of the hearing.
Mr. Davis of Illinois. Thank you very much.
Mr. Koskinen, we know that OMB plans to defer the start of
the pilot projects on performance budgeting for a year.
According to your report, a major reason for this delay is the
lack of adequate cost accounting capability in many of the
Federal agencies.
My question is: What are the implications of poor cost
accounting capabilities for the implementation of the GPRA
generally? And then, does this problem, coupled with the
absence of baseline data, mean that additional delays in
performance budgeting pilots are likely? And finally, what do
you plan to do to address these weaknesses?
Mr. Koskinen. First, let me state that the absence of cost
accounting data is a factor, but I think our major reason for
delaying, as I noted earlier to the chairman, is that we did
not want to distract the agencies at this timeframe while they
are working on completing their strategic plans and preparing
their first performance plans for submission to us in September
and the Congress in February, to at the same be starting up a
new set of pilots.
The cost accounting issue is an important one. We won't
solve that problem either in the next 12 months. What we are
talking about in cost accounting is not that we don't, in fact,
keep track of where the funds are spent, but we are talking
about costing out the cost of each activity or program. In
other words, as we have talked to you today and as the act
talks about, we want to know what the results are of our
activities. But at the same time, once we know what performance
we have gotten, we would like to know how much did it cost us
to achieve that performance? And, again, our present budgetary
structure disaggregates those costs. We have personnel, salary
and expenses, a lot of other kind of overhead costs that are
spread in various ways throughout the budgets, and it is
important for us to be able to pull all of those costs
together.
The Financial Accounting Standards Advisory Board, FASAB,
has provided a set of now complete accounting standards for the
Government, and one of the last ones they issued was cost
accounting. So we are moving in the right direction, but I
think it will be some time before we get there. But ultimately,
we need to have that information so that, as I say, we can
complete the equation; not only knowing what we got for what we
paid, but actually what did we pay to get that result.
With regard to your question, then, about will the absence
of baselines mean we will delay the performance budgeting? The
answer to that is, no; that we will look at the performance
budgeting pilots as a way of trying to figure out can we--how
reasonable is it to ask the agencies to give us, in effect,
sensitivity analyses not only of different resources, but the
allocation of existing resources in different ways?
I would note that the performance budgeting pilots are the
only pilots that then do not automatically go to full scale
implementation. The way the statute is designed, we do the
pilots and then OMB will report to the Congress with our
recommendations as to whether this is worth the effort. So this
is really a pilot program in which we will all make judgments
as to whether this adds anything significant to the dialog,
which is worth the cost and the effort of doing it.
With regard to baselines, let me just say, because that
runs through some of the GAO comments and our own, clearly we
need to have baselines for our activities so that we can see
and know how to measure the improvement. But even as a
fundamental question, it is hard to know what your goal ought
to be if you don't know where you are.
But the absence of those baselines shouldn't surprise
anyone. If we have not been, as a general matter across the
board, collecting performance information and talking about it,
then we are not going to have a lot of those baselines. So what
we have told the agencies is if you wait until you have perfect
information and wonderful histories of several years, we will
be at this for a long time.
So the conclusion we have reached, and the CFO Council,
which has worked with us, is that the algorithm we are using is
start wherever you are. Whatever information you have now,
whatever baseline information you have, whatever judgments you
can make on the basis of your experience, use them; but don't
wait until some future day when we have either better cost
accounting or better baselines. Start where you are and we will
be building the baselines as we go.
Mr. Davis of Illinois. I would assume that pilots resulted
as a result of earlier strategic planning. Would that be
accurate?
Mr. Koskinen. I am sorry?
Mr. Davis of Illinois. That the pilots were developed as a
result of earlier strategic planning.
Mr. Koskinen. No, actually, the statute recognized that the
most difficult part of implementing this act is going to be
defining performance measures and collecting data and
determining what is the right data and how hard is it to get?
So even while agencies were thinking about and beginning to
work toward the development of strategic plans, we went into
specific agencies who volunteered to be pilots and that we
selected as a pilot, and said wherever you are going with the
strategic plan, what are useful performance measures? And,
let's do a set of pilots to see how easy it is to collect that
information and what utility will it be once we have it.
So to some extent, the performance pilots were ahead of the
train, which would normally start with a strategic plan.
Now, the ones that were most effective, and the GAO report
showed that, were the ones that, in fact, grew out of a broader
strategic plan and vision for the agencies. And some agencies
had more experience at that just on their own than others. I
think that was one of the lessons GAO drew from those pilots
and we have agreed with that, and that is that the ultimate
test of performance measures is can you link them to your basic
goals and objectives?
Obviously to do that, you have got to know what your goals
and objectives are. As I noted in my testimony, in our review
last summer of the strategic planning process, summer of 1996,
we thought again, as GAO, that one of the great challenges will
be to take performance information and make sure that it
actually is performance-related to the achievement of the basic
goals and objectives that are part of an agency's strategic
plan.
Mr. Davis of Illinois. Is it likely that the budget process
will need to be changed to incorporate the performance
information generated by the GPRA? And if so, what is OMB's
position on this issue?
Mr. Koskinen. I think it is likely and, in fact, it is
imperative. And our position is that we are anxious to work
with the Congress and the Budget Committees to take a look at
the implications of that. Ultimately, we call it connecting
resources to results, that as we go through the budget process
we should be continually analyzing budgetary accounts and
decisions in terms of how they relate to the results that we
are getting from the allocation and the application of those
resources. So I think we are going to have to have a more
transparent budget process.
Mr. Davis of Illinois. Can you give us any specific
instances of how the link would take place or shape up?
Mr. Koskinen. Well, HUD, for instance, has an interesting
set of matrixes of their programs and the connection of the
programs to the budgetary accounts. They have, I don't remember
quite the exact numbers, but for a particular program they
might have as many as 60 budget accounts that related to that
program.
And conversely, they have some programs that themselves are
spread across a range of other budget accounts. So that the
issue is can we collect and connect the budget accounts to the
programs?
I just had a meeting recently with the State Department,
which talked about a hard set of strategic discussions. But it
has been wonderful. The State Department is really working its
way through it. But as they noted, when they get through
talking about their goals and objectives, they are still going
to then have to deal with a budget process that has very
specific line items in it that are not easily associated with
their goals, objectives, and performance measures.
So we talked with them about the need to engage in a dialog
with their appropriators about how to most meaningfully connect
the resources to the results.
Mr. Davis of Illinois. I would think that their goals and
objectives might sometimes be a little difficult to measure.
Mr. Koskinen. Yes.
Mr. Davis of Illinois. Mr. Stevens, the survey GAO
conducted as part of your report indicates that it will take
time for agencies to reorient their thinking toward the result-
driven approach required by GPRA. Can you give us any idea of
how much time it is reasonable to expect, realizing that things
will vary among different agencies?
Mr. Stevens. If you are referring, Mr. Davis, specifically
to the cultural aspects of the need to adapt to results-
oriented management, I don't think it will ever end. The
governmental system is fundamentally one that has strong
emphasis on process and securing the confidence of Government
managers that their programs can be and should be managed by
results I think will never be as fully implemented as it is in
the private sector, for example.
That isn't to say that we aren't making progress. When we
ask people what the situation was 3 years ago, they say, well,
it is better than it was then, so we are making progress, but I
don't think it will ever be done.
Mr. Davis of Illinois. Are you saying that process is
oftentimes as important as content or results?
Mr. Stevens. That has certainly been true of the
bureaucracy up until now, yes, sir, and I think the Government
Performance and Results Act is a direct attempt to change that
culture.
Mr. Davis of Illinois. In your statement, you say that
sustained congressional involvement is needed to ensure that
missions are based in statute and to identify cases where
statutory requirements need to be modified or clarified. Could
you give some examples of these instances?
Mr. Stevens. In the Government Performance and Results Act
itself or statutory requirements that would reflect the
requirements on agencies?
Mr. Davis of Illinois. That's correct, yes.
Mr. Stevens. Well, I would say, for example, that the 342
economic development programs that exist in the Government,
each one of those has a statutory foundation or basis that
attempts to look for commonalities and compare their results,
perhaps consolidate some, would certainly take congressional
authorization in many cases. They are spread among different
committees. They have different protectors and that could be a
very complicated job.
Mr. Davis of Illinois. GAO has commented that pilot
projects, which OMB is currently conducting to develop broad-
based accountability reports which integrate financial program
performance and management information, do you need legislation
in order to do this in this particular area?
Mr. Mihm. Mr. Davis, those are currently being piloted
under a separate piece of legislation called the Government
Management Reform Act--I am sorry for all of these acronyms--
GMRA, which expanded the requirements to the Chief Financial
Officers Act for audited financial statements for all agencies.
OMB is working with the agencies to pilot those consolidated
accountability reports that you mentioned.
There were a half dozen or so that were piloted the first
year, more in the second year, and now I understand there is
going to be plans for a dozen or more in the third year to
pilot the integration of bringing together for the first time
the information that you as congressional users really need in
one format. So you would get audited financial information,
program performance information and other vital management
information for the agencies together rather than coming up in
a semiannual basis or on different calendar times. So it will
be far more useful to you. So it is already under a statutory
basis, the piloting of those.
Mr. Davis of Illinois. And that information is evolving?
Mr. Mihm. It is evolving, yes, sir.
Mr. Davis of Illinois. Thank you very much, Mr. Chairman.
That completes my questioning.
Mr. Horn. I thank the gentleman. I now yield 10 minutes to
the gentleman from Virginia, Mr. Davis.
Mr. Davis of Virginia. Mr. Chairman, thank you very much. I
think both witnesses testified about really how well they
believed the Social Security Administration is at developing
strategic plans, but at this point I don't think--Congress has
not received their draft plan and we haven't been consulted on
this. In fact, I've got a list of agencies here, agencies that
haven't submitted their plans, prospects uncertain, but
agencies--Social Security is at the lowest, that they haven't
submitted their plans and they indicate that the consultations
aren't going to be forthcoming for some time; a risk of
noncompliance. And I have Social Security under that list the
staff has assembled.
Any reaction to that?
Mr. Koskinen. Yes. As I say, we are working very closely
with particularly the House leaders in the consultation
process, and I have advised Social Security that they are in
the ironic position of having done probably as much or more
work in strategic planning and performance measures than any
agency and yet now show up on the bottom of this list.
Their problem is they are in the middle of a change,
obviously, in political leadership. They want to ensure that
when they come with the consultation that they won't be
consulting about a plan that will be changed. But they
understand the problem and have committed that this month they
will begin that consultation process.
As I discussed with the majority leader's staff actually
yesterday, I think that of all the agencies they are least
likely to be a problem because of their history and the quality
of their information. But I have stressed to them that
consultation is a real part of this process, that they need to
be here talking with you about their plans. They need to be
getting input from you.
They have already over time gotten that from their
appropriators where they provide this performance information
every year, but I have noted to them that there is a broader
constituency here and they need to get themselves off of the
bottom of the list.
Mr. Davis of Virginia. There is probably more interest in
Congress today than was anticipated when this bill passed in
terms of how things are going, and agencies, everybody seems to
be having trouble adjusting. Even OMB was a little bit late
with its draft statutory report, and I know you have had a lot
of other things to do over there in the past. Is that also an
issue of just priorities with a limited staff at this point?
Mr. Koskinen. Right. I have been very concerned that we not
be the shoemaker's children and that we be out getting plans
from everybody else and not have one. We obviously have had a
few things on our mind with the budget agreement and other
negotiations, but we do have a draft. We did start the
consultation process. We do present an interesting challenge,
as a number of agencies, because we don't create widgets. We
don't produce necessarily products. We are a staff agency
providing policy advice analysis and other information both to
the President and to the agencies in the Congress. So figuring
out what is measurable in terms of our activities is a
challenge.
Our plan addresses that, and we are looking forward to more
discussion with not only the Congress, but other interested
parties, because we are open to additional suggestions about
how you can actually quantify most effectively the performance
measures other than the fact of policy operation.
Mr. Davis of Virginia. One of the interesting things is the
expectations everybody has coming from this act. I mean, some
of these expectations may be reinterpreted now over what might
have been intended when the act passes and time changes and
people read it and look at it in the context of where we are
today with balanced budget agreements and the like. I wasn't
even here when the law passed but looking at it, I am
interested in what the mission statements are going to show in
terms of what agencies are doing now and what their mission
statements actually call for.
It seems to me, to some extent, this can be where the
rubber can hit the road with some of these agencies that may
have to revamp their mission statements or change the way they
are doing things. And I did not hear a lot of testimony on that
from either of you. I wonder if you have any observations on
that.
Mr. Koskinen. As we have said to the agencies over this
long 3-year consultation process, particularly last summer when
issues began to surface, you don't find new issues in the
strategic planning process. What you find is it is a way of
pulling together all of the issues, so that your point is well
taken. In the consultation process, in the development of these
plans and ultimately in the review of them, the plans will be a
focal point for discussing some fundamental policy issues that
need to be resolved.
The favorite example everybody has has been the Forest
Service that on the one hand is trying to protect the forest
and on the other hand log them, and what are the differences in
those competing policy issues?
Regulatory agencies obviously have a range of issues that
have been the subject of discussion and debate. Strategic plans
won't reveal new problems. What they are going to do is, in
fact, engage people in a focused discussion about what are the
missions and goals and objectives and more--equally
importantly, what are we getting as a result of the activities?
What have been the results?
My only kibitz a little with GAO's point about the impact
issue is that it is correct, that ultimately when there is a
result out there or an outcome as we call it, the hardest
question will be to figure out what role did we play in
achieving that? But I think that's a secondary issue. It is a
great challenge, but if we could just get people focusing on
the actual outcomes, the results of what happened and then
worry about what role we had in it, we would be way ahead of
the present debate, which is primarily focused on inputs.
If you look at the dialog and debate over the last 2 or 3
years, contentious as it has been, it has been primarily
focused on inputs: How much resources? How many people should
we devote to what issues? And what I think the magic of this
act, and the potential it has for all of us, is that it will
move the dialog kind of along that spectrum and have us start
saying not only what were the inputs and what are the
appropriate inputs, but what were the results? And then I think
if we can ever get to the point where we are all arguing about
what role our programs played in the actual results, what
impact we had, we will have made great progress.
Mr. Davis of Virginia. Let me ask if GAO has any comment on
the mission statements and how these are going to gel as we
start addressing them and how agencies may have gone way beyond
their mission statements in some cases.
Mr. Stevens. Well, the very process of thinking about what
an agency's mission is is new to some of them, and certainly
the process of discussing that with their congressional
overseers is very new and somewhat worrisome to them.
The Environmental Protection Agency is a good example. They
have about a dozen statutory mandates, but they don't have any
overarching legislative mission statement or determination of
what their real mission is. They are responsible for clean air,
clean water and solid waste and so forth, but no overarching
determination of what their environmental responsibilities are.
The Federal Emergency Management Agency, I think, is one
that has shown a good approach to this in the recent past, in
which they examined whether they were really there to provide
assistance after a disaster takes place, or whether they
couldn't do more for the ultimate objective of mitigating the
damage of disasters by taking actions in advance and working
more closely with State and local governments to mitigate the
effects of disasters before they take place than having what
they interpreted their mission to be up until then of coming in
afterwards and providing money for a clean-up.
So there have been a number of cases in which this has been
a very therapeutic process.
Mr. Koskinen. Let me just comment. FEMA is a very
interesting example of what the Congressman is driving at. When
James Lee Witt started, he noted that one of the major missions
FEMA had was, in fact, preparing for a nuclear attack and the
results of it. And as he noted, the cold war seemed to have
ended in the meantime and the wall was down and they had 320
people working on, in fact, response to nuclear attack. So that
was a legitimate mission.
Mr. Davis of Virginia. How do we measure that one today?
Mr. Koskinen. It is like the guy with the elephants in
Indiana. We haven't had one for a while so it must have been
OK.
The mission was a legitimate one 5 years, 10 years, 15
years ago, but as the world changed it was appropriate for FEMA
to take a hard look at what is our basic mission and redeploy
those resources. So I think that the point you make is a good
one, and it is not static. We may have an agreement about
missions today that is appropriate in the present circumstances
and over the next iteration of the next strategic plan. Life
may change, and we may all decide that the focus in the
deployment of resources in an area ought to be adjusted
accordingly.
Mr. Davis of Virginia. Mr. Koskinen, business organizations
are doing this every day. They are examining their mission
statements every day, every quarter as the bottom line comes
in, and Government sometimes does it, oftentimes doesn't
because for a host of reasons. It is just a good policy and
rhythm to get into once we get started.
I know it is starting off perhaps more controversial
because of the cultural shock in some of these agencies that
haven't had the kind of oversight from Congress that this
demands and the kind of comparisons that they are forced to
make, that they have never been accustomed to making. But this
really, I think, shows great promise over the long-term if we
can get this off and running and started. It is a little uneven
right now.
But I would just say for having worked with you and Mr.
Kelman and others over at OMB it has really been very
foresighted in a lot of ways, and if you can help us get
through this and coordinate with GAO, I think we can leave a
legacy here that will stand for future administrations and
relationships that Congress, different parties and on different
sides of the table, are moving through. But I think this has a
lot of promise.
Let me ask you this: In this town I see an entire cottage
industry of specialized management consultants springing up as
governmentwide implementation gets closer and closer. To what
extent are agencies having to turn to outside resources or
consultants to help them identify meaningful performance goals
and measures, and develop their strategic plans or otherwise
work to comply with the Results Act?
Mr. Koskinen. I don't know if there is an easy way to get
at that. The statute makes it clear that the mission of an
agency is not to be designed by consultants, so they are
prohibited from using outsiders to tell them what their
missions are. Those have to be generated internally.
Clearly, a number of them have made effective use of
outside advisors about the strategic planning process. They
have gone on the private sector experiences and they are using
that. But again, one of our concerns, as I have testified in
the past, has been to make sure that the agencies don't create
what I call ``GPRA bureaucracies.'' That is, we have somebody
off on the side producing whatever we and you want them to
produce in the form of paper, but it doesn't relate to the day-
in and day-out management and operation of the agency.
So one of our tests of the agency in a strategic planning
process is: Who is involved in the process? Who is actually
leading it? What are the uses of outside people? How involved
are the senior leadership of the agency in the development of
the plan? And our goal is to ensure, as I say, that these
become working documents; that, in fact, agencies manage
against these; even if we don't allocate another dollar in
resources one way or the other, that they actually manage
against the information they get about how the programs are
operating and the effectiveness of them.
Mr. Davis of Virginia. Thank you very much. I think my time
is about up.
Mr. Horn. Thank you.
We have with us this morning Mr. Radanovich of California,
a member of the Budget Committee and without objection, I am
glad to yield you 5 to 10 minutes.
Mr. Radavonich. Thank you, Mr. Chairman. I am just
basically here to listen. I appreciate being able to be sat on
the dais and would just like to listen to the testimony. Thank
you very much.
Mr. Horn. That's humility beyond the call of any Member of
this House.
Mr. Koskinen. Could you come to a few more of my hearings?
Mr. Horn. OK. Let me ask a few questions and then we will
go in for the second round of questions.
These are directed at all of you, so you can all mix it up
on this. As we all know, the Department of Defense, the
Internal Revenue Service, will not be able to give Congress a
balance sheet that has been mandated by law for a number of
years, when it comes due this fall. Both have had severe fiscal
management problems. And I guess my curiosity is this: With
those two agencies being sort of basket cases at the civilian
level, and defense with 49 separate accounting systems, IRS
with a complete lack of management for years, why were not
various other pilots put in those agencies to see if we can't
learn something? Because these are the two of the three or four
largest agencies in the Federal Government, and I believe the
only one that was a pilot was Defense Logistics. But I just
wonder what the thinking of OMB was and I wonder what the
reaction of GAO is?
Mr. Koskinen. Mr. Chairman, as you know, you and I go round
and round about this. First, I would like to disagree that the
two agencies in question are a basket case, and I would
certainly disagree that there has been a complete lack of
management at the IRS for a long time. IRS clearly has systems
problems in tax systems modernization, but it is a leader in a
number of ways in internal management. So I think it doesn't
treat them well or fairly to say that they have had an absence
of management. I would not say that they have not had an
absence of problems, particularly in the information technology
area, but I don't think we further the dialog that way.
Let me now then say also that in the list of pilots, there
were five other pilots at the Department of Defense, although
Defense Logistics was one of the most successful, and the
entire IRS volunteered to be a pilot program agency to take a
look at what were appropriate measures, how they could measure
them. And it showed, as I say, 3 years ago, 4 years ago when
these pilots were designated, their interest. We didn't require
them to do it. They volunteered and said they wanted to be a
pilot, they wanted to see if they could begin to develop a
better performance matrix, which, again, as I say is not quite
consistent with an agency with no interest in these areas or a
lack of management.
Mr. Horn. What have we learned from what the IRS pilot at
this point? What have you learned?
Mr. Koskinen. What we have learned from the IRS--again, as
Mr. Mihm said, it is a lot like GAO. They in some ways are
closer to a private sector analogue because they have
measurable outputs and they are focused on things like customer
service. How long does it take you to get in contact with
someone? How long does the response come?
There are difficulties in fact, their abilities to improve
their customer service have fed back into their development of
systems. What we have been focusing with them on, and GAO has
for some time and the Congress has, is that the fundamental
problem with their systems approach was to try to solve all the
problems that they knew that were out there all at once in what
we call the ``big bang theory.'' And the private experience, as
well as the Government experience, is anybody who tries to
solve a problem in the IT area with a 5 to 8 year big bang,
usually ends up with a big failure. But they have been
increasingly focused on what are the appropriate and most
important priorities in dealing with the public in terms of
customer service? How can they get a handle on compliance
statistics? One of the issues we have with them is, how do you
collect information to determine what the compliance rate is?
Do you have to, in fact, go through these systemic analyses of
individual taxpayers from beginning to end?
So I think that we did learn a lot there. They are focused
on, in effect, how they can use performance information to
better serve the public. But I would be happy to hear GAO's
views as well.
Mr. Stevens. Well, IRS, their major problem, Mr. Chairman,
as I think you have hinted at, is they really don't know what
the tax gap is and therefore what their goal should be for
closing it and what annual progress they should be making
toward it. I would agree with Mr. Koskinen in that they do have
major customer service objectives. They phrase those in their
strategic plan. I think one of the things we think is worth
investigating there is the extent to which this gets down to
the front line tax examiners and agents. And if IRS has a goal,
as I think they have, of improving customer service to a world
class level, if the front line examiner still finds that he is
being--he or she is being judged on how many taxes get brought
in, there is a disconnect there.
So one of GPRA's real challenges is to spread that kind of
consciousness throughout the organization and not just prepare
a plan that says this is our goal, but have the working people
unaware of it.
Mr. Koskinen. And I might put a pitch in now for the
Clinger-Cohen Act as it relates to this. One of the issues we
have been trying to get the agencies to understand, and it is a
fundamental principle of that act which this committee, again,
was a strong supporter of, is that as you look at any
acquisition, any procurement, the fundamental question you
ought to be asking is, how will this help me in the achievement
of my mission, of my goals and objectives? That it is not just
a question of, well, this would be nice to have or it will make
things run faster. What it really causes you to ask, we hope,
is OK if I buy this system, if I make this improvement, if I
make this acquisition, what does that have to do with the
achievement of my goals and mission? How will that improve my
agency performance?
Too often we have looked at IT systems in terms of a major
challenge of did they come in on time and at cost, which are
important process performance measures. But we have ignored
saying, but what did we get for it in the long run in terms of
improved performance? And getting back to the IRS, one of the
things that I think they are going to be able to do a much
better job of, we have disaggregated their IT acquisitions, is
tying the actual development of an individual IT system to an
improved performance under one of their goals and one of their
measures rather than simply in terms of processing.
Mr. Horn. Since you brought up the IT system at IRS, which
has gone to the $4 billion mark and apparently been a failure
from all we read in the newspapers, what sort of management
oversight does OMB provide here when that type of situation can
occur?
I might add, it was also $4 billion with the Federal
Aviation Administration. Apparently, they can't find out
anything until they hit the $4 billion mark, and I worry about
that.
Mr. Koskinen. And you have to. As we have explained, one of
the reasons, we actually, with then Senator Cohen, worked very
hard to develop the legislation that passed, because we were
concerned as well as you as to what were the lessons we could
learn. GAO had done a marvelous study of the private sector.
They had isolated 10 of the best private sector companies in
using IT. They could also. My own experience is there are a lot
of companies in the private sector that have large scale
failures in IT in their history and background as well.
But what the GAO found, what our analysis of the agencies
found, that there are a fundamental set of principles that
agencies needed to understand. The first was that they needed
to take a look at IT questions not as technical issues, but as
management issues. They had to understand that the right and
most important questions about an IT system were managerial,
not about bits and bites. And therefore, we said they had to
take a look at, when they were automating a process, why do we
do the work at all? Couldn't we just stop doing this work
rather than automating it? The question we wanted them to ask
is, is there somebody else who does this better than we do,
either in the private sector or some other agency, so we don't
have to do it?
The third thing was, before they even got to this, was, are
we doing the work in the most efficient way of process? Have we
changed the way we do the work so we can both buy off the
shelf, if it is possible, but also get the best benefit from
it?
The next thing we learned, and the most fundamentally
important thing was, you had to buy in modules. The best
private sector companies designed systems that produced
deliverables in 12 to 18 months. If it couldn't be a
freestanding, operating result at the end of 12 to 18 months,
they didn't go forward.
The FAA, the tax systems modernization, a number of other
large Federal systems, as I say, were at the other end of the
spectrum. Their judgment was, we will design a system and in
over 6 to 8 years, we will solve all of our problems. We will
push the button at the end of the 8 years and, magically, we
will have a new system. Nobody in the private sector has been
able to make that work either.
Mr. Horn. But we learned that from the FAA and we knew it
in 1993 and 1994. I was then on the Aviation Subcommittee of
what was Transportation and Public Works Committee. If we have
learned that in Congress and we could walk in and know
something was screwy the minute we put our heads through the
door when we went out to see the operation, there was no
management. It seems to me the institutional memory of the
President, namely OMB, and its management section in
particular, should have said, hey, GAO has written on this. FAA
has been a failure. We knew why. Why did we let IRS get out of
control to do exactly what FAA did?
Mr. Koskinen. Well, IRS was up and running at that time. In
fact, in 1994 we did sit down with--we started this process in
the fall of 1994 reviewing what were the statutory framework--
what was the statutory framework and the requirements that
caused us to, in fact, keep reinventing the wheel? Ultimately,
what we did was blow up the Brooks Act with IMTRA. It was not
only an administrative process that was driving us. We had a
statutory system that was a great system in the 1960's and
1970's, but didn't reflect, again, the changes in time which
contemplated that we could put all the expertise in one area,
GSA; have all systems approved by GSA, or through delegated
procurement authority, and then the budget process would
operate as a secondary issue.
What the act says now is each agency is individually
responsible and the head of the agency is responsible for its
systems. There is only one level of approval, and it is in the
budget process. And we now have what we call the ``Raines
Rules'' we have distributed far and wide saying we are going to
judge your systems by whether they meet these eight criteria.
And as the Director has said recently, we are on the hunt for a
large system out there and we are going to try to kill them
all, to the extent that we can.
Mr. Horn. I can appreciate that, but I just still don't
understand it, where the institutional memory is that we should
have learned from these experiences?
Mr. Koskinen. Well, I am not sure, as you say, that there
was much institutional agreement about what this was about
before 1993 or 1994. As I say, if you went to the private
sector, I could show you, today, systems that don't work.
The last study I saw, in the last year or two, showed that
over half of all private sector systems come in over budget and
underperforming. And that's in the private sector.
Mr. Horn. Well, if it is only half, right now can we make
that statement that we are at the halfway mark; that only half
of ours are going bad just like the private sector?
Mr. Koskinen. Oh, I think we have a large number of systems
and a large amount of money that's being well spent now. And we
are, in fact, unwinding and coming to grips with the remaining
two or three major targets of opportunity, I would call them.
Mr. Horn. I think with Congress mandating chief information
officers, that's a help. We have got somebody that knows
something about technology presumably reporting to the two
principal operating officers of the Cabinet department.
Mr. Koskinen. Yes, although, again, that comes out of the
act. And I would stress one thing because I don't want to go
the wrong way with that, and that is the CIO is important not
because they understand technology, but the CIO is important
and we are selecting them because they understand the process
by which technology decisions ought to be made.
Mr. Horn. Well, I think we assume that.
We are going to have a hearing next week on total quality
management in the executive branch, various types of programs.
What role did total quality management play, if any, in the
pilots that were developed to look and move us toward results-
oriented Government?
Mr. Koskinen. Well, total quality management is a useful
concept. It is, in fact, one of those issues a little like
management by exceptions, or zero-based budgeting. It, in
effect, is an attempt to try to pull together a concept of
saying we need to get front line workers understanding and
dealing with headquarters about the fact that we ought to be
doing--everything we ought to do ought to have quality, it all
ought to relate to the mission and the operation of what we are
trying to achieve. There are various permutations on it.
The Japanese quality circles that Deming trained the
Japanese on in the forties or fifties is a kind of a total
quality management issue. In effect, as I say, GPRA is focused
on that. It is saying, we ought to be involved with basic
issues about the operation of an agency. We ought to be looking
at what it is trying to accomplish. We ought to know what its
effectiveness is. And ultimately, if we do that, we will, in
fact, end up with total quality performance if you want.
There is nothing magic in the words. As we noted, we are,
in fact, in the pilots and across the board, looking at things
like customer service. We are looking at things like empowering
front line workers. There is a lot of these concepts out there.
The ultimate goal is to--in fact, as GAO was saying earlier, to
make sure that all of these concepts get out of the concept
stage and get into the operational stage and not just at
headquarters, not just among all of us in Washington.
The real question is: Do we have improved customer service?
Do we have improved performance out in the front lines, in the
fields where people come into contact with Federal agencies?
Mr. Horn. When we looked at the Oregon situation, which is
probably the best example in the United States of an effective
results-oriented government, they had met with their
constituency and their citizens. To what degree do all of these
pilots relate to a constituency that was not simply the
bureaucratic constituency, important as that is?
In other words, was there constituent work? A lot of these
agencies have advisory committees. That might be one, to
involve them although often they are captives of the agency or
in similar fields as opposed to the average citizen. Did we do
any average citizen relating in these pilots?
Mr. Koskinen. Yes. The pilots that focused on customer
service and their service delivery to the citizens, a number of
them, in fact, have surveyed--either surveyed their citizens
before that--a number of them do surveys as a regular matter--
in terms of customer satisfaction. We now have over 2,000
customer service standards across the agencies that we have put
in place in the last 3 or 4 years.
I can't take you through the 70 pilots and say which of
them----
Mr. Horn. Those were used, you are saying, in some of the
pilots?
Mr. Koskinen. Right, and some of the pilots were focused
on----
Mr. Horn. You might want to file it for the record. I don't
want to belabor this. I am just curious to the degree to which
real people were contacted as part of this results goal
setting.
Mr. Koskinen. Good.
Mr. Horn. So let's just file it at this point in the
record.
Mr. Mihm. Mr. Horn, may I add something on that?
Mr. Horn. Yes.
Mr. Mihm. In our reviews, I would say it was very uneven.
In some cases agencies, as Mr. Koskinen mentioned, had customer
service standards or, as a result of the National Performance
Review, had a pretty aggressive effort underway to survey the
results of their customers. In other cases, though, it has been
somewhat disappointing. The agencies seem to be under the
impression that the requirement in the Results Act that they
solicit the views of other interested parties can be satisfied
just by a notice in the Federal Register, ``Hey, by the way, we
are issuing a strategic plan, if you have any comments, get
back to us in 30 days,'' type of approach.
We have been working with the House teams that have been
formed or through the House teams trying to encourage the
agencies that the Results Act is about a different form of
interaction between not only agencies and Congress, but
agencies and the American people, and that type of approach to
soliciting views isn't going to be successful.
The second thing that we have found where it has been quite
inconsistent is actually embedding routinely customer views and
stakeholder views into the daily operations of agencies. So
even those that have been fairly good, and there are quite a
few that have been fairly good in going out and asking
customers about what do you want. However, there still needs,
in many cases, to be the next step to actually embed those
views into the daily operations.
Finally, the third thing that has to happen that we haven't
seen happen in many cases, if at all, which would get them very
close to what's being done over in the United Kingdom, is
actually assign consequences to the failure to meet a customer
service standard. In the United Kingdom, if the mail doesn't
get there on time you get a subsidy on first class mail. If the
train doesn't run on time, you get part of the rebate of your
train ticket.
We don't do that routinely in the United States and say if
we don't meet a customer service standard, a published
standard, something is going to happen that we are trying to
make the citizen whole. So there is plenty of room that
agencies can move on to improve on their focus on customers.
Mr. Horn. Well, I appreciate that response. You are
absolutely correct.
I now am delighted to yield to the gentleman from Illinois,
Mr. Davis, for 10 minutes.
Mr. Davis of Illinois. Thank you very much, Mr. Chairman.
Mr. Stevens, OMB was required by statute to make
recommendations on changes to the GPRA and I would like to hear
what the GAO would have to say about that. So based upon your
monitoring, are there any areas that you think we ought to be
considering some change in?
Mr. Stevens. No, Mr. Davis, we don't. I don't think we
disagree with OMB here. The act still has a long way--it is a
work in progress and has a long way to go until it is fully
implemented. We didn't come across any killing defects in the
law, either in concept or implementation. And in our view, we
should continue implementing what we have rather than think
about changes at this point.
Mr. Davis of Illinois. One of the goals of the GPRA is to
help Federal agencies address fragmentation and overlap in
their programs. Could you comment on how well you think this is
taking place?
Mr. Stevens. Mr. Mihm can probably say more than I can on
it, but I would note that there is certainly a congressional
role in this, too. An individual agency has a very difficult
time, I think, comparing itself to other agencies. There is a
role for OMB in doing this, because they cross many functions.
I think there is a role for Congress, also, in making these
comparisons.
Not much has been done yet. The last strategic plans that I
have seen do spell out what an agency does. They don't spell
out that other agencies do very much the same thing and what
the coordinated relationships between them are.
Would you like to add on that?
Mr. Mihm. Just to add on that, as you know, Mr. Davis, our
work has shown in program area after program area, there is
overlap and duplication. We have talked already about the
problems in economic development programs. Mr. Stevens, in his
prepared statement, talked about education programs, employment
training programs. There appears to be at the Federal level,
which is replete with it, overlap and duplication.
What the Results Act allows Congress to do, if you put a
consistent focus on it and require it from the agencies, is to
over time compare goals across agencies to see if we have the
consistency in goals and thereby attempt to identify some of
this overlap.
Mr. Koskinen mentioned in his statement about the Office of
National Drug Control Policy. That shows an example of an
organization of a statutory basis for trying to pull together
overlap. It has been there a number of years and has made in
recent years some substantial progress, issued the President's
drug control strategic plan and is now working on performance
measures, which shows how long and how difficult this can be to
identify and address this overlap even when you have a
statutory mechanism in place. And for many of these program
areas we don't have that statutory mechanism in place, so it is
really going to require the Congress--and the House teams that
have been formed on the consultations are focusing on this an
awful lot--to really go after the agencies and ask about who
they are coordinating with in other agencies, how they are
ensuring that their goals are consistent with the goals of
other agencies.
Mr. Davis of Illinois. Do you think that some of this
overlap, though, is in reality necessary and essential? I mean,
can we refine the activity in such a way that we take out--I
mean, can an agency actually fulfill its mission without
getting into some of the activity in which another agency would
in all probability be involved?
Mr. Stevens. I think the Results Act provides the process
for making decisions like that. Right now, we are assuming that
is the case because nobody is really examining these cross-
agency relationships. I am not saying a case can't be made. It
is just--that in very few cases it has been.
Mr. Koskinen. Let me chime in, if I might, on that. If you
take the ONDCP, I think it is a great example of the point you
are getting to. I think of what the experience ONDCP
establishes is that you have got as many as 50 agencies
involved in some form of drug policy, either education or
eradication enforcement. And the argument isn't as a result of
that that, well, what we ought to do is put all of those in one
place. It wouldn't take what the Defense Department is doing
and HHS is doing and the Treasury is doing and necessarily say
they ought to be in one place.
What you would say is that they ought to be coordinating,
they ought to be collaborating, they ought to be, in fact,
working together toward a common set of goals. But I think you
are absolutely right, their effectiveness is, in fact, because
they are tied to programs in HHS, in Education, in the Defense
Department, and those are integrated.
So in some ways, I think Mr. Stevens is right. One of the
things the statute will do is begin to cause us to, in fact,
more effectively look at the way agencies are cooperating and
working together toward a common set of goals, while
recognizing that those goals are best achieved where the
programs are. Not in all cases. There are some cases where we
ought to be consolidating.
Secretary Reich tried, as everybody recalls, to in fact
consolidate a lot of training programs to in fact create a more
efficient training program, and then we ran into a lot of
congressional difficulties.
But I think those issues are the ones that will be very
important for us. I have told the agencies, as we go forward,
one of the major challenges will be in this area. That is, to
make sure that we are effectively coordinating, communicating,
and working together across agency lines where it is
appropriate for programs to be lodged where they are, but it is
important for them to be working in concert with other agencies
who are engaged in the same activities.
Mr. Davis of Illinois. And finally, Mr. Chairman, and
either one or all, as we continue to refine our systems, really
analyze what we are doing, look at it as well as we possibly
can, really understand the capacity that we have to produce in
certain instances, do we have any outside targets in terms of
what increased efficiencies and effectiveness we might think is
out there? I am saying like an athlete might say, if I train 20
more hours a week, if I shoot another 100 jump shots, maybe I
will increase my effectiveness by four more points a game, or
whatever.
Mr. Stevens. In results-oriented management, Mr. Davis, I
believe there are some countries that are certainly way ahead
of the United States and that provide an exemplary benchmark of
experience that has worked over a long period of time, in which
major changes have been made and which it has become, I
believe, even a political benefit. Those include Great Britain,
Australia, New Zealand, Canada to some extent, Sweden to some
extent. Within particular program measures, which I think is
also incorporated within your question, yes, there are outside
standards that can be used.
A very good example of this is the Social Security
Administration. We singled them out for favorable comment
because of their experience in improving their 800 number for
answering the telephone requests for information they get. And,
in fact, they have improved it so much that they have been
recognized along--in the same scale as some very good mail
order operations like L.L. Bean for having done extremely well
in terms of responsiveness and customer satisfaction to them.
So, yes, and I think using that outside measure has been
therapeutic to them and also instructive as to what an agency
can do if the motivations and rewards are there.
Mr. Koskinen. As a general matter, I think that our goal
is, in fact, to be the best in class, to benchmark against who
can do this--who does this the best around and we should do as
well?
As the Vice President has said on numerous occasions, if we
are really good at this, ``good enough for government work''
will be a standard of the highest performance, not a way of
dismissing a standard. And that is where we really ought to be
going--across the board. I think this statute is a great
vehicle and catalyst for us to get there.
Mr. Davis of Illinois. Thank you very much. I have no
further questions, Mr. Chairman.
Mr. Horn. I thank the gentleman. I now yield 10 minutes to
the gentleman from Texas, Mr. Sessions.
Mr. Sessions. Thank you.
Mr. Koskinen, have you had an opportunity to see this?
Mr. Koskinen. Well, my glasses are off so I don't know what
that is.
Mr. Sessions. It is that same book just to the left.
Mr. Koskinen. It is this. Yes.
Mr. Sessions. Have you had an opportunity to see that at
all?
Mr. Koskinen. I have scanned it.
Mr. Sessions. Well, I must confess, you are ahead of me. I
have been trying to go through this.
Without opening it up, I would like to just ask you a
question. We are sitting here talking about the application of
GPRA and all of these things and the plans, and we are
hopefully going to have them go down to the lowest level of
manager and worker within the Government to where they feel
like that not only do they comply with the mission statement,
but that what they are doing is of great benefit. And we have,
I think, generally said that we think this will help improve
not only the performance, but the measurements and the
effectiveness of an agency.
How well do you think or to what extent do you think that
the Federal managers would respond if they said that this work
that they are doing has had an impact on their agency up to
now?
Mr. Koskinen. Before I came to the Government, I spent 20
years managing large-scale failures in the private sector,
where you would have thought people would have been--and they
were--in great shock, large enterprises like the Penn Central
or Mutual Benefit Life Insurance had failed. Our experience in
those most difficult circumstances were that when people felt
that they were part of the solution, not part of the problem,
where they understood your point, that what--how what they were
doing related to the ultimate mission and success of the
enterprise, they responded with great enthusiasm and worked a
lot harder and longer than you could have asked them or made
them work.
My experience in the 3 years I have been in the Government
is that Federal employees are at least as motivated as those in
the private sector. People came to the Government because they
were committed and dedicated to the mission and roles of their
agencies. And that if we can accomplish just the paradigm that
you describe, I think we will find a tremendous increase in the
level of enthusiasm and morale, as well as productivity and
effectiveness of our work force.
But it is a great challenge because we have to, in fact,
beyond everything else we are doing, change our concept of
management. We have to catch up with the private sector. We
have to understand that top down hierarchical control no longer
works, whether it ever did in the past.
As I have said in the past, General Motors went from 13,000
people at headquarters to 1,300 not just to reduce costs, but
as a way of, in fact, eliminating unnecessary layers between
the people actually doing the work and the people running the
companies.
We need to reach out more to our employees, not just to
energize them, but ultimately to recognize that they really
know what is going on in our organizations. They know what the
obstacles are. They know what unnecessary rules and regulations
there are that interfere with their ability to perform with
their job. So they have the information we need if we are going
to continue to adjust and improve our performance.
I think your question is exactly right. They represent a
great resource for us, and I think that they would respond
enthusiastically and effectively.
Mr. Sessions. Do you perceive that up to now that this has
been an exercise by headquarters in each of these agencies or
that it has gone down within--permeated the agency to where
some of those regional managers have gotten involved in this
process?
Mr. Koskinen. Like the answer to all of these general
questions, I have decided all of life is a bell-shaped curve.
You have some agencies that have reached out and actually
brought in regional managers, tried to bring in front-line
employees. We have encouraged that.
There are clearly no other agencies, very large agencies,
where they have, in fact, done it more than headquarters. As I
noted, my concern is that we not in this process create the
expertise in a small few people who are the GPRA experts; that
we need to have these be operating documents. So we continue to
push the agencies to understand that, ultimately, they can
manage effectively only if they have support at the top, but if
they involve people on the front lines at the same time.
We won't succeed without leadership from the top of the
agencies, but we will not be successful if we do not involve
and energize people at the very bottom of the agencies at the
same time. That is basically the kind of Zen conundrum that
challenges people trying to make management change, and we need
to work both ends. I think at this stage it is the minority of
agencies that have done that, but we are continuing to
encourage them, and I hope over time more of them will do that.
Mr. Mihm. Mr. Sessions, we have some data that can speak
directly to that.
Mr. Sessions. Absolutely, and I am going to get to that.
Mr. Mihm. OK. I am sorry.
Mr. Sessions. I will get to that in just a minute.
I want to pat you on the back. I think what you said is not
only exactly correct about people wanting to have and be a part
of the process and have a process and make their jobs better.
But several months ago I was down in Dallas visiting an FAA
installation, and if you are in Washington for even small
periods of time, you have heard about the FAA and their
management structure and some of the decisions that they make
and perhaps they are one of the most, I will be careful here
without picking on any of the management, perhaps their
decisionmaking process and the things that they buy are not
leading edge.
That is trying to be very polite, Mr. Chairman. But when
you go down to Dallas, TX, and you talk with a front-line
manager, they are completely--the two I talked with were
unaware that there was even a problem; that someone even made
an accusation that their agency was not in complete compliance
and that they weren't leading edge. In other words, it was kind
of like they didn't even know about the disagreement.
And I, as I look on page 87, I would like to draw your
attention to--and you answered what would be on page 88, I
believe. But page 87, is the distribution of Federal managers
expressing an opinion on the extent to which implementing GPRA
to date had improved their agencies' programs. And that is why
I asked are these lower level, where the rubber meets the road,
are those people involved in GPRA to where they feel like they
are being asked and being heard from? Because if you look, it
says--it looks like to me that about 1 percent, very great
extent, and 9 percent, a great extent. So that is about 10
percent.
And then if you flip the page, you will find that it goes
up, that they want to be involved and feel like if they were
part of the process, it then goes to some 36 percent from 10
percent. And so my--I don't know whether I take this to a
conclusion, but I would like for you to hear me say I wonder
how well it is being sold throughout all the way down to that
bottom line person.
Let me end with this: About a year ago, and I am not taking
advantage of anybody who is from Chicago, Mr. Davis, at all, or
from Illinois in any of this, there was a huge flood that came
in the wintertime in Chicago. In fact, it was not a surprise to
the people who had known about the problem. They simply did not
want to spend $10,000 to fix the flood--the problem before the
flood came and it cost over $1 billion.
This is the kind of thing that we could tell the stories
over and over about how lower level management people being in
touch with whatever their job is and that should reflect not
just from an agency's perspective of what they are about, but
all the way down to their performance appraisal.
So I hope that--not to take advantage of you or anyone
else, but I hope that we see that this flips over with what
they see the current standard can be and how it can impact
them. Thank you.
Mr. Horn. I thank the gentleman.
Let me just pursue a number of questions here, and then
I'll turn to Mr. Davis again.
Was the Cabinet ever briefed on the results-oriented
government effort? Did you have a chance or the Director of OMB
have a chance to brief the Cabinet on it?
Mr. Koskinen. Yes. Actually, in either January or February
the director spent some time in the Cabinet briefing describing
the act--we had a number of new Cabinet members at that time--
their responsibilities; the fact that, as we told them, there
were a couple of things that they ought to be aware of. One is,
these were agency plans that they were responsible for and
that, at a minimum, they ought not to be embarrassed in the
fall and have a plan out that they didn't understand or didn't
know; and, even worse, they ought not to have a plan out there
that they disagreed with that ultimately the people were going
to expect that the Cabinet Secretaries understood and had been
involved with the strategic plans that had been produced.
We've spent a lot of time at the President's Management
Council, which I chair, which is the deputy secretaries of the
agencies and the chief operating officers, over the last 3
years, talking about the challenges and opportunities in
turning their organizations into performance-based
organizations.
Mr. Horn. On your early returns, as you look at the various
pilots, do most of the problems that exist on not having
perhaps as results-oriented a government as we would all like
to have; to what extent is that related to the current
personnel policies of the Federal Government?
What I'm getting to is one category that comes to mind, and
I don't know if there is any pilot that relates to it. It seems
to me when people are given responsibility for millions, tens
of millions, hundreds of millions, and billions of dollars in
some agencies on procurement, that we ought to make sure those
people are happy, they see a progression, and they get constant
training on improved methods. What I'm thinking of is sort of a
special class within the civil service that would reward
procurement officers for this type of responsibility. I just
wonder what you're getting out of the pilots that you've had a
chance to go through that says we better do better by a lot of
our public servants and procurement than we are doing?
Mr. Koskinen. Well, I think you're exactly right. It
applies across the board, obviously.
Again, one of the great presentations we had at the
President's Management Council about a year, year and a half
ago, was from the interagency training leaders who said that
their biggest challenge was making sure the people asked the
strategic question: What were we training people for? Their
concern was that people kept being sent to training, it was
their training, but without an understanding of, again, how did
that relate to improving their agency performance.
But part of our problem with the personnel system isn't
that we haven't held people accountable or isn't that we
haven't, in fact, looked at their performance. The problem has
been performance focused on process. We have been a compliance-
oriented system, for understandable reasons. Every time there
has been a problem or failure, or something popped out up in
procurement or other areas, we had a new rule that we would
say, this is the way to do it, so that we have been a very
process-oriented personnel system and have not necessarily been
a results-oriented, other than the result of, don't violate any
of these rules.
So that we need to do exactly what you're talking about,
and procurement, we've worked with it. Steve Kelman and the
head of the Office of Procurement Policy are working on it. We
look to look at training. We need to look at positive
reinforcement in terms of performance appraisals and
compensation, in terms of achieving the goals and objectives of
the procurement system. But those goals and objectives also
have to be more than complying with the rules. Everybody ought
to comply with the rules. But the goals and objectives of the
procurement system ought to be furthering the performance and
effectiveness of the agency.
Mr. Horn. In the pilots, the three approaches you had, you
stressed performance, planning, and reporting in some pilots,
managerial accountability and flexibility, and then performance
budgeting.
Now, the second pilot on managerial accountability and
flexibility, I gather, really never got off the ground. And I
guess what I would ask is, of both GAO and OMB, if we could go
back to 1993, what sort of pilots and in what sequence would
they occur to be most helpful in providing the experience and
the lessons agencies would need to have had earlier in order to
get more consistent success with the results-oriented
government approach?
Mr. Koskinen. I'm not sure, if we've done anything
differently, we would get farther along than we are. I think we
made good progress.
I think had we known or the authors known when drafting the
statute with regard to flexibility all that was going to happen
in terms of procurement reform, personnel reform, and
regulatory reform, we might have spent a little less time
focusing on flexibility from administrative rules and we might
have actually developed flexibility pilots that would have
provided flexibility from statutory limitations, which I think
was the biggest need the agencies felt they wanted to
experiment with; that we had no authority under the statute to
grant. So I think it might have been very helpful to have that
pilot.
As I noted in the past, our performance-based organization
concepts, in effect, are flexibility pilots with flexibility
from statutory requirements and limitations. I think we might
also have early on had a few pilots, although we had
experience, in the area of strategic planning. We produced case
studies. There are 22 of them now on the Internet that we
produced with the American Political Science Association of--
from agencies on strategic planning, performance planning, and
performance measurement. We produced those case studies to give
people object lessons on what actually did work or didn't work.
We encouraged the agencies to include in those studies the
problems they had, the failures they had, where they went
wrong. And a couple of the best case studies had been about
strategic planning, where the agencies talked about blind
alleys they went down, the difficulty of pulling plans to go
together. And I think, in my own view, we might have had a
strategic planning pilot at the front end where we might have
had a few more case studies to demonstrate the difficulty of
this as we move forward.
But I would be interested in the GAO response.
Mr. Mihm. Well, one thing on the strategic planning, just
to remind you, Mr. Chairman, under the performance plans,
agencies were to have had a strategic plan in place for at
least 1 of the 3 years that they were doing the performance
plans; that would be either fiscal year 1994, 1995, or fiscal
year 1996. So there was at least some effort there within--by
the authors of the Results Act to have a strategic planning
component, although that strategic plan didn't have to be GPRA
compliant, meaning they didn't have to consult with the
Congress.
In terms of the managerial flexibilities, I think one of
the--even though none of the pilots were chosen ultimately by
OMB, we learned some very valuable lessons there, and that is,
when we went to--when OMB went to the agencies asking them for
waivers, what they came back with was a lot of statutory
waivers or requests, as Mr. Koskinen mentioned. They also came
back fundamentally with answers that agencies were finding that
the--fundamentally, the constraints that confront agencies are
of the agencies' own creation, it's not something that's based
in regulation. It's not ultimately something that's often based
in statute, although, as I mentioned, they did have some
problems with those. But agencies have imposed requirements
upon themselves.
Mr. Sessions was asking earlier about the extent to which
this has penetrated down to field locations. Some of the most
interesting requests for waivers came in from field locations
to their headquarters units.
It was interesting being in those meetings where the
headquarters units had to admit, well, gee, OMB wasn't doing
that to you, we in headquarters are doing that to you. There
was some agitation, to put it nicely, and, as a result of that,
we've reported on one of those over at the Corps of Engineers
that they made some substantial changes in the procurement area
that were requirements that were imposed upon field locations
because of requirements from headquarters.
And it's not real clear to us that we would need to have--
in retrospect, that we should have changed the sequence of the
pilot phase, because I think we learned some pretty good
lessons all along.
Mr. Horn. I'm sort of amused and completely agree with your
comment, having been in State government for a long time,
exactly the same problem, where agencies were blaming the
control agencies in Sacramento, the equivalent of OMB in
California being the Department of Finance, which is the
Governor's management arm and budget arm. And the problem was
within their own agency, and these things just crept up, and
the people who were around that started 30 years ago aren't
around anymore, and the newcomers take it as gospel out of the
capitol. So I'm glad to see those things are rushing to the
surface and we're dealing with them.
You mentioned in your testimony on GAO five key challenges
to successfully implementing the act. And there are many
challenges to instilling a results oriented mind-set, let's
face it. However, I would like to know what are the factors you
think are the key to better goal setting, better measurement,
better information, and the use of that information to make
real improvements? When you look through all these different
filings, does something stand out there that, if we could do
nothing else, we ought to do that?
And I'm sort of using an analogy when I've got an academic
Senate to agree to the student evaluation of the faculty. You
could ask 50 questions; you could ask 10 questions. It really
boils down if you just asked one question.
Mr. Stevens. Yes.
Mr. Horn. The data return would be exactly the same.
Mr. Stevens. My response to that, Mr. Chairman, would be
something that is, in large part, under congressional control.
That is, what will determine the success or failure of the
Results Act is the extent to which the volumes of information
that the act will require agencies to produce and the extent to
which that information is actually used in decisions that
matter to the agency--budget decisions, oversight decisions,
and legislative decisions.
The surest way to ensure that the act does not succeed will
be for this information to be produced, to be available at some
cost, great cost in some cases, and to find that the people
making the real decisions affecting the agency, many of whom
are right here, ignore it. Assuring that this really becomes
the basis for decisionmaking is, to me, the sine qua non for
success of the act.
Mr. Horn. I now yield 10 minutes to the gentleman from
Illinois, Mr. Davis.
Mr. Davis of Illinois. Thank you very much, Mr. Chairman.
Mr. Koskinen, the chairman touched upon the Defense
Department in an earlier sequence, and we know that it
represents almost half of the discretionary spending. DOD has
stated that its Quadrennial Defense Review, the QDR, will be
used to satisfy the requirements of GPRA's strategic plan. And
even though the QDR does not seem to contain all of the
elements required of the GPRA strategic plan, do we know if DOD
will submit a GPRA-compliant strategic plan by this deadline of
September 30th?
Mr. Koskinen. It's our expectation that they will. The QDR
just came out in the last couple weeks. We are reviewing that
with the Department in the face of this question, which we have
as well, which is, does the QDR meet the requirements of the
act?
The Department's view, appropriately, is the QDR is based
on a statement of the mission of where we're going with our
armed forces, what the challenges are over the next several
years, a set of goals and objectives, performance measures, and
strategies. So that a substantial volume of the information
that one would expect one would have from an agency in terms of
its strategic plan for the next several years is contained in
that.
The real question over that we're all looking at is, does
it portray that in a way that provides measures against which a
performance, annual performance plan, can be held accountable?
Does it describe some of the issues that the act requires to be
described in a way that are appropriate?
I think the bottom line is that, to the extent that
additional information is needed, it should be easily provided,
I think, because the QDR does provide the most difficult parts
of the strategic plan, which is the statement mission, the
goals, the objectives of the Department and the external forces
that the Department faces over the next several years. But the
bottom line is that we are focused within the Department that
ensuring that in September they produce an acceptable strategic
plan.
Mr. Davis of Illinois. And they have not indicated that
there might be any unusual difficulty or circumstances or
that----
Mr. Koskinen. No. Actually, the Department at large has
done over the years probably as good a job as by far most of
the agencies in terms of looking at longer-term strategic and
planning objectives. When they have a 4- to 5-year budget
horizon, those aren't just spreadsheets, they actually have
meaning and policy behind them. So that there is a fairly good
history of development of performance measures, and in a
budgetary sense as well as in a programmatic sense. So I think
that to the extent that decisions need to be made to the QDR to
provide a full-fledged strategic plan, that should not be the
problem.
Mr. Mihm. Mr. Davis, the challenge all agencies are facing,
but particularly pointed at DOD, is being able to draw a
linkage between the broad strategic goals or statements that
may be in the QDR or will be in a strategic plan and the daily
operations that are taking place throughout the Department.
This is something Mr. Koskinen mentioned was a crosscutting
issue that OMB had with most agencies' strategic planning
efforts. It's going particularly a challenge within DOD.
We've done some work recently and wrote to the Secretary of
Defense on this, identifying problems and linking logistic
strategic plans to the overall logistic plan for the
Department, information technology at various component levels
to information technology strategy for the whole Department,
and, in fact, when we went and spoke with the key GPRA
officials in various defense components, this was one of their
real concerns. It wasn't real clear to them what the Results
Act would mean to them down at a component level or within the
military service or defense agencies.
Again, getting back to Mr. Sessions' point of making sure
that the strategic decisions that are being made at a
departmental level and in consultation with the Congress really
mean something in terms of the wheels turning back within an
organization is something that DOD and other organizations will
be challenged by.
Mr. Davis of Illinois. OK. The GPRA requires agencies also
to consult with their stakeholders as the strategic plan is
being developed. Who does DOD consider to be its stakeholders,
and how are they going about consulting with them?
Mr. Koskinen. That's a good question. They obviously have a
major consultation process that inevitably will occur around
the QDR with the Congress as they go forward. Many of the
agencies are consulting with each other. As we discussed
earlier, they in effect provide services to or receive services
from or work, hopefully collaboratively, with agencies in a
range of areas. So we've been encouraging agencies to in fact
share their plans as appropriately across the lines. And I
think the Defense obviously provides a range of services in
other areas as it goes forward.
The more difficult question to analyze, and I don't have
the answer off the top of my head, is who outside the
Government are stakeholders for the defense strategic plan, who
should they be discussing their plan with. And that really in a
lot of ways rises to the level of international policy and
treaty and the relationships we have with security
organizations and treaty operations around the world. And I'm
not sure anybody has really dealt with yet whether, and to what
extent, those are stakeholders that should be consulted.
Mr. Davis of Illinois. So in all probability I guess we
could say that they're still being defined.
Mr. Koskinen. I think that's a very felicitous way to
phrase it.
Mr. Davis of Illinois. That as we keep looking, I mean we
keep finding and we keep finding out, I would assume.
Mr. Koskinen. Yes.
Mr. Davis of Illinois. My final question, Mr. Chairman:
GPRA attempts to force the Government to focus on results and
may require significant congressional oversight if it's to be
effective. Do we think that implementation of the GPRA process
in Congress may strengthen the case of those who advocate a 2-
year budget cycle, focusing 1 year on appropriations and
oversight on the next?
Mr. Koskinen. And your question is, would that be helpful?
Mr. Davis of Illinois. [Indicating in the affirmative.]
Mr. Koskinen. I think it's always hard to know for sure
what will happen when you make process changes. But I think to
the extent that our recent experience anyway over the last
several years is that most of the time has been spent on inputs
or the budget process, how many--where are the resources going
to be allocated, as I say, in the last 3 or 4 years it's sort
of been an endless process which has left less time for
oversight.
I think to that extent we would have, I think, perhaps the
opportunity in the budget process to focus on results and in
the off year, as it were, to spend time looking at internal
structural and organizational issues.
We've provided to those supporting the biannual budget the
necessary technical adjustments to GPRA to make it consistent
with that, and, as a general matter, we've supported the
biannual budget process for the reasons you suggest, which is,
we think we would end up with a more constructive dialog about
a wider range of issues.
Mr. Davis of Illinois. Is there an increase in multiyear
budgeting, I mean across the board, I don't mean the Government
but outside government?
Mr. Koskinen. I think most organizations that I'm familiar
with still budget on an annual basis. The best organizations
run against a longer-term plan, business plan, strategic plan
that has generally no longer than a 5-year horizon where people
understand the real effective timeframe is probably 3 years,
and done well. And we've been through a number of organizations
that have never done it before; done well.
The way people view it is, the budget is the first year of
the next plan, and the plan becomes a rolling plan that gets
redone every 3 or 4 years in total, but you continue to measure
against those objectives as you go forward, which means that
each year you do not de novo start with the budget process
again.
To some extent, the congressional budget process seems to
have elements on occasion as if we didn't know anything from
last year and we're going to start this year with the same
arguments and same debates.
So one of the hopes would be out of GPRA and strategic
planning in the 5-year budget agreement to get to balance in
2002--is that we would have more of an idea and a shared
expectation as to where we're going to be, and we can measure
ourselves and debate within those frameworks rather than sort
of starting de novo each year and saying, ``OK, this is a new
year, a new budget, let's start all over again.'' Most
companies don't do it that way.
Mr. Davis of Illinois. Thank you very much.
I have no other questions, Mr. Chairman. I've always
wondered what would happen if we were to collect our money
first and then spend it as opposed to spending it and then
collecting it.
Mr. Horn. You mean we might keep some?
Let me ask both of you this question. We've talked about
the agencies, and the ones that have adequate data bases where
they can use some of that data in the performance sense of the
word. And we've talked about accounting systems. I mentioned
the 49 different ones in the Pentagon. We didn't get into the
hundreds of different computer systems that can't relate to
each other and need some linkage to do that.
And I guess that I've learned this is usually the agency
Inspector General is sort of an invaluable source to find out
if there's adequacy to an agency's data base and its various
systems. And I guess I would ask both the executive and the
GAO, in your opinion, is that a proper role for Inspectors
General to play? And to what degree have we involved the
Inspectors General in this process? Is it strictly a matter of
agency judgment, or are we getting the benefit of their
somewhat objective view as they look at the agency and its
weaknesses and its strengths?
Mr. Koskinen. One of the large number of speaker agency
groups I chair is the two groups--or are the two groups that
composed of the--or comprised of the Inspectors General from
across the Government. And over the last 2, 2\1/2\ years, we
have spent a significant amount of time discussing GPRA and the
appropriate role of the Inspectors General to it. And their
consensus is that they do have an important role to play
defined really as you describe it. They view that their role
has focused on the integrity of the data collection process,
whether systems are appropriate for delivering it.
They are careful to note that they do not have the
resources and don't think it's appropriate to even consider
having them. That they will be--are not going to be auditing
every piece of performance information since there will be a
substantial amount of volume, but, on the other hand, they
think it is appropriate for them to provide the agencies and
the Congress and us, their view in terms of the adequacy of the
data collection process, the integrity of the data as it's
provided over time.
They also have decided and noted that they do not think it
is their role to define for the agency performance measures.
They think that's an appropriate political judgment for the
Congress and the agencies to, in fact, discuss in terms of
mission goals and objectives. Those are set legislatively as
they go forward. But as a result, I expect that across the
Government, the Inspectors General are prepared to play a role
in ensuring that the performance information itself is valid,
has been collected in an appropriate way, and in fact is being
accurately presented.
Mr. Horn. Would GAO like to----
Mr. Stevens. I think that corresponds with our view of the
Inspector General's approach to the Results Act, too.
Mr. Horn. It's been mentioned several times by many members
that were into the bit of consultation at this point between
some of the agencies and some of the appropriate congressional
committees. Is it your reading that we will be able to do this
in a timely manner, according to the act? Or are we going to
have dropoffs off the wagon as consultation goes on? What's it
look like?
Mr. Koskinen. No, I think we're making good progress. I
think, in 80 percent of the cases, there's meaningful and
constructive dialog going on. I think we will be able to
identify, with the Hill, the agency or two that may be having
difficulty and work jointly to ensure that the consultation
process has meaning.
As I've noted in several cases in the past, we at OMB feel
very strongly that the consultation process is an important
part of the act, and we are anxious to make sure that it gets
done on an agency-by-agency basis. And I am confident that,
with our joint efforts, everyone will participate in that
process.
Mr. Horn. In other words, you're saying with the majority
leader having a major role, at least in-house consultation,
there shouldn't be a problem in getting the executive agency in
touch with the appropriate committees?
Mr. Koskinen. That's correct.
Mr. Horn. And you on your side will certainly be sure that
the executive agency is prepared to consult and has most of
their ducks in a row before they come up here?
Mr. Koskinen. Yes.
Mr. Horn. OK. So we don't have to worry about that one.
I guess what I'd ask is a very broad question. We go
through these phases of management reform in the private
sector, we go through them in graduate schools of public
administration and business, and we go through them in
Government. And I guess I'd ask you, John, what do you expect
from a strategic plan? What's strategic about it, in your
judgment?
Mr. Koskinen. Well, again, just to sort of repeat where
I've been earlier, I think a strategic plan, and probably the
important thing about a strategic plan is a process by which
you get it, that if you can involve the agency leadership, if
you can involve frontline workers, if you can involve the
Congress, and ultimately if you can involve the public over
time in a discussion about the roles, goals, and missions of an
agency and its objectives. How is it going to hold itself
accountable, what are its goals, what is its performance, that
you will create, in effect, a management document.
And I think Mr. Stevens is exactly right. We need this
report and the active involvement in the Congress to justify
the time and effort the agencies are putting into this in terms
of the dialog. Although I have been pushing to the agencies
that the information they're collecting is important, if it's
done correctly and if it's in the context of goals and missions
and objectives, and that they ought to be doing that even if
nobody on the outside asked about it, because it's important
for them to be able to manage more effectively.
As I said at the start of my testimony, our resources are
clearly going to be constrained over the next several years.
Therefore, the only way we're going to expand the effectiveness
of programs and of Government is, in fact, to be more
productive in the way we do our work. The only way to do that
is to get information back on a regular basis about what impact
we're having, how effective are the programs, what can we do to
increase that effectiveness, and, at least half the time, what
we can do to increase the effectiveness is not spend more
money?
What we can do to increase the effectiveness is to change
the way we manage, but we won't know that and we won't know the
implications of that if we're not collecting performance
information in the context of an overall strategic plan.
Mr. Horn. Does GAO have a comment?
Mr. Stevens. I would respond, Mr. Chairman, that there was
a hearing not long ago in which Mr. Armey, the majority leader,
sat in this very chair, I believe, and provided what I believe
was an answer to that question. He tied it to the opinion of
the American people and pointed to the low confidence of
Government and the perception that many people have, that they
are not getting very much for the tax dollars they're sending
to Washington.
And I think the discipline of the Results Act will provide
the knowledge of what that money is going for. It still may not
be satisfactory information. It may lead to changes, but it's
knowledge that we really just now do not have: What are we
getting for that tax dollar?
Mr. Horn. Well, it's an interesting comment, because many
Members of both parties and all ideologies do a survey often of
their constituency. It isn't a legitimate random sample or
anything, it's just, you send out the newsletter and there's a
coupon attached to where you are to make certain judgments, and
we tote them up, and see what it does.
It so happens I've also done legitimate random samples, and
it's my universe that responds is exactly in accord with the
legitimate random sample. And here's what they sort of feel,
and other Members have confirmed this in their constituency:
You ask them at what level is governmental money wasted, the
Federal, the State, or the local? And it's amazing around the
country that 50 percent of the Government's money is wasted at
the Federal level; maybe 35, 30 percent is wasted at the State
level; and maybe 15 percent or so or 10 percent is wasted at
the local level.
Now one obvious observation on that subject is, when
they're close to the Government at home and they can go down to
city hall and harangue the mayor and the council members or
they can wake the councilmen up or the councilwoman up at 2
a.m., and say, hey, the garbage truck hasn't come yet, it's a
little hard to find Members of the Congress, it's a little hard
to find the Cabinet officers, and at the local level you can
find them.
So I would think that when visible Government is there to
listen, that we get a better reaction out of it. I don't know,
you've looked at a lot of surveys, I'm sure, in the
administration.
Mr. Koskinen. Well, I think that's right. And it's not
inconsistent with Mr. Stevens' point, which I support, which I
would say would be a corollary to those numbers, which is that
the closer you are to the delivery of the service and the
Government providing it, the more you understand and oftentimes
support that service. The farther away you are from the
organization, the harder it is to bear in mind what it is that
the organization is trying to achieve.
So that, as Mr. Stevens said--and I was here with Mr.
Armey--I think it is correct that one of the things we've
gotten away from over the time is continually reminding and
explaining to the American public where we do what we do, what
are we trying to accomplish with each of these specific
programs and activities, which is part of that explanation, so
people will understand why we're spending this money. Because
part of the assumption of waste that we've seen in those
surveys is waste not because we're ineffective, but it's waste
because it's a program that they don't particularly support or
understand why it is that it runs.
To the extent we can better articulate what our mission is
and our goals and objectives, that will help. But the corollary
is that to the extent we can also say that we're holding
ourselves accountable for achieving a result, I think we will
increase significantly the confidence in people that we're not
wasting the money.
The experience in Britain and other countries has been that
rather than having people object to the inability of the
Government to achieve its performance standard, there's been a
tremendous outpouring of support for organizations that care
enough to even point to a goal and are actually striving to
meet it. I think what we need to do, and what this act will
allow us to do in a lot of areas, is to explain to people not
only what we're trying to accomplish, but to tell them that we
actually have goals for what the results are and that we're
actually going to every year try to get better at it. If we can
convince people that we're legitimately and honestly trying to
do that, I think the level of confidence in the Government and
the level of support for it will increase.
Mr. Horn. Could you describe the type of group you have on
your staff that is imbued with results-oriented government,
that is knowledgeable about the British, Australian, New
Zealand, Canadian, and Oregon experiments. Where's the
institutional memory in the executive branch that can go out
and help a Cabinet officer understand how this works so he or
she gets imbued with the spirit?
Mr. Koskinen. Well, I spent 3 years, with the support of
two different directors and the strong support of two different
directors, in effect, trying to turn the entire organization of
OMB into that organization.
I think that the one thing to remember, as we all know, is
the Government is a very large enterprise. When you have almost
2 million employees, we need to have that expertise in more
than a handful of people.
We have over 500 people at OMB. We have a significant
amount of our time spent looking at resource questions. And I
think we've been very successful over the last 3 years training
and engaging those people in a dialog about why a fundamental
part of the resource question is, what do we get for those
resources, so that the institutional memory, if we're
successful, and we're working on it, will be that the entire
organization will be results oriented. The entire organization
will be in communication with the agencies about these matters.
I've talked about the reviews we've done in 1995 and 1996
and this year. Those reviews aren't being done by a handful of
my people who aren't very knowledgeable; those reviews are
being done by the agency, OMB. The dialog going on with the
Cabinet Secretaries, budget officers, and managers are dialogs
with their normal program examiners. We've done a lot of
training and a lot of dialog to get our end of the group up to
speed. But I think that's the only way it starts, and even that
won't be sufficient.
The real goal, obviously, is to get people in the agencies
who understand this and themselves to, even if we quit talking
to them about it, which we don't plan to do, but that's the
only way it's going to work. It won't work, as you and I have
discussed in the past, if I had 10 more really great GPRA
people. That's not the way it's going to work. The way it's
going to work is if we at OMB and in the executive branch, and
as, Mr. Stevens said ultimately, you in the Congress in your
decisions continually resonating back asking questions about:
What are the results? How much did it cost to get those
results? What do we need to do differently to improve those
results? Only then will we actually see the successful
implementation of this act.
Mr. Horn. Where do you find the budget examiners fitting in
this process?
Mr. Koskinen. Where do I find----
Mr. Horn. Are the budget examiners going to still go about
reviewing the budget as they always have?
Mr. Koskinen. I know actually----
Mr. Horn. OMB, frankly, hasn't been thinking much about
management or results or performance or anything else, just,
how much do you need? And we only have so much to give you.
Mr. Koskinen. Right. We actually call them program
examiners now. And one of the reasons we've changed that name,
and changed the structure of the organization through OMB 2000,
is to ensure that the budget dialog and process is not just
about inputs, that it is, in fact, about structure and
organization and outcomes.
Many of the program examiners or budget examiners in the
past asked those questions. We're very focused on education
programs and other programs, what were the results of what we
got for the money, and what we're trying to do now is
institutionalize that, not only within OMB but within the
agencies, so that they understand that resources are not a
question just about inputs, they are a question about outcomes.
Mr. Horn. When will we get a budget submitted by the
President that looks at the outcomes on the budget page as well
as the budget numbers past, present, and proposed?
Mr. Koskinen. Well, the great joy of the statute is, it
requires us to produce a governmentwide performance plan with
the next budget, and we plan on doing that.
Mr. Horn. So in February of next year we'll see it for the
next fiscal year?
Mr. Koskinen. Yes, and in fact as we've discussed this
internally, I have an agency-wide implementation group for GPRA
drawn from all the program examining divisions, increasingly
done well. The budget ought to be, in effect, a performance-
based document, and to a large extent it already is. There is a
lot of performance information in the budget.
But again, the focus on the Hill and in the dialog has
probably been on the input side. So we don't think it's a major
change for us to turn the budget document into a results-
oriented document. And we plan to do that.
Mr. Horn. Does GAO have a comment on this discussion?
Mr. Stevens. Not yet, Mr. Chairman. We will.
Mr. Koskinen. Forewarned is forearmed.
Mr. Horn. You want to see who survives; is that it?
I'm curious about the consultation so far, in your judgment
and also GAO's judgment. As you've said, if we're simply going
to have this dialog go on up here, and it isn't translated into
how we make decisions and you make decisions, and there isn't
agreement, let's say, on the performance standard and what they
ought to look like if we're going to take them seriously up
here and not just fluff, and we can count that so we gave you
that--and I guess that's where I'm curious, what's your feel
for the consultation thus far as you hear about it?
Mr. Koskinen. I think we have room for improvement--on both
sides. We have some agencies--a small number--that need to be
responsive promptly to the interest in having strategic plans.
From the congressional side, we've had very good and strong
support from the majority leader's office, the Speaker, and
from this committee. But we need in some areas, for specific
areas, we need more involvement from appropriators and
authorizers.
The House in this area of consultation generally is the
head of the Senate. Some specific Senate subcommittees or
committees have engaged in very important consultations, but a
lot of them have not yet. There are indications that more are
starting. But again, I think that we need to broaden the base
of consultation from the congressional side at the same time as
we're encouraging the agencies to hold up their end of the
bargain.
Mr. Horn. Does GAO want to add anything to this?
Mr. Mihm. Yes, Mr. Chairman. Mr. Koskinen spoke quite a
while ago about, we all agree there's a bell curve, we just
argue a little bit over the slope, or disagree a little bit
over the slope. I think this might be one of the areas where we
take a little bit different perspective on the slope of the
curve. That is, based primarily on the discussions of
congressional staff that have been leading the consultation
effort and the 25 or so teams that have been formed here on the
House side, our sense is, the consultations aren't going nearly
as well as they could have.
And there's a couple of things to keep in mind here. First
is that the number of agencies that have not produced strategic
plans is still, in our view, a little bit high. We're still
dealing with half a dozen or so agencies that haven't been able
to produce a strategic plan. For example, the Environmental
Protection Agency, although it's produced parts of it, says it
won't be able to get the Hill a complete plan until July, which
doesn't leave an awful lot of time for consultations.
The thing to keep in mind is that the strategic planning
requirement and the consultation requirement does not sneak up
on agencies. GPRA was passed in July 1993. They've known for
3\1/2\ years that this requirement was going to be coming on
board and, clearly, probably wouldn't have made an awful lot of
sense to get up there, you know, 2 weeks after the act was
passed. But it's a little bit of concern that there's such a
rush to complete here within the final weeks before Congress
goes out on the August recess in order to get these
consultations completed.
The other thing that's a bit of concern for us, and Mr.
Stevens touched on this in the testimony that he had before
your subcommittee back in March, when we talked about how there
is a--based on the views that--of agency staff and
congressional staff that we were finding some very different
perspectives and what the consultation process ought to entail.
The congressional staff and Congress generally was looking
for a much deeper, much more innervative, much more give-and-
take process in consultations. We're not seeing yet an awful
lot of that understanding penetrating within the agencies.
There seems to be too much still of a view, if we come up and
have a couple of briefings, then, well, we've checked that off,
let's go to the next box on the mark.
By no means is this universal. Some of the agencies--and
we're hearing that they're having some real good consultations
both from the agency's perspective and the Hill perspective,
but there's just too much still, I think, in that category of
where there's going to be a rush to complete, and we're not
going to get the full effect that we could have gotten from the
consultation process.
Mr. Horn. I remember that old adage that the only
difference between an A student and an F student is that the F
student forgot it before the exam. And I expect that some are
going back and saying, well, we've done that, and, as you say,
check it off; we don't have to see those people for another 6
months or another year. And that isn't the way it should be.
There ought to be an open door and not, ``I gotcha.''
But, hey, you've got problems, we've got problems. The
Constitution makes sure we have those problems to some degree.
And the question is, how do we get this system to work more
effectively for the average system? And that's what our aim is.
Now, in closing, I would like to ask, is there anything
either side would like to say here that we haven't asked you or
you felt you didn't get a chance to make that point? This is
your chance to make the point.
Mr. Koskinen. No. I would just say again that we genuinely
appreciate the interest this committee generally and this
subcommittee have had on this subject over time. I think it's
an important matter.
As Mr. Stevens noted, no matter what we tell the agencies,
we, by ourselves, aren't going to be able to move the ball
forward as far as we need to. We need your continued
involvement. We need the broadest involvement from the Congress
that we can in a bipartisan way, and I think thus far we're
comforted by the bipartisan nature of the dialog.
But I think this is a joint venture we're engaged in, and I
would just close with the same point I've made several times,
and that is that we need to drive to as much perfection as we
can get in September, but it's a little like your A student/F
student notation, we shouldn't all bet on October 1st and
figure, oh, we'll go on to the next issue. This is part of a
dialog that needs to be held on a regular basis over a long
period of time.
Mr. Horn. Yes. I suspect you've got a lot of people in
Government who were around with Jimmy Carter and his budgeting
proposal, and some even with McNamara and PPBS and those
budgeting proposals, they're saying this too shall pass. But
this, too, isn't going to pass; it's written into law. There's
certainly a commitment in both parties--in both Houses that
this shall be the law, and it isn't because it's some punitive
thing, it's because it makes sense, and the New Zealanders and
the Oregonians have already proved that it works. So we'll see
what Canada does in its elections, and we'll see what Britain
is now going to do. Maybe even the French are going to get on
board.
Does GAO have any closing comments?
Mr. Stevens. Just that we stand ready, Mr. Chairman, to
assist not only this committee, which has had a long and very
productive history and concern about the Results Act, but also
the authorizing and appropriations committees that are now
beginning to take notice of it. Our interest, concern, and
involvement is not limited to the Federal management issues
group here, but throughout GAO. In all of our issue areas are
people concerned about what executive agencies are producing
and are ready to help Congress evaluate that.
Mr. Horn. Well, you've done an excellent job in your
report, as you always do, and we thank you and your staff for
preparing that. It's been immensely helpful.
Let me just--and I might say to the gentleman who is deputy
director for management, your Duke education has survived you
through another congressional hearing. I congratulate you.
I want to thank the following people that helped prepare
this hearing, starting with Russell George, against the wall
there, staff director and counsel for the Government Management
Information, and Technology Subcommittee; Jane Cobb we're
delighted to have with us, the professional staff member of the
full committee and specialist on management issues; Matt Ryan,
professional staff member on our subcommittee; John Hynes,
professional staff member on our subcommittee; and Andrea
Miller, our clerk that makes sure these hearings work.
And then on the Democratic side Mark Stephenson,
professional staff member; Jean Gosa, the clerk for the
minority, our two committee reporters of debates, Vicky
Stallsworth and Mindi Colchico. And we have three interns
working on this hearing: Melissa Holder, Grant Newman, and
Michael Presicci. So we thank the interns. This is the time
Congress gets free labor in violation of all the laws.
So thank you all, and the meeting is adjourned.
[Whereupon, at 12 noon, the subcommittee was adjourned.]
[Additional information submitted for the hearing record
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