[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
THE RESULTS ACT: STATUS OF PERFORMANCE BUDGETING PILOT PROGRAMS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
INFORMATION, AND TECHNOLOGY
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
__________
JULY 1, 1999
__________
Serial No. 106-106
__________
Printed for the use of the Committee on Government Reform
__________
U.S. GOVERNMENT PRINTING OFFICE
63-672 WASHINGTON : 2000
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
______
COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
JOE SCARBOROUGH, Florida CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South DENNIS J. KUCINICH, Ohio
Carolina ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia DANNY K. DAVIS, Illinois
DAN MILLER, Florida JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas JIM TURNER, Texas
LEE TERRY, Nebraska THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California ------
PAUL RYAN, Wisconsin BERNARD SANDERS, Vermont
HELEN CHENOWETH, Idaho (Independent)
DAVID VITTER, Louisiana
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
David A. Kass, Deputy Counsel and Parliamentarian
Carla J. Martin, Chief Clerk
Phil Schiliro, Minority Staff Director
------
Subcommittee on Government Management, Information, and Technology
STEPHEN HORN, California, Chairman
JUDY BIGGERT, Illinois JIM TURNER, Texas
THOMAS M. DAVIS, Virginia PAUL E. KANJORSKI, Pennsylvania
GREG WALDEN, Oregon MAJOR R. OWENS, New York
DOUG OSE, California PATSY T. MINK, Hawaii
PAUL RYAN, Wisconsin CAROLYN B. MALONEY, New York
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
J. Russell George, Staff Director and Chief Counsel
Matthew Ebert, Policy Advisor
Grant Newman, Clerk
Faith Weiss, Minority Counsel
C O N T E N T S
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Page
Hearing held on July 1, 1999..................................... 1
Statement of:
Harper, Sallyanne, Chief Financial Officer, Environmental
Protection Agency; Olivia A. Golden, Assistant Secretary,
Administration for Children and Families, Department of
Health and Human Services; and Jesse L. Funches, Chief
Financial Officer, Nuclear Regulatory Commission........... 50
Lee, Deidre, Acting Deputy Director for Management, Office of
Management and Budget; and Paul L. Posner, Director, Budget
Issues, U.S. General Accounting Office, accompanied by J.
Christopher Mihm, Acting Associate Director, Federal
Management and Workforce Issues............................ 6
Letters, statements, et cetera, submitted for the record by:
Funches, Jesse L., Chief Financial Officer, Nuclear
Regulatory Commission, prepared statement of............... 77
Golden, Olivia A., Assistant Secretary, Administration for
Children and Families, Department of Health and Human
Services, prepared statement of............................ 68
Harper, Sallyanne, Chief Financial Officer, Environmental
Protection Agency:
Information concerning reinventing environmental
information............................................ 63
Prepared statement of.................................... 52
Horn, Hon. Stephen, a Representative in Congress from the
State of California, prepared statement of................. 4
Lee, Deidre, Acting Deputy Director for Management, Office of
Management and Budget, prepared statement of............... 9
Posner, Paul L., Director, Budget Issues, U.S. General
Accounting Office, prepared statement of................... 20
Turner, Hon. Jim, a Representative in Congress from the State
of Texas, prepared statement of............................ 93
THE RESULTS ACT: STATUS OF PERFORMANCE BUDGETING PILOT PROGRAMS
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THURSDAY, JULY 1, 1999
House of Representatives,
Subcommittee on Government Management, Information,
and Technology,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 2 p.m., in
room 254, Rayburn House Office Building, Hon. Stephen Horn
(chairman of the subcommittee) presiding.
Present: Representatives Horn and Turner.
Staff present: J. Russell George, staff director/chief
counsel; Matthew Ebert, policy advisor; Jane Cobb, professional
staff member, Committee on Government Reform; Grant Newman,
clerk; Justin Schlueter and John Phillips, interns; Faith
Weiss, minority counsel; and Jean Gosa, minority staff
assistant.
Mr. Horn. The Subcommittee on Government Management,
Information, and Technology will come to order. I should warn
our witnesses, bear with us. We have a lot of votes coming up
this afternoon so we will probably have to go into recess on a
number of items. We have H.R. 10 before us later in the
afternoon, and right now we have the Y2K litigation conference
report that will be voted on soon.
For decades, widely publicized examples of waste, fraud and
error in Federal programs eroded the American public's trust in
Government. In 1993, Congress attempted to address this by
enacting on a bipartisan basis the Government Performance
Results Act, otherwise known as the Results Act. The act's goal
is to improve the efficiency and accountability of Federal
programs by shifting the focus of the Federal budget process
from its longstanding concentration on Government spending to
the results of its programs.
A key expectation of the Results Act is that Congress will
gain a clearer understanding of what is being achieved in
relation to what is being spent. To accomplish this, the act
required that beginning in fiscal year 1999, agencies must
prepare annual performance plans with goals covering the
program activities in their budget requests. In addition, these
plans must outline the funding level being applied to achieve
each performance goal.
The General Accounting Office assessment of fiscal year
1999 performance plans found that most of the agencies it
reviewed showed some progress in linking planning and budgeting
structures and presentations. However, most of the plans did
not explain how the funding would be allocated to achieve
performance goals. Much remains to be done if performance
information is to be more useful for budgetary decisions and
programmatic decisions, including the completion of another
requirement of the Results Act: Performance budgeting pilot
programs.
With the enactment of the Results Act when agencies make
spending decisions, they are required to make closer and
clearer linkages between the processes of allocating resources
on the one hand and expected results to be achieved with those
resources on the other. This management practice of aligning
spending decisions with expected performance is commonly
referred to as performance budgeting. The Results Act required
that pilot programs be used to test performance budgeting in
agency budget requests.
The act required the Office of Management and Budget to
designate at least five agencies to conduct pilot programs in
fiscal years 1998 and 1999. These agencies were expected to
develop budgets that show how performance would change if the
agency received more or less allocations than requested. The
office of management and budget was to include these pilot
performance budgets as an alternative presentation in the
President's budget for fiscal year 1999. In addition, a report
is required to be transmitted to Congress and the President no
later than March 31, 2001.
The performance budgeting pilot programs were scheduled to
start in fiscal year 1998 so that they would begin after
agencies had sufficient experience in preparing strategic and
performance plans. On May 20, 1997, the Office of Management
and Budget announced that pilot programs would be delayed for
at least 1 year. In September 1998, the Office of Management
and Budget solicited agencies' voluntary participation for
these pilot programs, but no agencies were selected. At
present, the Office of Management and Budget has no definite
plans for proceeding with the performance budgeting pilot
programs, at least that this committee is aware.
Meanwhile the American public continues to lack confidence
in the executive branch of the Federal Government because of
the widespread waste and inefficiency in Federal programs. The
Results Act represents a genuine attempt by Congress to restore
this trust by ensuring accountability and effectiveness in
Federal agencies and their programs. The Office of Management
and Budget's continual delay in implementing the performance
budgeting pilots called for by the Results Act greatly concerns
us as well as the leadership in this chamber. We hope that
experience to date with respect to the pilot designation does
not suggest that some of the statutory requirements of the
Results Act will simply be ignored.
On our first panel today, representatives from the Office
of Management and Budget and the General Accounting Office,
will discuss the delay and determine its implications for the
implementation of the Results Act and performance budgeting in
the Federal Government.
Our second panel includes witnesses from three Federal
agencies that have made considerable progress in performance
budgeting. They will describe the obstacles to overcome in the
process, the lessons that have been learned and the future
expectation of performance budgeting within their respective
agency. I welcome our witnesses and look forward to their
testimony.
I think this is one of the most important hearings we will
be having this year and we will keep at it in terms of
measurement of programs. New Zealand and Australia have done
this 10 years ago. We should not be such a laggard. South
Carolina, Minnesota, the State of Oregon have been doing it.
Oregon in particular is the one ahead of everybody else. So the
Federal Government certainly ought to catch up with Oregon, I
would hope.
[The prepared statement of Hon. Stephen Horn follows:]
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Mr. Horn. We have on panel one the Honorable Deidre Lee,
Acting Deputy Director for Management, Office of Management and
Budget; Mr. Paul L. Posner, the Director for Budget Issues of
the U.S. General Accounting Office, a part of the legislative
branch; and he is accompanied by Mr. Christopher Mihm, the
Acting Associate Director, Federal Management and Work Force
Issues in the U.S. General Accounting Office.
You know the routine, ladies and gentlemen. Stand up, raise
your right hands.
[Witnesses sworn.]
Mr. Horn. The clerk will note all three witnesses have
affirmed.
We thank you very much for coming, and we will start with
Ms. Lee on behalf of the administration.
STATEMENTS OF DEIDRE LEE, ACTING DEPUTY DIRECTOR FOR
MANAGEMENT, OFFICE OF MANAGEMENT AND BUDGET; AND PAUL L.
POSNER, DIRECTOR, BUDGET ISSUES, U.S. GENERAL ACCOUNTING
OFFICE, ACCOMPANIED BY J. CHRISTOPHER MIHM, ACTING ASSOCIATE
DIRECTOR, FEDERAL MANAGEMENT AND WORKFORCE ISSUES
Ms. Lee. Good afternoon, Chairman Horn. I appear before you
today to discuss the Government Performance and Results Act,
commonly referred to as GPRA or the Results Act. It's a very
difficult acronym. The Results Act of 1993 established a number
of new major requirements for the executive branch with one
overriding objective: To improve agency performance and get
better program results for the taxpayers. This has been a high
priority for the administration. The Results Act outlines
several objectives. Key among them is to clearly present what
results the taxpayers get for dollars spent. To accomplish
that, the Results Act delineated several progressive steps
including the concept of performance budgeting. There is quite
a bit of background on GPRA and on the performance budgeting
objectives in the GAO report dated April 12, 1999, which I know
you are very familiar with. I have also briefly outlined the
process in my testimony.
Therefore, in the interest of brevity and trying to stay
within my 5 minute limit----
Mr. Horn. We won't limit you to the 5 minutes, folks. This
is very important, so if you want to take some more time feel
free.
Ms. Lee. Good, I won't talk so fast. In the interests of
that, I will move on to accomplishments to date and future
plans for performance budgeting pilots.
Accomplishments to date. Performance measurement pilot
projects as required by GPRA were conducted during fiscal years
1994 through 1996; 28 departments and agencies were designated
as performance measurement pilots. These performance
measurement pilots successfully demonstrated that Federal
agencies could prepare annual performance plans and annual
program performance reports that met GPRA requirements. They
also documented that the time spent on the pilots was indeed a
learning process and helped lay the foundation for the full
implementation of Government wide plans.
Following these pilots, we began to implement GPRA in
earnest across the Government in 1997. We are now in the 3rd
year; and overall, the agencies have made very substantial
progress. Over the past 2 years about 100 departments,
independent agencies and Government corporations have prepared
their initial strategic plan and two sets of annual performance
plans. Within the next 15 months, these agencies will prepare
an updated strategic plan, two more sets of annual performance
plans and their first program report. All the while, the
agencies have prepared annual budgets and, as they will tell
you in the next panel, they are clearly involved in the
performance budgeting-like process of plan, budget, results,
report, and then integrate all of that.
Agencies continue to improve. As the GAO report indicates,
the continued success of this program will to a great extent
depend on its use and integration into the budget
decisionmaking process both internal and external to the
agencies.
Specifically, regarding performance budgeting pilots. The
GPRA specified the the Director of OMB, after consultation with
the agencies, would designate agencies or departments as
performance budgeting pilots. The pilots would test whether
agencies have adequate performance and financial information
from which to calculate the effectivness of varying funding
levels on several or more measures of performance. They would
also determine whether agencies can define in advance the
changes in performance resulting from various funding levels,
and they would describe and display the performance information
in a manner that would allow decisions to be based upon it. And
the performance budgeting pilot would have OMB assess agency
capabilities to perform a performance budget, including the
cost, practicability and time needed for preparation. These
pilots were to have been conducted in the fiscal year 1998-1999
with the report to Congress on the performance budgeting pilots
by March 31, 2001.
Let me add that as well as performance budgeting pilot
assessment, the report is to address the overall implementation
of GPRA from 1997 through 2000 and provide a picture of what is
working well in areas of change or improvement.
Mr. Chairman, as noted by the then Director of OMB,
Franklin Raines, letter to this committee on May 20, 1997, the
performance budgeting pilots were delayed. Our priority, then
as it is today, was to bring about the successful
implementation of GPRA throughout the executive branch.
Agencies have devoted a great deal of time and effort to
ensuring its strategic plans and annual plans were timely and
useful.
As with the performance measurement pilots, a foundation
was needed before the next steps. Challenges remain in
performance budgeting foundation as cited by the GAO. Some
agencies still need to clearly define their strategies, and the
second set of strategic plans is in process with congressional
consultation this fall and probably early next spring. Agencies
still need to improve their capability to gather and use
performance data--first reports due next spring--and they also
need to have more accurate and allocable cost accounting
systems. The FASBI standards are working, but they too had
experienced several years of delay.
I am acknowledging that challenges for performance
budgeting remain. However, during the fiscal year 2001 budget
formulation process, which is now beginning, OMB will select
agencies and programs or projects within those agencies for
performance budgeting pilots. With the agencies, we will
analyze these performance budgets to determine alternative
levels of performance and the associated resources aligned with
these performance levels. And we will report in the March 2001
GPRA report the results and recommendations stemming from
performance budgeting pilots. Although later than originally
anticipated, we believe this proposal is consistent with
previous recommendations on Government performance and results,
particularly in the relation to the need to set a foundation.
We look forward to working with the agencies, the GAO, and the
Congress in moving forward on this effort.
Mr. Chairman, the Results Act is bringing about a
fundamental transformation in how we prepare budgets, make and
manage programmatic decisions, and become more accountable to
the American public for how we spend their tax dollars. Any
great change is not accomplished overnight, but we have made a
very good start. And from this solid beginning the path to a
true and useful linkage of resources and performance can be
realized in the months ahead and we intend to work very hard to
bring about that linkage. Thank you.
Mr. Horn. We thank you for your statement. And as you know,
we will go to the next witness and then we will have a dialog
on this.
[The prepared statement of Ms. Lee follows:]
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Mr. Horn. Mr. Posner.
Mr. Posner. Thank you, Mr. Chairman. I want to introduce
Chris Mihm on my left who heads all of GAO's work on the
Results Act, and two people behind me, Mike Curro and Laura
Castro who have been instrumental in our own work in addressing
the linkages between resources and results which, as you so
aptly noted, is critical to both improving budgeting and
improving the outcome and likelihood for successful transition
to performance-based management at the Federal level.
What I thought I would talk about today is what is
performance budgeting, how is it defined by the Results Act,
why it is important, where are we at the Federal level and what
is the agenda for the future.
Performance budgeting did not start with the Results Act.
In the report that we did, we noted the checkered history of
performance budgeting over the past 50 years at least from the
Hoover Commission on through PPBS, ZBB, MBO and other acronyms
too numerous to mention. In general, all of those initiatives
tended to transform what the debate about resource allocations
are all about, from the debate about activities and inputs to a
debate about results and performance. Each one of them made
some progress. I think the Results Act promises to capitalize
on some of those earlier initiatives and really push this much
more completely.
The point in each of these efforts was to more
systematically address performance as part of resource
allocations, not necessarily in a mechanical way where
resources are adjusted every time performance goes up or goes
down but to improve the way we conduct the conversation about
resource allocation. That's clearly one of the main goals we
are talking about here.
The other main goal is to ground performance planning in
budgeting to ensure that whatever performance goals we
articulate are firmly grounded in realistic assessment of what
resources are available.
Against that general background, the Results Act has two
approaches that attempt to solidify this relationship.
First, the performance plans and the annual plans that
agencies define must cover the program and activities in the
Federal budget itself on a comprehensive basis. OMB's A-11
guidance goes further and calls for transparency so that you
know how much it is go going to take in resources to implement
the goals in the plans. The point is to make the link between
the goals in the performance terms and the budgets that
agencies have articulated elsewhere.
The second form of the performance budgeting, is what you
noted earlier, the performance budgeting pilots which were to
take place in fiscal year 1998-1999 where OMB was to choose
five pilots to show how performance varied based on funding
levels and other kinds of variables that were described. And
the intent was to pilot the resource linkage more systemically
during the implementation initially of the Performance Act.
We have already talked about why this is important. I think
that you could say that many of the previous reforms that we
have undertaken, whether it is PPB, ZBB, or MBO, failed in part
because of the failure to make the analysis and plans relevant
to the conversation about resources. These initiatives were
launched with great fanfare, sometimes with unrealistic
timeframes. I am reminded that under PPBS, agencies had 10
weeks to define the activities that we are giving them 7 years
to define in Results Act terms. It ultimately ground to a halt
when these were not really taken seriously in the resource
allocation process.
So we learned from this and I think the designers of the
Results Act learned very well that if we want to make
performance stick in the Federal environment, we have to make
it relevant to the one process that is most critical to the
agencies and the Congress, and that's the budget and
appropriations process.
Now, where are we in articulating this linkage? As the
study that we have done for the Senate Governmental Affairs
Committee that we published, as has been stated here before,
the two forms of the linkage have been--we took a snapshot of
them essentially in April and found the following: That the
performance budgeting pilots themselves have not gone forward
as of yet. We are heartened to hear that OMB is planning on
moving ahead with some performance pilots in the budget area. I
think that the barriers that OMB pointed to in the May 1997
letter were real and are still real. The cost accounting is
still in its beginning stages at the Federal level. Performance
baselines and other kinds of tools necessary to articulate and
tighten this linkage are still in the developmental stages so
this is still very much a work in progress.
Notwithstanding the performance budgeting pilots, our
reviews show that nonetheless a far more basic but yet useful
connection is in the process of being articulated by the
agencies at the Federal level anyway. We think these constitute
what we might call natural or grass-roots experiments and
pilots in themselves that provide the foundation for moving
ahead with this agenda of performance based-budgeting.
The point is that we found a variety of efforts under way
by agencies to incorporate and link performance into the budget
presentations and show the implications for the budget of their
performance goals. This is the first, and I will say in a few
minutes, necessary step but only the first step in the effort
to really promote this linkage in a more robust way.
As straightforward as this seems, it's nonetheless a
daunting challenge. When we look at our budget, we know that
there is a tremendous disconnect between the way the budget
accounts and program activities are presented and the way that
the performance plans and goals are articulated. That's the
fundamental challenge that we face. We have over 1,000 budget
accounts that reflect a 200 year history of budgeting that have
served very well the changing needs of appropriators. They have
a variety of orientations from object classes to organization
to function and programs. The program activities under them are
over 3,000, and they also reflect a variety of different
orientations. They very well serve Congress's control purposes
and Congress's efforts to allocate resources among competing
purposes.
The performance goals at agencies are more global. They are
more articulated as the act contemplates in outcome terms. So
there is a fundamental tension between the structures that we
found familiar use in budgeting and structures we find
necessary to implement the results-oriented approach. Agencies
have bridged this tension in three predominant ways.
A few agencies, are actually redefining the budget
structures to accommodate an outcome or results-oriented
perspective. You are going to hear from some of them on the
next panel. Others have attempted to embed their performance
results in their budget presentations themselves. Finally, the
vast majority of agencies are developing a variety of
informative and some noninformative crosswalks between these
two structures at least at this stage of the process. And to
reprise the results of our study of the 35 agencies, only 14
were able to for fiscal year 1999 translate their plan into
bedget form. In other words, what they were able to do was both
to identify the proposed funding level needed to implement the
performance goals and describe specifically where that money
could be found in the budget.
In my statement here on page 13, we have one illustration,
the Nuclear Regulatory Commission. As you can see there, the
NRC not only indicated they would need $211 million to achieve
a nuclear reactor safety performance goal or target in its
plan, but explained that it had been derived from a single
program activity in its budget request. The point is the NRC
plan indicates the estimated cost of a performance target and
shows which goals would be affected by the budget activity
structure that you see there. I have included in the appendix
to the testimony several examples from their budget-planned
presentations of how other agencies have articulated this
linkage that is so critical.
In contrast to the 14 agencies, most of the other agencies
we looked at, such as the Department of Veterans Affairs, did
not identify the funding levels needed to achieve the goals.
Mr. Horn. If you wouldn't mind, let me declare a recess so
I can make this vote. We will be in recess for 15 minutes and
we will try to be back and pick it up on page 13. So relax.
Thanks.
[Recess.]
Mr. Horn. Recess is ended and we will continue with Mr.
Posner's testimony, and we are about on page 13 in the
examples.
Mr. Posner. As I was saying, I was contrasting the 14
agencies where you could tell how much money they were going to
spend to support their performance goals and those where you
couldn't, which were the majority.
The Department of Veterans Affairs is one example where
they didn't identify the funding levels needed to achieve the
performance goals. And many agencies had the problem where they
had many goals linked to many program activities and the
problem was they would show the link, but they would not
apportion how much of the dollars from each of the activities
were related to which goal. So you really didn't have a
transparent kind of linkage there that we have all wanted to
move to. We will note that the VA is considering changes in its
budget structure to improve this relationship.
We have been looking at the 2000 plans for the same 35
agencies again for the Senate Governmental Affairs Committee. I
would note that we have noted little change in the overall
number of agencies that succeeded in relating resources to
results. It appears that some progress is being made in
presenting the performance consequences of budget decisions and
that more fiscal plans in 2000 were associating funding levels
with specific goals, but they weren't able to say which program
activities in the budget were related to those goals.
What does the agenda look like here based on this study for
the future? In our view, we were heartened to find that there
was continual experimentation in this very difficult but
important relationship. We believe that the approaches being
developed by some of the agencies can provide a valuable
foundation for further experimentation in this area. In light
of the delay in the performance budgeting pilots, in fact, we
recommended in our April 1999 report that the Director of OMB
use these natural experiments, if you will, as the basis to
push forward the agenda of linking resources and results.
We still think that this is relevant, that OMB should lead
an effort to analyze which kinds of approaches make the most
sense under different circumstances, should work with the
agencies in a proactive way, perhaps through the CFOC council
or the BOAC councils as they have so successfully in some other
areas like financial management reform, to promote more
knowledge about best practices in this area, to further promote
the kinds of pilot projects which we think are important here
and to provide some good evaluation as to what the effects of
these presentations have been.
Let me conclude at this point by noting that we are really
at the beginning of an important new stage for Results Act
implementation and one that really will very well be critical
in determining its ultimate success. It's important to note
where we are and where we are not.
What we are really working on is improving the kinds of
presentations so that we can better align performance
information with budget information. This is a critical first
step. We know that the absence of this first step will surely
frustrate the efforts to link resources and results. However,
having achieved this as we have in some cases is only the first
step.
A few cautionary notes I think are in order here about the
road that we still have left to travel. The first is we need to
be clear about what our expectations are as I indicated
earlier. What we want, I think, is to enhance the kind of
budget debate we have to enhance the quality of budgeting
itself to make it more performance based, but I don't think
that we should expect to promote the kind of mechanical
linkages where performance levels automatically in some way
determine resource allocations. There are too many values that
we care about like needs, equity, and a variety of other things
to have a straightforward relationship as some might expect.
Another thing to just caution about is that performance-
based budgeting won't take the politics out of budgeting, as I
am sure you know, and necessarily shouldn't. In fact, I think
that you could argue that performance-based budgeting will
increase the stakes involved with budget decisions. It will
increase the importance and the perceived importance of what we
are making decisions about. As a result, this, I think,
increases the importance of the rest of the GPRA Results Act
implementation agenda because as the stakes increase, so does
the potential for distorting measures and making decisions that
may not be based on the right kinds of data.
So this means that it's more important than ever, in our
view, to ensure that there is a validation and verification
process in place on the performance goals and results that the
agencies are reporting. It makes it more important than ever to
ensure that the goals that are articulated in performance plans
are balanced and reflect everything that is important that we
care about in that agency to avoid the kind of distortions that
we might see from a purely quantitative approach to the
decisionmaking.
It makes it more important to move on with the cost
accounting agenda that we just started this year. For the first
time, agencies have articulated cost accounting responsibility
segments. This is vital to comparing programs in like terms and
the like. It's probably also important to think about how our
budget structures could be ultimately better aligned with
performance in the long run. These are sensitive relationships.
Congress has many issues at stake in the appropriations
process. But ultimately, as we have seen in the past, we would
hope that as results become a more compelling way to make
decisions, that ultimately the budget account structures and
the program activity structures will change accordingly. We
have noticed this has happened in the past. It wasn't too long
ago that positions were described in the budget as line items,
for example, in agency budget presentations 50 or 60 years ago.
It no longer is the case. We note that the number of accounts
has actually been reduced in the past 50 years. My colleague,
Mike Curro, has done some pioneering studies of this. So we
have moved a long way in our budget account structures, and we
would hope that that would continue.
I think what this points to is that GPRA as an act was
right in concept, that budgeting is vital, and the act was
right in recognizing that it vitally rests on the successful
completion of the rest of this agenda which is why performance
budgeting was not introduced first, it was introduced last, it
was deliberately piloted in a development process. The linkage
of resource to results makes the implementation of this whole
act important. As daunting as the challenges are, we have no
choice but to pursue it if we want to improve both budgeting
and performance in the Federal Government. Thank you.
Mr. Horn. Well, thank you. Mr. Mihm, do you have anything
to add? That was a very eloquent statement you had, Mr. Posner.
[The prepared statement of Mr. Posner follows:]
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Mr. Horn. Let me go to figure one just for a while before
we start the usual questions. Here you have on the left-hand
side the salaries and expenses account, fairly traditional.
They took out of this the first two items, nuclear reactor
safety--which makes sense--and nuclear materials safety. And
then the next is nuclear waste safety which might not affect
some of the personnel but might affect the neighborhood.
I would simply ask is this basically the chart that NRC has
on terms of strategic goals and performance goals or is this
the GAO interpretation of what they have?
Mr. Posner. This is our analysis of that.
Mr. Horn. The question is very simple. Was there anything
else here beside--let's take goal 1.A--zero civilian nuclear
reactor accidents.
That often is going to be down the line and less--hopefully
less likely. Is there another measure that one could think
about there in terms of nuclear reactor safety? Would the
accident, for example, if one forgot some of the safety clothes
they wear for a day or something, and might have had some
exposure, is that checkmarked under that accident? Is that
basically an accident?
Mr. Posner. Well, you are saying that that's an ambitious
goal, if you will. I think there is some intermediate
performance goals there.
Mr. Horn. Well, do you know for several years? I guess that
is another thing I have got in my mind. When I look at that, if
it's a nuclear accident and the employee didn't say much about
it, the doctors didn't have it as a case, and something might
happen to them 5, 10 years down the line that they did have an
exposure. I was just wondering how you would deal with
something like that. That's a negative performance goal.
Mr. Posner. I don't know that in this context. I do know
that that's a challenge that we face in measuring and tracking
outcomes in general. Oftentimes we don't know for several
years--at least--whether we have been successful.
Mr. Horn. Then the goal 1.A.1 is maintain low frequency of
events which could lead to severe accident.
That probably can be done on a yearly--within a year's
basis. Goal 1.B.--zero death due to radiation or radioactivity
releases from civilian nuclear reactors.
Well, can you understand the deaths. The question is what
do you tie it to if they have left the employment or whatever.
How do we deal with that?
Mr. Mihm. The key thing here, Mr. Chairman, without
speaking particularly to this example, the key thing that we
have seen for goals that are results oriented that will take
several years before we know whether or not we have met the
goal or not is to have a good sense of the intermediate goals
or the steps that you would use in order to measure progress.
Often those are more output oriented in nature and then you can
budget to those if you have a good sense of what your ultimate
result is. For example, in science and R&D programs, in some of
those programs, as people at the NSF have put it to me, are
trying to create scientists that will discover the disease that
we don't even know yet exists for the next 20 or 30 years.
How do you develop an annualized performance goal for those
types of programs? Part of the answer here is to know what sort
of scientific programs will lead you to those types of results
and therefore you focus on making sure that you have those
quality scientific programs in place. So you focus on
intermediate goals--developing quality receives toward the
longer term goals----
Mr. Horn. Well, that's, of course, difficult and this
agency has great difficulties because this is something that
you can't easily see if you have an exposure. You are in a
traditional building trades, a contractor putting up a sky
scraper, there is often a sign in almost every plant you go
into, it's been 400 days since we have had an accident, let's
say, on the assembly line or whatever it is.
You are pretty sure that you have caught most of those
because you have Workers' Comp claims, you have all sorts of
things. Sometimes a worker might be hiding something dumb they
did because they just don't want to be thought of as being that
dumb in a firm that doesn't have emissions popping out of a
nuclear reactor. So, I am sort of fishing around here for the
long run bit as we agreed, and how you really can measure this.
Are there some cases where, let's say if you are an airline
passenger. Some of us get a form every once in a while
presumably on a random airplane basis, are you satisfied with
the counter personnel, are you satisfied with the airplane
personnel and all of this. Obviously, that is a satisfaction
index. That makes a lot of sense to me. It is like a student
evaluation of faculty. That makes a lot of sense to me. It
didn't make much sense to the faculty, but it made a lot of
sense to me. The fact is those are valid data, and they do make
a difference and you can tell over a time line.
I am just wondering when you look at--this one is very
difficult. But when you look at other agencies without nuclear
emissions, what--do you have sort of a choice and a measurement
operation that GAO has ever put out as possible ways to measure
a program?
Mr. Mihm. We have done a number of products related to
that. We have issued products that talk about the difficulty of
measuring some of these larger results. We have issued some
guidance to agencies on how to measure complex problems. We
also have issued quite a number of products that talk about the
other half of your equation, how do we know that the data we
are getting is any good.
That's an area that we have put a lot of emphasis in our
reviews of the annual performance plans. The Results Act
require that the agencies talk about how they are going to
verify and validate the performance information. Sadly, that's
also consistently one of the weakest areas in annual
performance plans, everything from absolute silence to how the
agency is going to do it to plans that just aren't very clear.
The point, Mr. Chairman, that you are touching on is that
if we don't have accurate information that we can be using to
make decisions on, either in a budget context or nonresource
allocation context, then the whole planning effort is really
not worth its weight we don't have confidence in the results of
the planning effort.
Mr. Horn. I would like a little exhibit in this record,
without objection, of some of the choices that you have made
over the years. If you could just excerpt those, 10, 20 pages,
put it in the hearing at this point.
Mr. Mihm. We will work with the staff to get that to you.
Mr. Horn. Thank you. Ms. Lee, what does the delay of the
pilots mean for the Government wide implementation of the
Results Act? What does it mean, anything?
Ms. Lee. I think what it tells us, Mr. Chairman, is timing
as Mr. Posner mentioned. There is a great deal of work to be
done and we wanted to make sure that the foundation was laid,
the agencies had begun the alignment of budgeting and resources
and plans and measurement. We think it was logical to delay
that time until we had a better structure. There still are
going to be some challenges in those tradeoffs.
Mr. Horn. It seems there is confusion between the general
concept of performance budgeting as envisioned by some of the
authors of the Results Act back in 1993 and 1994 versus the
specific language in the act that requires agency pilots to
link varying levels of performance with different budgeted
amounts. Can you sort of clarify this confusion for the record?
Ms. Lee. There are several options in some of the
background in the literature, everything from taking a budget
level and determining what different levels of performance you
can get for that same budget amount versus different levels of
performance for different budget level amounts versus cost
agency or even intraagency tradeoffs among--requirements and
budget responsibilities. So what we need to do from a piloting
standpoint is look at these and say how can we test those
theories in various ways.
Mr. Horn. Can we agree on a general definition of
performance budgeting as envisioned by GPRA that would include
the type of performance budgeting required for the pilots? Is
that pretty clear for everybody, the pilots, are they singing
from the same hymnal of what they mean by performance
budgeting?
Ms. Lee. I think we all agree that there needs to be a
linkage between plan, expected results and the various varying
results or budget levels. I think that's the theory. But that
is not to say specifically that every one will be the same. I
think that we will see variance across the pilots.
Mr. Horn. Is there an aim to get this variance? I'm not
against variance. I just am wondering if in, say, a small
agency, a medium size agency, a large agency just for the sake
of it, that's one typology. The question would be, can you have
performance budgeting in that relationship or is it just the
simple things that we are doing. I remember when we had one of
these hearings, I thought, good heavens, that's not so
difficult. We have got to do this so let's dump this on this
poor soul or that poor soul volunteered was sort of my feeling.
What do you think about that in terms of definition of
performance budgeting?
Ms. Lee. What we try to do is consult with the agencies and
try to make sure that we have got somebody that is willing to
step up and work on this. Again, a solid definition of what we
would like to do is get the pilot that looks at both small,
medium, and large agencies, but also looks at those other
tradeoffs. I don't think we want to just align it by agency
size but we actually want to dig a little deeper and say can we
find someone who can do the tradeoffs between resources and
results or who can even do cross programmatic tradeoffs. When
we select those, I would think that they would all look really
quite different.
Mr. Horn. Now, these pilot programs are in some stage of
being undertaken, or are they?
Ms. Lee. We are in discussions with the agencies to say----
Mr. Horn. In other words, they haven't started?
Ms. Lee. They have not started with them.
Mr. Horn. It seems to me as they are started down the line
that you might ask at the end of the first year if you don't
submit that one to us, did they ever get rid of anything? Did
they ever say this is a stupid program? That would be a Federal
Government first, I realize.
Ms. Lee. I think we are actually seeing some of that in
GPRA when people have to align dollars are goals. Even if it is
not performance budgeting, they have to actually sit there and
say I have these resources, what is my expected result. And we
are beginning to see a little bit of that tension deliver
results as people need to articulate the outcomes of various
programs.
Mr. Horn. In your testimony you stated, Ms. Lee, that you
would select the agencies that will prepare a performance
budget pilot during the fiscal year 2001, 1 year really away
from us. Budget formulation process, that's under way now I
think.
As you said, it's now beginning. At what point during this
process of the budget--which usually you are wrestling with
three budgets at a time--will the agencies actually be
selected? Are we talking about August or are we talking about
November? When you are going to select them?
Ms. Lee. We are going to do that within the next several
months. We wanted to go through a consultation process with the
agencies. If we have a ready willing volunteer early, that
would certainly be selected. In the meantime, there is going to
be a little work and discussion going on to determine exactly
who the candidates are.
Mr. Horn. There would be few cynics that say, yes, I
remember zero-based budgeting. Nothing ever happened to that
either. So they will all say where did this goofy idea come
from? It was a bipartisan Congress that submitted that goofy
idea into law. We think it's pretty good.
Ms. Lee. There are some agencies as we discussed that are
really making some progress. Perhaps they would be willing to
illustrate the progress they have made.
Mr. Horn. Well, we hope so that--that would be the closeout
optimistic panel, I am sure.
You agree with GAO's recommendation that you should assess
agencies' linkages between plans and budgets to determine an
agenda for future performance-budgeting efforts? Do you pretty
much buy what they have said on this?
Ms. Lee. Yes, I do.
Mr. Horn. Well, what are you and your program examiners
doing to ensure that the agencies' performance plans meet the
criteria you set out in the A-11 guidance on performance
planning? That is GAO testimony on page 4.
Ms. Lee. I was just telling Mr. Posner at the recess that
we have actually taken this report and distributed it among the
Resource Management Offices. This is very informative, very
illustrative particularly in some of the illustrations where it
shows the alignment. We have actually distributed that already
to resource managers and said, yes, start thinking about this
as we go into the next set of strategic plans and the next set
of performance plans, and as we work with the agencies to
further develop those.
Mr. Horn. I am glad you say that because I hope that you
will stress to them that we are serious here, not only in this
subcommittee but also increasingly in authorization committees
and also the subcommittees on appropriations. In the first
testimony on the update of this legislation several years ago,
I suggested to the majority leader, and whoever was majority
leader will do the same, we ought to create a war room in his
suite where we put up the strategic goals, and where we really
watch this stuff.
He is taking it seriously. I am taking it seriously.
Believe me, by the time we are done all the appropriators will
take it seriously. Sometimes last year they didn't. They were
in the usual rush to try to get the job done. It's very
difficult for people here as well as in the executive branch
sometimes to find something different that they might think
about rather than the routine that they have been in and it's
so comfortable after a while.
So what I am saying is we have a number of places around
here where it won't be too comfortable, and we hope they will
take it seriously. If it's good government, we ought to be for
good government. It just seems to me that the satisfaction
index is one way to get at these things. I think the State of
Oregon, somebody ought to go out there and see how they do it.
They have been doing this for years. They actually get rid
of things, and they also improve things when something is
worthwhile. And the citizens agree with that idea. I think
that's a worthwhile model that the Federal Government could
look at. I realize we are in a town somewhat like the New York
Times, that if they haven't printed it or you haven't done it,
it hasn't happened. They are wrong. It happens all over the
world. It is just somebody's judgment as to what is printed. It
is to someone's judgment in this town that, my heavens, we have
to do something new around here? The answer is yes. When the
leadership is pretty serious about it, I think it's a good idea
to move right along on some of these things.
When you issued your September 1998 discussion paper, what
formats and timeframes did you recommend for the pilot
programs?
Ms. Lee. In September 1998, at that point were hoping to
make 2000 budget. But as you know, we are now aiming for the
2001 budget.
Mr. Horn. What type of comments did you get back from the
agencies?
Ms. Lee. We didn't have any outright volunteers.
Mr. Horn. Well, did you have any comments?
Ms. Lee. Yes, we did. Because of the complexity, we need a
little bit more time here. Some things that actually we have
covered here, we need a little more time to work on this piece
or we are still working on an alliance, cost accounting
comments and things along those lines. There also was some
concern on the agencies' part that said basically, does this
put me in a spotlight that perhaps I don't want to be in.
Mr. Horn. Well, maybe that will put them in a spotlight
that would allow us to give them some extra money. Could we
dangle that out there?
Ms. Lee. That tends to be an incentive.
Mr. Horn. Slowly but surely, $1 a carrot, but I would think
of that and what OMB could do creatively to say, hey, for your
trouble and if you do a good job, we are prepared to give this
or that program some more budget authority.
In your testimony, Mr. Posner, you indicated that the GAO
did not assess the quality of the goals presented in agency
performance plans or independently verify the funding levels
associated with these goals.
Does this imply that the status of performance budgeting in
Federal agencies is actually worst than depicted in your recent
report?
Mr. Posner. No, we just looked at the linkage itself. In
this particular study, we didn't look at the quality of the
goals or the underlying data, but we are doing that in other
studies that we have been working on with the Congress across
the board, really.
Mr. Horn. Well, obviously, our worry is are you gauging
agency progress on unreliable data?
Mr. Posner. That's one reason why we put that caveat in
there. We couldn't vouch for the data itself so we put the
footnote in that we didn't verify the funding levels associated
with that at that time. I think this is an area that does--the
whole area as, I indicated, earlier of verifying not only the
funding levels but, just as important, the underlying
performance results that are achieved is going to be an
emerging challenge.
Mr. Horn. It's like Y2K reporting, it's self-reported data.
That has a lot of problem sometimes.
Mr. Mihm. Mr. Chairman, just to add on to that, to keep
working the Y2K analogy, the self-reported data is pretty bad
now. It becomes a nightmare in the case of GPRA when we have
the performance reports. In other words, there is an action
forcing event when the bad reports or bad promises will come
home to roost in agencies. That's why we have become quite
adamant in focusing on verification and validation in the
plans. It undermines the usefulness of the plans now. It will
be a real nightmare for agencies that haven't done a good job
of this when it comes time to put together the reports for next
March.
Mr. Horn. There is a day of reckoning, you are saying
somehow, somewhere. OMB states in its testimony that agency
budgets are showing how performance is affected by increases
and decreases in funding levels. They also state that agency
performance plans provide information on the budgetary
resources associated with the set of performance goals.
Is this a fair characterization of the status of Federal
agency performance plans?
Mr. Posner. Well, again, from our study, about less than
half of the agencies are associating performance plans with
budgeted levels, but the rest have a long way to go in that
regard.
Mr. Horn. Well in your testimony, you noted little change
in the overall number of agencies clearly relating resources to
results between fiscal years 1999 and 2000. How do you account
for this lack of improvement?
Mr. Posner. Well, we are still in the throes of analyzing
that ourselves. We would have liked to have seen greater
progress. One thing is it just shows how formidable the
barriers are to executing this kind of linkage because of the
disparate nature of budget activity structures and program
planning structures. We also think that this could be aided and
hurried along by some of the kinds of things that we talked
about earlier here, some more concerted effort among agencies
to learn from one another and that kind of thing.
Mr. Horn. In your testimony, you recommended that OMB
conduct analysis that addresses what types of pilot projects
might be practical and beneficial and when and how these
projects would take place. What specific recommendations can
you offer to OMB to expedite this analysis?
Mr. Posner. I think this really is the kind of thing that
we think calls for somewhat more of a proactive leadership role
as their part Governmentwide councils, of agency leaders and
managers may be a useful strategy for leadership in this regard
to identify some of these best practices. And frankly, I think
it also calls for involvement of the program examiners in OMB.
They have quite a bit of background and knowledge on these
agencies and budgets and they need to--if they haven't already
to gain a stake in analyzing these plans. And helping OMB
figure out where the opportunities really lie.
Mr. Horn. Any other comment you want to make, Ms. Lee?
Ms. Lee. Chairman Horn, the emphasis on Government
Performance and Results Act has been presented several times to
the President's management council which, as you know, is the
deputy secretaries.
I believe last month or the month before, a couple of
agencies came through and discuss, as we do this first report,
how agencies are working on their next strategic plan. They
laid out their schedule for consultation with Congress. They
also thought about how do we write these performance plans and
doing a little testing internally. So it is going on, but it is
a difficult task.
Mr. Horn. Well that's good news that the Deputy Secretary's
undersecretaries are taking this seriously. That's the only way
it is ever going to get done, is the chief operating officers
of these agencies doing it. The poor secretaries running around
the country and the world in planes to tell what the mission
is. Somebody has got to stay at home and make sure that this
tough, dull, drudgery--which is crucial to outcomes--is done.
Ms. Lee. We are trying to tell them it's exciting.
Mr. Horn. Well, you are a much more positive personality
than a legislative personality. We hope you are right. Let it
be exciting, let it be done. The next time you come here, you
are going to have all of those select models prepared. And how
long is it going to take them, one budget cycle to do it? And
then see what happens?
Ms. Lee. I think we will use the budget cycle and see what
happens and then say do we repeat this? Do we have enough
information? Where do we go from there?
Mr. Horn. We look forward to that. Anything that the
General Accounting Office wants to say on this subject?
Mr. Posner. We have said our piece.
Mr. Horn. Well, you have done a good job, all three of you.
Thanks for coming.
We now go to panel two, the Honorable Sallyanne Harper,
Chief Financial Officer of the Environmental Protection Agency,
the Honorable Olivia Golden, Assistant Secretary,
Administration for Children and Families, Department of Health
and Human Services, and Mr. Jesse L. Funches, the Chief
Financial Officer of the Nuclear Regulatory Commission.
OK. If you would stand up and all of those who are going to
feed you information also stand up and raise your right hands.
We have three witnesses and five feeders.
[Witnesses sworn.]
Mr. Horn. The three witnesses have affirmed and so have the
five others with them, and the clerk will get all of the names
and make sure that they are in the hearing record.
So we will now start with the Honorable Sallyanne Harper,
Chief Financial Officer, Environmental Protection Agency. Thank
you for coming.
STATEMENTS OF SALLYANNE HARPER, CHIEF FINANCIAL OFFICER,
ENVIRONMENTAL PROTECTION AGENCY; OLIVIA A. GOLDEN, ASSISTANT
SECRETARY, ADMINISTRATION FOR CHILDREN AND FAMILIES, DEPARTMENT
OF HEALTH AND HUMAN SERVICES; AND JESSE L. FUNCHES, CHIEF
FINANCIAL OFFICER, NUCLEAR REGULATORY COMMISSION
Ms. Harper. Thank you, Mr. Chairman.
I appreciate this opportunity to appear before the
subcommittee to discuss EPA's efforts to align planning and
budgeting and to manage for results. I particularly appreciate
your interest in these reforms and hope that EPA's experience
will help illustrate both the benefits and the challenges we
face in performance budgeting. With the subcommittee's
permission I would like to submit my written statement for the
record.
Mr. Horn. They are automatically in the record. Maybe you
were not here. Once we introduce you, they all go in the
record. You are free to give us a summary and then we will have
more time for a dialog.
Ms. Harper. Thank you, Mr. Chairman.
Mr. Horn. So don't read it. We have read it.
Ms. Harper. We are very proud to have been the first agency
to succeed in fully integrating our budget request with our
annual performance plan. EPA has benefited substantially from
the structure, visibility, and credibility provided by the
Results Act. It has been a unique and exciting challenge for me
to oversee EPA's implementation of the Results Act because it
fully supports our focus on environmental outcomes and sound
management of public resources.
The basis for many of EPA's performance budgeting
accomplishments has been our strategic plan and its
architecture of 10 long-term strategic goals supported by a
range of objectives representing major steps toward those goals
achievements. The architecture captures EPA's many complex and
interrelated mandates in a relatively simple structure and
paves the way for linking planning with budgeting. EPA's new
budget structure matches the architecture of our Results Act's
goals and objectives. Consistent with GPRA requirements, we
implemented changes in the fiscal year 1999 budget development
cycle that identify fiscal year 1999 activities as incremental
steps toward our longer term objectives.
These incremental steps were embodied in the annual
performance goals and measures that made up our first annual
performance plan under the Results Act. In other words, EPA
specified what it intended to accomplish in fiscal year 1999
with the requested resources at a level of specificity we had
never attained in the past.
We also have modified our financial structures to reflect
the 10-goal architecture. This was a massive undertaking and we
are very pleased to report that we have succeeded in putting
the necessary financial processes in place to support cost
accounting in time for the initial implementation in fiscal
year 1999. We acknowledge the need to discuss results and costs
with comparable precision. To that end, we are working to
improve annual performance goals and measures, making clear the
connections between what we accomplish in a single year and
what we hope to accomplish over the longer term.
One promising effort is EPA's National Environmental
Performance Partnership system [NEPPS], which aims to
strengthen our ability, combined with that of our State
partners, to improve environmental results. EPA's annual
performance plan contains core performance measures, those that
we have negotiated with our partner States so that both NEPPS
and the Results Act processes reinforce each other.
We will summarize our 1999 accomplishments in our first
annual performance report to Congress in March 2000. The
information we developed through our accountability process
will be a principal input to both future planning as well as
budgeting cycles.
There are some challenges that remain. We have not yet
completed our first full year's learning experience under the
Results Act. We must find ways to portray environmental results
that are the product of many efforts, including those of State
partners, other agencies and other stakeholders. We need to
work to ensure the validity and the reliability of our
performance data. Finally, many of the environmental results we
aim for may become apparent only over long periods of time; and
their full costs, including all funding sources, will be
difficult to assess.
In closing, I would like to reaffirm EPA's support for
performance budgeting and the full range of Results Act
activities that support it. We count on your continued support
as we tackle the challenges that I have described to you as
well as others that are bound to appear along the way.
I thank you for the opportunity to discuss these important
issues with you today.
Mr. Horn. Well, thank you.
[The prepared statement of Ms. Harper follows:]
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Mr. Horn. This is a question that probably should be put to
your chief information officer. The State of California's EPA
several years ago, maybe 6 years ago, had a very interesting
development in computing where they worked with business, and
they set the joint codes and definitions between the agency and
the business and most of their filing, was electronic. And, I
just wondered to what degree, while it stays in my brain, that
EPA has done that because I mentioned it to some of your
assistant directors since I sit on their review committee,
Water Resources and Environment; and I just wondered if they
are doing any of that?
Ms. Harper. Mr. Chairman, I am pleased to report that they
are. I am sure that our chief information officer can provide
more detail for the record, but one of the programs that we
feel would be ultimately quite successful in following
California's example is our one-stop reporting program. We are
trying to synchronize with those who report in to us one place
where they bring in all of their data rather than to our
separate stovepipe elements, which we ask sometimes for the
same data in completely different formats or slightly different
variations.
The administrator is also establishing, and it should be in
early September of this year, a consolidation of our entire
information function at EPA into a new information office, one
of its primary goals is to do exactly what the State of
California has been so successful in doing.
Mr. Horn. I am delighted to hear that. I know that you have
a very fine leadership there. That is just a good thing to do
and I think everybody is the better for it. I am glad to hear
about it. If you can just put a little exhibit at this point in
the record without objection, we will do that.
Ms. Harper. Thank you.
[The information referred to follows:]
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Mr. Horn. We now go to the second witness, the Honorable
Olivia A. Golden, Assistant Secretary, Administration for
Children and Families, Department of Health and Human Services.
We are glad to have you here.
Ms. Golden. Thank you, Mr. Chairman. I am Olivia Golden,
Assistant Secretary for Children and Families at HHS, and I
want to say how much I appreciate your invitation to speak with
you today on the topic of performance budgeting under the
Government Performance and Results Act of 1993.
The Administration for Children and Families [ACF] is the
lead agency in the Department for programs serving America's
children, youth, and families. Our programs are at the heart of
the Federal effort to strengthen families and give all children
a chance to succeed. ACF is responsible for almost 50 Federal
programs, including Temporary Assistance for Needy Families or
welfare reform, child support enforcement, Head Start, child
care, and child welfare and adoption services.
Our partners in delivering these services are the State,
territories, local and tribal governments, other Federal
agencies, and the private sector.
We are pleased with the recognition we have received for
our work, particularly our consensus building with our partners
and our approach to linking performance measures to the budget.
There were several critical steps that we took early on to lay
the groundwork for implementing the Results Act.
In 1994, shortly after the enactment of the Results Act,
the Office of Child Support Enforcement and the Office of
Refugee Resettlement became our Results Act pilots. At the same
time, we initiated an agency wide process to define the vision,
values, and goals of ACF. In 1995, we released our first report
card on achieving success for children and families based on
the goals we identified.
Over the next 2 years, a number of senior staff members,
including myself, taught more than 20 2-day partnership
collaboration sessions with our staff, including how to work
differently with our partners and how to focus on results. And
to encourage cross-organization learning, we asked our early
Results Act pilots to present their successes and failures to
our whole senior staff.
We have continued to build on these efforts, and our
current performance plan includes agreed upon measurable
outcomes for all of the ACF programs. These activities occurred
in a legislative environment that also has supported a focus on
results. For example, the Child Support Performance and
Incentive Act of 1998 established a performance-based incentive
system that will reward States on the basis of their
performance on 5 results measures.
The Adoption and Safe Families Act created the adoption
incentive program under which States will receive incentive
funds tied to their success in increasing the number of
children adopted from the foster care system. This new program
is the first in child welfare to tie outcomes to funding, and
we look forward to making the first payments later this summer.
GAO has called useful the way ACF's plan displayed goals
and related program activities, and has used our budget linkage
approach as one example of how to consolidate program
activities and relate them to performance goals.
In our fiscal year 2000 performance plan presented to
Congress with the fiscal year 2000 President's budget, ACF
created a table to crosswalk our four strategic goals and 10
objectives to over 60 program activities and line items. The
plan provided a narrative about program context and strategies
along with the program's performance measures, goals and
targets and information on data sources, validation and
verification.
Over the past several years, ACF has experienced increasing
demands resulting from newly enacted programs in changing
statutory requirements while working in an environment of
decreasing staff and tight budgets. Our Results Act plan has
been a key tool to help us manage our resources more
effectively and focus our financial investments on our goals
and priorities.
I believe that we have learned many important lessons from
our experiences to date. First the performance measures must
include measures of outcomes and results. Process measures
provide an important piece of the overall picture, especially
where research shows that they are linked to outcomes but they
should not stand-alone.
Second, it is both difficult and critically important to
develop outcome measures through consensus with partners.
Third, it is not possible to create in a short period of
time a mature set of performance goals and data collection
strategies. It takes considerable time to bring partners to the
table, develop shared priorities and goals, and address
weaknesses in data collection and the shortcomings of the
available measures.
Fourth, establishing measurable goals and outcomes leads to
opportunities for cross-program collaboration and new program
initiatives.
And fifth, performance measurement is one of a number of
tools along with research and evaluation that can help us, over
time, do a better job of taking results into account in
difficult budgetary choices.
In conclusion, ACF is firmly committed to the principles of
performance measurement and the utility of the Results Act. We
believe that performance measures are most effective when
developed through a collaborative process with partners and
that investments in data collection, as you have seen several
times today are an important element of success. Results
measurement can produce information that will inform the budget
process and it can motivate Federal, State, local and community
partners to work together to improve results for children.
Thank you and I would be pleased to answer any questions.
Mr. Horn. Well, thank you. That was a very helpful
statement, especially on the lessons learned. We can all
benefit from that.
[The prepared statement of Ms. Golden follows:]
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Mr. Horn. Mr. Funches, we are delighted to have you here.
You are the Chief Financial Officer for the Nuclear Regulatory
Commission, a very important agency.
Mr. Funches. Thank you, Mr. Chairman. On behalf of the
Nuclear Regulatory Commission, I welcome the opportunity to
testify today on our successes and continued progress toward
implementation of the Government Performance and Results Act.
My specific focus today will be in the area of performance
budgeting.
NRC's progress in implementing the performance budgeting
has been recognized by the General Accounting Office as
positive and significant.
Let me first note that a major factor in our success has
been the strong support exhibited by the Commission for
transitioning the agency to a more performance-based
organization. Key to reaching this goal was the initiation of
the NRC's strategic assessment and rebaselining initiative in
1995. This internal effort provided a solid, reliable
foundation on which to develop the NRC's first strategic plan
and subsequent performance plan.
We have found that few areas are more crucial to
implementing GPRA than the implementation of an integrated
planning budgeting, and performance management process. We are
implementing such a process. The result has been the
establishment of one, a sensible, reliable process for defining
goals and establishing strategic direction; two, cost effective
strategies for achieving these goals; three, and the ability to
determine the resources needed to achieve the goals, and last,
the ability to measure and assess our progress and overall
performance. A recent contract evaluation of our process found
that it is sound, and it has been a catalyst in improving
integrated planning and budgeting.
Thus far, we have used this process to produce the NRC's
fiscal year 1999 performance plan and fiscal year 2000
performance plan and budget. We are also applying this process
in revising our strategic plan.
A key strategy that we have used to transition to a more
performance-based agency is to integrate the various components
of planning and budgeting.
We agree with GAO's findings that the following three
approaches facilitate linking budget requests to anticipated
results. First, change the program structure to reflect goal
structures. Second, there should be a simple, clear
relationship between the program activities and performance
goals. Third, the performance plan should be fully integrated
with the congressional budget justification.
The NRC's fiscal year 1999 performance plan encompassed two
of the three approaches.
First, the NRC substantially changed its program activity
structure to be consistent with its planning structures. We
identified strategic arenas which comprised our major mission
responsibilities. Funding for programs was identified for each
strategic arena which corresponded to a specific strategic goal
and associated performance goals and measures. This represented
our initial steps to transition from an organizational budget
which emphasized individual office outputs to a more
performance-based budget that emphasizes mission-related
outcomes.
With respect to the second approach of establishing a
simple relationship between program activities and performance
goals, we created such a relationship by linking a single
program activity with multiple performance goals. We did not
fully integrate performance information with the budget
justification in our initial performance plan in fiscal year
1999, but we have for fiscal year 2000 where we combined the
performance plan and the budget. This improvement contributed
to the integration of planning and budgeting. At the same time,
we were able to communicate a more complete picture of what
actions the agency was planning to take and the resources
needed to get the job done.
During the past 18 months, we have taken additional actions
to support our continued conversion to a more performance-based
organization.
Improving the use of outcomes and deciding which programs
to pursue and subsequently allocate our resources continues to
be an agency priority. We are not able to create a direct
mathematical relationship to calculate incremental change in
outcomes relative to an incremental change in resources.
However, we were able to evaluate activities relative
contributions to performance outcomes. To date, an application
of this concept has been in our Office of Nuclear Reactor
Regulation which is responsible for oversight of nuclear
reactors.
Proposed and existing work were evaluated in terms of how
they leveraged the outcomes. By linking key activities and
specific performance goals and then judging the relative
contributions to the outcomes, we identified new initiatives
that need to be undertaken, determine work that could be
eliminated without impacting outcomes, and identify work that
should be continued.
We are currently revising our strategic plan. Our goal is
to identify performance goals that more directly relate to what
the agency wants to achieve and how the agency will be managed.
We will identify key strategies for achieving these performance
goals, and identify performance measures that demonstrate our
progress in achieving each performance goal. The challenge,
especially for a regulatory agency like the NRC, is to find the
right balance between information related to our own
performance and operation, and information on the industry we
regulate. Inherent in that challenge is the need to verify and
validate, on a sound sampling and auditing basis, information
generated by the industry we regulate and by ourselves.
The NRC intends to continue to provide Congress with an
integrated budget and performance plan. We are currently
examining how best to integrate performance reporting with the
performance plan and budget.
In conclusion, we are making progress in performance
budgeting. However, we recognize we are not where we need to
be. We need to evolve to a point where we are able to clearly
articulate that we are doing the right work, and we are doing
it right. The transition to a performance-based organization is
an iterative process that requires our continued attention to
manage toward outcomes.
Thank you for the opportunity to summarize the status of
our performance budgeting efforts. This concludes my remarks,
and I am pleased to answer any questions you might have.
Mr. Horn. Thank you very much.
[The prepared statement of Mr. Funches follows:]
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Mr. Horn. All three of you have given us helpful
statements. Does that mean all three of you want to be a model?
You are part way there it seems to me in really grappling with
some of these problems.
While you are thinking on that, I am going to yield time to
my ranking member, and we are delighted to have him here. He
takes a great interest in these projects, and Mr. Turner of
Texas for questioning the panel.
Mr. Turner. Thank you, Mr. Chairman. I am a strong
supporter of performance budgeting because we embarked on that
in Texas when I was a member of the legislature there some
years ago, and I think it has proven to be very helpful. It is
a very difficult system to implement and sometimes the
relationships between funding and performance and outcomes are
difficult to refine and make meaningful, but one of the things
that I would like to inquire of each of you because obviously,
even though I didn't see any of you raise your hands on
volunteering to be a pilot, it does seem that you have taken
the matter seriously.
I would just like to know a little about your own
experiences with your own staff about the attitudes that exist
in your agency toward performance budgeting. Is it viewed as a
pain that somehow you have to go through the paperwork and show
all of this on paper so it looks good or is there--is there
some significant commitment and significant belief in the
validity of performance budgeting? Any of you can begin. Ms.
Harper.
Ms. Harper. Congressman Turner, I would be delighted to
start. EPA has never treated performance budgeting as a paper
exercise. We had initiated our move toward performance
budgeting as a result of a very critical study by NAPA on how
we set priorities to get environmental results. The
Administrator, Carol Browner, took that study very seriously
and established a senior leadership team of her top career
officials of the agency to respond to this and assess how we
were going to change.
The net result of it was that we went through a major
reorganization. We formed a new Office of the Chief Financial
Officer. We put planning with it as well as budgeting,
accountability financial management and services, and an
analysis function to focus solely on bringing up performance
budgeting in the agency. This is our first full year of
implementation with our 1999 budget. In actuality, the Deputy
Administrator just finished meeting in May with each of our
goal leaders each of the goals that we have got to assess their
progress against both their annual performance goals and
measures as well as their long-term. How are we doing against
the long-term strategic plan? Where are our data gaps? Where
are our performance gaps? How does this reflect in terms of
what we have budgeted, and where we are going?
So I believe that at EPA there is top political support for
this, and the career leadership has endorsed this fully and
take it quite seriously.
Ms. Golden. Congressman Turner, what I am very excited
about, at the Administration for Children and Families, is that
not only have ACF staff invested in performance and end results
but also our partners in State and local government have made
these investments. And I think the reason is that a focus on
results has contributed today to results for children which is
the reason people are in the business. The example I wanted to
give you is an example where we had a pilot in the area of
child support for our work on child support enforcement and
paternity establishment and work with fathers.
We are very proud of the overall result that 1.5 million
paternities were established in 1998. It has tripled the number
in 1992, and it is well above our GPRA target for 1999. That
happened because when you get a very vivid focus on a result,
people really do buy into it and think about it.
What happened with us, I think, initially was the early
anxiety among our staff about how our State and local partners
would react to measurements. I am sure you can imagine, people
were worried if they talked to Texas and said, we are going to
need you to reach this number and it is going to be pretty
public and pretty vivid. There was lots of worry about how that
would play out. We focused both on our staff and our partners
from the beginning. What we found is that you really have to,
in our kind of work--where everything depends on local and
State governments--focus on both those things; and then you can
get very strong buy in.
Now, I think the next step which may be a topic we want to
come back to is that we have buy in. We have data that is
improving year by year, but we also have lots of data gaps we
need to continue to fill for the future, and I think that
maintaining buy in requires that you keep working on credible
data so people don't get worried that they will get measured
for the wrong things. They have to feel good that they will be
measured for the right things.
Mr. Funches. At NRC, I would say it is definitely not an
effort to produce a report or produce a plan that is not being
used. From the beginning, we had strong support by our
commission which is the head of our agency. They had a very
strong interest in it with the idea that it would improve
management. It would improve the allocation of resources within
the agency. We have an executive council comprised of the
executive director for operations who is responsible for all
programs, the chief information officer, and myself; and we all
participated very heavily in the establishment of the goals.
And we meet often to talk about where we are in implementing
our plan and measurement process.
We have now moved to the next level and one of the largest
offices have implemented and have become very excited about it.
They see that it is a way of making decisions, bringing
rationale to the decisions by looking at the outcomes they want
to achieve. We are transitioning this to the different levels
of staff by using different planning techniques.
One of the items that we will have is an operating plan
which will be at a lower level than our performance plan which
is at the agencywide level. But again, we will focus on the
outcomes.
So, I think, we have a lot of excitement within the agency,
and a lot of interest in doing it. And, in fact, while
recognizing that GPRA was there, we would have started
something very similar to this independent of the GPRA.
Mr. Turner. It takes not only a commitment at each agency
for it to be meaningful, but the people on the other end at OMB
that are putting together the President's budget, the
appropriators, and the Congress, I think they have to have a
clear understanding of performance budgeting and its
limitations. Sometimes things reflect inaccurately on what is
really happening, and we have to understand that.
But I guess I would like to ask each of you has your
experience in performance budgeting thus far seemed to have
impacted either the OMB in drawing up the President's budget or
have you seen it impact the appropriators and Congress to
really ultimately make this successful those who are deciding
how the money is allocated and spent in the Congress and the
office of the President, those people have to use this data.
And I would like to ask you if you have seen any tangible
examples of an appropriation decision having been based upon
some of the performance-based indicators that you have
generated?
Ms. Harper. Congressman Turner, for EPA we have found that
at least our budget examiners have not been shy about engaging
in the Results Act discussions during the budget preparation
period.
As you may know, internally there are a number of hearings
that take place as we prepare for a budget submission, and each
of our program managers participates with OMB and a panel of
OMB examiners during each of those hearings. During each of
those hearings there was extensive discussion. What are the
performance results? What does this mean in terms of what you
are proposing to us? How does this differ from last year? And
how does it track? It is difficult to trace how that will
impact decisions sometimes. We know that it is raised. We know
that OMB is focused on it when we get inquiries back, but it is
hard right now so early in the process to understand how that
translates into final budgetary decisions. It is difficult.
The appropriation committee staff that we deal with on VA-
HUD are extremely knowledgeable about the agency. They have
worked the agency budget for many, many years. The transition
to the new budget structure, which is aligned with our goals
and objectives, as well as our new finance and accounting
process that was match our Results Act structure, is difficult
for them because they are worried about losing the tracking
capability built over time.
They know our programs extremely well, and in the new
architecture they want to make sure that they have not lost
pieces of program information. To facilitate the transition, we
have provided crosswalks back to the old budget structures that
we have had and engaged in extensive discussions. That said, in
our report language consistently over the last 2 years, on both
the House and the Senate side from the Appropriation
Subcommittees, there have been extensive notes on our GPRA
implementation. The subcommittee requested information or what
was going well and what was not and areas that we needed to
focus on. So it is certainly taken very seriously. It hasn't
been a flawless presentation on the agency's part to the
subcommittee in terms of being able to walk them through the
changes in the structure.
Ms. Golden. I agree completely that it is very important
that both within the administration and the Congress, the
results information gets taken seriously, and we are part way
there. There are a couple of examples in my testimony where we
are very pleased that as a result of bipartisan work between
the administration and the Congress, in the area of adoption
and in the area of child support, we have been able to work out
incentive strategies where dollars go to States in a way that
is driven by results. We are well on our way to our goal of
doubling the number of adoptions from the child welfare system
by fiscal year 2002. And incentive legislation is not the only
reason, there are other reasons for focusing on results besides
the budget, there is the issue of leadership and technical
assistance.
Another example would be in the Head Start program where we
have made major investments in research and data collections so
that we can do both what we want to do and what the Results Act
requires--which is really to look at a sample of programs and
talk about the results for children. I do think that the fact
that we are doing that and are serious about it, helped us last
year in achieving the full amount of the President's request
for Head Start, and I certainly hope it will this year as well.
We obviously don't know the answer yet.
Mr. Funches. I would say definitely that the appropriating
committees are very aware of outcome-based budgeting that we
are looking at. We do have discussion with them about the
outcomes. Likewise with our OMB analysts, there are questions
about outcomes. I can give you a couple of examples that may
help illustrate the types of discussions that we are having.
Nuclear power reactors are licensed for 40 years. One of
the issues that is very important for the nuclear industry and
for the country is the renewal of those licenses. During the
past year, there has been a lot of discussion about what
outcome do we want and how do we know if we are successful.
Ultimately we came to the conclusion that one of the keys was
the time that it would take to renew such a license. We
interacted with the appropriators, et cetera. We came up with a
time, and I think, that this definitely supported getting
adequate resources to meet those time lines in terms of the
outcome goal of having a review completed. So far, I am pleased
to say that we are meeting the outcome goal that we have set.
During the past year we have also made the effort to reform
our regulatory processes, in order to address concerns which
have been expressed. We worked with the Congress in trying to
determine the outcomes that we want as a result of this. We now
provide Congress with a report that talks about the outcomes.
It is very consistent. They have been looking at it, and I am
sure that we it will be an input to their decision on the
appropriation bill this year.
Mr. Turner. Well, I am impressed to see that there seems to
be a sensitivity not only within the agencies but on the part
of OMB and the appropriators and the staff of the appropriators
to trying to make it work.
I am one who--through our experience in Texas, I came to
understand that it is really--over a period of years of
applying it, have seen that it becomes meaningful. In fact, in
the earlier stages, it can be very misleading. And there are
always going to be decisions made that won't solely be based
upon performance measures. But over time, as you refine the
data collection and the methodology, then you begin to get
comparisons 1 year to the next to the next, and then I think it
becomes a very useful tool.
So I am pleased to see all of you have embraced it, and I
think positive attitude about it is essential to being sure
that it actually ends up working. Thank you, Mr. Chairman.
Mr. Horn. Well, you are quite welcome. That is a very good
exchange. Some of these questions might be duplicative of Mr.
Turner, but just for the record, do you feel it is necessary to
have a second comment period with OMB before establishing the
pilot programs? All three of you seem to be pretty far advanced
in terms of looking at the performance in relationship to the
budget? What is your feeling on this?
Ms. Harper. Mr. Chairman, I think that it is necessary to
have a second comment period with OMB. One of the dilemmas that
we face, I would say probably all three of us, is that we have
taken our lead and gone on, and I would say that there might be
some concern about whether diverting attention to one portion
of the agency's implementation in terms of setting up a pilot
might detract from the critical mass we need to keep the whole
of it moving. At least for EPA, it is the entire agency that is
moving forward with performance budgeting.
We have under taken it across the entire agency already.
And the pilots call for components of an ongoing to look at the
different levels of budget and the expected results, which, I
think, is actually a very valuable exercise; but since we chose
to go with the whole restructuring, I wonder if that might not
be the best way for us right now. Budget restructuring is a
massive undertaking. It is a very big change for our programs,
for our State partners and for us on the fiscal side.
Mr. Horn. Well, I can understand that. We had that in the
university when we were way ahead of everybody else, pretty
soon they had a system that said, hey, everybody else has to do
it; but we didn't want to do some little piece of it when you
are already doing the whole works, so I can appreciate your
situation.
Ms. Golden.
Ms. Golden. I think the biggest issue for us is that we
have made this process that we are enormously proud of. I told
you about some of the results that we have forward in child
support, adoption, and some of the other areas, but for us
there are big next steps in terms of data collection,
verification, data investments, and also working with our
partners as we go through each step. Just to take the example
of child support where I told you about the progress on
paternities and 80 percent increase of collections, we are very
proud of those; but as we move into the next step which is
implementation of the bipartisan legislation, I mentioned where
the incentives are going to go to States, we are having to work
with States, very closely on their data systems. And some of
the interpretations of performance budgeting I don't think any
of us would want to be in a situation where we were telling
Texas or California that they didn't get dollars because their
data just was not up to speed. We would much rather be
developing information systems and data collection systems for
the States and local governments to provide us with
information. And so we need to make sure that that comes along
as we make each step, and I think that is the big lesson that
we have learned.
Mr. Horn. That is very good. Now, were you in Massachusetts
when the Debt Collection Improvement Act went on the books, the
Federal one at all?
Ms. Golden. I believe I was here. What year was that?
Mr. Horn. This would have been 1996.
Ms. Golden. No, I was in Washington.
Mr. Horn. I just wondered because Commissioner Adams
happened to phone me up the day it took effect. He said you
made my day. I said, What do you mean?
He said I am going to be able to collect a lot of money
with that act.
Ms. Golden. That is correct.
Mr. Horn. And that was an act that Mrs. Maloney and I put
in the omnibus bill that year, and it was really drafted by
many of the Chief Financial Officers in the Federal Government.
So I was just curious how you thought that was working because
he felt that he could bring millions home of deadbeat dads'
payments.
Ms. Golden. I know that this is not the subject of the
hearing so I won't take too long, but I do think, the numbers
on collections for 1998 are $14.4 billion which is an 80
percent increase over 1992. I think that it has happened for
many reasons. It has happened because of a bipartisan
commitment that involved investment in computer systems. It has
happened because I think the part that is tied to the Results
Act has been really important in focusing our efforts on
outcomes. And then I also believe--that is partly why I
mentioned the paternity establishment result here--that part of
what we need to do is ensure that fathers are connected to
their children and to their families.
Part of this is about making sure that both parents are
part of the child's upbringing, and I think that the
extraordinary increases in father's voluntarily acknowledging
paternity early, which people thought couldn't be done, are a
really important part of what we have accomplished. So I do
want to say thank you to the Members of Congress from both
parties who have really had a sustained commitment to that set
of issues.
Mr. Horn. The Debt Collection Act of 1996 does permit the
agency to put some of the money back in for better computing
things. I don't know if you have taken advantage of that within
HHS or not. Right now I don't have in my mind where they had
debts.
As I understand it, when the agency discussions occurred
with OMB in September 1998, three specific approaches to
performance budgeting were suggested from what the GAO informs
us. What approach, if any, do you prefer? Do you have any
thoughts, Ms. Harper, on that? Were you in that meeting?
Ms. Harper. Actually, Mr. Chairman, I don't have any
thoughts on that. I don't recall which of the three approaches
EPA supported or spoke to.
Mr. Horn. How about you, Secretary Golden?
Ms. Golden. I think we have been focusing most on that
first step that GAO described which is making sure that you can
really see what results you get for the dollars; we have been
focusing beyond that not only on how the Results Act plays out
on the budget side but how it plays out on the management and
the leadership side. So I think we have been focusing across
those areas rather than looking into those particular three
approaches.
Mr. Horn. Mr. Funches.
Mr. Funches. We have been doing the same thing. What we
have focused on is trying to look at how we can evaluate our
activities in terms of leveraging against the outcomes as
opposed to trying to figure out the incremental pieces. I think
we have come up with some methods to do that. I was not in the
meeting with OMB and GAO when they looked at the different
approaches, but we have focused on trying to look at how we can
examine the relative merits of the different activities as
measured against the outcome, recognizing some of the
activities that we do will support more than one outcome.
Mr. Horn. Did you have a chance to look at figure 1 of the
GAO testimony.
Mr. Funches. Yes, I did.
Mr. Horn. Is that fairly accurate as to what you would like
to do?
Mr. Funches. You are absolutely correct, the top goal that
we talk about is a very long-term goal that you measure over
time.
What we did was to create what we call some intermediate
goals. In the second level goal, we are trying to say we can't
wait until there is a death or an accident. What we want to do
is look at intermediate measures which give us an indication
that something might happen.
The second tier goal, which looks at the increases or
changes in probability of an accident, is what we created to
give us an indication on a yearly basis whether we were on a
trend in the wrong direction. But you are absolutely right,
many of the outcomes that we have cannot be measured
immediately. They are long-term outcomes, and what we try to do
is create something that will give us an indication that things
were going in the wrong direction.
Mr. Horn. I see we are about to have a vote. I think we
have 5 more minutes. I have a few more questions.
I would be curious as to your plans succeeding in aligning
programs and activities and strategic goals and objectives and
that is very impressive. How does this affect the day-to-day
management of the agency? Is this just an exercise for Chief
Financial Officers and Assistant Secretaries or do your
colleagues--we will do it the same way that we have been doing
it for 20 years?
Ms. Harper. I think that the introduction of cost
accounting, Mr. Chairman, has very much helped to bolster the
fact that this is a paper exercise, because we aligned our
budget structure under our Results Act structure, of goals and
objectives. That is how we are budgeting. It is also how we are
doing our accounting. Cost accounting means that we are
collecting our costs against the goals and objective also, so
on a real time basis we have an understanding, and the program
managers do as well, of what they are spending against the new
Results Act structure.
As I mentioned to Congressman Turner, the deputy
administrator just finished meeting with each of the program
managers as part of a midyear review on where they were in
their performance against their annual and longterm performance
goals and their measures, and so it is something that we are
deeply engaged in as a management process within the agency and
with our State partners. We have included in our annual
performance goals and measures core performance measures that
were negotiated with our State partners, and we also monitor
them.
Mr. Horn. Go ahead.
Ms. Golden. To me, the focus on results is central and the
reason it is important is not because of paper, it is because
that is the way you leverage change for children and families.
It is especially important to us because our world is so
complicated. That is for our dollars to lead to a change in a
child's life, it passes through a State agency, perhaps a
nonprofit, and so being focused and clear about results is a
way of making that happen. And that is the reason that you said
earlier something about the secretaries are traveling on planes
and their deputies need to focus.
I actually try to talk about results in my travels when I
talk to people, as well as here because I do think that the
reason we have accomplished those results in child support,
Head Start, the doubling of adoptions is because of being able
to crystallize some clear results indicators and I think that
the challenges, as I was saying to Congressman Turner, is for
our partners and for our staff, once you raise the stakes, once
you make it really important, the quality of the data and the
measurement becomes especially important so we have to keep
improving that.
And the one thing that I wanted to tell you because I know
you have highlighted Oregon which has, in fact, done many
impressive things, is that we are very proud that the
measurement strategy we developed for Head Start--the sample of
programs, and the assessment both of programs and of children.
They have been looking for a good way to look at outcomes in
early childhood, and we expect that they will be adopting what
we have developed and so we are very pleased to have that
working relationship.
Mr. Funches. I think it is very important for us to move
forward on what we use internally. And I am pleased to say that
our program managers are very excited about it, and they are
using it. So our vision is that it become part of our day to
day management approach.
Mr. Horn. The General Accounting Office discussed the
performance to the performance budgeting of agency compliance
with cost accounting standards as set forth in the FASAB,
otherwise known as the Federal Accounting Standards Appeals
Board. Can you comment on this assertion and tell us where you
think your agency is with regard to accommodating and complying
with the Federal Accounting Standards Appeals Board?
Ms. Harper. Mr. Chairman, EPA initiated cost accounting
this year, at the start of fiscal year 1999. We are also doing
our cost accounting in accordance with our Results Act
structure that is aligned with our budget structure and our
accounting structure. It has been difficult. We have not had
difficulty in terms of the mechanics of it because we were able
to handle that, but having the agency understand that this is
how they need to accommodate their costs has taken a lot of
time and effort. I am pleased to report that we seem to be
making good progress. I am anxious to see how we fare at the
end of the year. We are close. Three quarters of the year is
done. And we seem to be on track.
Mr. Horn. How about you?
Mr. Funches. We are not where we would like to be. We are
able to get some costs. We are putting in a new labor cost
distribution system, including a cost accounting system. We
expect the labor cost distribution system to be up in the
February timeframe. We are not where we would like to be. It is
very important and a key element. We will get another piece of
the performance report and marriage of outcomes and costs. But
it is an important thing that we are focusing on.
Mr. Horn. One quick question for the two Chief Financial
Officers. Are you part of the chief administrator of your
agency's cabinet when she calls people together?
Mr. Funches. Yes, sir. As I mentioned before, we have an
executive council at the Nuclear Regulatory Commission?
Mr. Horn. So the answer is yes?
Ms. Harper. Yes.
Mr. Horn. There will be some questions on both sides.
Because of the vote we don't have the time to ask any more
questions and you have all given excellent testimony. We
appreciate that.
I want to thank the following people that are related to
this hearing. I don't see our staff director, Russell George,
and chief counsel. On my immediate left, your right, is Matthew
Ebert, policy adviser for a good part of this panel and Jane
Cobb was involved with that for the full committee, and Mr.
John Phillips, an intern worked very hard on this, Bonnie
Heald, our director of communications, Grant Newman, our clerk,
Justin Schlueter, another intern, and Lauren Leften, intern.
You can see we use a lot of free labor from colleges during the
summer months.
And Faith Weiss who is not an intern, minority counsel, and
we will be sorry to see her leave. And staff assistant for the
minority is Jean Gosa and the court reporters are Randy
Sandefer and Doreen Dotzler, and with that we thank all of you
and we are adjourned.
[Whereupon, at 4:15 p.m., the subcommittee was adjourned.]
[The prepared statement of Hon. Jim Turner follows:]
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