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Demanding
Performance and Results: The President’s 2nd Term
Management Legacy
by John M. Kamensky
President George W. Bush wants to leave his mark on how government is managed. His recent budget message to the Congress says: “My administration is pressing for reforms so that every program will achieve its intended results.” He continues to invest his personal time and energy to foster a results-oriented government.
Over the past four years, he has laid the groundwork for this through his President’s Management Agenda, which focuses on improving the capacity of agencies to better manage. To gain attention on some of the more mundane, yet still important, issues such as human capital and e-government, the Office of Management and Budget (OMB) created a red-yellow-green scorecard for each agency. OMB publicly releases updates to this scorecard quarterly. “Shame and humiliation works,” remarked Clay Johnson, OMB’s deputy director for management. And there has been improvement on the scores.
But what about the next four years?
A key thread running through the President’s Management Agenda has been various strategies to create a demand for performance and results information. Much of the supply pipeline for this information had evolved over the previous 15 years thanks to a series of laws, such as the Government Performance and Results Act, the Chief Financial Officers Act, and the Clinger-Cohen Act. The president’s strategy has been to create a three-prong demand for this information by policymakers and managers by linking performance information to the budget, highlighting performance outcomes at the program level via OMB’s Program Assessment Rating Tool (PART), and tying individual employees’ pay to the performance of their organization and programs.
Linking Performance to Budget
In a 2003 review of the state of performance-informed budgeting, George Washington University professor Philip Joyce concludes that federal executives, “should focus less on the Congress and more on how performance information can influence the management of resources within the executive branch.” This insight reflects much of the impetus behind the budget and performance integration initiative sponsored by OMB. OMB declared that “beginning with the budget of FY 2005, agencies will prepare a performance budget in lieu of the annual performance plan.” As a result, the president’s FY 2005 budget was the first comprehensive submission of a performance budget organized around agencies’ strategic plans that were integrated with the Results Act-required annual performance plans.
The Government Accountability Office (GAO) has been supportive of this approach. However GAO raises some pragmatic cautions in a recent report on agency efforts to restructure their appropriations account structure to align with their strategic goals. While OMB and agency officials “credited budget restructuring with supporting results-oriented management” by increasing attention on results, “Congressional appropriations subcommittee staff for the most part continued to state a preference for and rely on previously established budget structures” that emphasize workload and output measures. GAO concludes that restructuring budgets is not a technical matter but reflects “important trade-offs among different and valid perspectives and needs” of various stakeholders and that “changes to the account structure have the potential to change the nature of the management and oversight and ultimately the relationship” among key decisionmakers.
GAO suggests that there needs to be more agreement among the stakeholders of the budget process before true performance budgeting may be possible. Part of this consensus-building process links to increased credibility around financial and performance information related to how well programs are performing.
Assessing Performance and Results
OMB developed a diagnostic questionnaire to assess the performance of selected programs on a 100-point scale in four areas. These four areas are weighted based on relative importance:
When it began in 2002, OMB announced that it planned to assess about 20 percent of the federal government’s programs each year. As of 2005 – year three -- it had completed assessments for a total of 607 programs, and plans to have all programs assessed by 2007.
In the president’s most recent budget submission for FY 2006, how programs fared in the budget process roughly paralleled how they rated. Those that were rated as moderately effective (about a quarter of all the programs assessed) received budget increases averaging 11 percent. Those rated as ineffective (about 4 percent of all the programs assessed) received funding cuts averaging 42 percent. In addition, nearly one third of the programs assessed did not have enough performance data to demonstrate whether they were effective or not. On average, these programs received a slight cut.
OMB places all of the PART information on its website. However, it is fairly technical and not inviting to the general public. However, OMB plans to create a more inviting presentation via a new website, tentatively named “Results Matter.” According to Johnson, this website will display what programs are intended to accomplish, what they plan to accomplish in the coming year, and at the end of the year, what they actually accomplished, along with relevant explanatory materials.
With both the budgetary implications and the greater transparency of performance, PART begins to change the way federal managers think about their responsibilities, and it places the burden of proving effectiveness on their shoulders. This in turn is increasingly being linked to their pay and rewards.
Linking Performance to Pay
The Office of Personnel Management (OPM) has been leading the charge to link individual performance to organizational and program performance. OPM has championed legislative reforms that link senior executives’ pay to organizational performance, and supported statutory changes to allow the Departments of Defense and Homeland Security to create a greater link between pay and performance.
GAO supports this trend. In 2003, it examined high-performing organizations that were early adopters of this approach and sees linking performance and pay as a way of “. . . fundamentally changing their cultures so that they are more results-oriented, customer-focused, and collaborative in nature. . . high-performing organizations have recognized that an effective performance management system can be a strategic tool to drive internal change and achieve desired results.”
The president’s most recent budget requests that Congress extend this approach to the rest of the government. While many observers recommend postponing the expansion of this approach pending the experiences of Defense and Homeland Security, OMB’s Johnson says that it is important to embed into law now, because it takes years to implement, and agencies will have the opportunity to learn from the experience of Defense and Homeland Security along the way.
Cementing a “Results” Legacy
When asked at a recent forum what the Bush Administration hoped for as its management legacy, OMB’s Johnson said, “We don’t want to run government like a business. We want to run it to get results.” He reinforced this, saying that he hoped that government in the future would “budget for programs largely on whether the program works or not.”
He says that the key is to have good leadership. He says “If the head of the agency doesn’t want it to happen, it won’t happen.” He offered four leadership characteristics for successfully improving management:
While good leadership cannot be legislated, creating transparent oversight of program performance can be. The administration proposes Congress create two statutory commissions. The first would create a process to regularly scrutinize programs which have to defend their existence before a Sunset Commission every 10 or 12 years. Programs would automatically terminate unless Congress took action to reauthorize them. It also proposes the authorization of Results Commissions, which would address single program or policy areas where there is extensive overlap of jurisdictions between programs, agencies, or congressional committees. Restructuring proposals would then be approved by the President and considered by Congress under expedited procedures.
As of mid-April, no legislation for these two commission proposals has been introduced. However, Congressman Todd Platts (R-PA) has introduced legislation to require a review process similar to PART. His legislation, H.R. 185, would amend the Government Performance and Results Act to require OMB and agencies to assess the performance and results of individual programs every five years so that Congress could “conduct more effective oversight, make better-informed authorization decisions, and make more evidence-based spending decisions.” The bill has been passed by the Government Reform Committee and will be considered by the full House shortly.
Taken together, these statutory initiatives, along with progress on the President’s Management Agenda, could help create a long-term foundation for changing how government works. And if successful, the President’s second term will have created a legacy of a results-oriented government.