This first appeared as an ASPANET On-Line column in May 2003.

Beyond the Results Act
by John M. Kamensky

The passage of the Results Act was ten years ago and now is the time to step back and gain some perspective.  This year, a series of reports and studies assessing the effects of the Results Act – GAO, the Association for Government Accountants, and others will be published. The IBM Endowment for the Business of Government has also issued several reports related to the implementation of the Act.  One, by Christopher Wye, takes on all the canards about why performance measurement is hard and can’t be done.  Another, by Harry Hatry, et. al, is a series of mini-case studies of how federal managers use outcome information to manage their programs.

But if we go back to the beginning, the authors’ vision of that legislation was to “create useful measures that are used.”  Agencies have worked hard to achieve the first part of that vision.  Since the Act was passed, most agencies have drafted three strategic plans; six annual performance plans (the latest round topped 16,000 pages according to one count); and four annual performance reports.  These activities have been measurable.  In fact, one organization, the Mercatus Center, annually scores the usefulness of agency annual performance reports.  This year’s assessment of fiscal year 2002 reports finds minor improvements and several agencies switching rankings.  This reinforces GAO reviews of agency plans and reports in recent years that generally show mixed progress in the vision of “creating useful measures.”

The second part of the vision, “creating measures that are used,” has been even more problematic.  Here, measuring success is even harder.  A 2001 GAO survey of program managers showed that only about 43 percent of managers reported that they used performance measures to allocate resources or to set priorities.  Maybe they will show greater usage in a repeat of this survey later this year.

Getting real progress on “useful measures,” however, may depend on getting the measures used.  We need to get past reporting requirements and move toward providing information that can help managers manage.  And this cannot be legislated.  Fortunately, three initiatives by the Office of Management and Budget (OMB) may make this a reality.  In each case, these initiative go beyond what is written in the Results Act – but clearly envisioned by its authors.

Budget and performance integration initiative.  President Bush’s fiscal year 2004 budget submitted in February contains a status report on agencies’ progress toward his goal of integrating their performance information with the budget.  The budget itself is also being reformatted and for the first time includes performance information tables alongside the traditional budget line items.  The line items themselves are also being transformed into performance statements.  For example, instead of describing budget line items by program (such as “migratory birds” and “fisheries” in the Fish and Wildlife Service), they would be described in results-oriented terms (such as “recover 10 endangers species” by “restoring x acres of land” and “release z hatchery fledglings”).

This approach is closely linked to a parallel Presidential initiative, assessing the performance of each major government program.

Program Assessment Rating Tool (PART).  The fiscal year 2004 budget contains another performance budgeting initiative, resulting in a new, separate volume in the budget.  This initiative, an OMB rating of the performance of individual programs, is intended as a supplement to the budgetary information reported in the budget.  First piloted in FY2003, OMB expanded this effort and assessed 20 percent of each major agencies’ programs in the FY2004 budget – a total of 234 programs.  It has committed to adding an additional 20 percent each year until all major programs are covered. 

One good government group created a website that assesses OMB’s rating effort and concluded that while OMB could not rate the performance of half of the programs because of a lack of good measures, it did use the ratings to make some decisions.  For example, the Federal Times found that programs that could not demonstrate results received on average a 1.2 percent budget increase while those rated “effective” averaged an 18.8 percent budget increase.  The Federal Times also observed that, “never before have budget officials placed such a premium on federal managers being able to measure program results.”

OMB is moving aggressively to expand this initiative.  It recently updated its criteria for use in preparing the FY2005 budget (which is already underway).  It has also identified a new group of programs that are being assessed for the coming budget review cycle. 

This initiative is also sparking interest in program performance in Congress.  House Government Reform Chairman Tom Davis has praised it and Senator Sam Brownback is sponsoring legislation to make the PART a permanent fixture – going beyond the Results Act.

Individual performance-based pay.  A third Presidential initiative that goes beyond the Results Act is making the civil service more performance and results oriented.  Until an organization’s plan is acted upon, it is just a paper exercise.  By tying pay to organizational performance, the plans get attention.

 The President’s FY2004 budget contains a $500 million performance fund to reward employees in agencies that make “meaningful distinctions in performance” among their employees.   While controversial, the Defense Department’s civil service reform bill passed House committees in recent weeks, with a strong emphasis on pay-for-performance, including the President’s Human Capital Performance Fund.  This performance pay initiative is supported by a recent GAO report that describes the characteristics of organizations that have successfully linked individual performance to organizational success.  However, GAO also cautions that agencies that pursue this approach must have “modern, effective, credible, and validated performance management systems” to both protect workers and ensure accountability.

So, while the Results Act itself may seem on the surface to be floundering in a blizzard of paper, the concepts behind it seem to be going farther and faster than many could have believed a decade ago. 

 

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