oversight

Review of the Department of Education's Annual Plan 2002-2003 Reveals Strengths and Areas for Improvement. I13C0014, Date Issued: 02/07/2004 PDF (120K) Ms Word (58K)

Published by the Department of Education, Office of Inspector General on 2004-02-07.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

INSPECTION MEMORANDUM

TO:               William Hansen
                  Deputy Secretary


FROM:             Mary Mitchelson
                  Acting Assistant Inspector General
                  Analysis and Inspection Services

SUBJECT:          Review of the Department of Education’s Annual Plan 2002-2003 Reveals
                  Strengths and Areas for Improvement (ED/OIG I13C0014)


This memorandum provides the results of our review of the U.S. Department of Education
Annual Plan 2002–2003 (Plan) published in March 2002. The Plan is the Department’s Annual
Performance Plan. We analyzed the Plan to determine (1) how it addresses the management
challenges identified by the Office of Inspector General (OIG) and (2) how it links performance
plans and budgets under the Government Performance and Results Act of 1993 (GPRA), using
General Accounting Office methodology.1 In addition, we compared the results that selected
Department programs received from the Office of Management and Budget’s (OMB) Program
Assessment Rating Tool (PART) in the areas of performance goals and program budget
alignment.

Our review showed that the Plan effectively addresses the management challenges identified by
OIG, although additional steps could be developed to enhance the Plan. We applied the GAO
methodology and found that the Plan does not link program performance measures to program
budgets. The results of the PART review also highlighted a need for the Department to
strengthen program performance measure and budget linkages.

We are providing suggested revisions and additional action steps to enhance the Department’s
efforts to resolve its management challenges. We also discuss the importance of the Department
undertaking improvement activities to develop program performance measures that are linked to
funding levels.



1
 GAO-02-236, Managing for Results: Agency Progress in Linking Performance Plans With Budgets and Financial Statements,
January 2002.
                                               Inspection Results

Issue 1. Department Officials Should Consider Adding or Revising Action Steps Related to
         OIG Identified Management Challenges

While the Plan is not required to include a reference to the OIG identified management
challenges (February 2002), the Plan’s action steps provide the best evidence of the
Department’s commitment to meeting the management challenges, which will also support the
Department’s goals of implementing the No Child Left Behind Act and creating a culture of
accountability. Our analysis revealed that the Plan generally addresses the management
challenges. In addition, we identified areas within the Plan where the Department should
consider making additional action steps or revisions to existing steps to make them more
effective in meeting the management challenges.

Out of a total of 383 action steps listed in the Department’s Plan, we found that 158 or 41
percent are related to meeting the management challenges. Of the 158, we suggested revisions
for 8 action steps and proposed adding one additional action step.2 For example, action step 310
directs Department officials to complete remedial actions on all problems identified through
security reviews. To better address Management Challenge 2, Strengthen Information
Technology Security, Department officials should consider amending this action step to specify
that, in addition to addressing remedial actions, the step include completion of corrective action
plans implementing recommendations made by the OIG GISRA audit and other security reviews.

Improvement Activity:

    We provided specific OIG suggested revisions for the improvement of the Department’s
    action steps in Attachment 1. These suggested revisions should be provided to the
    appropriate management officials for their consideration when preparing the next Department
    Plan.

Issue 2. Department Officials Should Explicitly Link Program Performance Measures and
         Program Budgets
During 2001, GAO reviewed 32 different federal government agencies to determine how their
performance plans linked to the agencies’ budgets and financial statements.3 At the time of
GAO’s review, the Department had not yet completed its Plan. Therefore, GAO could not
conduct a review of the Plan.
To determine how the Department’s Plan linked to the Department’s budget and financial
statements, we applied the GAO methodology. Our analysis revealed that the Plan does not
explicitly link program performance measurement with program budgets.




2
  Our comments and specific recommendations for steps requiring revisions are provided in Attachment 1. We are currently
conducting audit work in some areas related to specific management challenges, so we chose not to comment on some challenges
pending the outcome of this audit work.
3
  GAO-02-236, Managing for Results: Agency Progress in Linking Performance Plans With Budgets and Financial Statements,
January 2002.
ED/OIG I13C0014              Review of the Department of Education’s Annual Plan 2002-2003                             Page 2
The Plan is designed to support the achievement of the Department’s Strategic Plan, which has
six goals.4 The Plan contains 24 objectives with 166 performance indicators that measure the
accomplishment of these objectives. Many of the 24 objectives and their associated measures
report national achievement on such essential areas as reading, math, and drug free schools.
Other objectives are aimed at achieving management excellence within the Department in such
areas as financial integrity and the management of human capital.

The Plan’s appendix, Program to Objective Crosswalk (Attachment 2), provides a matrix of
programs, budgets, and associated objectives. Using this crosswalk, our analysis showed that
multiple programs supported 21 of the 24 objectives. In one instance, Objective 5.1 was
associated with 58 programs. An average of 17 programs were related to each objective.
Similarly, we noted that many of the programs were associated with multiple objectives.
Specifically, we found that 73% of the programs were associated with multiple objectives. The
matrix provided in Attachment 2 shows the links identified by the Department in its Plan.

The importance of linking funding with accountability for results is recognized in Objectives 1.1
and 6.5 of the Plan. These objectives use the same measures. These measures are:

     •    The percentage of Department programs that demonstrate effectiveness in terms of
          outcomes, either on performance indicators or through rigorous evaluations.

     •    The percentage of Department program dollars that are in programs that demonstrate
          effectiveness in terms of outcomes, either on performance indicators or through rigorous
          evaluations.

An asterisk at the bottom of both objectives is followed by the statement: For more detailed
information on Department programs, visit the site: www.ed.gov/pubs/annualreport2001. A
visitor to this site will find program performance measures for 88 Department programs. There
is no indication, however, how these measures support the Plan and how they are tied to the
Department’s budget, as there are no specific linkages between the program measures and the
Plan objectives. This lack of emphasis on program performance measurement is reflected in the
results of our evaluation of the Plan using GAO methodology.

GAO employed a methodology that applied three characteristics to agency performance plans
and then provided a table reflecting agency status in linking plans and budgets for fiscal year
2002 (Attachment 3). We used the same GAO characteristics and applied them to the
Department’s Plan. Our analysis of the Plan showed that it meets minimum GPRA
requirements, but it does not link program activities to program performance goals or show
funding levels needed to achieve program performance goals. Overall, we concluded GAO
would have likely assigned a low ranking in the area of linkages between programs and budgets
compared to the majority of the agencies rated by GAO. For each GAO characteristic we found:


4
    Goal 1: Create a Culture of Achievement
    Goal 2: Improve Student Achievement
    Goal 3: Develop Safe Schools and Strong Character
    Goal 4: Transform Education into an Evidence-based Field
    Goal 5: Enhance the Quality of and Access to Postsecondary and Adult Education
    Goal 6: Establish Management Excellence

ED/OIG I13C0014              Review of the Department of Education’s Annual Plan 2002-2003    Page 3
Characteristic 1: Program activities were linked to goals.
                  GAO identified agencies that linked program activities directly, or by
                  aggregation, disaggregation, or consolidation to some level of performance
                  planning structure.

                  The Program to Objective Crosswalk appendix (Attachment 2) in the Plan
                  provides linkages at a general level of performance. That is, performance
                  measurement is at the broad objective level and not at the specific program
                  level. Therefore, while this Plan provides some linkage to a level of
                  performance planning, it does not reflect specific program linkages. This
                  measurement at the objective level may not provide the specific information
                  needed by Congress or Department management.

Characteristic 2: Plans associated dollars with goals.

                  GAO identified agencies that associated an amount of funding with some level
                  of their performance planning structure.
                  The Program to Objective Crosswalk reflects the appropriation/budget
                  connection with performance at the general, objective level. As previously
                  noted, Attachment 2 reflects that program budgets support multiple objectives;
                  therefore, there are only general associations with funding and performance
                  planning. While this approach provides a general association, it does not
                  provide a clear linkage between requested resources and expected results.

Characteristic 3: Funding was allocated to a discrete set of goals and/or measures.

                  GAO identified agencies that displayed how requested funding for program
                  activities directly, or by aggregation, disaggregation, or consolidation was
                  allocated among specific or a unique set of performance goals or measures.
                  The Program to Objective Crosswalk reflects connections at a general level with
                  individual programs supporting multiple objectives and each objective being
                  supported by an average of 17 programs. The Plan does not link budget
                  amounts with specific or unique sets of performance goals or measures. As
                  previously noted, an asterisked comment at the bottom of Objectives 1.1 and 6.5
                  provides a web link to a listing of program performance measures. As the
                  Department does not link these measures to funding, this characteristic is not
                  met.
Without appropriate linkage between the program performance measures and the budget,
Congress may not have the necessary information to make decisions on the relative effectiveness
and efficiency of federal programs and spending. In addition, the linkage could help provide
federal managers with information about program results, cost, and service quality.




ED/OIG I13C0014        Review of the Department of Education’s Annual Plan 2002-2003           Page 4
Improvement Activity:

    The Department Plan should be modified to include specific program measure and funding
    allocation linkages to better inform congressional decision makers and program managers.


Issue 3. The OMB PART Reviews Identified Needed Improvements in Program
         Performance Measures and Budget Alignment

The results of the OMB PART review highlight the same need for improvement in program
performance measures and budget linkages as demonstrated in our review using the GAO
methodology. Specifically, in the initial Spring 2002 application and then again in the larger Fall
2002 PART review, the overall results of Section II, Strategic Planning, showed that the
program budget was not aligned with the program goals in such a way that the impact of funding,
policy, and legislative changes on performance was readily demonstrated.

We determined that the results of PART Section II, Strategic Planning, questions one, two, and
six provide the most relevant information. Question one and two relate to performance goals,
and question six relates to budget alignment. For our analysis, we reviewed the 6 programs that
were part of the OMB Spring PART review and 12 that were part of the Fall review. 5

Under PART Section II, question one asked: Does the program have a limited number of
specific, ambitious long-term performance goals that focus on outcomes and meaningfully reflect
the purpose of the program? The results showed that only 3 or 17 percent of the 18 programs
had appropriate performance goals. A “yes” answer required identifying a limited number (e.g.,
two or three) of specific, easily understood program outcome goals that directly and
meaningfully support the program’s mission and purpose.

Question two asked: Does the program have limited performance goals that demonstrate
progress toward achieving the long-term goals? The results showed that only 7 or 39 percent of
the 18 programs had annual performance goals that demonstrate progress toward achieving the
long-term goals. A “yes” answer required annual performance goals that are discrete,
quantifiable, and measurable.

Question six asked: Is the program budget aligned with the program goals in such a way that
the impact of funding, policy, and legislative changes on performance is readily known? The
results showed that only 4 or 22 percent of the 18 programs had the budget appropriately aligned
with program goals. A “yes” answer required the annual budget request to be clearly derived by
estimating what is needed to accomplish annual performance measures and long-term goals.


5
 The cumulative 18 programs are: National Assessment, NCES, Safe and Drug Free Schools and Communities
State grants, Adult Education State grants, America’s Career Research Network, Tech-Prep Education State Grants,
Tribally Controlled Vocational & Technical Institutions, Vocational Education State Grants, Grants for Infants and
Families, IDEA Grants to States, Preschool Grants (IDEA, section 619), Even Start, Comprehensive School Reform,
Vocational Rehabilitation State Grants, TRIO Upward Bound, TRIO Student Support Services, Federal Pell Grants,
and Student Aid Administration.

ED/OIG I13C0014           Review of the Department of Education’s Annual Plan 2002-2003                     Page 5
The results of the PART Section II review highlight the same lack of program performance
measures and budget linkages indicated in our review using the GAO methodology. As a
consequence, the effectiveness of many of the Department’s programs cannot be directly
measured.

                                            Background

In the past, the Congress has expressed an interest in having OIG identify the Department’s most
important performance measures. In 2001, the Chairman of the Committee on Government
Reform asked OIG to identify the Department’s most important performance measures. We
selected those measures associated with the Department’s most significant management
challenges as identified by the OIG. In anticipation of a similar request, we performed this
analysis of the Department’s Plan.

Last year GAO published the report, Agency Progress in Linking Performance Plans With
Budgets and Financial Statements, (GAO-02-236, January 2002). This report focuses on
applying OMB Circular No. A-11 and GPRA to agency performance plans. The Department’s
Plan was one of the performance plans selected for review. However, as the new Plan was not
finished when the review was conducted, it was not included in the report. Therefore, we
applied the methodology GAO used in its review to the now completed Plan (Issue 2).

                          Objectives, Scope, and Methodology

The objectives of our analysis were to evaluate the Department’s Annual Plan to determine (1)
how it addresses the management challenges identified by the OIG and (2) how it links
performance plans and budgets under GPRA, using GAO methodology. In addition, we
compared the Plan and the results the Department’s programs received from OMB’s PART
analysis in the areas of performance goals and program budget alignment.

The references used to conduct this inspection are:

   •   U.S. Department of Education Annual Plan 2002-2003
   •   OMB Circular No. A-11 (2001)
   •   Government Performance and Results Act
   •   U.S. Department of Education 2001 Performance Plan
   •   The updated management challenges issued by the OIG in February 2002
   •   Office of Management and Budget Program Assessment Rating Tool
   •   The results of the OMB ”Spring Review” of six Department programs as well as 12
       Department PART submissions for the Fall Review
   •   Interview with Hugh Walkup, Director of Strategic Accountability Services, in January
       2003

OIG managers in Audit Services and Analysis and Inspection Services were provided a list of the
OIG management challenges published in February 2002 and the related action steps from the
Department’s Performance Plan. They reviewed the action steps to determine if these steps
addressed the management challenges. If not, they were requested to identify additional actions
that, in their professional judgment, the Department should take.
ED/OIG I13C0014       Review of the Department of Education’s Annual Plan 2002-2003        Page 6
The review was conducted in Washington, D.C. and was done in accordance with the President’s
Council on Integrity and Efficiency Inspection Standards.

We appreciate the cooperation given to us during the inspection. If you have any questions or
wish to discuss the contents of this report, please call me on 202-260-3556, or Brent Weston,
Director, A&I, on 202-205-9833. Please refer to the control number in all correspondence
relating to this report.



Attachments
1. Management Challenges
2. Appendix B Program-to-Objective Crosswalk
3. Table 1: Agency Status in Linking Plans and Budgets, Fiscal Year 2002

cc: Hugh Walkup




ED/OIG I13C0014       Review of the Department of Education’s Annual Plan 2002-2003        Page 7