United States General Accounting Office GAO Testimony Before the Committee on Appropriations and Committee on Governmental Affairs U.S. Senate For Release on Delivery Expected at 10:00 a.m., EDT MANAGING FOR RESULTS Tuesday June 24, 1997 The Statutory Framework for Improving Federal Management and Effectiveness Statement of James F. Hinchman Acting Comptroller General GAO/T-GGD/AIMD-97-144 Statement Managing for Results: The Statutory Framework for Improving Federal Management and Effectiveness Messrs. Chairmen and Members of the Committees: It is a pleasure to appear before you today to discuss how Congress can use the statutory framework that it enacted to help provide the more responsive and cost-effective government that the American people are demanding. There has been a groundswell movement in recent years toward performance-based management in public sector organizations. The federal government, as well as state, local, and foreign governments, have grappled with how best to improve effectiveness and service quality while limiting costs.1 In response, these governments have implemented reform agendas that have tended to include a common recognition that improved management was a critical part of the answer to meeting demands for a government that accomplishes more while economizing on resources. A part of this common recognition was the widespread acceptance of the need to shift the focus of government decisionmaking and accountability away from a preoccupation with the activities that are undertaken—such as grants or inspections made—to a focus on the results of those activities—such as real gains in employability, safety, responsiveness, or program quality. The key concepts of this performance-based management are the need to define clear agency missions, set results-oriented goals, measure progress toward the achievement of those goals, and use performance information to help make decisions and strengthen accountability.2 Congress, too, has recognized the need for improved federal management and a greater focus on results and has put in place a statutory framework for achieving those ends. This framework includes the Chief Financial Officers (CFO) Act and information technology reform legislation, in particular the Clinger-Cohen Act of 1996 and the Paperwork Reduction Act of 1995. The Government Performance and Results Act—commonly know as “GPRA” or “the Results Act”—is the centerpiece of the framework. As agencies implement this framework, Congress also intended for the acts to be useful to Members by providing information pertinent to a broad range 1 See, for example, Managing for Results: Experiences Abroad Suggest Insights for Federal Management Reform (GAO/GGD-95-120, May 2, 1995); Managing for Results: State Experiences Provide Insights for Federal Management Reforms (GAO/GGD-95-22, Dec. 21, 1994); and Government Reform: Goal-setting and Performance (GAO/AIMD/GGD-95-130R, Mar. 27, 1995). 2 Executive Guide: Effectively Implementing the Government Performance and Results Act (GAO/GGD-96-118, June 1996). Page 1 GAO/T-GGD/AIMD-97-144 Statement Managing for Results: The Statutory Framework for Improving Federal Management and Effectiveness of management-related decisions in their capacities as Members of budget, authorization, oversight, and appropriations committees. The purpose of my testimony today is to provide an overview of this statutory framework and discuss how Congress can use the framework, in particular the Results Act, to help identify and address some of the key management challenges that are undermining the effectiveness and responsiveness of federal agencies. I will also highlight the key implementation issues associated with linking the benefits of this statutory reform framework with the budget process. Finally, I will suggest how this framework, if fully implemented, can be used by Congress to strengthen its decisionmaking and oversight and better assure that the public gets the efficient and responsive government that is being demanded. My comments today are based on a wide range of reports and testimonies we have done in recent years on the federal management issues associated with federal program performance, financial management, and information technology. These reports include, most recently, our overall assessment on the prospects for governmentwide implementation of the Results Act.3 That report, mandated by the Results Act, included among its addressees the Chairmen and Ranking Minority Members of the Committees holding today’s hearing. Congress’ desire to enhance agencies’ accountability for their performance Congress Has Enacted is at the heart of the statutory framework that Congress has put in place to a Statutory reform federal management. Congress enacted the CFO Act—as expanded Framework for by the Government Management Reform Act of 1994 (GMRA)—to remedy decades of serious neglect in federal financial management by establishing Improving Federal chief financial officers across the government and requiring the Management and preparation and audit of annual financial statements. The information technology reform legislation is based on the best practices used by Decisionmaking leading public and private organizations to more effectively manage information technology.4 Under these laws, agencies are to better link their technology plans and information technology use to their programs’ missions and goals. 3 The Government Performance and Results Act: 1997 Governmentwide Implementation Will Be Uneven (GAO/GGD-97-109, June 2, 1997). 4 Executive Guide: Improving Mission Performance Through Strategic Information Management and Technology—Learning from Leading Organizations (GAO/AIMD-94-115, May 1994). Page 2 GAO/T-GGD/AIMD-97-144 Statement Managing for Results: The Statutory Framework for Improving Federal Management and Effectiveness Finally, in crafting the Results Act, Congress recognized that congressional policymaking, spending decisions, and oversight all had been severely handicapped by lack of sufficiently precise program goals and adequate program performance information. The Act sought to remedy that situation by requiring agencies to set multiyear strategic goals and corresponding annual goals, measure performance toward the achievement of those goals, and report on their progress. This statutory framework seeks to create a more focused, results-oriented management and decisionmaking process within both Congress and the executive branch. It seeks to improve federal management by responding to a need for accurate, reliable information for congressional and executive branch decisionmaking, information that has been badly lacking in the past, as much of our work had demonstrated. The framework provides a powerful opportunity to develop fully integrated information about agencies’ missions and strategic priorities, the results-oriented performance goals that flow from those priorities, performance data to show the achievement (or not) of those goals, the relationship of information technology investments to the achievement of performance goals, and accurate and audited financial information about the costs of achieving mission results. Our work has shown that when an agency adopts a disciplined approach to setting results-oriented goals, measuring its performance, and using performance information to improve effectiveness, significant performance improvements occur. For example, we have reported on how the Coast Guard reexamined its mission and shifted the focus of its marine safety program from regulation to one that includes education.5 This change contributed to a significant decline in the towing industry fatality rate—from 91 per 100,000 industry employees in 1990 to 27 per 100,000 in 1995. Similarly, the Veterans Health Administration improved services to veterans by more rigorously assessing the results of the medical care it provides to the nation’s veterans. In particular, the Veterans Health Administration reported that it used performance information to target the most important improvement opportunities and thereby lowered the mortality rate for cardiac procedures by an average of 13 percent over the last 8 years. 5 GAO/GGD-96-118, June 1996. Page 3 GAO/T-GGD/AIMD-97-144 Statement Managing for Results: The Statutory Framework for Improving Federal Management and Effectiveness In another example, involving the Social Security Administration’s (SSA) national toll-free 800 telephone number to handle citizen inquiries, SSA used customer satisfaction and other performance information to identify and make program changes, including providing additional staff to handle phone calls from the public. As a result, the busy rate decreased from 49 to 34 percent, and the percentage of calls answered within 5 minutes increased from 74 to 83 percent from fiscal year 1995 to fiscal year 1996.6 Although the Coast Guard, Veterans Health Administration, SSA, and other Improving Federal performance improvements are noteworthy, the reported examples of Management Is Key to substantial performance improvements are still relatively few. In fact, our Increasing work has long identified serious weaknesses in federal management and has pinpointed the actions that need to be taken to address those Effectiveness and weaknesses.7 In many cases, the effective implementation of the Results Reducing Costs Act will be an essential part of any successful effort to improve federal management, and active congressional input into the executive branch strategic planning process is an important first step in that effort. Our recent guide, intended to help facilitate congressional review of agencies’ strategic plans, provided suggested questions for each of the key elements of a strategic plan and for a plan as a whole.8 As I noted earlier, the information generated under the Results Act can be useful to Congress in making a wide range of congressional decisions to address the public demand for a more efficient and better managed government. Today, I would like to highlight four key areas where our work suggests that congressional attention could pay particularly significant dividends in creating a more effective and less costly government. These areas are (1) ensuring a coordinated response to national needs across agency and program lines, (2) giving agencies a clear sense of direction, (3) sustaining a systematic focus on results, and (4) ensuring sound and realistic agency strategies. A Coordinated Response to First, although federal programs have been designed for different National Needs purposes or targeted for different population groups, coordination among federal programs with related responsibilities is essential to efficiently and 6 Social Security Administration: Significant Challenges Await New Commissioner (GAO/HEHS-97-53, Feb. 20, 1997) and Social Security Administration (GAO/HEHS-97-79, June 11, 1997). 7 See, most recently, High Risk Series (GAO/HR-97-20SET, Feb. 1997). 8 Agencies’ Strategic Plans Under GPRA: Key Questions to Facilitate Congressional Review (GAO/GGD-10.1.16, Version 1, May 1997). Page 4 GAO/T-GGD/AIMD-97-144 Statement Managing for Results: The Statutory Framework for Improving Federal Management and Effectiveness effectively meet national concerns. Uncoordinated program efforts can waste scarce funds, confuse and frustrate program customers, and limit the overall effectiveness of the federal effort. A focus on results, as envisioned by the Results Act, implies that federal programs contributing to the same or similar results should be closely coordinated to ensure that goals are consistent and that, where appropriate, program efforts are mutually reinforcing. This suggests that federal agencies should look beyond their organizational boundaries and coordinate with other agencies to ensure that their efforts are aligned. Our work has shown that, as the federal government has responded over time to new needs and problems, many federal agencies have been given responsibilities for addressing the same or similar national issues.9 Of the 18 national mission areas displayed in the federal budget, 14, including health, international affairs, and justice, involved more than 1 executive branch department or major agency in fiscal year 1996.10 Six of the national mission areas, including education, income security, and commerce and housing credit, were addressed by six or more executive branch departments and major agencies. Of course, some of this shared responsibility was intended, recognizing that addressing some issues from a national perspective necessarily involves more than one federal agency or more than one approach. However, in many program areas—such as food safety, employment training, early childhood development, at-risk and delinquent youth programs, federal land management, and national laboratories—our work suggests that significant overlap and fragmentation existed in the federal response to national needs and problems.11 For example, in 1995 we testified on the Department of Education’s programs that provided loans and grants to students to help finance their higher education.12 We found that, although the student loan and Pell grant programs provided the majority of federal financial aid to students for postsecondary education, 9 Government Restructuring: Identifying Potential Duplication in Federal Missions and Approaches (GAO/T-AIMD-95-161, June 7, 1995). 10 Budget Issues: Fiscal Year 1996 Agency Spending by Budget Function (GAO/AIMD-97-95, May 13, 1997). 11 Government Reorganization: Issues and Principles (GAO/T-GGD/AIMD-95-166, May 17, 1995); At-Risk and Delinquent Youth: Multiple Federal Programs Raise Efficiency Questions (GAO/ HEHS-96-34, Mar. 6, 1996); Federal Land Management: Streamlining and Reorganization Issues (GAO/T-RCED-96-209, June 27, 1996); and Federal R&D Laboratories (GAO/RCED/NSIAD-96-78R, Feb. 29, 1996). 12 Department of Education: Information on Consolidation Opportunities and Student Aid (GAO/ T-HEHS-95-130, Apr. 6, 1995) and Department of Education: Opportunities to Realize Savings (GAO/T-HEHS-95-56, Jan. 18, 1995). Page 5 GAO/T-GGD/AIMD-97-144 Statement Managing for Results: The Statutory Framework for Improving Federal Management and Effectiveness another 22 smaller programs were targeted to specific segments of the postsecondary school population, such as prospective students from disadvantaged families or women and minorities, who are underrepresented in graduate education. These 22 programs were collectively funded at $1.1 billion for fiscal year 1995. We concluded that these smaller grant programs could be considered candidates for consolidation—with other larger programs or among themselves—with no adverse impact on students’ access to postsecondary education, and that the federal government could anticipate administrative savings of 10 percent each year, or a total of $550 million in budget authority (adjusted for inflation) over 5 years.13 Similarly, we reported in 1995 on the federal programs that assisted urban communities and their residents through a complex system involving multiple federal agencies.14 We found that the government’s Catalog of Federal Domestic Assistance listed over 340 federal economic development-related programs administered by 13 agencies. These were in the areas of housing, economic development, and social services. We reported that, considered individually, many of these programs may have made sense. However, the proliferation of federal programs and the lack of coordination among agencies could impose a burden on local organizations that attempted to piece together programs to serve their communities. In particular, the neighborhood organizations we studied found it burdensome to manage multiple programs with individual funding streams, application requirements, and reporting expectations. The Results Act requires that agencies consult with Congress as they develop strategic plans. These consultations are under way now as agencies prepare to issue their plans by September 30, 1997, as required by the Act. As Congress provides input to agencies’ strategic plans, it can insist that agencies show how their programs are aligned with related efforts in other agencies. Congress can also use the planning process to seek opportunities to streamline government by comparing the effectiveness of similar program efforts carried out by different agencies. 13 Addressing The Deficit: Budgetary Implications of Selected GAO Work for Fiscal Year 1998 (GAO/OCG-97-2, Mar. 14, 1997). 14 Economic Development Programs (GAO/RCED-95-251R, July 28, 1995) and Community Development: Comprehensive Approaches and Local Flexibility Issues (GAO/T-RCED-96-53, Dec. 5, 1995). Page 6 GAO/T-GGD/AIMD-97-144 Statement Managing for Results: The Statutory Framework for Improving Federal Management and Effectiveness A Clear Sense of Agency Closely related to the issue of ensuring a coordinated response to national Direction needs, is the issue of each agency having a clear sense of direction in terms of what it is in business to accomplish. Sustained congressional input into agencies’ strategic planning efforts is vital, both to ensure that missions are based in statute and to identify cases where statutory requirements need to be modified or clarified due to changed circumstances. Over the years, our work has identified instances where an agency’s effectiveness was hampered by the lack of a clearly defined mission and goals—a concrete sense of why the organization exists and what it is to accomplish. For example, our work has shown that the Department of Energy (DOE) needs to reevaluate its basic mission.15 DOE’s responsibilities and priorities have changed dramatically over time. The DOE of today is a very different organization from what it was in 1977, when as a newly created agency, its mission was to respond to a perceived national energy crisis. Thus, while energy research, conservation, and policymaking dominated early DOE priorities, national defense and environmental cleanup now overshadow those areas. Meanwhile, new DOE mission areas in science and industrial competitiveness have emerged and are pressing for priority attention. To each new phase, DOE leadership responded with a vastly different agenda concerning DOE’s basic responsibilities and how the agency should be managed. We have reported that these shifts have contributed to uneven performance in many mission areas. For example, during the time that DOE emphasized nuclear weapons production, it gave little attention to the environmental consequences. Partly as a result of this inattention, environmental cleanup will now cost between $189 and $265 billion by DOE’s estimate. In another example, the Environmental Protection Agency (EPA) was established in 1970 under a presidential reorganization plan in response to concerns over protecting public health, as well as air, water, and land resources. Subsequently, as environmental threats were identified, Congress gave EPA responsibility for implementing over a dozen environmental laws. We reported in May 1995 that, because it did not have an overarching legislative mission and its environmental responsibilities had not been integrated, EPA had not been able to target its resources to 15 Department of Energy: A Framework for Restructuring DOE and Its Missions (GAO/RCED-95-197, Aug. 21, 1995). Page 7 GAO/T-GGD/AIMD-97-144 Statement Managing for Results: The Statutory Framework for Improving Federal Management and Effectiveness reduce the greatest risks to human health and the environment.16 EPA has been working with state governments, industry, environmental groups, and other interested parties since 1992 to select the most appropriate national environmental goals. Building on these goals, EPA is also ranking the relative risk of environmental problems to help identify the most appropriate goals for the agency. Congress can also use the Results Act to work with the executive branch to clarify its expectations for the goals that agencies should seek to achieve. Federal agencies often face a variety of competing priorities that require them to strike balances among a variety of competing policy goals. Multiple priorities, which in many cases are a natural by-product of the need to build a legislative majority and are frequently built into the intent and design of an agency or program, constitute one of the primary challenges to government management and performance. For example, agencies often must weigh the demands of program customers for responsive services against the cost of providing those services. These and other competing priorities continually need to be weighed against one another; otherwise, one or two priorities may be inappropriately overemphasized at the expense of others. A Systematic Focus on A third critical area where Congress can use the Results Act is in better Results ensuring that agencies are managing to achieve results rather than just focusing on activities or processes. Many agencies have a difficult time moving from measuring program activities to establishing results-oriented goals and performance measures. The fundamental reason that this is so difficult is that, to manage on the basis of results, agencies must move beyond what they control—that is, their activities—to focus on what they merely influence—their results. The often limited or indirect influence that the federal government has in determining whether a desired result is achieved complicates efforts to measure program performance. Our work has shown that measuring the federal contribution can be particularly challenging for regulatory programs; scientific research programs; and programs that deliver services to taxpayers through third parties, such as state and local governments. For example, isolating the effectiveness of the federal government’s economic development programs is a daunting challenge. Numerous 16 Managing for Results: EPA’s Efforts to Implement Needed Management Systems and Processes (GAO/T-RCED-97-133, Apr. 15, 1997); and Environmental Protection: Current Environmental Challenges Require New Approaches (GAO/T-RCED-95-190, May 17, 1995). Page 8 GAO/T-GGD/AIMD-97-144 Statement Managing for Results: The Statutory Framework for Improving Federal Management and Effectiveness external forces, including broad national economic trends and assistance communities may receive from state and local governments and the private sector, contribute to local economic development. Despite the challenge, a focus on results is critical to providing decisionmakers with potentially vital information needed to assess the value of the federal effort. We reported in 1996 that a study of the effectiveness of the Department of Commerce’s Economic Development Administration (EDA) programs found that income in the counties that received EDA funding grew significantly faster than income in the counties that received no aid.17 However, when the researchers simultaneously considered EDA’s programs and factors unrelated to EDA, they found that EDA’s programs had a very small effect on income growth rates during the period that the aid was received and had no significant effects in the 3 years after the aid ceased. EDA’s programs thus could explain only a small part of the difference in the growth rates between the two groups of counties. Congressional input into agencies’ strategic planning efforts may be needed to ensure that agencies gather the performance information and conduct the evaluations necessary to assess the worth of the federal investment in programs. For example, we reported in April 1997 that although an extensive body of literature exists on Head Start—a program that over the last 30 years has served over 15 million children at a total cost of $31 billion—the research is inadequate for drawing conclusions about the impact of the national program in any area in which Head Start provides services, such as school readiness or health-related services.18 We found that the Department of Health and Human Service’s planned research will focus on new and innovative service delivery strategies and demonstrations but will provide little information on the impact of regular Head Start programs. We concluded that the size and costs of the Head Start program appear to warrant an investment in the research needed to provide information on the results of the program. Sound and Realistic Finally, the effective implementation of the Results Act can help Congress Agency Strategies and the executive branch ensure that agencies have in place the programs and strategies that will best achieve results. As the example of the Coast 17 Economic Development: Limited Information Exists on the Impact of Assistance Provided by Three Agencies (GAO/RCED-96-103, Apr. 3, 1996). 18 Head Start: Research Provides Little Information on Impact of Current Program (GAO/HEHS-97-59, Apr. 15, 1997). Page 9 GAO/T-GGD/AIMD-97-144 Statement Managing for Results: The Statutory Framework for Improving Federal Management and Effectiveness Guard that I mentioned earlier suggests, once an agency begins to focus on results and understand how its programs affect the degree to which desired results occur, the agency often makes significant program changes to better achieve those desired results. Moreover, Congress should rightfully expect that each agency’s plans and programs will make efficient use of budgetary resources and that, if reductions need to be made, those resources will be used in a way that maintains, to the fullest extent possible, the agency’s ability to carry out its mission. Our work has shown that many agencies are currently struggling to develop coherent strategies for restructuring their organizations, workforces, and operations to meet results-oriented goals in a cost-effective manner. This need for a coherent strategy is particularly true in the area of information technology.19 The sound application and management of information technology to support strategic goals must be an important part of any serious attempt to improve agency mission performance, cut costs, and enhance responsiveness to the public. We have noted that the successful implementation of information technology reform legislation—which, among other things, requires that agencies have a strategy that links technology investments to achieving programmatic results—is critical to ensuring the wise use of the billions of dollars the government is investing in information systems.20 We also have found that agencies need to do a better job of designing mission-based strategies to improve efficiency and reduce costs. For example, we recently reported that the Department of State does not have a comprehensive strategy to restructure its operations to adjust to today’s needs.21 State’s vast network of embassies and consulates, together with the way they are configured and operated, has remained largely unchanged despite communications and transportation advances, geopolitical changes, and new budget realities. State has not been able to make hard choices about resource priorities for its wide range of locations 19 For further information see: Information Technology Investment: Agencies Can Improve Performance, Reduce Costs, and Minimize Risks (GAO/AIMD-96-64, Sept. 30, 1996); Information Management Reform: Effective Implementation Is Essential for Improving Federal Performance (GAO/T-AIMD-96-132, July 17, 1996); and GAO/AIMD-94-115, May 1994. 20 Information Management and Technology (GAO/HR-97-9, Feb. 1997). 21 State Department: Options for Addressing Possible Budget Reductions (GAO/NSIAD-96-124, Aug. 29, 1996). Page 10 GAO/T-GGD/AIMD-97-144 Statement Managing for Results: The Statutory Framework for Improving Federal Management and Effectiveness and functions, or to fundamentally rethink the way that it does business, in order to reduce its operating costs. Ultimately, achieving the kinds of performance and management Integrating improvement discussed today will require close linkage with the federal Performance government’s budget and appropriations process. While providing needed Information With tools and approaches for agency managers, these statutory reforms will also generate new information and perspectives that can be particularly Budget and useful to the process of allocating scarce resources among competing Appropriations national priorities. Although many factors appropriately influence appropriations decisions, effective implementation of the Results Act will Decisions Is a Key add critical information about what citizens and the nation are receiving Implementation Issue for each dollar spent, thereby helping to restore public confidence at a time when increasingly more difficult resource decisions must be made. As we recently reported, the Results Act is a significant break from previous federal initiatives that sought to more closely “connect resources with results.”22 Under the Results Act, agencies are required to plan and measure performance using program activity structures that are the basis for agencies’ budget requests. Previous initiatives tended to devise unique planning structures, and, not surprisingly, congressional interest and use quickly waned as performance information reflecting the new planning structures could not be directly tied to familiar oversight categories and patterns. The Results Act aims to provide systematic information on the performance of government programs and to link this information with current budget presentations. While this approach should improve prospects for use within budgetary processes, it also presents a challenge. An agency’s program activity structure is often the product of longstanding negotiated agreements between individual appropriations subcommittees and the executive branch. As such, program activity structures represent a variety of organizational, process, project, or other orientations. For example, the “space station” program activity in the National Aeronautics and Space Administration’s budget is a discrete program. In contrast, the “park service management” program activity under the National Park Service’s budget represents process and/or functional efforts. 22 Performance Budgeting: Past Initiatives Offer Insights for GPRA Implementation (GAO/AIMD-97-46, Mar. 27, 1997). Page 11 GAO/T-GGD/AIMD-97-144 Statement Managing for Results: The Statutory Framework for Improving Federal Management and Effectiveness Because of the wide variability across program activities, the suitability of the current program activity structures for the Results Act’s performance planning and measurement also will vary. Consequently, over time, some modifications may be needed in program activity structures to achieve the intended results-based orientation. If effectively implemented, the statutory framework that Congress has put Integrated in place will result in a wealth of program performance and cost Performance, Cost, information not previously available to decisionmakers and the public. and Management The program performance information that agencies are to generate under the Results Act will be a valuable new resource for Congress to use in its Reports Provide Basis program authorization, oversight, and appropriations responsibilities. To for Improved be most useful in these various contexts, the information needs to be consolidated with critical financial and program cost data in financial Decisionmaking and statements, which agencies are to produce and have audited under the CFO Oversight Act.23 To promote the needed consolidation, and building on the requirements of the Results Act and the CFO Act, reporting concepts and standards developed by the Federal Accounting Standards Advisory Board (FASAB) are intended to provide congressional and other decisionmakers for the first time with annual “report cards” on the costs, management, and effectiveness of federal agencies.24 The new reporting model for federal agencies is geared to providing users with information about budgetary integrity, operating performance, stewardship, and systems and controls. As authorized by GMRA, OMB is piloting accountability reports that are consistent with the FASAB accountability reporting concept. OMB worked with six agencies to pilot the development of accountability reports for fiscal year 1995 and added an additional eight agencies to the pilot test in fiscal year 1996. According to OMB, additional agencies will produce accountability reports for fiscal year 1997. By consolidating and integrating the separate reporting requirements of the Results Act, the CFO Act, and other specified acts, the accountability reports are to show the degree to which an agency met its goals, at what cost, and whether the 23 Financial Management: Continued Momentum Essential to Achieve CFO Act Goals (GAO/T-AIMD-96-10, Dec. 14, 1995). 24 FASAB was created in October 1990 by the Secretary of the Treasury, the Director of OMB, and the Comptroller General to consider and recommend accounting principles for the federal government. Page 12 GAO/T-GGD/AIMD-97-144 Statement Managing for Results: The Statutory Framework for Improving Federal Management and Effectiveness agency was well run.25 We have suggested that these accountability reports could serve as a basis for annual or at least biennial comprehensive oversight hearings on each department and major independent agency.26 FASAB’s new cost accounting standards are intended to further strengthen federal decisionmaking by requiring agencies to provide relevant and reliable cost information that can be used, for example, to relate the costs of various programs and activities to their performance outputs. The FASAB concepts and standards underpin OMB’s guidance to agencies on the form and content of their agencywide financial statements. Moreover, under the Federal Financial Management Improvement Act of 1996, agencies’ financial management systems are to, among other things, comply with FASAB standards beginning with fiscal year 1997. In summary, Messrs. Chairmen, Congress has put in place a statutory framework with the essential ingredients needed to address long-standing weaknesses in federal management and to create a federal government that is more responsive and cost-effective. The key now is for agencies to implement that framework and for the executive branch and Congress to use it to help make decisions and ensure accountability. Given the experiences of the foreign and state governments that have been seeking to instill a more results-oriented approach to management for some years now, the implementation of the Results Act, and of the other key parts of the framework, has not been, and will not be, quick or easy. Moreover, addressing some of the challenges that I have highlighted today, such as addressing crosscutting program efforts and balancing competing priorities, will raise significant policy issues for Congress and the administration to consider, some of which will likely be very difficult to resolve. The Results Act’s success or failure should not be judged on whether contentious policy issues are fully resolved; rather, judgment of the success or failure of the Act should turn on the extent to which the information produced through the required goal-setting and performance measurement practices—once those practices are successfully implemented—helps inform policy decisions and improve government management and performance. 25 Managing For Results: Using GPRA to Assist Congressional and Executive Branch Decisionmaking (GAO/T-GGD-97-43, Feb. 12, 1997). 26 Managing for Results: Achieving GPRA’s Objectives Requires Strong Congressional Role (GAO/T-GGD-96-79, Mar. 6, 1996). Page 13 GAO/T-GGD/AIMD-97-144 Statement Managing for Results: The Statutory Framework for Improving Federal Management and Effectiveness This concludes my prepared statement. I would be pleased to answer any questions. 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Managing for Results: The Statutory Framework for Improving Federal Management and Effectiveness
Published by the Government Accountability Office on 1997-06-24.
Below is a raw (and likely hideous) rendition of the original report. (PDF)