sAOo
GA
G United States
General Accounting Office
Washington, D.C. 20548
General Government Division 159125
B-277593
July 31, 1997
The Honorable Richard K. Armey
Majority Leader
House of Representatives
The Honorable John Kasich
Chairman, Committee on the Budget
House of Representatives
The Honorable Dan Burton
Chairman, Committee on Government
Reform and Oversight
House of Representatives
The Honorable Bob Livingston
Chairman, Committee on Appropriations
House of Representatives
Subject: The Results Act: Observations on the Department of the Treasury's
July 1997 Draft Strategic Plan
On June 12, 1997, you asked us to review the draft strategic plans submitted by
the cabinet departments and selected major agencies for consultation with
Congress as required by the Government Performance and Results Act of 1993
(the Results Act). This letter is our response to that request concerning the
Department of the Treasury.'
Our overall objective was to review and evaluate the latest available version of
Treasury's draft strategic plan. Specifically, we (1) assessed the draft plan's
compliance with the Act's requirements and its overall quality, (2) determined if
Treasury's key statutory authorities were reflected, (3) identified whether
discussions about crosscutting functions and interagency involvement were
included, (4) determined if the draft plan addresses major management
'In addition to the Treasurywide plan, 15 components within the Department
had draft strategic plans as of July 1, 1997. We only reviewed and report here
on the Treasurywide plan.
GAO/GGD-97-162R Treasury's Draft Strategic Plan
5 cl IA15
B-277593
problems, and (5) discussed Treasury's capacity to provide reliable information about its
operations and performance.
BACKGROUND
The Results Act seeks to shift the focus of federal management and decis:.onmaking away
from a preoccupation with staffing, activity levels, and tasks completed tc a focus on
results-that is, the real difference that federal programs make in people's lives. Under
the Results Act, executive agencies are required to develop (1) strategic plans by
September 30, 1997; (2) annual performance plans for fiscal year 1999 and beyond; and
(3) annual performance reports beginning March 31, 2000. The Act states that agencies'
strategic plans should cover a period of at least 5 years and that these plms should
include, among other requirements, a set of strategic goals. Although the intent of the
Results Act is to have agencies focus their strategic goals on results to the extent feasible,
the Act does not require that all of an agency's strategic goals be explicitly results-
oriented.
As the chief financial agent of the U.S. government, Treasury administers diverse
programs that have governmentwide implications. Treasury, among other things,
produces and protects the currency; processes tax returns; helps set tax, economic, and
fiscal policies; enforces trade agreements; regulates financial institutions; enforces
alcohol, tobacco, and firearm laws; and pursues criminals who launder money, threaten
U.S. borders, or use illegal weapons. Overall, Treasury collects about 98 percent of the
revenue for the federal government. Because its functions are so diversE, Treasury
historically has not been managed under a unifying mission and shared goals.
Furthermore, this diversity of functions raises a number of challenges for Treasury in
developing a comprehensive strategic plan that adequately addresses all of its
responsibilities.
Organizationally, Treasury is composed of 16 major units, including the Internal Revenue
Service (IRS), the Customs Service, the Secret Service, and the Office of the Comptroller
of the Currency, and headquarters operations. In addition to the Department's draft
strategic plan, many of the other components have developed their own draft strategic
plans. While the components' draft plans were written before the Treasurywide draft
strategic plan, Department officials told us that the components' plans were developed
tinder Departmental guidance.
The Treasurywide strategic plan we reviewed is the Department's initial draft submission.
The Results Act anticipated that it may take several planning cycles to perfect the
strategic plan process, and that strategic plans would be continually refined as various
planning cycles occur. Thus, our comments reflect a snapshot status of the draft plan at
a given point in time. We recognize that developing a strategic plan is a dynamic process
and that Treasury officials, with input from the Office of Management and Budget (OMB)
and congressional staff, are continuing to revise the draft.
Page 2 GAO/GGD-97-162R Treasury's Draft Strategic Plan
B-277593
RESULTS IN BRIEF
Treasury's initial draft strategic plan is incomplete and does not meet the requirements of
the Results Act. Of the six elements required by the Act, the Treasury draft plan includes
four. Of the four elements, two generally meet the Act's requirements but could be
strengthened-the mission statement and key factors external to the agency that could
significantly affect achievement of the strategic goals and objectives. The information on
the two other elements in the plan-goals and objectives and the strategies to achieve
these goals and objectives-is often too general and vague to be used effectively by
Treasury management, Congress, and other stakeholders. Two elements-the relationship
between long-term goals and objectives and annual performance goals and a description
of how program evaluations were used to establish or revise strategic plans-were missing
from the draft plan we reviewed. Furthermore, the draft plan does not adequately discuss
critical management problems or describe interagency coordination of crosscutting
activities. Finally, our work and that of Treasury's Inspector General (IG) raises
questions about the Department's capability to provide reliable information.
Two of the four elements that are included in the draft plan could be made more specific
to better meet the purposes of the Results Act and to be more consistent with OMB
Circular A-li, Part 2.2 Treasury's goals and objectives are primarily general assertions
that do not describe intended outcomes. The strategies to achieve the goals and
objectives do not fully disclose what specific actions are to be taken, and by which
component, to attain the plan's goals and objectives. The strategies almost always fail to
meet the Results Act requirements that the plan describe how the goals and objectives are
to be achieved, including a description of the processes, technology, and other resources
needed to meet the goals and objectives.
The draft plan appears to reflect consideration of Treasury's major statutory
responsibilities. However, we noted that the draft plan is written in such a general way
that it is difficult to determine the extent to which the plan is implementing the specifics
of any particular statutory responsibility.
The draft plan does not adequately address crosscutting issues and does not mention
whether Treasury coordinated with other federal departments and agencies where they
share related functions, such as law enforcement programs in the Department of Justice
or programs involving the tax expenditures administered by IRS, such as the low-income
housing and research tax credits.
In addition, although a major part of the mission statement is focused on management,
the draft plan does not adequately address some of the critical management problems
facing Treasury that could affect its ability to achieve its strategic goals and objectives.
In recent years, we and others have reported on many management challenges facing IRS
and other components of Treasury. For example, our most recent high-risk series of
2 OMB Circular A-i,. Part 2, provides guidance to agencies in preparing and submitting
strategic plans and annual performance plans.
Page 3 GAO/GGD-97-162R Treasury's Draft Strategic Plan
13-277593
reports identified eight Treasury management problems. The draft plan could be
improved if it more specifically addressed some of these major management problems. In
another example, the National Commission on Restructuring the IRS identified problems
with Treasury's oversight of IRS. Again, the draft plan does not provide specifics on how
the problems are to be resolved. While some of these issues may be addressed in
component plans, Treasury draft plan's discussion of the management m ssion is
incomplete without some consideration of its role in resolving these problems--some of
which are long-standing.
We and the Treasury IG have long reported on problems with the reliability of
information systems-both program-related and financial-within the Department. The
draft plan identifies goals, objectives, and strategies under Treasury's management
mission that are aimed at addressing the capacity of the Department to provide reliable
data and modernize information systems. The draft plan does not address how data
reliability and information systems currently affect Treasury's ability to measure
performance or provide necessary information to permit Congress to assess the
I)epartment's progress toward its goals.
DRAFT STRATEGIC PLAN DOES NOT
HAVE ALL OF THE REQUIRED ELEMENTS
AND IS TOO GENERAL
Treasury's draft strategic plan does not have all of the elements required by the Results
Act, and its usefulness is limited because it is too general. Treasury's draft plan includes
two elements-mission statement and key external factors that may impact on achieving
the plan's goals and objectives--that generally meets the Results Act's requirements but
could be strengthened. The information provided in the draft plan on two other elements-
-goals and objectives and the strategies for achieving the goals and objectives-is too
general to achieve the purposes of the Results Act. The draft plan is also missing two of
the required six elements-a discussion on how Treasury's strategic goals and objectives
and annual performance goals will be linked and a description of how program
evaluations were used to establish strategic goals.
Two Elements Generally Meet the Results Act's
Requirements But Could Be Strengthened
The draft plan's mission statement and key external factors that could a:fect the plan
generally meet the requirements of the Results Act. However, some additional
information would be helpful to more fully understand the complexity aid diversity of
Treasury's responsibilities.
Mission Statement
The Results Act and Circular A-11 state that an agency's strategic plan is to contain a
comprehensive mission statement, defining the basic purpose of the agenlcy, with
particular focus on its core programs and activities. In addition, Circular A-11 states that
Page 4 GAO/GGD-97-162R Treasury's Draft Strategic Plan
B-277593
the mission statement may include a concise discussion of enabling or authorizing
legislation as well as the identification of issues that Congress specifically charged the
agency to address.
According to its draft plan, Treasury divided its mission into three major programmatic
missions, spanning the breadth of programs that it oversees. Treasury's missions are (1)
economic-to promote prosperous and stable American and world economies, (2)
financial-to manage the government's finances, and (3) safety-to protect our financial
systems and our nation's leaders and to foster a safe and drug free America. To help
ensure its ability to accomplish the goals and objectives for the programmatic missions,
Treasury's draft plan has a fourth mission area of managing-to continue to build a strong
institution.
The draft plan does not include a discussion of enabling or authorizing legislation. While
the three programmatic missions generally cover Treasury's functions and responsibilities,
the plan could be made more useful if there was some linkage between these broad
missions and the missions of the Department's components or its underlying statutory
authorities.
Key External Factors That Could
Affect the Achievement of General
Goals and Objectives
The Results Act and Circular A-il require that agencies identify and discuss key factors,
external to the agency and beyond its control, that could affect its ability to achieve the
goals and objectives in its strategic plan. These factors, which can be economic,
demographic, social, or environmental, are to be described and linked to a particular
goal(s) with details on how the achievement of the goal(s) will be affected by it.
Treasury's draft plan includes a brief discussion on some of the key external factors for
each of its 13 goals but provides little detail on how particular factors affect the
achievement of specific goals. Between one and six factors are discussed for each of the
goals. In general, the list appears to be representative of factors that could affect
Treasury's ability to achieve its goals. To illustrate, Treasury lists changing demographics,
changing technology, and changes in the financial services industry as among the key
factors affecting the goal to promote domestic economic growth. But the plan provides
little, if any, detail on how the factors would affect the achievement of Treasury's goals or
whether steps could be taken to mitigate the impacts.
Two Elements Are Too General to
Achieve the Purposes of the Results Act
Treasury's draft plan includes two of the key elements-goals and objectives and strategies
for achieving those goals and objectives, but these are stated in very general terms and
thus are not as useful as they could be to achieve the purposes of the Results Act.
Page 5 GAO/GGD-97-162R Treasury's Draft Strategic Plan
B-277593
Goals and Obiectives
According to the Results Act and Circular A-il, a strategic plan is to contain general goals
and objectives for the major functions and operations of the agency. These goals and
objectives are to elaborate or provide greater specificity on how an agency will carry out
its mission through its programs and activities. Also, the goals and objectives should be
sufficiently detailed to guide and direct agency staff toward actions that fulfill the mission
of the agency. Finally, the goals and objectives should often be results-oriented, to the
extent possible; that is, they should attempt to focus on program outcomes, rather than
outputs.
Although Treasury's draft plan does provide linkages among its mission,, goals, and
objectives, its goals and objectives are not specific enough to be used effectively by
Treasury management, Congress, or other stakeholders. For example, under its financial
mission, "manage the government's finances," Treasury identified as a goal, "cost-
effectively finance the Federal government's operations." The only objective associated
with this goal is to "finance the Federal government in the most cost-ef['ective manner
over the long term," which is a restatement of the goal. Although the goal and objective
are clearly linked to the economic part of the mission, the general manner in which they
are stated makes it difficult for Congress and Treasury to assess the Department's
progress. For example, without a definition of the term "cost effective," it would be
difficult to determine when the goal is achieved or to measure progress toward that end.
Furthermore, Treasury's draft plan does not precisely state which Department bureaus
have responsibility for carrying out the goals and objectives. A clearer discussion of
which bureaus are responsible for particular goals and objectives wouli allow for a
comparison of the individual bureaus' strategic plans to ensure that their missions, goals,
and objectives are aligned with those of the Department.
Finally, Treasury's draft strategic plan also includes several goals that are not as results-
oriented as they could be. For example, Treasury has a goal to "fight violent crime,"
which could be made more results-oriented by explicitly stating the outcomes that are
intended to be achieved through the Department's various efforts to combat violent crime.
Although it is not a specific requirement of the Results Act that all goals and objectives
be results-oriented, it is clearly the intent of the Act that agencies focus on the outcome,
or impact, of their programs whenever possible.
Strategies for Achieving
Goals and Objectives
Under the Results Act, strategic plans are to contain a description of how the goals and
objectives are to be achieved, including a description of the operational processes, staff
skills and technology, and the human, capital, information, and other resources needed to
achieve the goals and objectives. This information would be useful in showing how the
agency's activities, core processes, and resources are to be used to achieve the strategic
goals. According to Circular A-il, such strategies should also contain schedules for
Page 6 GAO/GGD-97-162R Treasury s Draft Strategic Plan
B-277593
significant actions and outline how the agency will communicate strategic goals
throughout the organization and hold managers and staff accountable for achieving these
goals.
Although Treasury's draft plan lists strategies for each of its objectives, the strategies do
not meet the Results Act's requirements or reflect consistency with guidance in Circular
A-li. Instead, the draft plan's strategies are mostly general statements that do not
describe the operational processes and resources needed to achieve the plan's goals and
objectives. The strategies also do not outline how Treasury will communicate strategic
goals to its managers and staff and hold them accountable for achieving these goals. For
example, the strategy to "help develop over the long term a secondary market for
community and economic development loans to enhance liquidity and market
performance" does not describe the operational processes and resource requirements or
give any information on how staff are to be held accountable.
As previously mentioned, Treasury's draft plan has a management mission area that
includes goals and strategies focusing on staff, technology, and other resource
requirements to accomplish its other three mission areas. However, the strategies in this
section are too general to be useful. This is because many strategies do not describe the
resources needed to carry them out, and none of them schedule significant actions. In
addition, the management strategies are not clearly linked to the specific goals and
objectives in the programmatic mission areas.
Furthermore, the draft plan does not always disclose which agency or bureau will be
involved in executing its strategies or whether interagency coordination would be
involved. Thus, it is difficult to evaluate resource requirements for carrying out particular
strategies.
Two Elements Are Missing From Treasury's Draft Plan
The following two elements are required by the Results Act and are missing from the
draft plan.
Relationship Between Long-term Goals
and Objectives and the Annual
Performance Goals
An agency's strategic plan is to describe how the performance goals included in its annual
performance plans will be related to the goals and objectives in the agency's strategic
plan. The Treasury draft plan we reviewed did not have information that discusses the
relationship between goals and objectives and annual performance goals and measures.
Such a discussion is important in linking an agency's long-term goals and objectives in its
strategic plan to the goals in its annual performance plan to gauge progress. The
Treasury draft plan's overall usefulness is limited because this discussion was not in the
draft plan.
Page 7 GAO/GGD-97-162R Treasury's Draft Strategic Plan
B-277593
In a July 18, 1997, meeting, Treasury officials told us that performance goals would be
part of the Department bureaus' strategic plans and not part of the Treasurywide plan.
To meet the Results Act requirements, comply with Circular A-11 guidance, and help
clarify the meaning of its strategic goals and objectives, the draft plan could be improved
if it included (1) the type, nature, and scope of the performance goals to be included in
the performance plan; (2) the relationship between the performance goals and the long-
term goals and objectives; and (3) the relevance and use of performance goals in helping
determine the achievement of long-term goals and objectives.
Program Evaluation
One of the purposes of the Results Act is to enable Congress to direct resources to the
programs and agencies that use them most effectively. Program evaluations-defined in
the Results Act as objective and formal assessments of the results, impacts, or effects of
a program or policy-are a means to determine how effectively agencies are using their
resources. According to Circular A-11, the planned program evaluation section of the
strategic plan should briefly describe the program evaluations that were used in preparing
the strategic plan and outline (1) the general scope and methodology for planned
evaluations, (2) the key issues to be addressed, and (3) a schedule for: uture evaluations.
Treasury's draft plan neither discusses how program evaluations were used to establish
general goals and objectives nor provides a schedule for future program evaluations.
Program evaluations are particularly important for a department such as Treasury, which
shares functions with other departments and agencies.
KEY STATUTORY AUTHORITIES ARE
GENERALLY REFLECTED IN TREASURY'S
DRAFT STRATEGIC PLAN
Treasury's draft plan appears to reflect consideration of most of the Department's major
statutory responsibilities. Consistent with your request, we did not attempt to identify
whether all of Treasury's statutory responsibilities were reflected in the preliminary plan;
rather, we focused on whether the "major" responsibilities were addressed. The draft
plan addresses these responsibilities generally, and it contains only a few specific
references to the statutory bases for Treasury's major functions and operations. In fact,
the draft plan does not cite Treasury's (or its bureaus') general author zing legislation. It
does cite some of the laws that Treasury is involved in implementing, but it does not
explain how the Department is implementing the specifics of any statutory authority. For
example, it is unclear from the draft plan how Treasury will "centralize administrative
offset of Federal payments by delinquent debtors as mandated by the Debt Collection
Improvement Act of 1996," even though the Department has taken steps to do so. It
should be noted that the Results Act does not require an agency's strategic plan to
contain a compilation of statutory authorities of the agency, but Circular A-11 does state
that a plan may include a concise discussion of enabling or authorizing legislation.
Page 8 GAO/GGD-97-162R Treasury's Draft Strategic Plan
B-277593
Although the draft plan appears to reflect consideration of most of Treasury's major
statutory responsibilities and to be generally consistent with them, it should be noted that
the draft plan is written in such a general way that it is difficult to determine the extent
to which the plan is implementing the specifics of any particular statutory responsibility.
The draft plan does not provide any linkages between the stated goals and objectives and
any major statutory authorities that form the basis for-them.
CROSSCUTTING ACTIVITIES ARE
INADEQUATELY ADDRESSED
Crosscutting activities are agency activities that share a common purpose with activities
in other agencies. Treasury, because of its broad statutory authorities, shares many
responsibilities with other executive agencies. Also, several Treasury bureaus have
overlapping programmatic responsibility. Likewise, several tax expenditures administered
by IRS share similar goals with programs administered by other executive agencies.
Treasury's draft plan could do a better job of addressing crosscutting program activities.
In particular, the plan could better serve the purposes of the Results Act by making it
more clear how Treasury's goals and objectives relate to those of other federal agencies.
We recognize that this is Treasury's initial plan and that including a complete discussion
on crosscutting programs is a not an easy task considering the array of such programs in
the Department.
Specifically, some crosscutting programs are not addressed in the draft plan at all, while
other crosscutting programs are discussed very generally. The draft plan, for example,
does not address how IRS' law enforcement programs should be coordinated with law
enforcement programs in other Department components or Justice. There is also no
discussion of the crosscutting nature of many tax expenditures administered by IRS, such
as the earned income tax credit, the low-income housing credit, and the research credit.
Where crosscutting issues are addressed, they are addressed only in a general way. For
example, Treasury lists as an objective to "disrupt and dismantle drug smuggling
operations." As a related strategy, Treasury lists that it will "continue participation in
productive Federal, State, and local anti-drug task forces." No detail is provided about
which Treasury bureaus or other federal agencies will participate in these task forces, nor
what their respective responsibilities will be. The draft plan does include some
discussion on crosscutting management functions within the Department in the
management mission area; however, it does not discuss how the management functions
support Treasury programs in achieving their goals. For example, one strategy for
making wise information and technology investments is to "integrate information
gathering and storage with other agencies." No detail is provided about who at Treasury
will have lead responsibility, what agencies are included, or what programs would operate
more successfully as a result of such integration.
Page 9 GAO/GGD-97-162R Treasury's Draft Strategic Plan
B-277593
TREASURY'S DRAFT STRATEGIC PLAN
DOES NOT ADEQUATELY ADDRESS
MAJOR MANAGEMENT CHALLENGES
Over the years, we have reported on major management challenges facing many of the
agencies in Treasury. Congressional committees, the National Commission on
Restructuring the IRS, Treasury's IG and others have also reported on similar
management problems confronting Treasury agencies. The draft plan mentions some of
the major management challenges Treasury faces under the section entitled "Management
Mission: Continue to Build a Strong Institution." However, the draft plan could be more
useful to Congress and other stakeholders if there was a clearer presentation of the
relationship between how Treasury's critical management problems are to be addressed
and how they will facilitate the Department's achievement of its strategic goals and
objectives.
Our 1997 high-risk series of reports identified eight major management problems affecting
Treasury's operations.3 Two of the problems-computer security and the year 2000
conversion-are governmentwide management challenges, four others were specific to IRS'
operations, one related to the Customs Service's financial management problems, and one
related to the control of seized assets included in the Treasury Forfeiture Fund.4 The
draft plan could be improved if it more specifically addressed some of these major
problems.
For example, under its objective to "make wise information technology investments,"
Treasury recognizes that it needs to accomplish the year 2000 conversion and incorporate
information technology security as an essential part of the systems development life-cycle
process. But the draft plan provides no specifics on who at Treasury would be
responsible for the success of these strategies, what resources would be required, or how
success would be measured.
While the Treasury draft plan provides strategies for achieving its management objectives,
these strategies do not have the detail necessary to determine precisely how the
Department plans to address these challenges. This is because, in most instances, the
draft plan does not indicate which Treasury bureau would be affected For example,
although our past work has shown that financial management problems exist at IRS and
the Customs Service, the draft plan does not specifically address themn. Furthermore, it is
unclear how Treasury's IRS Management Board will provide strategic leadership and
ensure close oversight of IRS modernization and performance improvement efforts.
3 High-Risk Series: An Overview (GAO/HR-97-1, Feb. 1997).-
4The year 2000 conversion refers to the need for computer systems Lo be changed to
accommodate dates beyond the year 1999.
Page 10 GAO/GGD-97-162R Treasury's Draft Strategic Plan
B-277593
While some of these issues may be addressed in component plans, a more explicit
discussion of Treasury's role in resolving the Department's management challenges would
be helpful. It is also unclear in many cases to what specific end Treasury efforts are
focused and how progress and success in meeting Department objectives will be
measured.
TREASURY'S CAPACITY TO PROVIDE RELIABLE
INFORMATION ON THE ACHIEVEMENT OF STRATEGIC
AND PROGRAM PERFORMANCE IS QUESTIONABLE
To efficiently and effectively operate, manage, and oversee its diverse array of
responsibilities, Treasury needs reliable data. Treasury and its component bureaus rely
on a number of automated management information systems to carry out their roles. Our
past work and that of others has shown that in many cases a lack of readily accessible,
quality data raises questions about Treasury's capacity to track and measure its
performance in achieving its strategic mission and goals. Treasury's draft plan could be
improved if it more clearly addressed the Department's data reliability problems.
In its report on Treasury's fiscal year 1996 financial statements, the Treasury IG reported
that material weaknesses continued to exist in the internal controls structures of key
bureaus, and that many component entities lacked integrated financial management
systems, which preclude the integration of financial, budgetary, and performance dataF
Treasury's draft strategic plan attempts to address this problem with a strategy to "align
performance measurement, accounting, and budgeting data to produce a cohesive
financial information framework that institutionalizes the Departmental performance
management and decision making process." However, the strategy is not specific enough
to indicate what actions Treasury may be proposing and how the actions would affect its
ability to provide reliable information to measure the success made relative to achieving
the draft plan's strategic goals and objectives.
Furthermore, the strategies do not specifically address the long-standing weaknesses in
Treasury's ability to provide reliable information needed to carry out its programs that we
have discussed in our previous reports on component agencies, such as IRS and the
Customs Service. For example, IRS' ability to access accurate and reliable information on
taxpayers' accounts have long affected its ability to collect delinquent taxes.5
SCOPE AND METHODOLOGY
We obtained a copy of the July 1, 1997, draft strategic plan that Treasury provided to the
House of Representatives staff team working with the agency. We did not perform a
comprehensive review of the draft strategic plans of Treasury's component agencies.
Our overall assessment of Treasury's draft plan was generally based on our knowledge of
the Department's operations and programs, our numerous past and ongoing reviews of
5 High Risk Series: Internal Revenue Service Receivables (GAO/HR-95-6, Feb. 1995).
Page 11 GAO/GGD-97-162R Treasury's Draft Strategic Plan
B-277593
the Department's agencies, and other existing information available at the time of our
assessment. Specifically, the criteria we used to determine whether the draft plan
complied with the requirements of the Results Act were the Results Act and Circular A-
11. To make judgments about the overall quality of the plan and its components, we used
our May 1997 guidance for congressional review of the plans as a tool.6
As you requested, we coordinated our work on Treasury's key statutory authorities and
its capacity to provide reliable information with the Congressional Research Service and
the Treasury IG, respectively. We did our work between July 2 and 28. 1997. Treasury
officials provided oral comments on a draft of this letter, which are reflected in the
Agency Comments section that follows.
A list of our major products related to selected Treasury agencies is on pages 15 through
20.
AGENCY COMMENTS AND OUR EVALUATION
On July 28, 1997, we met with and obtained comments from Treasury officials, including
the Director of the Office of Strategic Planning and the Deputy Chief Financial Officer.
The officials generally agreed with many of our observations. The officials pointed out
that they view the plan we reviewed, which was entitled U.S. Department of the Treasury
Draft Strategic Plan 1997-2002, as an overview plan for the Department and that the full
Treasury strategic plan consists of the overview and the strategic plans of component
bureaus and offices. On that basis, the Director of the Office of Strategic Planning said
that the level of detailed information we envisioned being in the plan, such as strategies
on how specific objectives are to be achieved and information on resource requirements,
is better reflected in the component plans.
The Treasury officials said that they will revise the plan in light of many of our
observations. With regards to the two elements that were not included in the plan we
reviewed, Treasury plans to include information that would (1) more clearly show how
the Department's goals and objectives link to the goals and objectivEs of its bureaus and
offices and better tie this information to the components' annual performance plan goals
in the Department's budget and (2) reflect the Department's view that program
evaluations are important in making the strategic planning process work, but that details
on program evaluations are better reflected in the plans of the components that would be
responsible for carrying them out. The revised plan is also to include, among other
things, strategies that will address all high-risk management problems confronting
Treasury and more information on how the Department and components have
coordinated with stakeholders on crosscutting activities.
The officials also stated that Treasury should be recognized for its overall Results Act
implementation efforts. In particular, the officials told us that Treasury has had
6Agencies' Strategic Plans Under GPRA: Key Questions to Facilitate Congressional
Review (GAO/GGD-10.1.16, May 1997).
Page 12 GAO/GGD-97-162R Treasury's Draft Strategic Plan
B-277593
performance plans in its annual budgets for the past 2 fiscal years and has completed one
annual performance report based on the performance plans-far ahead of the Act's
requirements. In addition, they said that the performance report uses a common set of
performance measures, with the key measures being included in the Departmentwide
audited financial statements of all Treasury components. The Deputy Chief Financial
Officer said that, because an increasing number of bureaus are now receiving unqualified
opinions on their financial statements, data reliability within the Department has
improved. However, he said that additional enhancements are still needed at certain
bureaus and that the annual performance plans are a better place to address their
continuing efforts in this area.
As arranged with your offices, unless you publicly announce its contents earlier, we plan
no further distribution of this letter until 30 days from its issue date. At that time, we
will send copies of this letter to the Minority Leader of the House of Representatives;
Ranking Minority Members of your Committees; the Chairmen and Ranking Minority
Members of other Committees that have jurisdiction over Treasury activities; the
Secretary of the Treasury; and the Director, Office of Management and Budget. Copies
will be made available to others on request.
Major contributors to this letter are listed in the enclosure. Please contact me at (202)
512-9110 if you or your staff have any questions concerning this letter.
Lynda D. Willis
Director, Tax Policy and
Administration Issues
Enclosure
Page 13 GAO/GGD-97-162R Treasury's Draft Strategic Plan
ENCLOSURE ENCLOSURE
MAJOR CONTRIBUTORS TO THIS REPORT
GENERAL GOVERNMENT DIVISION. WASHINGTON, D.C.
Charlie W. Daniel, Assistant Director
Bryon S. Gordon, Senior Evaluator
OFFICE OF THE GENERAL COUNSEL, WASHINGTON, D.C.
M. Rachel DeMarcus, Assistant General Counsel
Page 14 GAO/GGD-97-162R Treasury's Draft Strategic Plan
RELATED GAO PRODUCTS
INTERNAL REVENUE SERVICE
IRS Management
IRS Management: Improvement Needed in High-Risk Areas (GAO/T-GGD-97-79,
Apr. 14, 1997).
High-Risk Series: IRS Management (GAO/HR-97-8, Feb. 1997).
IRS Operations: Critical Need to Continue Improving Core Business Practices (GAO/T-
AIMD-96-188, Sept. 10, 1996).
Internal Revenue Service: Business Operations Need Continued Improvement
(GAO/AIMD/ GGD-96-152, Sept. 9, 1996).
Managing IRS: IRS Needs to Continue Improving Operations and Service (GAO/T-GGD/
AIMD-96-170, July 29, 1996).
IRS Operations: Significant Challenges in Financial Management and Systems
Modernization (GAO/T-AIMD-96-56, Mar. 6, 1996).
Tax Systems Modernization
IRS Systems Security: Tax Processing Operations and Data Still at Risk Due to Serious
Weaknesses (GAO/AIMD-97-49, Apr. 8, 1997).
IRS High-Risk Issues: Modernization of Processes and Systems Necessary to Resolve
Problems (GAO/T-GGD-97-52, Mar. 4, 1997).
Tax Systems Modernization: Actions Underway But Management and Technical
Weaknesses Not Yet Corrected (GAO/T-AIMD-96-165, Sept. 10, 1996).
Tax Systems Modernization: Actions Underway But IRS Has Not Yet Corrected
Management and Technical Weaknesses (GAO/AIMD-96-106, June 7, 1996).
Tax Systems Modernization: Progress in Achieving IRS' Business Vision (GAO/T/GGD-96-
123, May 9, 1996).
Tax Systems Modernization: Management and Technical Weaknesses Must Be Overcome
to Achieve Success (GAO/T-AIMD-96-75, Mar. 26, 1996).
Status of Tax Systems Modernization, Tax Delinquencies, and the Potential for Return-
Free Filing (GAO/T-GGD/AIMD-96-88, Mar. 14, 1996).
Page 15 GAO/GGD-97-162R Treasury's Draft Strategic Plan
Tax Systems Modernization: Management and Technical Weaknesses Must Be Corrected
If Modernization Is to Succeed (GAO/AIMD-95-156, July 26, 1995).
Tax Systems Modernization: Unmanaged Risks Threaten Success (GAO/T-ALMD-95-86,
Feb. 16, 1995).
Financial Management
Financial Management: Challenges Facing the IRS (GAO/T-AIMD-97-34, Jan. 9, 1997).
IRS Financial Audits: Status of Efforts to Resolve Financial Management Weaknesses
(GAO/T-AIMD-96-170, Sept. 19, 1996).
Financial Audit: Examination of IRS' Fiscal Year 1995 Financial Statements (GAO/AIMD-
96-101, July 11, 1996).
Financial Audit: Actions Needed to Improve IRS Financial Management (GAO/T-AIMD-96-
96, June 6, 1996).
Financial Audit: Examination of IRS' Fiscal Year 1994 Financial Statements (GAO/AIMD-
95-141, Aug. 4, 1995).
Financial Audit: Examination of IRS' Fiscal Year 1993 Financial Statements (GAO/AIMD-
94-120, June 15, 1994).
Financial Audit: Examination of IRS' Fiscal Year 1992 Financial Statements (GAO/AIMD-
93-2, June 30, 1993).
Compliance Issues
Tax Administration: Earned Income Credit Noncompliance (GAO/T-GGD 97-105,
May 8, 1997).
Taxpaver Compliance: Analyzing the Nature of the Income Tax Gap (GAO/T-GGD-97-35,
Jan. 9, 1997).
IRS Tax Collection Reengineering (GAO/GGD-96-161R, Sept. 24, 1996).
Earned Income Credit: IRS' 1995 Controls Stopmed Some Noncomplance. But Not
Without Problems (GAO/GGD-96-172, Sept. 18, 1996).
Tax Administration: Tax Compliance of Nonwage Earners (GAO/GGD-96-165,
Aug. 28, 1996).
Internal Revenue Service: Results of Nonfiler Strategy and Opportunities to Improve
Future Efforts (GAO/GGD-96-72, May 13, 1996).
Page 16 GAO/GGD-97-162R Treasury's Draft Strategic Plan
Tax Administration: IRS Tax Debt Collection Practices (GAO/T-GGD-96-112, Apr. 25,
1996).
IRS Efforts to Control Fraud (GAO/GGD-96-96R, Mar. 25, 1996).
Taxpayer Compliance: Reducing the Income Tax Gap (GAO/T-GGD-95-176, June 6, 1995).
Reducing the Tax Gap: Results of a GAO-Sponsored Symposium (GAO/GGD-95-157,
June 2, 1995).
Tax Administration: Tax Compliance Initiatives and Delinquent Taxes (GAO/T-GGD-95-74
Feb. 1, 1995).
High-Risk Series: Internal Revenue Service Receivables (GAO/HR-95-6, Feb. 1995).
Tax Administration: Electronic Filing Fraud (GAO/T-GGD-94-89, Feb. 10, 1994).
Tax Administration: IRS Can Improve Controls Over Electronic Filing Fraud (GAO/GGD-
93-27, Dec. 30, 1992).
Taxpayer Service and Submission Processing
IRS' 1996 Tax Filing Season: Performance Goals Generally Met: Efforts to Modernize Had
Mixed Results (GAO/GGD-97-25, Dec. 18, 1996).
Tax Administration: Alternative Filing Systems (GAO/GGD-97-6, Oct. 16, 1996).
The 1995 Tax Filing Season: IRS Performance Indicators Provide Incomplete Information
About Some Problems (GAO/GGD-96-48, Dec. 29, 1995).
Tax Administration: Electronic Filing Falling Short of Expectations (GAO/GGD-96-12,
Oct. 31, 1995).
Tax Administration: IRS Faces Challenges in Reorganizing for Customer Service (GAO/
GGD-96-3, Oct. 10, 1995).
Telephone Assistance: Adopting Practices Used by Others Would Help IRS Serve More
Taxpayers (GAO/GGD-95-86, Apr. 12, 1995).
Tax Administration: Continuing Problems Affect Otherwise Successful 1994 Filing Season
(GAO/GGD-95-5, Oct. 7, 1994).
Taxpayer Burden
Tax Administration: IRS Is Improving Its Controls for Ensuring That Taxpayers Are
Treated Properly (GAO/GGD-96-176, Aug. 30, 1996).
Tax System: Issues in Tax Compliance Burden (GAO/T-GGD-96-100, Apr. 3, 1996).
Page 17 GAO/GGD-97-162R Treasury's Draft Strategic Plan
Tax System Burden: Tax Compliance Burden Faced by Business Taxpaver;I (GAO/T-GGD-
954t2, Dec. 9, 1994).
Tax Administration: IRS Can Strengthen Its Efforts to See That Taxpayers Are Treated
Properlv (GAO/GGD-95-14, Oct. 26, 1994).
U.S. CUSTOMS SERVICE
U.S. Customs Service: Oversight Issues (GAO/T-GGD-97-107, May 15, 1997).
Customs' Office of International Affairs (GAO/NSIAD-97-146R, Apr. 25, 1997).
U.S. Customs Service: Office of Regulations and Rulings Has Yet to Establish
Performance Measures (GAO/T-NSIAD-97-115, Mar. 11, 1997).
Customs Modernization (GAO/AIMD-97-43R, Feb. 21, 1997).
Customs Service: Drug Interdiction Efforts (GAO/GGD-96-189BR, Sept. 26, 1996).
Customs Service: Status of the Implementation of Blue Ribbon Panel Recommendations
(GAO/GGD-96-163, Sept. 3,1996).
Customs Service Modernization: Strategic Information Management Must Be Improved
for National Automation Program To Succeed (GAO/AIMD-96-57, May 9, 1996).
Customs' Reorganization (GAO/GGD-96-81R, Feb. 23, 1996).
Managing Customs: Efforts Under Way to Address Management Weaknesses (GAO/GGD-
95-73, Mar. 16, 1995).
Customs Service: Status of Reorganization and Modernization Efforts (GAO/T-
GGD/AIMD-95-70, Jan. 30, 1995).
BUREAU OF ALCOHOL. TOBACCO AND FIREARMS
Federal Firearms Licensee Data: ATF's Compliance With Statutory Restrictions (GAO/
GGD-96-174, Sept. 11, 1996).
Alcohol, Tobacco and Firearms: Issues Related to Use of Force. Dealer, Licensing. and
Data Restrictions (GAO/T-GGD-96-104, Apr. 25, 1996).
Federal Firearms Licensees: Various Factors Have Contributed to the 'Decline in the
Number of Dealers (GAO/GGD-96-78, Mar. 29, 1996).
Use of Force: ATF Policy, Training, and Review Process Are Comparable to DEA's and
FBI's (GAO/GGD-96-17, Mar. 29, 1996).
Page 18 GAO/GGD-97-162R Treasury s Draft Strategic Plan
FINANCIAL CRIMES ENFORCEMENT NETWORK
Money Laundering: A Framework for Understanding U.S. Efforts Overseas (GAO/GGD-96-
105, May 24, 1996).
Money Laundering: U.S. Efforts to Combat Money Laundering Overseas (GAO/T-GGD-96-
84, Feb. 28, 1996).
Money Laundering: Rapid Growth of Casinos Makes Them Vulnerable (GAO/GGD-96-28,
Jan. 4, 1996).
National Fine Center: Implementation of Criminal Debt System Presents Challenges
(GAO/ T-GGD-95-215. Sept. 19. 1995K.
Money Laundering: Stakeholders View Recordkeeping Requirements for Cashier's Checks
As Sufficient (GAO/GGD-95-189, July 28, 1995).
Money Laundering: Needed Improvements For Reporting Suspicious Transactions Are
Planned (GAO/GGD-95-156, May 30, 1995).
National Fine Center: Progress Made but Challenges Remain for Criminal Debt System
(GAO/AIMD-95-76, May 25, 1995).
TREASURY FORFEITURE FUND
Asset Forfeiture: Historical Perspective on Asset Forfeiture Issues (GAO/T-GGD-96-40,
Mar. 19, 1996).
High-Risk Series: Asset Forfeiture Programs (GAO/HR-95-7, Feb. 1995).
BUREAU OF ENGRAVING AND PRINTING
AND U.S. MINT
Coin and Currency Production: Issues for Congressional Consideration (GAO/T-GGD-97-
146, June 26, 1997).
U.S. Mint: Commemorative Coins Could Be More Profitable (GAO/GGD-96-113,
Aug. 7, 1996).
Future of the Penny: Options for Congressional Consideration (GAO/T-GGD-96-153, July
16, 1996).
A Dollar Coin Could Save Millions (GAO/T-GGD-95-203, July 13, 1995).
1-Dollar Coin: Reintroduction Could Save Millions If It Replaced the 1-Dollar Note
(GAO/T-GGD-95-146, May 3, 1995).
Page 19 GAO/GGD-97-162R Treasury's Draft Strategic Plan
OFFICE OF COMPTROLLER OF THE CURRENCY
AND OFFICE OF THRIFT SUPERVISION
Bank and Thrift Regulation: Implementation of FDICIA's Prompt Regulatorv Action
Provisions (GAO/GGD-97-18, Nov. 21, 1996).
Bank Oversight Structure: U.S. and Foreign Experience May Offer Lessons for
Modernizing U.S. Structure (GAO/GGD-97-23, Nov. 20, 1996).
(268814)
Page 20 GAO/GGD-97-162R Treasury's Draft Strategic Plan
Ordering Information
The first copy of each GAO report and testimony is free.
Additional copies are $2 each. Orders should be sent to the
following address, accompanied by a check or money order
made out to the Superintendent of Documents, when
necessary. VISA and MasterCard credit cards are accepted, also.
Orders for 100 or more copies to be mailed to a single address
are discounted 25 percent.
Orders by mail:
U.S. General Accounting Office
P.O. Box 6015
Gaithersburg, MD 20884-6015
or visit:
Room 1100
700 4th St. NW (corner of 4th and G Sts. NW)
U.S. General Accounting Office
Washington, DC
Orders may also be placed by calling (202) 512-6000
or by using fax number (301) 258-4066, or TDD (301) 413-0006.
Each day, GAO issues a list of newly available reports and
testimony. To receive facsimile copies of the daily list or any
list from the past 30 days, please call (202) 512-6000 using a
touchtone phone. A recorded menu will provide information on
how to obtain these lists.
For information on how to access GAO reports on the INTERNET,
send an e-mail message with "info" in the body to:
info@www.gao.gov
or visit GAO's World Wide Web Home Page at:
http://www.gao.gov
PRINTED ON RECYCLED PAPER
United States
General Accounting Office Bulk Rate
Washington, D.C. 20548-0001 'Postage & Fees Paid
GAO
Official Business Permit No. G100
Penalty for Private Use $300
Address Correction Requested
The Results Act: Observations on the Department of the Treasury's July 1997 Draft Strategic Plan
Published by the Government Accountability Office on 1997-07-31.
Below is a raw (and likely hideous) rendition of the original report. (PDF)