oversight

Managing For Results: Critical Issues for Improving Federal Agencies' Strategic Plans

Published by the Government Accountability Office on 1997-09-16.

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

                 United States General Accounting Office

GAO              Report to Congressional Requesters




September 1997
                 MANAGING FOR
                 RESULTS
                 Critical Issues for
                 Improving Federal
                 Agencies’ Strategic
                 Plans




GAO/GGD-97-180
      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      General Government Division

      B-277715

      September 16, 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

      There has been a groundswell movement in recent years toward
      performance-based management in public sector organizations. The
      federal government, as well as some state, local, and foreign governments,
      has grappled with how best to improve effectiveness and service quality
      while limiting costs.1 As a result, those governments have implemented
      reform agendas that have tended to include a common recognition that
      improved public management was a critical part of the answer to meeting
      demands for a government that performed better while economizing on
      resources.

      The Government Performance and Results Act of 1993, commonly referred
      to as “GPRA” or “the Results Act,” was enacted as the centerpiece of a
      statutory framework Congress has put in place to improve federal
      management and provide a greater focus on results. The Results Act seeks
      to shift the focus of government decisionmaking and accountability away
      from a preoccupation with the activities that are undertaken—such as
      grants and inspections made—to a focus on the results of those
      activities—such as real gains in employability, safety, responsiveness, or
      program quality. In crafting the Results Act, Congress understood that the
      management changes required to effectively implement the Act would not
      come quickly or easily.

      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).



      Page 1                                             GAO/GGD-97-180 Agencies’ Strategic Plans
              B-277715




              A key requirement of the Results Act is that agencies are to develop
              strategic plans in consultation with Congress and to submit these plans in
              final form to Congress and the Office of Management and Budget (OMB) by
              September 30, 1997. On June 12, 1997, you requested that we review and
              evaluate the latest available version of the draft strategic plans that were
              submitted to Congress for consultation by cabinet departments and
              selected independent agencies. As you requested, those reviews of
              individual agencies’ draft plans (1) assessed the draft plans’ compliance
              with the Act’s required elements and their overall quality, (2) determined if
              the plans reflected the key statutory requirements for each agency,
              (3) identified whether the plans reflected discussions about crosscutting
              activities and coordination with other agencies having similar activities,
              (4) determined if the draft plans addressed major management challenges,
              and (5) provided a preliminary assessment of the capacity of the
              departments and agencies to provide reliable information about
              performance.

              In developing those reports, we noted that Congress anticipated that it
              may take several planning cycles to perfect the process and that strategic
              plans would be continually refined as various planning cycles occur. We
              also recognized that developing a strategic plan is a dynamic process and
              that agencies, with input from OMB and Congress, were continuing to
              improve their plans. A list of our reports, prepared in response to your
              request, on the draft strategic plans of 27 cabinet departments and
              selected independent agencies and related work appears at the end of this
              report.

              This report responds to your separate request that we (1) summarize the
              overall results of our reviews of those plans; and (2) identify, on the basis
              of those reviews, the strategic planning issues most in need of sustained
              attention.


              This summary report is based on our analysis of the information contained
Scope and     in our reviews of 27 agencies’ draft strategic plans. To do those 27 reviews
Methodology   and the related reports, we used the Results Act supplemented by OMB’s
              guidance on developing the plans (Circular A-11, part 2) as criteria to
              determine whether draft plans complied with the requirement for the six
              specific elements that are to be in the strategic plans. To make judgments
              about the overall quality of the plans, we used our May 1997 guidance for




              Page 2                                    GAO/GGD-97-180 Agencies’ Strategic Plans
                   B-277715




                   congressional review of the plans.2 We recognized in each instance that
                   the plans were drafts and that our assessment thus represented a snapshot
                   at a given point in time. To make judgments about the planning issues
                   needing attention, we also relied on other related work, including our
                   recent report on governmentwide implementation of the Results Act and
                   our guidance for congressional review of Results Act implementation, as
                   tools.3


                   At the time of our reviews of agencies’ draft plans, we found that a
Results in Brief   significant amount of work remained to be done by executive branch
                   agencies if their strategic plans are to fulfill the requirements of the
                   Results Act, serve as a basis for guiding agencies, and help congressional
                   and other policymakers make decisions about activities and programs.
                   Although all 27 of the draft plans included a mission statement, 21 plans
                   lacked 1 or more of 5 other required elements. For example, two plans did
                   not contain long-term strategic goals that are to be the basis for directing
                   agencies toward the achievement of their missions, and six did not
                   describe approaches or strategies for achieving those goals and objectives.
                   Overall, one-third of the plans were missing two required elements; and
                   just over one fourth were missing three or more of the required elements.

                   Our reviews of agencies’ draft strategic plans also revealed several critical
                   strategic planning issues that are in need of sustained attention if agencies
                   are to develop the dynamic strategic planning processes envisioned by the
                   Results Act. First, most of the draft plans did not adequately link required
                   elements in the plans. For example, some of the draft plans did not
                   consistently describe the alignment between an agency’s long-term
                   strategic goals and objectives and the strategies planned to achieve those
                   goals and objectives. As we reported, these linkages are important if
                   strategic plans are to drive the agencies’ daily activities and if agencies are
                   to be held accountable for achieving intended results. Furthermore, 19 of
                   the 27 draft plans did not attempt to describe the linkages between
                   long-term strategic goals and annual performance goals. We have reported
                   that this linkage is critical for determining whether an agency has a clear
                   sense of how it will assess progress toward achieving its intended results.



                   2
                    Agencies’ Strategic Plans Under GPRA: Key Questions to Facilitate Congressional Review
                   (GAO/GGD-10.1.16, May 1997).
                   3
                    See The Government Performance and Results Act: 1997 Governmentwide Implementation Will Be
                   Uneven (GAO/GGD-97-109, June 2, 1997); GAO/GGD-10.1.16, May 1997; and Executive Guide:
                   Effectively Implementing the Government Performance and Results Act (GAO/GGD-96-118,
                   June 1996).


                   Page 3                                               GAO/GGD-97-180 Agencies’ Strategic Plans
B-277715




Second, long-term strategic goals often tended to have weaknesses.
Although the Results Act does not require that all of an agency’s strategic
goals be results oriented, the intent of the Act is to have agencies focus
their strategic goals on results to the extent feasible. However, several
plans contained goals that were not as results oriented as they could have
been. In addition, several plans also contained goals that were not
expressed in a manner that would allow future assessments of whether
they were being achieved. Further, in three plans, long-term goals were
not developed for major functions or activities, as required by the Results
Act.

Third, many agencies did not fully develop strategies explaining how their
long-term strategic goals would be achieved. For example, we found that
each of the plans could be strengthened if the sections on strategies
included, among other things, specific actions, planned accomplishments,
and implementation schedules. Also, the plans for most of the 27 agencies
did not reflect strategies for addressing key management challenges that
could affect the agencies’ ability to achieve strategic goals.

Fourth, most agencies did not reflect in their draft plans the identification
and planned coordination of activities and programs that cut across
multiple agencies. We recently reported to you on our work that suggested
that mission fragmentation and program overlap are widespread
throughout the federal government.4 We noted that interagency
coordination is important for ensuring that crosscutting program efforts
are mutually reinforcing and efficiently implemented. However, our
reviews indicated that 20 of the draft strategic plans lacked evidence of
interagency coordination.

Fifth, our work suggests that the questionable capacity of many agencies
to gather performance information has hampered, and may continue to
hamper, efforts to identify appropriate goals and confidently assess
performance. We have reported that the lack of reliable data to measure
the costs and results of agency operations has been a long-standing
problem for agencies across the federal government.5 Our work also has
shown that agency officials with experience in performance measurement




4
 Managing for Results: Using the Results Act to Address Mission Fragmentation and Program Overlap
(GAO/AIMD-97-146, Aug. 29, 1997).
5
High-Risk Areas: Actions Needed to Solve Pressing Management Problems (GAO/T-AIMD/GGD-97-60,
Mar. 5, 1997).



Page 4                                               GAO/GGD-97-180 Agencies’ Strategic Plans
             B-277715




             cited ascertaining the accuracy and quality of performance data as 1 of the
             top 10 challenges to performance measurement.6

             Finally, the draft strategic plans did not adequately address program
             evaluations. For example, 16 plans did not discuss program evaluations,
             and the discussions of program evaluations in the remaining 11 plans
             lacked critical information, such as descriptions of how evaluations were
             used in setting strategic goals and schedules for future evaluations.
             Evaluations are important because they potentially can be critical sources
             of information for ensuring that goals are reasonable, strategies for
             achieving goals are effective, and that corrective actions are taken in
             program implementation.


             The Results Act is the centerpiece of a statutory framework Congress put
Background   in place during the 1990s to address long-standing weaknesses in federal
             operations, improve federal management practices, and provide greater
             accountability for achieving results. Under the Results Act, strategic plans
             are the starting point and basic underpinning for results-oriented
             management. The Act requires that an agency’s strategic plan contain six
             key elements: (1) a comprehensive agency mission statement;
             (2) agencywide long-term goals and objectives for all major functions and
             operations; (3) approaches (or strategies) and the various resources
             needed to achieve the goals and objectives; (4) a description of the
             relationship between the long-term goals and objectives and the annual
             performance goals; (5) an identification of key factors, external to the
             agency and beyond its control, that could significantly affect the
             achievement of the strategic goals; and (6) a description of how program
             evaluations were used to establish or revise strategic goals and a schedule
             for future program evaluations.7

             In addition to the Results Act, the statutory framework includes the Chief
             Financial Officers (CFO) Act, as expanded and amended by the
             Government Management Reform Act of 1994; and information technology
             reform legislation, in particular the Clinger-Cohen Act of 1996 and the
             Paperwork Reduction Act of 1995. Congress enacted the CFO Act to
             remedy decades of serious neglect in federal financial management by
             establishing chief financial officers across the federal government and
             requiring the preparation and audit of annual financial statements. The

             6
             Managing for Results: Analytic Challenges in Measuring Performance (GAO/HEHS/GGD-97-138,
             May 30, 1997).
             7
              For a detailed discussion of the Results Act, see appendix I.



             Page 5                                                   GAO/GGD-97-180 Agencies’ Strategic Plans
B-277715




information technology reform legislation is based on the best practices
used by leading public and private sector organizations to manage
information technology more effectively. Under the information
technology reform legislation, agencies are to better link their planned and
actual use of technology to their programs’ missions and goals to improve
performance.

Congress has demonstrated its commitment to the Results Act and
reinforced to executive agencies the importance it places on the full and
complete implementation of the Act. One such prominent demonstration
occurred on February 25, 1997, when the Speaker of the House, the
Majority Leader of the Senate, and other senior members of the House and
Senate sent a letter to the Director of OMB. The letter underscored the
importance that the congressional Majority places on the implementation
of the Results Act, noted a willingness on the part of Congress to work
cooperatively with the administration, and established expectations for
congressional consultations with agencies on their draft strategic plans.

Under the Results Act, those consultations are to be an integral part of
strategic planning. For example, consultations can help to create a basic
understanding among the stakeholders of the competing demands that
confront agencies and how those demands and available resources require
careful and continuous balancing. In the House, the consultation effort
was led by teams consisting of staff from various committees that focused
on specific agencies. In an August 1997 letter, the House Majority Leader
provided the Director of OMB with an overview of recent congressional
consultations and highlighted some recurring themes, such as the need for
interagency coordination. Although the consultation process in the Senate
has been less structured than the one in the House, a number of
consultations have been held there as well.

In addition to consulting with agencies, several House and Senate
authorizing committees also held hearings on draft strategic plans in
July 1997, which further underscored congressional interest in agencies
creating good strategic planning processes that support
performance-based management. For example, these hearings included
those held by the Subcommittee on Water and Power, House Committee
on Resources; the House Committee on Science; the Subcommittee on
Human Resources, House Committee on Government Reform and
Oversight; the House Committee on Banking and Financial Services; the
Subcommittee on Forests and Forest Health, House Committee on
Resources; and the Senate Committee on Indian Affairs.



Page 6                                   GAO/GGD-97-180 Agencies’ Strategic Plans
                        B-277715




                        The Senate and House appropriations committees have been expanding
                        their focus on the Results Act as well. For example, the Senate
                        Appropriations and Governmental Affairs committees held a joint hearing
                        on the status of Results Act implementation, with particular emphasis on
                        agencies’ strategic planning efforts. The Senate Appropriations Committee
                        has included comments on the Results Act in its reports on the fiscal year
                        1998 appropriations bills. The report language has discussed the
                        Committee’s views on the status and quality of individual agencies’ efforts
                        to implement the Results Act and expressed the need for continuing
                        consultations, among other issues. In the House, the Appropriations
                        Committee has included a standard statement in its appropriations reports
                        that strongly endorses the Results Act. This standard statement notes that
                        each appropriations subcommittee “takes (the annual performance plan)
                        requirement of the Results Act very seriously and plans to carefully
                        examine agency performance goals and measures during the
                        appropriations process.”


                        A significant amount of work remains to be done by executive branch
Most Plans Lacked       agencies before their strategic plans can fulfill the requirements of the
Some Required           Results Act, serve as a basis for guiding agencies, and help congressional
Elements                and other policymakers make decisions about activities and programs.
                        Although all 27 of the draft plans included a mission statement, 21 plans
                        lacked 1 or more of the other required elements. Specifically, of the 27
                        draft strategic plans:

                    •   2 did not include agencywide strategic goals and objectives,
                    •   6 did not describe approaches or strategies for achieving those goals and
                        objectives,
                    •   19 did not describe the relationship between long-term goals and
                        objectives and annual performance goals,
                    •   6 did not identify key factors that are external to the agency and beyond
                        its control that could affect the achievement of the goals and objectives,
                        and
                    •   16 did not discuss program evaluations that the agency used to establish or
                        revise goals and objectives or provide a schedule of future program
                        evaluations.

                        Moreover, while all but six of the plans were missing at least one required
                        element, one-third were missing two required elements. Just over
                        one-fourth of the plans failed to cover at least three of the required
                        elements.



                        Page 7                                   GAO/GGD-97-180 Agencies’ Strategic Plans
                                 B-277715




                                 Because most of the draft plans did not contain all six required elements,
                                 Congress did not have access to critical pieces of information for its
                                 consultations with the agencies on their draft strategic plans; and, if these
                                 elements are not included in the final plans, federal managers will not have
                                 a clear strategic direction upon which to base their daily activities. For
                                 example, agencies whose plans lacked strategic goals and strategies for
                                 achieving those goals will not have a solid foundation upon which to build
                                 the performance measurement and reporting efforts that are required by
                                 the Results Act. The incomplete or inadequate coverage of the six required
                                 elements in the plans is an indication of the amount of additional work
                                 necessary to fulfill the Act’s minimum requirements that agencies had to
                                 undertake prior to the submission of strategic plans to Congress on
                                 September 30, 1997.


                                 Many agencies showed progress in developing comprehensive mission
Critical Strategic               statements upon which they can build strategic goals and strategies for
Planning Issues Most             achieving those goals. A mission statement is important because it focuses
in Need of Sustained             an agency on its intended purpose. It explains why the agency exists and
                                 tells what it does and is the basic starting point of successful planning
Attention                        efforts. However, our reviews of draft strategic plans for 27 agencies found
                                 several critical strategic planning issues that are in need of sustained
                                 attention to ensure that those plans better meet the needs of agencies,
                                 Congress, and other stakeholders and that agencies shift their focus from
                                 activities to results. These issues were:

                             •   the lack of linkages among required elements in the draft plans,
                             •   the weaknesses in long-term strategic goals,
                             •   the lack of fully developed strategies to achieve the goals,
                             •   the lack of evidence that agencies’ plans reflect coordination with other
                                 federal agencies having similar or complementary programs,
                             •   the limited capacity of agencies to gather performance information, and
                             •   the lack of attention to program evaluations.


Most Plans Lacked Critical       The majority of the draft strategic plans lacked critical linkages among
Linkages                         required elements in the plans. We have noted in our Executive Guide and
                                 other recent reports that for strategic plans to drive an agency’s
                                 operations, a straightforward linkage is needed among its long-term
                                 strategic goals, strategies for achieving goals, annual performance goals,
                                 and day-to-day activities. First, as prior work has shown, a direct
                                 alignment between strategic goals and strategies for achieving those goals



                                 Page 8                                   GAO/GGD-97-180 Agencies’ Strategic Plans
                              B-277715




                              is important for assessing an agency’s ability to achieve those goals.
                              Second, we have noted that the linkage between long-term strategic goals
                              and annual performance goals is important because without this linkage,
                              agency managers and Congress may not be able to judge whether an
                              agency is making annual progress toward achieving its long-term goals.8

Linkage Between Goals and     In several draft strategic plans, the agencies’ presentation of information
Strategies                    on strategic goals, objectives, and strategies made it difficult to determine
                              which strategy was supposed to achieve which goal or objective and what
                              unit or component within the agency was supposed to carry out the
                              strategy. For example, in the Small Business Administration’s (SBA) plan,
                              objectives were listed as a group under goals, followed by strategies,
                              which were also listed as a group. This presentation does not convey how
                              specific strategies would lead to achieving specific goals. In another
                              example, the Federal Emergency Management Agency (FEMA) listed
                              several areas of focus and operational objectives under each of its five
                              strategies, but if did not establish linkages among them or between the
                              strategies and the agency’s strategic objectives. Accordingly, although an
                              affiliation between specific strategies and objectives may exist, it was not
                              readily apparent from these agencies’ draft strategic plans.

                              In contrast, the Department of Education’s plan linked each strategic goal
                              to a set of objectives that were, in turn, linked to a set of strategies. For
                              example, the strategic goal to “build a solid foundation for learning” had as
                              one of its objectives, “every eighth grader masters challenging
                              mathematics, including the foundations of algebra and geometry.” Two of
                              the strategies listed under this objective were to develop and use a
                              national, voluntary test in mathematics as a means to encourage schools,
                              school districts, states, businesses, and communities to move toward
                              improving math curricula and instruction, among other things; and to
                              increase public understanding and support of mastering mathematics by
                              the end of eighth grade through partnerships with key education,
                              mathematics, and professional organizations.

Linkage Between Strategic     As noted in our section on required elements, 19 of 27 draft plans did not
Goals and Performance Goals   describe the linkages between long-term strategic goals and annual




                              8
                               See GAO/GGD-96-118, June 1996; and GAO/GGD-10.1.16, May 1997, as well as our reports on agencies’
                              draft strategic plans.



                              Page 9                                              GAO/GGD-97-180 Agencies’ Strategic Plans
                             B-277715




                             performance goals.9 As we have reported, without this linkage, it may not
                             be possible to determine whether an agency has a clear sense of how it
                             will assess the progress made toward achieving its intended results.
                             However, some agencies made good attempts at providing this linkage in
                             their draft plans. For example, the Department of Education, the General
                             Services Administration (GSA), and the Postal Service10 used a matrix to
                             illustrate the linkages among their strategic goals, objectives, and the
                             measures that are to be reflected in their annual performance goals.

Linkage Between Component    Our work on the draft plans found that clearly aligning required strategic
Goals and Agencywide Goals   planning elements is especially important in those cases where agencies,
                             as allowed under OMB guidance, chose to submit a strategic plan for each
                             of their major components and a strategic overview that under the
                             guidance is to show the linkages among these plans, instead of a single
                             agencywide plan. A few agencies, including the Departments of
                             Agriculture (USDA), Labor, and the Interior, used this approach. USDA,
                             Labor, and Interior are large agencies with disparate functions that are
                             implemented by a number of subagencies. For example, USDA has 18
                             subagencies working in 7 different mission areas, such as farm and foreign
                             agricultural services and food safety and inspection service. None of the
                             three agencies adequately linked component-level goals to the agencywide
                             strategic goals. For example, their plans did not consistently demonstrate
                             how the components’ goals and objectives would contribute to the
                             achievement of agencywide goals. Furthermore, Labor’s overview plan did
                             not contain agencywide goals, even though the Secretary set forth
                             agencywide goals in recent congressional testimony.


Strategic Goals Often        Leading organizations we have studied set long-term strategic goals that
Tended to Have               were an outgrowth of a clearly stated mission.11 Setting long-term strategic
Weaknesses                   goals is essential for results-oriented management, because such goals
                             explain in greater specificity the results organizations are intending to
                             achieve. The goals form a basis for an organization to identify potential
                             strategies for fulfilling its mission and for improving its operations to
                             support achievement of that mission. Congress recognized both the
                             importance and difficulty of setting results-oriented strategic goals. Under

                             9
                              An annual performance goal is defined in the Results Act as the target level of performance expressed
                             as a tangible, measurable objective against which actual achievement is to be compared. We have
                             noted that an annual performance goal is to consist of two parts: (1) the performance measure that
                             represents the specific characteristic of the program used to gauge performance and (2) the target
                             level of performance to be achieved during a given fiscal year.
                             10
                              Unlike executive branch agencies, the Postal Service is not required to submit its strategic plan to
                             OMB and is not subject to the provisions of OMB’s Circular No. A-11, part 2.
                             11
                                 GAO/GGD-96-118, June 1996.


                             Page 10                                                 GAO/GGD-97-180 Agencies’ Strategic Plans
B-277715




the Results Act, all of an agency’s strategic goals do not need to be
explicitly results oriented, although the intent of the Act is to have
agencies focus on results to the extent feasible.

Although most agencies attempted to articulate agencywide strategic goals
and objectives in their plans, many of those goals and objectives tended to
be weak. We often found that the draft plans contained goals and
objectives that were not as results oriented as they could have been. For
example, one of the Department of Veterans Affair’s (VA) goals, to
“improve benefit programs,” could be more results oriented if VA identified
the purpose of the benefit programs (e.g., to ease veterans’ transition to
civilian life). In contrast, GSA’s goals and objectives reflect a positive
attempt to define the results that it expects from its major functions. For
example, one of the goals in the draft strategic plan states that GSA will
become the space/supplies/telecommunications provider of choice for all
federal agencies by delivering quality products and services at the best
value.

In several plans, agencies expressed goals and objectives in a manner that
would make them difficult to measure or difficult to assess in the future.
Although strategic goals need not be expressed in a measurable form, OMB
guidance says goals must be expressed in a manner that allows for future
assessment of whether they are being achieved. One example of an
objective that was not measurable as written is the Social Security
Administration’s (SSA) goal “to promote valued, strong, and responsive
social security programs through effective policy development and
research.” This goal recognized that program leadership cannot be
achieved without a strong policy and research capability—the lack of
which we have criticized SSA for in the past. Yet, the goal itself and the
supporting discussion in the draft strategic plan were difficult to
understand and the results SSA expects were unclear. In addition, the goal
was not stated in a manner that allows for a future assessment of its
achievement.

Three plans were missing goals for major functions and operations that
are reflected in statute or are otherwise important to their missions. The
Department of Health and Human Services (HHS) stated in its draft plan
that the plan’s goals relate to those activities that have HHS priority over
the next 6 years and that the goals did not cover every HHS activity.
However, we found that the plan made no mention of a major
function—that is, HHS’ responsibilities for certifying medical facilities, such
as clinical laboratories and mammography providers. The section on goals



Page 11                                   GAO/GGD-97-180 Agencies’ Strategic Plans
                             B-277715




                             in the Agency for International Development’s (AID) draft plan also did not
                             fully encompass the agency’s major functions, because the section did not
                             specifically address some programs, such as assistance to Eastern Europe
                             and the former Soviet Union and Economic Support Funds, which
                             represent about 60 percent of AID’s budget. In addition, the Postal Service’s
                             draft plan did not contain goals and objectives for two major functions:
                             providing mail delivery service to all communities and providing ready
                             access to postal retail services.


Strategies Often Not Fully   In our reports on draft strategic plans, we noted that strategies should be
Developed                    specific enough to enable an assessment of whether they would help
                             achieve the goals in the plan. In addition, the strategies should elaborate
                             on specific actions the agency is taking or plans to take to carry out its
                             mission, outline planned accomplishments, and schedule their
                             implementation. However, many of the strategies in the plans we reviewed
                             lacked descriptions of approaches or actions to be taken or failed to
                             address management challenges that threatened agencies’ ability to meet
                             long-term strategic goals.


Plans Frequently Lacked      Incomplete and underdeveloped strategies were a frequent problem with
Descriptions of              the draft plans we reviewed. For example, the draft plan for the
Approaches                   Department of State did not specifically identify the actions needed to
                             meet the plan’s goals but rather often focused on describing the
                             Department’s role in various areas. For example, the Department’s first
                             strategy, “maintaining effective working relationships with leading
                             regional states through vigorous diplomacy, backed by strong U.S. and
                             allied military capability to react to regional contingencies,” did not
                             describe how the Department planned to maintain effective working
                             relationships or coordinate with the other lead agency, the Department of
                             Defense (DOD), identified in the strategy.

                             In some cases, such as in the plans of Justice and Energy, strategies
                             frequently read more like goals or objectives, rather than approaches for
                             achieving goals. Justice’s strategy to promote compliance with the
                             country’s civil rights laws and Energy’s strategy to maintain an effective
                             capability to deter and/or respond to energy supply disruptions did not
                             describe what actions the agencies planned to take to implement their
                             related goals. Instead, their labelled strategies sounded like additional
                             goals and objectives in that they discussed what the agencies expected to
                             achieve. In other cases, such as in the plans of HHS and Commerce,



                             Page 12                                  GAO/GGD-97-180 Agencies’ Strategic Plans
                            B-277715




                            strategies read like program justifications. Under strategies for addressing
                            alcohol abuse, HHS’ draft plan states that “[t]he National Institutes of
                            Health conducts research and develops and disseminates information on
                            prevention and treatment effectiveness.” Under strategies for providing
                            technical leadership for the nation’s measurement and standards
                            infrastructure, the Commerce plan stated that the “laboratories of the
                            National Institute of Standards and Technology provide companies,
                            industries, and the science and technology community with the common
                            language needed in every stage of technical activity.” Without fully
                            developed strategies, it will be difficult for managers, Congress, and other
                            stakeholders to assess whether the planned approach will be successful in
                            achieving intended results.

Key Management Challenges   One purpose of the Results Act is to improve the management of federal
Often Not Addressed         agencies. Therefore, it is particularly important that agencies develop
                            strategies that address management challenges that threaten their ability
                            to meet long-term strategic goals as well as this purpose of the Act.
                            However, we found that most of the plans did not adequately address the
                            major management challenges and high-risk areas that we and others have
                            identified.12 For example, in our recent high-risk report series, we noted
                            that DOD has long-standing management problems in six high-risk areas,
                            including financial management, information technology, infrastructure,
                            and inventory management.13 However, DOD’s draft plan generally paid
                            little—and in one case, no—attention to high-risk management issues. We
                            also placed Medicare, one of the largest federal entitlement programs, on
                            our high-risk list, because of Medicare’s losses each year due to fraudulent
                            and abusive claims. For example, the recent audit of financial statements
                            performed by the Inspector General of HHS disclosed improper payments
                            of $23.2 billion nationwide, or about 14 percent of total Medicare fee for
                            service benefit payments. However, HHS’ draft plan did not address the
                            long-standing problem the agency has with Medicare claims processing.

                            Another management-related issue that presents a challenge to agencies is
                            ongoing and proposed restructuring of federal activities, which will likely
                            require adjustments to agencies’ management practices, processes, and
                            systems. For example, the administration has ongoing efforts to integrate
                            (1) the Department of State, the U.S. Information Agency, and the Arms
                            Control and Disarmament Agency into one agency with the intent to better
                            serve the U.S. national interests and foreign policy goals in the 21st

                            12
                             Since 1990, we have produced a list for Congress of areas that were identified, on the basis of GAO
                            work, as highly vulnerable to waste, fraud, abuse, and mismanagement.
                            13
                              High-Risk Series: An Overview (GAO/HR-97-1, Feb. 1997).



                            Page 13                                                GAO/GGD-97-180 Agencies’ Strategic Plans
                         B-277715




                         century; and (2) certain shared administrative functions of State and AID.
                         However, State’s draft plan did not discuss how State planned to integrate
                         these agencies into its organizational structure or address substantive
                         support requirements for the reorganization.

Information Technology   For many years, we have reported on federal agencies’ chronic problems
                         in developing and modernizing their information systems. Given the
                         government’s ever-increasing dependency on computers and
                         telecommunications to carry out its work, agencies must make dramatic
                         improvements in how they manage their information resources in order to
                         achieve mission goals, reduce costs, and improve service to the public.
                         Moreover, without reliable information systems, agencies will not be able
                         to gather and analyze the information they need to measure their
                         performance, as required by the Results Act. Yet most of the 27 plans did
                         not cover strategies for improving the information management needed to
                         achieve their strategic goals or provided little detail on specific actions
                         that agencies planned to take in this critical area.

                         In its draft plan, for example, DOD—which receives 15 percent of the
                         federal budget—did not explicitly discuss how it plans to correct
                         information technology investment problems. These problems led us to
                         place its Corporate Information Management initiative on our high-risk
                         list, because DOD continues to spend billions of dollars on automated
                         information systems with little sound analytic justification. Without such
                         discussions, Congress will not be able to assess the agencies’ planned
                         approaches for upgrading information technology to improve the agencies’
                         performance.

                         Furthermore, we have identified as high risk two technology-related areas
                         that represent significant challenges for the federal government: resolving
                         the need for computer systems to be changed to accommodate dates
                         beyond the year 1999, which is referred to as the “year 2000 problem”; and
                         providing information security for computer systems. Yet most of the
                         plans did not contain discussions of how agencies intend to address the
                         year 2000 problem, and none of the plans addressed strategies for
                         information security. For example, the draft plan of the Office of
                         Personnel Management (OPM) did not discuss the year 2000 problem even
                         though many of its critical information systems are date dependent and
                         exchange information with virtually every federal agency. In another
                         example, DOD’s draft plan did not specifically address information security
                         even though DOD recognizes that information warfare capability is one of a
                         number of areas of particular concern, especially as it involves



                         Page 14                                 GAO/GGD-97-180 Agencies’ Strategic Plans
                            B-277715




                            vulnerabilities that could be exploited by potential opponents of the
                            United States.

                            OMB’s guidance stated that agencies’ strategies for achieving goals should
                            include a description of the process for communicating goals throughout
                            an agency and for holding managers and staff accountable for achieving
                            the goals. However, a few of the plans that we evaluated, such as those for
                            Education and SSA, indicated that agencies had developed, or are planning
                            to develop, approaches for communicating goals to employees or for
                            holding managers and staff accountable for achieving results. We noted
                            that assigning clear expectations and accountability to employees so that
                            they see how their jobs relate to the agency’s mission and goals can be
                            useful in implementing a strategic plan. It is especially important that
                            managers and staff understand how their daily activities contribute to the
                            achievement of their agencies’ goals and that they are held accountable for
                            achieving results.

Noteworthy Progress         In contrast to the lack of strategies in most plans for addressing
                            management weaknesses, we found that a few plans had operational
                            strategies that indicated agencies are beginning to consider management,
                            financial, and information technology weaknesses that need to be
                            corrected to ensure that management practices, processes, and systems
                            support the achievement of agency goals. For example, Education took an
                            important step toward implementing results-oriented management by
                            outlining in its draft strategic plan changes needed in activities, processes,
                            and operations to better support its mission. To illustrate, Education’s
                            plan contained core strategies for the goal that schools are safe,
                            disciplined, and drug-free. These strategies included proposals for new
                            legislation, public outreach, improved data systems, and interagency
                            coordination. Energy and Education were among those agencies that
                            included agencywide strategies to address needed process and operational
                            realignments that would better enable them to achieve their missions. For
                            example, Energy’s plan discussed strategies that emphasize changing
                            contracting approaches to focus on results, contractor accountability, and
                            customer satisfaction.


Little Evidence Regarding   As we recently reported, a focus on results, as envisioned by the Results
Interagency Coordination    Act, implies that federal programs contributing to the same or similar
                            results should be closely coordinated to ensure that goals are consistent
                            and, as appropriate, program efforts are mutually reinforcing.14 This means

                            14
                              GAO/GGD-97-109, June 2, 1997.



                            Page 15                                   GAO/GGD-97-180 Agencies’ Strategic Plans
B-277715




that federal agencies are to look beyond their organizational boundaries
and coordinate with other agencies to ensure that their efforts are aligned.

Our work has underscored the need for such coordination efforts.
Uncoordinated program efforts can waste scarce funds, confuse and
frustrate program customers, and limit the overall effectiveness of the
federal effort. Our recent report to you provided further information on
mission fragmentation and program overlap in the federal government.15
We have often noted that the Results Act presents to Congress and the
administration a new opportunity to address mission fragmentation and
program overlap.

OMB and Congress recognize that the Results Act provides an approach for
addressing overlap and fragmentation of federal programs. OMB’s guidance
stated that agencies’ final submission of strategic plans should contain a
summary of agencies’ consultation efforts with Congress and other
stakeholders, including discussions with other agencies on crosscutting
activities. During its Summer Review of 1996, OMB provided feedback to
agencies where it found little sign of significant interagency coordination
to ensure consistent goals among crosscutting programs and activities.
This feedback also underscored the need for such coordination. In an
August 1997 letter to heads of selected independent agencies and members
of the President’s Management Council, OMB reiterated the importance of
interagency coordination and stated that during the 1997 Fall Budget
Review, it intended to place a particular emphasis on reviewing whether
goals and objectives for crosscutting functions or interagency programs
were consistent among strategic plans.

Congress has also shown active interest in using the Results Act to better
ensure that crosscutting programs are properly coordinated. The
February 25, 1997, letter from congressional Majority leaders to the
Director of OMB outlined the leaderships’ interest in agencies’ strategic
plans addressing how the agencies were coordinating their activities
(especially for crosscutting programs) with other federal agencies working
on similar activities. In addition, the staff teams in the House of
Representatives, which were to coordinate and facilitate committee
consultations with executive branch agencies, often have asked agencies
about crosscutting activities and programs.

Despite this interest, we found that 20 of the 27 draft plans lacked
evidence of interagency coordination as part of the agency and

15
  GAO/AIMD-97-146, August 29, 1997.



Page 16                                  GAO/GGD-97-180 Agencies’ Strategic Plans
    B-277715




    stakeholder consultations and that some of the plans—including those
    from some agencies that are involved in crosscutting program areas where
    interagency coordination is clearly implied—lacked any discussion of
    coordination. For example:

•   According to Energy, it does not have any crosscutting programs because
    its functions are unique. However, our review of draft strategic plans
    indicated areas of potential overlap concerning Energy’s programs. For
    example, Energy’s science mission was to maintain leadership in basic
    research and to advance scientific knowledge. The National Science
    Foundation’s (NSF) mission included promoting the progress of science
    and enabling the United States to uphold a position of world leadership in
    all aspects of science, mathematics, and engineering. NSF’s plan also did
    not discuss the possible overlap between the two missions. Another area
    of potential overlap for Energy included environmental and energy
    resources issues addressed by Energy as well as the Environmental
    Protection Agency (EPA) and other agencies. Similarly, nuclear weapons
    production issues involve Energy and DOD.
•   The draft plan for HHS did not address coordination of alcohol and drug
    abuse prevention and treatment programs, even though these programs
    are located in several of its subagencies and in 15 other federal agencies.
    These other agencies include VA, Education, Housing and Urban
    Development, and Justice.
•   In the June 27, 1997, consultation with congressional staff on OPM’s draft
    plan, OPM officials said that they had not yet involved stakeholders,
    including other federal agencies, in developing their strategic plan. Among
    the organizations with which OPM must work to achieve its desired results
    are the Interagency Advisory Group of federal personnel directors, the
    Personnel Automation Council, the National Partnership Council, the
    Security Policy Board and Security Policy Forum, the Federal Bureau of
    Investigation, the Equal Employment Opportunity Commission, the
    Federal Labor Relations Authority, and the Merit Systems Protection
    Board.

    Even if an agency’s draft plan recognized the need to coordinate with
    others, it generally contained little information about what strategies the
    agency pursued to identify and address mission fragmentation and
    program overlap. For example:

•   State’s draft plan recognizes several crosscutting issues but does not
    clearly address how the agency will coordinate those issues with other
    agencies. State and over 30 agencies and offices in the federal government



    Page 17                                  GAO/GGD-97-180 Agencies’ Strategic Plans
                              B-277715




                              are involved in trade policy and export promotion, about 35 are involved in
                              global programs, and over 20 are involved in international security
                              functions.
                          •   Treasury’s draft plan listed as a strategy that it will “continue participating
                              in productive Federal, State, and local anti-drug task forces” but did not
                              provide any detail about which bureaus or other federal agencies would
                              participate in those task forces or what their respective responsibilities
                              would be.
                          •   Even though it recognized the roles of other organizations, Labor’s draft
                              plan did not discuss how the agency’s programs could fit in with a broader
                              national job training strategy and the coordination required to develop and
                              implement such a strategy. In 1995, we identified 163 employment training
                              programs spread across 15 federal agencies, including Labor.16
                          •   Commerce’s draft plan did not indicate how its emphasis on restructuring
                              export controls to promote economic growth complements or contrasts
                              with the strong emphasis of State’s Office of Defense Trade Controls and
                              the U.S. Nuclear Regulatory Commission, which are both responsible for
                              licensing exports overseas on safeguarding against proliferation of
                              dual-use technology.


Many Agencies’ Capacity       To efficiently and effectively operate, manage, and oversee activities, we
to Gather Performance         have reported that agencies need reliable information on the performance
Information Is                of agency programs, the financial condition of programs and their
                              operations, and the costs of programs and operations. For example,
Questionable                  agencies need reliable data during their planning efforts to set realistic
                              goals and later, as programs are being implemented, to gauge their
                              progress toward achievement of those goals. However, our prior work
                              indicated that agencies often lacked information and that even when this
                              information existed, its reliability was frequently questionable.17

                              On the basis of our recent report on implementing the Results Act, we
                              found that some agencies lacked results-oriented performance information
                              to use as a baseline for setting appropriate improvement targets. Our
                              survey of federal managers done for that report suggested that those
                              agencies were not isolated examples of the lack of performance
                              information in the federal government. In this survey, we found that fewer
                              than one-third of managers in the agencies reported that results-oriented
                              performance measures existed for their programs to a great or very great

                              16
                               Multiple Employment Training Programs: Major Overhaul Needed to Create a More Efficient,
                              Customer-Driven System (GAO/T-HEHS-95-70, Feb. 6, 1995).
                              17
                                GAO/GGD-97-109, June 2, 1997.



                              Page 18                                             GAO/GGD-97-180 Agencies’ Strategic Plans
B-277715




extent. The existence of other types of performance measures also was
reported as low. For example, of the managers reporting the existence of
such measures to a great or very great extent, 38 percent reported the
existence of measures of output, 32 percent reported the existence of
customer satisfaction measures, 31 percent reported the existence of
measures of product or service quality, and 26 percent reported the
existence of measures of efficiency.18

Our prior work also suggests that even when information existed, its
reliability was frequently questionable. In our report on the Department of
Transportation’s (DOT) draft plan, we stated that we had identified
information resources and database management as one of the top
management issues facing DOT. For example, the Federal Aviation
Administration, which is a component of DOT, may rely on source data that
are incomplete, inconsistent, and inaccurate for an aviation safety
database that is under development. In our report on the draft HHS
strategic plan, we stated that the agency had only limited data on the
Medicaid program, some of which were of questionable accuracy. Some of
these data problems stemmed from data originating in the 50 states and
the District of Columbia, which did not all use identical definitions for data
categories.

In addition to HHS, other agencies will likely have difficulties collecting
reliable data from parties outside the federal government. Some agencies,
such as Education, HHS, and EPA, planned to use or to strengthen
partnerships with outside parties; thus, those agencies will also need to
rely on those parties to provide performance data. During our recent
review of analytic challenges that agencies faced in measuring their
performance, agency officials with experience in performance
measurement cited ascertaining the accuracy and quality of performance
data as 1 of the top 10 challenges to performance measurement.19 The fact
that data were largely collected by others was the most frequent
explanation for why ascertaining the accuracy and quality of performance
data was a challenge. In our report on implementing the Results Act, we
also reported on the difficulties agencies were experiencing with their
reliance on outside parties for data.20




18
  GAO/GGD-97-109, June 2, 1997.
19
  GAO/HEHS/GGD-97-138, May 30, 1997.
20
  GAO/GGD-97-109, June 2, 1997.



Page 19                                  GAO/GGD-97-180 Agencies’ Strategic Plans
                          B-277715




                          These experiences suggest that agencies face many challenges in gathering
                          reliable information and that it is important that agencies follow through
                          with the implementation of the CFO Act, the Clinger-Cohen Act, and the
                          Paperwork Reduction Act. These experiences also suggest that coherent
                          strategies for using or strengthening partnerships with outside parties
                          would also include a strategy for data collection and verification plans. To
                          Education’s credit, its draft plan recognized that improvements were
                          needed in these areas. For example, Education’s plan identified core
                          strategies for improving the efficiency and effectiveness of operations
                          through the use of information technology, such as development of an
                          agencywide information collection and dissemination system. As another
                          example, EPA’s draft plan discusses the agency’s initiative to draft “core
                          performance measures” with the environmental commissioners of state
                          governments.


Program Evaluations Not   As we noted in our guide on assessing strategic plans, program evaluations
Adequately Addressed in   are a key component of results-oriented management.21 In combination
Most Plans                with an agency’s performance measurement system, evaluations can
                          provide feedback to the agency on how well an agency’s activities and
                          programs contributed to achieving strategic goals. For example,
                          evaluations can be a potentially critical source of information for Congress
                          and others in assessing (1) the appropriateness and reasonableness of
                          goals; (2) the effectiveness of strategies by supplementing performance
                          measurement data with impact evaluation studies; and (3) the
                          implementation of programs, such as identifying the need for corrective
                          action.

                          In our recent report on the analytic challenges facing agencies in
                          measuring performance, we stated that supplementing performance data
                          with impact evaluations may help provide agencies with a more complete
                          picture of program effectiveness.22 A recurring source of the programs’
                          difficulty in both selecting appropriate outcome measures and in analyzing
                          their results stemmed from two features common to many federal
                          programs: the interplay of federal, state, and local government activities
                          and objectives and the aim to influence complex systems or phenomena
                          whose outcomes are largely outside government control. Evaluations can
                          play a critical role in helping to address the measurement and analysis
                          difficulties agencies face. Furthermore, systematic evaluation of how a


                          21
                            GAO/GGD-10.1.16, May 1997.
                          22
                            GAO/HEHS/GGD-97-138, May 30, 1997.



                          Page 20                                 GAO/GGD-97-180 Agencies’ Strategic Plans
             B-277715




             program was implemented can provide important information about why a
             program did or did not succeed and suggest ways to improve it.

             In that report, we also said that evaluation offices can provide analytical
             support for developing a performance measurement system. When asked
             where they needed assistance in performance measurement, agency
             officials were most likely to report that they could have used more
             evaluation help with creating quantifiable, measurable performance
             indicators and developing or implementing data collection and verification
             plans. Under the Results Act, program managers may wish to turn to their
             evaluation offices for formal program evaluations and for assistance in
             developing and using a performance measurement system. However, we
             have also reported that a 1994 survey found a continuing decline in
             evaluation capacity in the federal government.

             Although the Results Act requires agencies to discuss program evaluations
             in their strategic plans, 16 of the draft plans we reviewed did not contain
             such a discussion. Of the 11 plans that did contain a section on
             evaluations, most of those sections lacked critical information specified in
             OMB guidance, such as a discussion of how evaluations were used to
             establish strategic goals or a schedule of future evaluations. Given the
             importance of evaluation for results-based management and the
             continuing decline in evaluation capacity, it is important that agencies’
             strategic plans systematically address this issue.


             It is clear that much work remains to be done if strategic plans are to be as
Conclusion   useful for congressional and agency decisionmaking as they could be. We
             found that agencies’ draft strategic plans were very much works in
             progress. This situation suggests that agencies are struggling with the first
             step of performance-based management—that is, adopting a disciplined
             approach to setting results-oriented goals and formulating strategies to
             achieve the goals.

             As agencies continue their strategic planning efforts and prepare for the
             next step of performance-based management—measuring performance
             against annual performance goals—it is important that the agencies,
             working with Congress and other stakeholders, address those strategic
             planning issues that appear to need particularly sustained attention. Our
             past work has shown that leading organizations focus on strategic
             planning as a dynamic and continuous process and not simply on the
             production of a strategic plan. They also understand that stakeholders,



             Page 21                                  GAO/GGD-97-180 Agencies’ Strategic Plans
                     B-277715




                     particularly Congress in the case of federal agencies, are central to the
                     success of their planning efforts. Therefore, it is important that agencies
                     recognize that strategic planning does not end with the submission of a
                     plan in September 1997 and that a constant dialogue with Congress is part
                     of a purposeful and well-defined strategic planning process.

                     Authorization, appropriation, budget, and oversight committees each have
                     key interests in ensuring that the Results Act is successful, because once
                     fully implemented, it should provide valuable data to help inform the
                     decisions that each committee must make. In that regard, Congress can
                     continue to express its interest in the effective implementation of the
                     Results Act through iterative consultations with agencies on their missions
                     and goals. Congress can also show its interest by continuing to ask about
                     the status of agencies’ implementation of the Act during congressional
                     hearings and by using performance information that agencies provide to
                     help make management in the federal government more performance
                     based.


                     On September 3, 1997, we provided a draft of this report to the Director of
Agency Comments      OMB for comment. We did not provide a draft to individual agencies
and Our Evaluation   discussed in this report, because the drafts of the reports we prepared on
                     individual agency plans in response to your request were provided to the
                     relevant agency for comment. Those comments were reflected, as
                     appropriate, in the final versions of those reports.

                     On September 10, 1997, a senior OMB official provided us with comments
                     on this report. He generally agreed with our observations and said that the
                     report was a useful summary of the 27 reports we issued on agencies’ draft
                     strategic plans. The official also said that by identifying areas of
                     widespread compliance or noncompliance with requirements of the
                     Results Act, the report can be used to focus on those parts of plans that
                     may require further work.

                     The senior OMB official did, however, raise an issue regarding program
                     evaluations and the Results Act. He said that many strategic goals and
                     objectives included in strategic plans will not require a program evaluation
                     to help determine whether the goal was achieved. Thus, the absence of a
                     schedule for future program evaluations should not be the basis for a
                     categorical conclusion that a plan is deficient for this requirement. He also
                     said that process evaluations can be useful in defining why a program is
                     not working; they may be less instructive on why a program is succeeding.



                     Page 22                                  GAO/GGD-97-180 Agencies’ Strategic Plans
B-277715




In his view, process evaluations are more aligned with the strategies
section of a strategic plan than with determinations of whether strategic
goals and objectives are being achieved. In addition, the OMB official said
that an evaluation of program impact is beyond the scope of the Results
Act and that agencies are not required or expected to define their goals or
objectives in terms of impact.

We note that the Results Act establishes two approaches for assessing an
agency’s performance: annual measurement of program performance
against performance goals outlined in a performance plan and program
evaluations to be conducted by the agency as needed. Although the Act
gives agencies wide discretion in determining the need for program
evaluations, the Act also requires that agencies report to Congress and
other stakeholders in their strategic plans on their planned use of
evaluations to assess achievement of goals. Therefore, although program
evaluations may not be necessary for determining whether every strategic
goal in the strategic plan is achieved, a fuller discussion of how
evaluations will, or will not, be used to measure performance is critical.
Without this discussion, Congress and other stakeholders will not have
assurances that agencies, as intended by the Act, systematically
considered the use of program evaluations, where appropriate, to validate
program accomplishments and identify strategies for program
improvement. Thus, in cases where an agency concludes that program
evaluations are not needed, we continue to believe that the agency’s plan
would be more helpful to Congress if it contained such a statement and
the reasons for the agency’s conclusion.

Moreover, the Senate report that accompanied the Results Act described
program evaluations in broad terms, specifically “including evaluations of
. . . operating policies and practices when the primary concern is about
these issues rather than program outcome.” In this context, program
evaluations are to be used to assess both the extent to which a program
achieves its results-oriented goals (outcome evaluations) and the extent to
which a program is operating as it was intended (process evaluation.)
Understanding how a program’s operations produced, or did not produce,
desired outcomes is critical information for agencies’ senior managers and
Congress to consider as decisions are being made about programs and
strategic goals.

Although the Act does not explicitly mention impact evaluations, it does
require programs to measure progress toward achieving goals and explain
why a performance goal was not met. Impact evaluations can be employed



Page 23                                  GAO/GGD-97-180 Agencies’ Strategic Plans
B-277715




when external factors are known to influence the program’s objectives in
order to isolate the program’s contribution to achievement of its
objectives. Given the complexity of crosscutting federal programs as well
as state and local programs, we continue to believe that in some
circumstances, impact evaluations could be useful in helping to provide a
more accurate picture of program effectiveness than might be portrayed
by annual performance data alone or by other types of evaluations.


As arranged with your offices, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days after its
issue date. At that time, we will send copies of this report to the Minority
Leader of the House; Ranking Minority Members of your Committees;
other appropriate congressional committees; and the Director, Office of
Management and Budget. We also will make copies available to others on
request.

If you or your staffs have any questions concerning this report, please
contact me on (202) 512-2700. The major contributors to this letter are
listed in appendix II.




Johnny C. Finch
Assistant Comptroller General




Page 24                                    GAO/GGD-97-180 Agencies’ Strategic Plans
Page 25   GAO/GGD-97-180 Agencies’ Strategic Plans
Appendix I

Overview of the Government Performance
and Results Act

              The Government Performance and Results Act (GPRA) is the primary
              legislative framework through which agencies will be required to set
              strategic goals, measure performance, and report on the degree to which
              goals were met. It requires each federal agency to develop, no later than by
              the end of fiscal year 1997, strategic plans that cover a period of at least 5
              years and include the agency’s mission statement; identify the agency’s
              long-term strategic goals; and describe how the agency intends to achieve
              those goals through its activities and through its human, capital,
              information, and other resources. Under GPRA, agency strategic plans are
              the starting point for agencies to set annual goals for programs and to
              measure the performance of the programs in achieving those goals.

              Also, GPRA requires each agency to submit to the Office of Management
              and Budget (OMB), beginning for fiscal year 1999, an annual performance
              plan. The first annual performance plans are to be submitted in the fall of
              1997. The annual performance plan is to provide the direct linkage
              between the strategic goals outlined in the agency’s strategic plan and
              what managers and employees do day-to-day. In essence, this plan is to
              contain the annual performance goals the agency will use to gauge its
              progress toward accomplishing its strategic goals and identify the
              performance measures the agency will use to assess its progress. Also, OMB
              will use individual agencies’ performance plans to develop an overall
              federal government performance plan that OMB is to submit annually to
              Congress with the president’s budget, beginning for fiscal year 1999.

              GPRA  requires that each agency submit to the president and to the
              appropriate authorization and appropriations committees of Congress an
              annual report on program performance for the previous fiscal year (copies
              are to be provided to other congressional committees and to the public
              upon request). The first of these reports, on program performance for
              fiscal year 1999, is due by March 31, 2000; and subsequent reports are due
              by March 31 for the years that follow. However, for fiscal years 2000 and
              2001, agencies’ reports are to include performance data beginning with
              fiscal year 1999. For each subsequent year, agencies are to include
              performance data for the year covered by the report and 3 prior years.

              In each report, an agency is to review and discuss its performance
              compared with the performance goals it established in its annual
              performance plan. When a goal is not met, the agency’s report is to explain
              the reasons the goal was not met; plans and schedules for meeting the
              goal; and, if the goal was impractical or not feasible, the reasons for that
              and the actions recommended. Actions needed to accomplish a goal could



              Page 26                                  GAO/GGD-97-180 Agencies’ Strategic Plans
Appendix I
Overview of the Government Performance
and Results Act




include legislative, regulatory, or other actions or, when the agency found
a goal to be impractical or infeasible, a discussion of whether the goal
ought to be modified.

In addition to evaluating the progress made toward achieving annual goals
established in the performance plan for the fiscal year covered by the
report, an agency’s program performance report is to evaluate the agency’s
performance plan for the fiscal year in which the performance report was
submitted. (For example, in their fiscal year 1999 performance reports,
due by March 31, 2000, agencies are required to evaluate their
performance plans for fiscal year 2000 on the basis of their reported
performance in fiscal year 1999.) This evaluation will help to show how an
agency’s actual performance is influencing its plans. Finally, the report is
to include the summary findings of program evaluations completed during
the fiscal year covered by the report.

Congress recognized that in some cases not all of the performance data
will be available in time for the March 31 reporting date. In such cases,
agencies are to provide whatever data are available, with a notation as to
their incomplete status. Subsequent annual reports are to include the
complete data as part of the trend information.

In crafting GPRA, Congress also recognized that managerial accountability
for results is linked to managers having sufficient flexibility, discretion,
and authority to accomplish desired results. GPRA authorizes agencies to
apply for managerial flexibility waivers in their annual performance plans
beginning with fiscal year 1999. The authority of agencies to request
waivers of administrative procedural requirements and controls is
intended to provide federal managers with more flexibility to structure
agency systems to better support program goals. The nonstatutory
requirements that OMB can waive under GPRA generally involve the
allocation and use of resources, such as restrictions on shifting funds
among items within a budget account. Agencies must report in their
annual performance reports on the use and effectiveness of any GPRA
managerial flexibility waivers that they receive.

GPRA called for phased implementation so that selected pilot projects in
the agencies could develop experience from implementing GPRA
requirements in fiscal years 1994 through 1996 before implementation is
required for all agencies. When this part of the pilot phase concluded at
the end of fiscal year 1996, a total of 68 pilot projects representing 28
agencies were project participants. OMB also was required to select at least



Page 27                                  GAO/GGD-97-180 Agencies’ Strategic Plans
Appendix I
Overview of the Government Performance
and Results Act




five agencies from among the initial pilot agencies to pilot managerial
accountability and flexibility for fiscal years 1995 and 1996; however, we
found that the pilot did not work as intended. OMB did not designate as
pilot projects any of the 7 departments and 1 independent agency that
submitted a total of 61 waiver proposals because, among other reasons,
changes in federal management practices and laws that occurred after the
Act was enacted affected agencies’ need for the managerial flexibility
waivers.

Finally, GPRA required OMB to select at least five agencies, at least three of
which have had experience developing performance plans during the
initial GPRA pilot phase, to test performance budgeting for fiscal years 1998
and 1999. Performance budgets to be prepared by pilot projects for
performance budgeting are intended to provide Congress with information
on the direct relationship between proposed program spending and
expected program results and the anticipated effects of varying spending
levels on results. However, we found that the performance budgeting
pilots are likely to be delayed. According to OMB, few agencies currently
have either sufficient baseline performance or financial information or the
ability to use sophisticated analytic techniques to calculate the effects that
marginal changes in funding can have on performance.




Page 28                                   GAO/GGD-97-180 Agencies’ Strategic Plans
Appendix II

Major Contributors to This Report


                        L. Nye Stevens, Director, Federal Management and Workforce Issues,
General Government      (202) 512-8676
Division, Washington,   J. Christopher Mihm, Acting Associate Director, (202) 512-3236
D.C.                    Donna Byers, Project Manager
                        Allan C. Lomax, Senior Evaluator
                        Dorothy L. Self, Evaluator
                        Kiki Theodoropoulos, Senior Evaluator




                        Page 29                               GAO/GGD-97-180 Agencies’ Strategic Plans
Appendix II
Major Contributors to This Report




Page 30                             GAO/GGD-97-180 Agencies’ Strategic Plans
Appendix II
Major Contributors to This Report




Page 31                             GAO/GGD-97-180 Agencies’ Strategic Plans
Appendix II
Major Contributors to This Report




Page 32                             GAO/GGD-97-180 Agencies’ Strategic Plans
Related GAO Products


                  The Results Act: Observations on the Draft Strategic Plan of the
Agencies’ Draft   Department of Agriculture (GAO/RCED-97-169R, July 10, 1997).
Strategic Plans
                  The Results Act: Observations on the Draft Strategic Plan of the
                  Department of Commerce (GAO/GGD-97-152R, July 14, 1997).

                  The Results Act: Observations on the Draft Strategic Plan of the
                  Department of Defense (GAO/NSIAD-97-219R, Aug. 5, 1997).

                  The Results Act: Observations on the Draft Strategic Plan of the
                  Department of Education (GAO/HEHS-97-176R, July 18, 1997).

                  The Results Act: Observations on the Draft Strategic Plan of the
                  Department of Energy (GAO/RCED-97-199R, July 11, 1997).

                  The Results Act: Observations on the Draft Strategic Plan of the
                  Department of Health and Human Services (GAO/HEHS-97-173R, July 11, 1997).

                  The Results Act: Observations on the Draft Strategic Plan of the
                  Department of Housing and Urban Development (GAO/RCED-97-224R, Aug. 8,
                  1997).

                  The Results Act: Observations on the Draft Strategic Plan of the
                  Department of the Interior (GAO/RCED-97-207R, July 21, 1997).

                  The Results Act: Observations on the Draft Strategic Plan of the
                  Department of Justice (GAO/GGD-97-153R, July 11, 1997).

                  The Results Act: Observations on the Draft Strategic Plan of the
                  Department of Labor (GAO/HEHS-97-172R, July 11, 1997).

                  The Results Act: Observations on the Draft Strategic Plan of the
                  Department of State (GAO/NSIAD-97-198R, July 18, 1997).

                  The Results Act: Observations on the Draft Strategic Plan of the
                  Department of Transportation (GAO/RCED-97-208R, July 30, 1997).

                  The Results Act: Observations on the Draft Strategic Plan of the Treasury
                  (GAO/GGD-97-162R, July 31, 1997).

                  The Results Act: Observations on the Draft Strategic Plan of the
                  Department of Veterans Affairs (GAO/HEHS-97-174R, July 11, 1997).



                  Page 33                                  GAO/GGD-97-180 Agencies’ Strategic Plans
Related GAO Products




The Results Act: Observations on the Draft Strategic Plan of the U.S.
Agency for International Development (GAO/NSIAD-97-197R, July 11, 1997).

The Results Act: Observations on the Draft Strategic Plan of the
Environmental Protection Agency (GAO/RCED-97-209R, July 30, 1997).

The Results Act: Observations on the Draft Strategic Plan of the Federal
Emergency Management Agency (GAO/RCED-97-204R, July 22, 1997).

The Results Act: Observations on the Draft Strategic Plan of the General
Services Administration (GAO/GGD-97-147R, July 7, 1997).

The Results Act: Observations on the Draft Strategic Plan of the National
Aeronautics and Space Administration (GAO/NSIAD-97-205R, July 22, 1997).

The Results Act: Observations on the Draft Strategic Plan of the National
Science Foundation (GAO/RCED-97-203R, July 11, 1997).

The Results Act: Observations on the Draft Strategic Plan of the Nuclear
Regulatory Commission (GAO/RCED-97-206R, July 31, 1997).

The Results Act: Observations on the Draft Strategic Plan of the Office of
Management and Budget (GAO/GGD-97-169R, Aug. 1997).

The Results Act: Observations on the Draft Strategic Plan of the Office of
Personnel Management (GAO/GGD-97-150R, July 11, 1997).

The Results Act: Observations on the Draft Strategic Plan of the U.S.
Postal Service (GAO/GGD-97-163R, July 31, 1997).

The Results Act: Observations on the Draft Strategic Plan of the Small
Business Administration (GAO/RCED-97-205R, July 11, 1997).

The Results Act: Observations on the Draft Strategic Plan of the Social
Security Administration (GAO/HEHS-97-179R, July 22, 1997).

The Results Act: Observations on the Draft Strategic Plan of the U.S. Trade
Representative (GAO/NSIAD-97-199R, July 18, 1997).

The Results Act: Observations on Federal Science Agencies
(GAO/T-RCED-97-220, July 30, 1997).




Page 34                                  GAO/GGD-97-180 Agencies’ Strategic Plans
                    Related GAO Products




                    Financial Management: Indian Trust Fund Strategic Plan (GAO/T-AIMD-97-138,
                    July 30, 1997).

                    The Results Act: Observations on Draft Strategic Plans of Five Financial
                    Regulatory Agencies (GAO/T-GGD-97-164, July 29, 1997).

                    National Labor Relations Board: Observations on the NLRB’s July 8, 1997,
                    Draft Strategic Plan (GAO/T-HEHS-97-183, July 24, 1997).

                    The Results Act: Observations on the Forest Service’s May 1997 Draft
                    Strategic Plan (GAO/T-RCED-97-223, July 23, 1997).

                    Results Act: Observations on the Department of Energy’s August 15, 1997,
                    Draft Strategic Plan (GAO/RCED-97-248R, Sept. 2, 1997).


                    Managing for Results: Using the Results Act to Address Mission
Other Related GAO   Fragmentation and Program Overlap (GAO/AIMD-97-146, Aug. 29, 1997).
Products
                    Managing for Results: The Statutory Framework for Improving Federal
                    Management and Effectiveness (GAO/T-GGD/AIMD-97-144, June 24, 1997).

                    The Results Act: Comments on Selected Aspects of the Draft Strategic
                    Plans of the Departments of Energy and the Interior (GAO/T-RCED-97-213,
                    July 17, 1997).

                    Managing for Results: Prospects for Effective Implementation of the
                    Government Performance and Results Act (GAO/T-GGD-97-113, June 3, 1997).

                    The Government Performance and Results Act: 1997 Governmentwide
                    Implementation Will Be Uneven (GAO/GGD-97-109, June 2, 1997).

                    Managing for Results: Analytic Challenges in Measuring Performance
                    (GAO/HEHS/GGD-97-138, May 30, 1997).

                    Agencies’ Strategic Plans Under GPRA: Key Questions to Facilitate
                    Congressional Review (GAO/GGD-10.1.16, May 1997).

                    Performance Budgeting: Past Initiatives Offer Insights for GPRA
                    Implementation (GAO/AIMD-97-46, Mar. 27, 1997).




                    Page 35                                 GAO/GGD-97-180 Agencies’ Strategic Plans
           Related GAO Products




           Measuring Performance: Strengths and Limitations of Research Indicators
           (GAO/RCED-97-91, Mar. 21, 1997).

           Managing for Results: Enhancing the Usefulness of GPRA Consultations
           Between the Executive Branch and Congress (GAO/T-GGD-97-56, Mar. 10,
           1997).

           Managing for Results: Using GPRA to Assist Congressional and Executive
           Branch Decisionmaking (GAO/T-GGD-97-43, Feb. 12, 1997).

           Executive Guide: Effectively Implementing the Government Performance
           and Results Act (GAO/GGD-96-118, June 1996).




(410165)   Page 36                                GAO/GGD-97-180 Agencies’ Strategic Plans
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 37050
Washington, DC 20013

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 (202) 512-6061, or TDD (202) 512-2537.

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                       Bulk Rate
General Accounting Office      Postage & Fees Paid
Washington, D.C. 20548-0001           GAO
                                 Permit No. G100
Official Business
Penalty for Private Use $300

Address Correction Requested