oversight

Results Act: Observations on USDA's Draft Strategic Plan

Published by the Government Accountability Office on 1997-07-10.

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

                     United States
GAO                  General Accounting Office
                     Washington, D.C. 20548

                     Resources, Community, and
                     Economic Development Division

                     B-277376

                     July 10, 1997

                     The Honorable Richard K. Armey
                     Majority Leader
                     House of Representatives

                     The Honorable John Kasich
                     Chairman, Committee on the Budget
                     House of Representatives

                     The Honorable Dan Burton
                     Chairman, Committee on Government Reform
                       and Oversight
                     House of Representatives

                     The Honorable Bob Livingston
                     Chairman, Committee on Appropriations
                     House of Representatives

                     Subject: Results Act: Observations on USDA’s Draft Strategic Plan

                     On June 12, 1997, you asked us to review the draft strategic plans
                     submitted by the cabinet departments and selected major agencies for
                     consultation with the Congress as required by the Government
                     Performance and Results Act of 1993 (the Results Act). This letter is our
                     response to that request concerning the draft strategic plan for the U.S.
                     Department of Agriculture (USDA).


                     Specifically, you asked us to review USDA’s draft plan and assess
Objectives, Scope,   (1) whether it fulfills the requirements of the Results Act and to provide
and Methodology      our views on its overall quality; (2) whether it reflects USDA’s key statutory
                     authorities; (3) whether it reflects interagency coordination for
                     crosscutting programs, activities, or functions that are similar or
                     complementary to other federal agencies; (4) whether it addresses
                     management problems we have previously identified; and (5) the adequacy
                     of USDA’s data and information systems for providing reliable information
                     for measuring results.

                     We obtained the May 1997 draft strategic plan that USDA provided to
                     congressional committees. USDA’s draft strategic plan includes a
                     Department-wide strategic overview as well as the 30 plans for the mission




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areas, subagencies, and staff offices that make up the Department. We
reviewed the Department-wide strategic overview and the 16 subagency
plans that are directly related to accomplishing USDA’s mission and
implementing its programs. These 16 subagency plans cover the seven
primary mission areas of USDA: Farm and Foreign Agricultural Services;
Food, Nutrition, and Consumer Services; Food Safety; Marketing and
Regulatory Programs; Natural Resources and Environment; Research,
Education, and Economics; and Rural Development.1

It is also important to recognize that USDA’s final plan is not due to the
Congress and the Office of Management and Budget (OMB) until
September 1997. Furthermore, the Results Act anticipated that it might
take several planning cycles to perfect the process and that the final plan
would be continually refined as future planning cycles occur. Thus, our
findings reflect a snapshot status of the draft strategic plan at this time. We
recognize that developing a strategic plan is a dynamic process and that
USDA, OMB, and congressional staff are continuing to revise the draft.


Our overall assessment of USDA’s draft strategic plan was generally based
on our knowledge of USDA’s operations and programs, our numerous
reviews of the Department, and other existing information available at the
time of our assessment. Specifically, the criteria we used to determine
whether USDA’s draft strategic plan complied with the requirements of the
Results Act were the Results Act, supplemented by OMB’s guidance on
developing the plans (OMB Circular A-11, Part 2). To make judgments about
the overall quality of the plan and its components, we used our May 1997
guidance for congressional review of the plans (GAO/GGD-10.1.16). To
determine whether the plan contained information on interagency
coordination and addressed management problems previously identified
by GAO, we relied on our general knowledge of USDA’s operations and
programs, and the results of our previous reports. In determining whether
USDA’s draft strategic plan reflects the Department’s major statutory
responsibilities, as you requested, we coordinated our review with the
Congressional Research Service and reviewed material in USDA’s 1998
budget explanatory notes for an overview of the Department’s primary
functions and activities. To determine whether USDA had adequate systems
in place to provide reliable information on performance, we reviewed the
Department-wide plan for financial management and the subagency plans
for the Chief Financial Officer and the Chief Information Officer. We also
relied on the results of our previous reports and those from USDA’s Office
of Inspector General.

1
 The Rural Development mission area has one combined plan for all three component subagencies.



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             With an operating budget of about $57 billion, USDA is one of the largest
Background   civilian agencies. USDA administers over 200 programs that cover a wide
             range of issues related to food and agriculture. Among other things, USDA’s
             programs support farmers’ incomes, stabilize domestic markets, promote
             U.S. exports, manage national forests, conserve agricultural lands, provide
             access to food for low-income households, improve the nutritional status
             of the American people, ensure a safe food supply, and support research
             for the development of new agricultural products and processes. The
             programs are administered by 18 subagencies in seven mission areas.

             The diverse nature of USDA’s programs raises a number of challenges in
             developing a comprehensive and exhaustive strategic plan that adequately
             addresses all the responsibilities falling under the Department’s purview.
             To best address the wide range of program activities and functions that
             support its mission and respond to the Results Act, USDA chose to develop
             as its draft strategic plan a Department-wide strategic overview that is
             accompanied by the 30 plans for the mission areas, subagencies, and staff
             offices that constitute the Department. The Department-wide strategic
             overview lays out the overall mission and goals for the Department, and
             the subagency plans provide greater detail on the missions and the goals
             of the individual subagencies, as well as reflect the multifaceted and
             multidimensional nature of the subagencies that together make up the
             Department.

             USDA’s Department-wide strategic overview defines the common mission
             for the Department as follows: “To enhance the quality of life for the
             American people by supporting production agriculture; promoting a safe,
             affordable, nutritious, and accessible food supply; caring for agricultural,
             forest, and range lands; supporting sound development of rural
             communities; providing economic opportunities for farm and rural
             residents; and expanding global markets for agricultural and forest
             products and services.” The Department-wide strategic overview presents
             four overall goals for accomplishing the Department’s mission: (1) expand
             economic and trade opportunities for agricultural producers and other
             rural residents; (2) ensure a safe, affordable, nutritious, and accessible
             food supply; (3) provide sensible management of natural resources; and
             (4) promote good government by providing USDA’s services efficiently and
             effectively.

             The Results Act requires that an agency’s strategic plan contain the
             following six critical components: (1) a comprehensive mission statement;
             (2) agencywide long-term goals and objectives for all major functions and



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                   operations; (3) approaches (or strategies) and the various resources
                   needed to achieve the goals and objectives; (4) a 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.

                   For the purpose of this report, we consider USDA’s draft strategic plan to be
                   a combination of the Department-wide strategic overview and the included
                   subagency plans.


                   Overall, USDA’s draft strategic plan does not fulfill the requirements of the
Results in Brief   Results Act. The draft plan in many cases does not include the six
                   elements required by the Results Act and generally lacks some key
                   attributes necessary for a quality strategic plan. USDA’s overall mission and
                   goals are contained in the Department-wide strategic overview; the
                   overview refers the reader to the subagency plans for information on the
                   six required elements. However, only one of the subagency plans we
                   reviewed contains all six required elements. USDA’s draft strategic plan also
                   falls short in several other areas necessary for achieving the purposes of
                   the Results Act. Among other things, the draft strategic plan lacks an
                   emphasis on externally focused goals and objectives; adequate,
                   quantifiable performance measures; and good linkages between the
                   subagencies’ goals and the Department’s overall goals.

                   USDA’s draft strategic plan reflects consideration of the key statutes
                   authorizing the Department’s programs. However, USDA’s draft strategic
                   plan does not generally contain clear linkages between the stated goals
                   and objectives and the Department’s relevant major statutory
                   responsibilities. The Results Act does not require agencies’ strategic plans
                   to contain a statement of statutory authorities. However, we believe that
                   including such linkages may facilitate a better understanding of the
                   diversity and complexity of USDA’s overall mission, goals, and objectives.

                   We could not determine, from the information presented in the draft plan,
                   the extent to which interagency coordination with federal agencies, both
                   within and outside the Department, occurred in the strategic plan’s
                   formulation. Similarly, it is unclear whether an assessment of duplicative
                   and overlapping functions was performed in developing the subagencies’
                   goals and objectives. USDA’s Department-wide strategic overview



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                        acknowledges the role of USDA subagencies that carry out similar and/or
                        complementary functions, but it does not recognize the role of other
                        federal agencies. On the other hand, many of the subagency plans
                        generically recognize the role of other federal agencies in accomplishing
                        their missions. However, there is little evidence in either the
                        Department-wide strategic overview or the subagency plans to suggest
                        that the subagencies coordinated with other agencies—within or outside
                        of USDA—when developing their goals and objectives.

                        USDA’s draft strategic plan addresses some but not all of the high-risk
                        issues and management problems we have previously identified.
                        Generally, information on how USDA will address these high-risk issues and
                        management problems, such as the need to reduce losses in the farm loan
                        program, is included as goals and objectives in the subagency plans.
                        However, USDA’s draft strategic plan does not address some management
                        issues, such as the need to reform milk marketing orders, improve the
                        management of agricultural trade programs, and strengthen financial
                        controls under credit reform.

                        USDA is not yet in a position to provide reliable data to measure some of its
                        performance goals because many of its information, accounting, and
                        financial management systems are inadequate, and long-standing problems
                        with these systems have not been corrected. Moreover, many of the
                        performance measures to be used by USDA’s subagencies have not yet been
                        developed sufficiently so that we can determine whether the data needed
                        to measure performance are already available or will be available in the
                        future.


                        A significant amount of work still needs to be done before USDA’s draft
USDA’s Strategic Plan   strategic plan can fulfill the requirements of the Results Act. USDA’s draft
Does Not Yet Fulfill    strategic plan does not contain all six elements required by the Results
the Requirements of     Act. In addition, the draft strategic plan does not represent a
                        comprehensive strategy to accomplish USDA’s mission because it lacks
the Results Act         some of the key attributes necessary for a quality strategic plan. USDA’s
                        Draft Plan Does Not Contain All Six Required Elements

                        USDA’s  Department-wide strategic overview provides a mission statement
                        for USDA and lays out four general goals and their related subgoals. Each
                        subgoal contains some information on the subagencies within USDA that
                        provide support for accomplishing the goal and some of the major
                        initiatives to be undertaken under the goal. The Department-wide strategic



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    overview refers to the subagency plans for information on strategies for
    achieving the goals; the relationships between long-term goals and annual
    performance goals; key factors external to the subagency that could affect
    the achievement of the goals; and the use of program evaluations to
    establish goals and to modify them in the future.

    However, our review of the 16 subagency plans for the seven mission
    areas shows that, except for one plan, none of the subagency plans
    contain all six key elements required by the Results Act. The only
    subagency plan that contains all six elements is the plan for the Food and
    Consumer Service. Overall, the Food and Consumer Service’s plan
    provides a good starting point to begin the strategic planning process for
    this subagency. The 15 subagency plans not providing information for all
    six elements contain two elements each—a mission statement and goals
    and objectives—but the information provided for the other four key
    elements varied as follows:

•   Seven of the 15 subagency plans do not provide information on the
    resources needed to achieve goals and objectives.
•   None of the 15 subagency plans provide sufficient information on the
    relationships between the long-term goals and annual performance goals;
    most plans indicate that this information is being developed.
•   Seven of the 15 subagency plans do not provide information on external
    factors beyond the control of the subagency that could affect the
    achievement of the goals.
•   Thirteen of 15 subagency plans allude to the fact that program evaluations
    may be used to modify goals and objectives in the future, but none
    describe the general scope and methodology for the evaluations, key
    issues that would be addressed during the evaluations, or the timing for
    the evaluations.

    While many of the subagency plans include sections that should have
    covered information on the required elements, the information actually
    provided is incomplete and often not relevant or directly linked to the
    goals and objectives stated in the plans. Merely having a subheading for a
    required element does not ensure that the requirements of the Results Act
    have been satisfied. For example, almost all of the 16 subagency plans
    include a section that discusses the external environment facing the
    subagency, but only about half of the plans provide any indication of how
    these external factors could affect the subagency’s ability to accomplish
    specific goals and objectives. Because external factors can influence the
    achievement of a goal directly and significantly, not including a discussion



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                                  of these factors could invalidate the assumptions underlying a goal.
                                  Similarly, providing a schedule of future program evaluations is important
                                  not because it is required but rather because without these evaluations a
                                  subagency cannot have the confidence that it has set the right goals and
                                  that its strategies will be effective in achieving these goals.


Observations on the               Collectively, the Department-wide overview and the subagency plans are
Overall Quality of the Plan       not yet sufficient to provide a comprehensive strategy for USDA or to
                                  achieve the purposes of the Results Act, such as improved management,
                                  program effectiveness, and public accountability and confidence in the
                                  agency, for the following reasons:

                              •   As stated previously, many of the subagency plans are incomplete. We
                                  found a significant amount of variation in the level of completeness of the
                                  subagency plans. Until these plans are complete, they cannot provide an
                                  overall guide to help subagencies set priorities and allocate resources
                                  consistent with these priorities.
                              •   Some of the subagency plans provide incomplete descriptions of the
                                  strategies to be used to achieve goals and objectives. The general goals
                                  and objectives should elaborate how the subagency is carrying out its
                                  mission, outline planned accomplishments, and schedule their
                                  implementation. Without fully descriptive strategies, it is unclear how the
                                  subagencies will achieve their stated goals and objectives. For example,
                                  the Rural Development plan states, as one of its objectives, that it will
                                  develop demographic, natural resource, infrastructure, or program data on
                                  rural communities and analyze these data to determine barriers and
                                  opportunities. However, the strategy to carry out this objective only states
                                  that the Rural Development mission area will identify data sources and
                                  describe the methodology for analysis.
                              •   Some subagency plans contain goals and objectives with results that are
                                  beyond the subagency’s span of influence. For example, the Foreign
                                  Agricultural Service’s plan ties the accomplishment of many of its goals
                                  and objectives to an increase in the value of U.S. exports. The achievement
                                  of this performance goal depends on a number of external factors, some of
                                  which may be more significant than the subagency’s programs and
                                  functions. At a minimum, these external factors should be recognized in
                                  the subagency plans and linked to particular goals.
                              •   Only a few subagency plans include clear linkages between the
                                  subagencies’ goals and objectives and the contributions of these goals and
                                  objectives to the Department’s major goals. These linkages are important
                                  because the goals and objectives set out the long-term programmatic



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    policy and goals of the Department as a whole and are important for
    providing direction and guidance to the staff toward actions that fulfill the
    overall mission of the Department. For example, the plans for the
    Agricultural Research Service and Cooperative State Research, Education,
    and Extension Service contain good linkages between the subagency goals
    and the contributions of these goals to USDA’s overall goals.
•   USDA’s strategic plan lacks a clear emphasis on externally focused goals.
    For example, two subagency plans—the Agricultural Marketing Service
    plan and the Grain Inspection, Packers and Stockyards Administration
    plan—fail to include any goals and objectives that are logically related to
    accomplishing the subagencies’ missions. In addition, less than half of the
    goals stated in four other subagency plans were directly related to their
    missions. While the Results Act does not preclude the development of
    agency goals that are process oriented, the formulation of goals that relate
    to the accomplishment of an agency’s mission are important because the
    process of formulating goals provides an opportunity for the agency to
    identify programs that are essential to the accomplishment of its mission
    as well as those activities that can be eliminated, reduced in scope, or
    transferred to another agency.
•   Some of the goals and objectives in the subagency plans are not
    measurable and may preclude a future assessment of whether the goals
    have been or are being achieved. While not all the goals must be stated in a
    quantitative fashion, some of the goals in the subagency plans are stated
    so broadly that they are inherently unmeasurable, either directly or
    through the use of performance measures. This problem was particularly
    evident in the four subagency plans related to the Research, Education,
    and Economics mission area. Some of the stated goals and objectives may
    be difficult to measure as stated in the subagency plans, while the results
    of others may not be easily assessed in the short-term.
•   Many of the performance measures are either missing, not useful, or
    incomplete, making a comprehensive assessment of performance and
    results difficult. For example, the Forest Service’s plan contains no
    performance measures, while the Animal and Plant Health Inspection
    Service’s plan provides performance measures for only a few objectives.
    Although some of the subagency plans provide information on
    performance measures, the information is not sufficient to show the
    relationship between the subagency’s strategic goals and the performance
    goals to be included in its annual performance plans.




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                        USDA’s  draft strategic plan reflects consideration of the key statutes
Key Statutory           authorizing USDA’s programs. However, the Department-wide strategic
Authorities Are         overview and the subagency plans do not generally contain clear linkages
Reflected in USDA’s     between the stated goals and objectives and USDA’s relevant major
                        statutory responsibilities. The Results Act does not require a statement of
Strategic Plan          major statutory responsibilities to be included with the agency’s goals and
                        objectives.2 Nonetheless, we believe that including such linkages in the
                        subagency plans may facilitate a better understanding of the diversity and
                        complexity of USDA’s overall mission and goals and objectives. For
                        example, the Animal and Plant Health Inspection Service—a subagency
                        within the Marketing and Regulatory Programs mission area—provides
                        some links between its stated goals and its statutory authorities. As a
                        result, it was clear why a seemingly unrelated goal, such as ensuring the
                        humane care and treatment of pets, was included as a goal for a subagency
                        within USDA. Such linkages may also help ensure that the subagency is
                        stating goals and objectives that are related to its mission and statutory
                        authorities. For example, we found that the plans for the Agricultural
                        Marketing Service and the Grain Inspection, Packers and Stockyards
                        Administration—two other subagencies within the Marketing and
                        Regulatory Programs mission area—provide no links between the stated
                        goals and objectives and the key statutory authorities.


                        USDA’s draft strategic plan provides little evidence to suggest that
USDA’s Strategic Plan   interagency coordination occurred to address the issues of duplication and
Does Not Contain        overlap when preparing the plan. Although the Department-wide strategic
Adequate Information    overview provides information on the role of various USDA subagencies in
                        accomplishing each of the Department’s four overall goals, it does not
on Interagency          acknowledge the role of other government agencies that support and/or
Coordination            complement these goals. Our previous work has shown that a number of
                        USDA’s programs and functions are similar and/or complementary to those
                        of other agencies. For example, USDA’s strategic overview does not
                        acknowledge the role of the Food and Drug Administration or the Centers
                        for Disease Control in supporting USDA’s efforts to ensure a safe food
                        supply. Similarly, there is no reference to the role of the Environmental
                        Protection Agency, Bureau of Land Management, or the Fish and Wildlife
                        Service in helping USDA achieve its natural resource management and
                        conservation goals. In addition, although USDA is a significant participant in
                        governmentwide initiatives relating to trade policy and promotion and
                        food security—together with the U.S. Trade Representative, Agency for

                        2
                         OMB Circular A-11 suggests that an agency’s mission statement may include a brief discussion of the
                        agency’s enabling or authorizing legislation; this suggestion, however, does not extend to the
                        statement of goals and objectives.



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                            International Development, and Department of State—the roles of these
                            agencies are not acknowledged in the Department-wide strategic
                            overview.

                            The subagency plans generally acknowledge the role of other federal
                            agencies—both within and outside of USDA—as being necessary for the
                            subagencies to accomplish their stated missions. However, the subagency
                            plans do not provide information to determine to what extent coordination
                            with other agencies has occurred or whether an assessment of duplicative
                            and overlapping functions was performed in developing the subagencies’
                            goals and objectives. Instead, the roles of other agencies are usually not
                            linked to the goals and objectives stated in the subagency plans and often
                            ignored completely. For example, the Farm Service Agency’s and the
                            Natural Resources Conservation Service’s plans both fail to recognize that
                            the success of the Conservation Reserve Program depends on each
                            subagency’s successfully carrying out its respective responsibilities.


                            USDA’s draft strategic plan addresses some of the high-risk issues and
USDA’s Strategic Plan       major management problems we have previously identified, but it does not
Addresses Some              address all of them. Some of the program-specific issues that we have
Previously Identified       raised in the past are generally included in the goals and objectives of the
                            subagency plans and include the following:
Management
Problems                •   In 1991, and again in 1997, we reported our concerns that the growing
                            concentration in the meatpacking industry could lead to an increase in
                            greater use of anticompetitive practices, such as price-fixing, by buyers.3
                            The Grain Inspection, Packers and Stockyards Administration’s plan
                            includes an objective to monitor the performance and structure of the
                            livestock, meat, and poultry industries and to investigate anticompetitive
                            practices to ensure that dominant firms do not adversely affect
                            competition in these markets.
                        •   In 1995, we reported that controls and procedures for authorizing and
                            monitoring retailers that participate in the Food Stamp Program have not
                            deterred nor prevented fraudulent activities.4 The Food and Consumer
                            Service plan includes an objective to improve program integrity in order to
                            increase claims collections and reduce the incidence of fraudulent activity.


                            3
                             Packers and Stockyards Administration: Oversight of Livestock Market Competitiveness Needs to be
                            Enhanced (GAO/RCED-92-36, Oct. 16, 1991); Packers and Stockyards Programs: USDA’s Response to
                            Studies on Concentration in the Livestock Industry (GAO/RCED-97-100, Apr. 23, 1997).
                            4
                             Food Assistance: Reducing Food Stamp Benefit Overpayments and Trafficking (GAO/RCED-95-198,
                            June 23, 1995).



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•   In 1992, and again in 1994, we reported that USDA’s farm loan programs
    were highly vulnerable to waste, abuse, and mismanagement, resulting in
    billions of dollars in losses to the federal government.5 The Farm Service
    Agency’s plan includes one objective to reduce losses from the farm loan
    program.
•   Since 1981, we have issued a series of reports about our concerns with the
    federal crop insurance program, including the lack of compliance with
    program requirements, inadequate controls over companies’ claim
    adjustment practices, and actuarial soundness of premium rates.6 The Risk
    Management Agency’s plan includes objectives to (1) improve the
    effectiveness of the subagency’s compliance function, (2) implement a
    process to ensure that underwriting principles and alternative reinsurance
    agreements are reevaluated periodically, and (3) continually improve the
    actuarial soundness and overall effectiveness of insurance programs.
•   Since 1996, we and the Office of Inspector General have identified
    shortcomings in the Forest Service’s accounting and financial data and
    information systems.7 The Forest Service’s plan includes an objective to
    develop a sound financial system that will meet federal accounting
    standards and provide overall financial accountability.

    On the other hand, we noted some important omissions in the Agricultural
    Marketing Service’s and Foreign Agricultural Service’s plans. The
    Agricultural Marketing Service’s plan does not include a goal or objective
    to reform the milk marketing order system. Since 1988, we have reported a
    number of times on the need to reform this system because it is outdated.8
    Because this program was created in 1937, when the structure of the dairy
    industry was significantly different than it is today, milk marketing orders
    have resulted in excess production and the inequitable treatment of some
    producers. To address these concerns, the Federal Agriculture

    5
     Farmers Home Administration: Billions of Dollars in Farm Loans Are at Risk (GAO/RCED-92-86,
    Apr. 3, 1992); Debt Settlements: FmHA Can Do More to Collect on Loans and Avoid Losses
    (GAO/RCED-95-11, Oct. 18, 1994).
    6
     Analysis of Certain Operations of the Federal Crop Insurance Corporation (CED-81-148, July 30,
    1981); Crop Insurance: Overpayment of Claims by Private Companies Costs the Government Millions
    (GAO/RCED-88-7, Nov. 20, 1987); Crop Insurance: Additional Actions Could Further Improve
    Programs’ Financial Condition (GAO/RCED-95-269, Sept. 28, 1995); Crop Insurance: Opportunities
    Exist to Reduce Government Costs for Private-Sector Delivery (GAO/RCED-97-70, Apr. 17, 1997).
    7
     Forest Service (GAO/AIMD-97-11R, Dec. 20, 1996); Forest Service’s Financial Data Limitations
    (GAO/RCED-96-198R, June 19, 1996); Forest Service Decision-Making: A Framework for Improving
    Performance (GAO/RCED-97-71, Apr. 29, 1997).
    8
    Milk Marketing Orders: Options for Change (GAO/RCED-88-9, Mar. 21, 1988); Milk Pricing: New
    Method for Setting Farm Milk Prices Needs to Be Developed (GAO/RCED-90-8, Nov. 3, 1989); Federal
    Dairy Programs: Information on Dairy Pricing and Related 1995 Farm Bill Issues (GAO/RCED-95-97BR,
    Mar. 27, 1995).



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Improvement and Reform Act of 1996 requires USDA to make reforms to the
milk marketing order system. It is unclear why USDA did not include this
issue either as a goal or an objective in the plan, especially when the
subagency is currently in the process of developing options to implement
the mandated reforms, which must be completed in 1999. Similarly, the
Foreign Agricultural Service’s plan does not recognize the numerous
problems we have identified in agricultural trade programs.9 In the past,
we have concluded that these programs have been poorly managed, lack
internal controls, and need greater accountability. However, the draft
strategic plan does not provide a clear strategy on how these problems
will be addressed.

In addition, we have identified significant Department-wide problems in
information technology, accounting, and financial management, but USDA’s
draft strategic plan does not adequately recognize and address some of
these problems. For example, with regard to information technology
issues, we have reported that although USDA has spent nearly $8 billion on
information technology resources over the past 10 years, it has not
effectively planned or managed these investments and, as a result, has
wasted millions of dollars.10 To address this issue, the strategic plan for
the Chief Information Officer (CIO) contains general goals and outlines
actions for improving the acquisition and management of information
technology. However, the CIO’s strategic plan lacks quantifiable
performance measures, time frames and milestones, and resources needed
to accomplish these goals, as well as an explanation of how these goals are
specifically linked to the subagencies’ plans.

Similarly, with regard to financial management issues, USDA has a
long-standing history of deficiencies in its accounting and financial
management systems, including nonintegrated financial systems;
inaccurate reporting; and ineffective controls leading to disclaimed,
adverse, or qualified Inspector General audit opinions on financial
statements. To address these issues, USDA has developed a
Department-wide financial management plan that recognizes and
addresses some of the Department’s major weaknesses in its accounting
and financial management systems. However, we found that this plan does
not provide clear strategies on how USDA will address credit reform issues.

9
Farm Bill Export Options (GAO/GGD-96-39R, Dec. 15, 1995); U.S. Department of Agriculture: Foreign
Agricultural Service Could Benefit From Better Strategic Planning (GAO/GGD-95-225, Sep. 28, 1995);
Agricultural Trade: Significance of High-Value Products as Agricultural Exports (GAO/GGD-93-120,
Aug. 10, 1993).
10
 USDA Information Management: Extensive Improvements Needed in Managing Information
Technology Investments (GAO/T-AIMD-97-90, May 14, 1997).



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                      We believe that this is a critical financial management issue for USDA
                      because the Department makes billions of dollars in loans every year.
                      While the plan identifies a methodology for strengthening the subagency’s
                      controls for establishing and reestimating loan subsidy costs, as required
                      by the Federal Credit Reform Act of 1990 and the Statement of Federal
                      Financial Accounting Standards, No. 2, Accounting for Direct Loans and
                      Loan Guarantees, it does not provide a clear strategy for eliminating the
                      material weaknesses identified in the Inspector General’s financial audit
                      reports on credit reform.

                      Furthermore, we have reported in the past that USDA has not allocated
                      adequate resources to fully comply with the Chief Financial Officers (CFO)
                      Act and Government Management Reform Act.11 These resource
                      limitations are not recognized in USDA’s strategic plan and will continue to
                      preclude USDA from generating reliable financial data.


                      Given the long history of problems with USDA’s information, accounting,
USDA Does Not         and financial management systems, we believe that USDA does not have
Currently Have        adequate systems at this time to develop reliable information for
Adequate Systems to   measuring subagencies’ performance and results. Therefore, until the
                      problems we have identified in the past (some of which are stated above)
Provide Reliable      are corrected, USDA will not be able to produce reliable data, which are
Information for       essential for the development of useful performance measures. In
                      addition, the CFO Act requires the development of cost information to
Measuring Results     enable the systematic measurement of performance and the integration of
                      program, accounting, and budget systems.

                      Moreover, as part of the financial audit required by the CFO Act, the
                      Inspector General has reported on inadequate controls over USDA’s
                      performance measures data. For example, the Inspector General found
                      that the Forest Service did not have sufficient internal controls over
                      recording and compiling performance measures data and as a result could
                      not ensure that accurate and reliable measures were reported in the
                      subagency’s annual report. The Inspector General attributed these
                      weaknesses to the Forest Service’s lack of adequate reviews, policies, and
                      procedures to ensure that the data are reliable.

                      In addition, USDA’s draft strategic plan has not yet been developed
                      sufficiently to identify all of the data needed to measure performance. This
                      is because (1) not all goals and objectives in the draft plans are stated in a

                      11
                        Agriculture’s CFO Act Implementation (GAO/AIMD-95-238R, Sept. 29, 1995).



                      Page 13                                        GAO/RCED-97-196R USDA’s Draft Strategic Plan
                  B-277376




                  manner that is measurable and (2) while a few subagencies have
                  developed useful performance indicators, many of the subagency plans
                  either have no performance indicators or have incomplete ones. We also
                  noted this concern in our June 1997 report on governmentwide
                  implementation of the Results Act.12 We reported that the lack of
                  results-oriented performance information to use as a baseline complicates
                  agencies’ efforts to set appropriate targets. USDA, in particular, had to
                  eliminate some performance measures because it did not have a way to
                  collect data for these measures.


                  We provided copies of a draft of this report to USDA for review and
Agency Comments   comment. We met with USDA’s Acting Chief Financial Officer and other
                  officials, who told us that overall the Department has made significant
                  progress in developing a strategic plan that meets the requirements of the
                  Results Act. While they agreed that additional work is needed, they
                  emphasized that the strategic planning process is an iterative process that
                  is evolving, and they expect that USDA’s strategic plan will continue to
                  improve with each planning cycle.

                  However, USDA expressed two principal concerns with the draft report.
                  First, the officials disagreed with our statement that the plan does not
                  adequately address information technology issues that we have previously
                  identified. We continue to believe that while the draft strategic plan for the
                  Chief Information Officer discusses general goals and outlines actions for
                  improving the acquisition and management of information technology, it
                  lacks specificity in terms of performance indicators, time frames, and
                  resources. Moreover, it is not clear how the goals discussed in the Chief
                  Information Officer’s plan are specifically linked to the subagency plans.
                  We have added language to our comments on USDA’s draft strategic plan to
                  clarify our concerns. Second, USDA stated that the Foreign Agricultural
                  Service was not aware of any outstanding recommendations by us relating
                  to management problems. We believe that a number of issues and
                  recommendations relating to management problems at the Foreign
                  Agricultural Service have not yet been adequately addressed by the
                  subagency. Our concerns and recommendations have been stated in
                  various reports, including our 1995 report entitled U.S. Department of
                  Agriculture: Foreign Agricultural Service Could Benefit from Better
                  Strategic Planning (GAO/GGD-95-225, Sept. 28, 1995). USDA also provided us



                  12
                   The Government Performance and Results Act: 1997 Governmentwide Implementation Will Be
                  Uneven (GAO/GGD-97-109, June 2, 1997).



                  Page 14                                     GAO/RCED-97-196R USDA’s Draft Strategic Plan
           B-277376




           with some technical comments that have been incorporated into the
           report, as appropriate.


           As arranged with your offices, unless you publicly announce its contents
           earlier, we plan no further distribution of this report until 30 days from its
           issue date. At that time, we will send copies of this letter to the Ranking
           Minority Members of your Committees; the Chairmen and Ranking
           Minority Members of the Senate Committee on Agriculture, Nutrition, and
           Forestry and the House Committee on Agriculture; the Secretary of
           Agriculture; and the Director, Office of Management and Budget. Copies
           will also be made available to others upon request.

           Please contact me at (202) 512-5138 if you or any of your staff have any
           questions concerning this report. Major contributors to this report are
           Stephen M. Cleary, Eileen M. Cortese, Anu K. Mittal, and Dale A. Wolden.




           Robert A. Robinson
           Director, Food
             and Agriculture Issues




(150731)   Page 15                              GAO/RCED-97-196R USDA’s Draft Strategic Plan
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