oversight

Results Act: Observations on the Department of the Interior's Draft Strategic Plan

Published by the Government Accountability Office on 1997-07-18.

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-277452

                     July 18, 1997

                     The Honorable Richard K. Armey
                     Majority Leader
                     House of Representatives

                     The Honorable John R. 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 the Department of the Interior’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
                     your consultation with the Congress as required by the Government
                     Performance and Results Act of 1993 (the Results Act). This report is our
                     response to that request concerning the Department of the Interior.


                     Specifically, you asked us to review Interior’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 Interior’s key
                     statutory authorities; (3) whether it reflects interagency coordination for
                     crosscutting programs, activities, or functions that are similar or
                     complementary with those of other federal agencies; (4) whether it
                     addresses management problems that we have previously identified, and
                     (5) the adequacy of Interior’s data and information systems for providing
                     reliable information for measuring results.




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We obtained the version of the draft strategic plan that Interior provided
congressional committees with as of June 18, 1997.1 Interior’s draft
strategic plan includes a Department-wide strategic overview as well as
eight subagency plans.2 The eight subagencies within Interior are the
Bureau of Land Management (BLM), the Minerals Management Service
(MMS), the Office of Surface Mining (OSM), the Bureau of Reclamation
(BOR), the Geological Survey (USGS), the Fish and Wildlife Service (FWS),
the National Park Service (NPS), and the Bureau of Indian Affairs (BIA). We
reviewed the overview and the subagency plans because Interior considers
them, as a whole, to constitutes its strategic plan for purposes of the
Results Act. In addition to providing the broad framework for the agency,
the Interior’s strategic overview is intended to provide linkages between
the departmental level and the individual subagency plans.

It is important to recognize that the 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 may 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 plans at this time. We recognize that developing a
strategic plan is a dynamic process and that the Department of Interior,
OMB, and congressional staff are continuing to revise the draft.


Our overall assessment of Interior’s draft strategic plans was generally
based on our knowledge of agencies’ operations and programs, our
numerous reviews of Interior’s agencies, and other existing information
available at the time of our assessment. Specifically, the criteria we used
to determine whether Interior’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 (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). In determining whether Interior’s draft strategic plan
reflects its major statutory responsibilities, we coordinated our review
with the Congressional Research Service, reviewed material in Interior’s
1998 budget explanatory notes for an overview of the Department’s
primary functions and activities, and reviewed statutory provisions


1
 There is one exception to this cutoff date. The Congress was not provided with the subagency portion
of the plan from the Fish and Wildlife Service, dated May 22, 1997, until after June 18, 1997. However,
we included the subagency portion in our analysis because it was substantially revised from the
version that the Congress received prior to June 18th.
2
 As used in this report, “subagency” refers to agencies and bureaus within Interior.



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             relating to Interior. To determine whether the plan contained information
             on interagency coordination and addressed management problems that we
             previously identified, we relied on our general knowledge of Interior’s
             operations and programs and the results of our previous reports. To
             determine whether Interior had adequate systems 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 of Interior’s Office of Inspector General
             (OIG). Our work was performed in June and July 1997. We obtained
             comments on a draft of this report from Interior.


             As the caretaker of the nation’s natural resources and much of our cultural
Background   heritage and as custodian of our responsibilities to Native Americans,
             Interior’s responsibilities cover a broad range of activities. For the most
             part, these activities are carried out through eight subagencies within
             Interior. Given this organization, Interior officials included eight
             subagency plans as part of the Department’s draft strategic plan.

             Interior’s Department-wide strategic overview defines the common
             mission for the Department as follows: “to protect and provide access to
             our nation’s natural and cultural heritage and honor our trust
             responsibilities to tribes.” From this common mission, the
             Department-wide strategic overview identifies 10 overarching themes
             called “commitments” that guide the development of the subagency
             strategic plans. Furthermore, the Department has identified two strategic
             goals that crosscut subagencies’ responsibilities. These goals involve
             (1) developing natural resource management partnerships with other
             federal, state, local, and private entities and (2) improving departmental
             management processes and functions.

             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
             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.



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


                   While Interior has made progress in developing its draft strategic plan, the
Results in Brief   plan does not yet fulfill the Results Act’s requirements. In many cases, the
                   plan does not include the six key elements required by the Results Act.
                   Interior’s Department-wide strategic overview does contain the
                   Department’s overall mission and goals and refers to the subagency plans
                   for information on the six required elements. But half of the eight
                   subagency plans were incomplete and lacked two or more of the six
                   required elements. The overall quality of Interior’s strategic plan is not yet
                   sufficient to achieve the purposes of the Results Act. The plan does not
                   include clear linkages between the agencies’ goals and objectives and the
                   contributions of these goals and objectives to the Department’s major
                   goals or commitments. In addition, some of the goals and objectives in the
                   subagency plans are not stated in a manner that allows for a future
                   assessment of whether the goals have been or are being achieved.

                   Interior’s draft strategic plan reflects a consideration of the key statutory
                   authorities authorizing Interior’s programs. However, the
                   Department-wide strategic overview and the subagency plans do not
                   generally present clear linkages between the stated goals and objectives
                   and Interior’s relevant statutory responsibilities. The Results Act does not
                   require an agency’s strategic plan 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
                   Interior’s overall mission, goals, and objectives.

                   A number of cross-cutting issues need to be addressed in Interior’s draft
                   strategic plan to prevent duplication and overlap. Our past work at the
                   Department has identified several examples indicating where improved
                   coordination should have occurred. For example, while the plan points out
                   that coordination among Interior’s subagencies will be done for some of
                   the natural resource partnership initiatives identified in the plan, it does
                   not indicate that the kind of mission-oriented reexamination of the
                   processes and structures suggested by our work has or will be done.

                   While Interior has identified information management resource goals in its
                   strategic plan, how it plans to achieve and measure the success of those
                   goals is not clearly delineated. Traditionally, Interior has allowed its



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                             subagencies to independently acquire and manage information technology.
                             This culture has resulted in inefficiencies in technology investments and
                             information sharing.

                             Interior’s draft strategic plan states that a key to the Results Act’s
                             implementation will be the availability of timely and reliable financial
                             information that will permit decisionmakers to track progress and
                             evaluate the results of Interior’s programs. To achieve this overall goal,
                             Interior has identified specific goals of strengthening financial operations
                             and resource management. In this light, Interior needs to continue to
                             address certain accounting systems and internal control weaknesses that,
                             if not fully corrected, could affect the reliability of program and
                             performance information.


                             While Interior has made progress in developing its draft strategic plan, a
Interior’s Draft             significant amount of work still needs to be done before the plan can fulfill
Strategic Plan Does          the requirements of the Results Act. Interior’s draft strategic plan does not
Not Yet Fulfill the          yet contain all six elements required by the Results Act. Half of the
                             subagency plans (four of eight) are missing required elements.
Requirements of the          Furthermore, even those that include all required elements need further
Results Act                  work and development in several key areas. In addition, the draft strategic
                             plan does not yet represent a comprehensive strategy to accomplish
                             Interior’s mission because it lacks some of the key attributes necessary for
                             making the strategic planning process successful.


Interior’s Draft Plan Does   Interior’s Department-wide strategic overview provides a mission
Not Contain All Six          statement for the Department and lays out 10 general goals referred to in
Required Elements            the plan as “commitments.” For example, the strategic overview
                             establishes a goal of restoring and maintaining the health of federally
                             managed lands and preserving our nation’s natural and cultural heritage
                             for future generations. For more information on strategies for achieving
                             the goals; the relationships between long-term goals and annual
                             performance goals; key factors external to the Department or 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; the
                             Department-wide strategic overview refers to the subagency plans.

                             Our review of the eight subagency plans shows that half of the plans did
                             not contain all six of the elements required by the Results Act. For those
                             agencies which did not include all required elements, each of the



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                                  subagency plans contained information on their mission and goals and
                                  objectives, but the information provided for the remaining four required
                                  elements varied as follows:

                              •   Two of the eight subagencies (BIA and FWS) did not discuss the approaches
                                  or strategies for achieving goals and objectives.
                              •   Four of the eight subagencies either did not sufficiently address the
                                  relationship between long-term goals and annual performance goals (NPS
                                  and FWS) or did not address it at all (BIA and MMS). In the case of NPS and
                                  FWS, the subagency components did not specifically address the links
                                  between long-term goals and annual performance measures.
                              •   Two of the eight subagencies (NPS and FWS) did not discuss the impact that
                                  external factors could have on their ability to achieve their goals.
                              •   Four of the eight subagencies (NPS, BIA, FWS, and MMS) had little or no
                                  discussion about how or whether program evaluations were used to
                                  develop the plan and did not include schedules of future program
                                  evaluations.

                                  While many of the subagencies’ plans included discussions that related to
                                  the required elements, the information provided was frequently
                                  incomplete and often not relevant or directly linked to the goals and
                                  objectives stated in the plans. For example, while six of the eight draft
                                  subagency plans discussed the external environment facing them, several
                                  of the subagencies did not address how these external factors could affect
                                  the subagency’s ability to achieve specific goals and objectives. Similarly,
                                  not providing a discussion of whether and how program evaluations were
                                  used in developing the plan is important not because it is required but
                                  because without this information, it is difficult for both the subagencies
                                  and other users of the plan to have confidence that the former’s goals are
                                  the correct ones and that its strategies will be effective.


Observations on the               While Interior has made progress in developing its draft strategic plan, the
Overall Quality of the Plan       plan does not yet fulfill the requirements of the Results Act. Collectively,
                                  the Department-wide overview and the subagency plans are not yet
                                  sufficient to provide a comprehensive strategy for Interior or achieve the
                                  purposes of the act, such as improved program effectiveness,
                                  management, and public accountability and confidence in the Department
                                  or subagencies, for the following reasons:

                              •   As stated previously, many of the subagency plans are incomplete. Until
                                  the subagency plans are complete, they cannot provide an overall guide



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                       for helping agencies to set priorities and allocate resources consistent with
                       these priorities. Furthermore, because all of the required elements are not
                       included, complete information has not been available for the
                       congressional consultation process.
                   •   While the subagency plans generally provided some discussion of how the
                       goals contained in the plans are to be achieved, most of the subagency
                       plans did not discuss the amount of resources—human, capital, or
                       information—that would be needed to implement their strategy. For
                       example, neither USGS, OSM, nor MMS provided details of the extent of
                       resources needed to implement its goals and objectives. Explaining the
                       amount of resources needed to carry out the plan is vital to achieving a full
                       understanding of the trade-offs, costs, and commitments needed to
                       achieve the goals and objectives in the plans.
                   •   Most of the subagency plans did not include clear linkages between the
                       subagencies’ goals and objectives and the contributions of these goals and
                       objectives to the Department’s major goals. Furthermore, the
                       Department’s strategic overview does not link its Department-wide goals
                       or “commitments” back to the subagencies. These linkages are important
                       because the goals and objectives (1) set out the long-term programmatic
                       policy and goals of the Department as a whole and (2) provide the
                       subagencies’ staff with direction and guidance toward actions that fulfill
                       the overall mission of both the Department and the subagencies.
                   •   Some of the goals and objectives in the subagency plans are not stated in a
                       manner that will allow a future assessment of whether the goals have been
                       or are being achieved. For example, one of BOR’s goals is to “manage the
                       nations western water resources wisely for present and future
                       generations.” 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.
                   •   Although several of the subagency plans provide some information on
                       performance measures, the information is sometimes not sufficient to
                       show the relationship between the subagencies’ strategic goals and the
                       performance goals to be included in the subagencies’ annual performance
                       plans.


                       Interior’s draft strategic plan reflects consideration of the key statutory
Key Statutory          authorities authorizing Interior’s programs. However, the
Authorities Are        Department-wide strategic overview and the subagency plans do not
Reflected in the       generally present clear linkages between their stated goals and objectives
                       and Interior’s relevant major statutory responsibilities. The Results Act
Strategic Plan

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                        does not require that a statement of major statutory responsibilities be
                        included with the agency’s goals and objectives.3 Nevertheless, we believe
                        that including such linkages in the subagency plans may facilitate a better
                        understanding of the diversity and complexity of Interior’s overall mission
                        and the goals and objectives of its constituent agencies. For example, the
                        plan for BOR provides few linkages between the large number of outcome
                        goals and 5-year strategic goals and its many different statutory
                        authorities. The plan contains 18 outcome goals and over 60 5-year
                        strategic goals that contain few statutory references. As another example,
                        BIA’s subagency plan does not provide clear statutory linkages with its
                        performance goals and strategies. Sample performance goals related to
                        education, resources management, public safety and justice, and trust
                        services do not identify what relevant statutes authorize such activities. In
                        commenting on a draft of this report, Interior noted that while it may not
                        be necessary to include linkage between authorities’ and agencies’ goals
                        and objectives, the Department plans on including an attachment to its
                        final strategic plan that identifies these links.


                        Historically, Interior has been a highly decentralized agency. As a result,
Crosscutting            Interior has allowed its subagencies, for the most part, to develop their
Activities Need to Be   own systems and processes for managing their programs. Our past work at
Addressed in the        the Department has identified several areas where improved coordination
                        should have occurred to address issues of duplication and overlap.
Interior Plan
                        The federal government now owns about 30 percent (about 650 million
                        acres) of the nation’s total surface area. Four federal land management
                        agencies manage about 95 percent of these lands for a variety of
                        commodity uses—including hardrock mining, livestock forage, oil and gas
                        exploration and development, and timber harvesting—and noncommodity
                        uses—including fish and wildlife; natural, scenic, cultural, and historic
                        resources; recreation; water; and wilderness. These four agencies are the
                        Forest Service (FS) in the US Department of Agriculture and NPS, BLM, and
                        FWS in Interior.


                        Our work has shown that the responsibilities of these four agencies have
                        become similar over time.4 Most notably, FS and BLM now provide more
                        noncommodity uses like recreation and protection for fish and wildlife on

                        3
                         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.
                        4
                         Federal Land Management: Streamlining and Reorganization Issues (GAO/T-RCED-96-209, June 27,
                        1996).



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    their lands. At the same time, managing these lands has become more
    complex. Managers have to reconcile differences among a growing
    number of laws and regulations, and the authority for the administration
    of these laws is dispersed among several federal, state, and local agencies.
    These changes have coincided with two other developments—the federal
    government’s increased emphasis on downsizing and budgetary constraint
    and scientists’ increased understanding of the importance and functioning
    of natural systems whose boundaries may not be consistent with existing
    jurisdictional and administrative boundaries of federal, state and local
    agencies. Together, these conditions suggest a basis for reexamining the
    processes and structure under which the federal land management
    agencies—Interior and FS—currently operate. The strategic planning
    process required under the Results Act and the development of the overall
    Interior plan provides this opportunity. While the plan points out that
    coordination with FS and among Interior’s agencies will be done for some
    of the natural resource partnership initiatives identified in the plan, it does
    not indicate that the kind of mission-oriented reexamination of the
    processes and structures suggested by our work has been done.

    In commenting on this point the Department noted in the past that this has
    been a controversial issue with the Congress and that the partnership
    efforts currently described in its draft strategic plan represent an effort to
    deal with this kind of cross-agency situation in a seamless way without
    addressing organizational structures. In its view, unless the Congress
    changes Interior’s statutory responsibilities, the strategic plan must reflect
    the Department’s current mission. We acknowledge that this is a difficult
    and controversial issue. However, it is this type of mission-oriented issue
    that needs to be addressed as part of a strategic planning process.
    Addressing this issue in the draft strategic plan would facilitate a dialogue
    on the issue during consultations between Interior and the Congress.

    Interior has several other broad crosscutting programs where a
    coordinated strategic planning process would help to provide
    Department-wide information on program results as follows:

•   Environmental protection and remediation programs. Interior currently
    lacks a complete inventory of hazardous materials and abandoned mines
    sites to support management and financial reporting. Interior’s
    environmental programs are managed primarily by BLM, FWS, NPS, BIA, BOR,
    and Interior’s Office of Environmental Policy Compliance. In addition,
    BOR’s draft plan addresses reducing, on a site-specific basis, the sources of




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    pollution that affect water quality, and USGS’ plan addresses water quality
    studies.
•   Stewardship assets. Interior’s BLM, FWS, and NPS have implemented early
    the new federal accounting standards for reporting on stewardship land
    and heritage assets (parks, recreation and wildlife areas, buildings,
    monuments, and museum collections). By developing Department-wide
    guidelines for stewardship reporting and adequate inventory systems in
    subagencies for tracking, managing, and reporting on these assets, Interior
    would ensure that consistent and reliable data are available.
•   Indian Programs. Most of Interior’s subagencies (BIA, BLM, BOR, USGS, MMS,
    OSM, and the Office of the Secretary, and that Office’s Office of the Special
    Trustee for American Indians and Office of American Indian Trust) have a
    role in helping Interior to carry out its trust responsibility to American
    Indians and tribes. However, Interior lacks adequate systems and financial
    and program information to effectively manage and budget for Indian
    programs. The strategic plan for Indian trust fund and asset management
    proposes consolidating Indian financial and asset management programs
    and upgrading and acquiring new systems.
•   Land and Natural Resource Management. Interior’s BLM, FWS, and NPS are
    responsible for managing federal land and natural resources, and BIA is
    responsible for these functions on federal Indian land. In addition,
    Interior’s OSM is responsible for regulating mining activity on federal and
    Indian land, MMS enforces oil and gas leases on the Outer Continental
    Shelf, and USGS performs studies, investigations, and mapping services
    related to land and natural resources. Interior needs to develop adequate
    crosscutting information on the effectiveness of these agencies.
•   Recreation programs. Interior’s BLM, BOR, FWS, and NPS manage programs
    that provide numerous recreational opportunities for the public. Interior’s
    plan states that Interior will continue to promote and provide these
    opportunities where they are consistent with other land uses and with
    maintaining the health of the land.

    Interior’s plan, when completed, is to include information on its
    component agencies’ mission statements and goals. However, it is not
    clear in the draft strategic plan which, if any, of the issues identified in our
    work were addressed. A Department-wide framework for identifying and
    measuring crosscutting programs and goals will help to determine the
    overall cost or effectiveness of these programs. In addition, Interior will
    have reliable information for setting priorities and formulating budgets.

    In commenting on a draft of this report, Interior noted that (1) a discussion
    of crosscutting issues is not required by the Results Act and (2) the



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                       Department is involved with a number of activities that address issues of
                       coordination both within and outside of Interior. The Department’s
                       comments on both of these points are correct. However, a focus on
                       results, as envisioned by the Results Act, implies that federal programs
                       contribution to the same or similar results should be closely coordinated
                       to ensure that goals are consistent, and, as appropriate, program efforts
                       are mutually reinforcing. We believe the strategic planning process offers
                       an opportunity to discuss matters of overlap and duplication like, for
                       example, those identified in our past work. Furthermore, while the
                       Department is engaged in a number of coordinating activities, there is
                       nothing in the plan that demonstrates that these activities are linked to the
                       cross-cutting matters noted in this report.


                       The Paperwork Reduction Act of 1995 and the Clinger-Cohen Act of 1996
Interior’s Strategic   direct agencies to implement a framework of modern technology
Plan Needs to More     management on the basis of practices followed by leading private and
Fully Address          public sector organizations that have successfully used technology to
                       improve performance and help meet strategic goals. Interior has identified
Information            goals and actions needed to implement the provisions of these Acts in its
Management Issues      draft strategic plan. However, how Interior plans to achieve and measure
                       the success of these goals and actions is not clearly discussed in the draft
                       strategic plan.

                       Traditionally, Interior has allowed its subagencies to independently
                       acquire and manage information technology. This culture has resulted in
                       inefficiencies in technology investments and information sharing. For
                       example, in May 1997, we reported that Interior had not systematically
                       identified and acted on opportunities to consolidate and share
                       telecommunications resources within and among its bureaus or its
                       2,000-plus field locations.5 Instead, the Department has relied on its
                       subagencies to independently identify and act on such opportunities. To
                       its credit, Interior has undertaken a number of telecommunications
                       cost-savings initiatives that have produced significant financial savings and
                       helped reduce the Department’s more than $62 million annual
                       telecommunications investment. In addition, in commenting on a draft of
                       this report, Interior stated that progress has been made in overcoming its
                       long history of component agency autonomy as it relates to information
                       systems, such as the successful consolidation of some of its information



                       5
                        Telecommunications Management: More Effort Needed by Interior and the Forest Service to Achieve
                       Savings (GAO/AIMD-97-67, May 8, 1997).



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                      and financial systems. We have not yet had an opportunity to fully review
                      and assess the Department’s progress in this area.

                      While the draft strategic plan sets information technology goals, it does
                      not describe how the Department will overcome these problems and
                      ensure the efficient and effective use of information resources across the
                      Department. Furthermore, Interior, like many agencies, will face the
                      emerging management challenges of implementing modern technology
                      and resolving the need for computer systems to be changed to
                      accommodate dates beyond 1999—the “year 2000” problem. Consequently,
                      in developing its information technology strategy, Interior needs to be sure
                      to explain how it plans to address the “year 2000 problem” as well as any
                      significant information security weaknesses—two issues that we have
                      identified as high risk areas across the government.6

                      In commenting on a draft of this report, Interior told us that because of the
                      level of detail required, it did not address strategies for resolving the “year
                      2000” problem in its draft strategic plan. Similarly, Interior did not address
                      information security because it regards this area as a management and
                      operational responsibility that needs attention on a daily basis. We believe
                      that it is appropriate for these items to be addressed in the plan to convey
                      how the Department intends to deal with them and provide linkages to its
                      operational and management plans. This disclosure would also help the
                      Congress, departmental customers, and the general public to better
                      understand the Department’s goals, strategies, and measures.


                      To support the implementation of the Results Act, Interior’s strategic plan
Interior Needs to     states that a key ingredient will be the availability of timely and reliable
Continue Improving    financial and program information that will permit decisionmakers to
Its Financial         track progress and evaluate the results of Interior’s programs. To achieve
                      this overall goal, Interior has identified specific goals of strengthening
Information to        financial operations and information resource management.
Accurately Measure
                      Interior has made progress in addressing past problems with its
Progress Toward       management of financial information. For fiscal year 1996, the Department
Achieving Strategic   received unqualified audit opinions on all but one of its subagency
and Performance       financial statements. Nonetheless, work still needs to be done in this area.
                      Our work and that of the Interior Inspector General has shown that
Goals                 Interior needs to continue to address certain accounting and financial
                      management system and internal control weaknesses that could affect the

                      6
                       GAO High-Risk Series (GAO/HR-97-20, Feb. 1997).



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                     reliability of program level financial and performance information. For
                     example, OIG audits completed in the past year have identified
                     weaknesses in accounting for investments in fixed assets and project cost
                     accounting and controls that, if uncorrected, could affect the effectiveness
                     of Interior’s Results Act’s implementation.7

                     Furthermore, Interior’s and its component agencies’ draft strategic plans
                     could be strengthened if they addressed how financial information will be
                     used to support the measurement of progress toward strategic goals.
                     Identifying performance measures and ensuring the development of
                     reliable financial and program performance information will help to
                     ensure the effective implementation of the Results Act for Interior and its
                     subagencies.

                     Like other agencies, once Interior develops key performance measures it
                     will need to consider appropriate system modifications to capture data
                     needed for performance measurement. Key requirements of the CFO Act
                     are the development of cost information to enable the systematic
                     measurement of performance and the integration of systems—program,
                     accounting, and budget systems.


                     We provided Interior with copies of a draft of this report for review and
Agency Comments      comment. We met with Interior’s Assistant Secretary for Policy,
and Our Evaluation   Management, and Budget and other officials. The Department raised a
                     number of substantive concerns about the draft report including concerns
                     about the portion of the report dealing with the Department’s crosscutting
                     activities. We have addressed many of those concerns in the body of the
                     report. In addition to those comments already acknowledged and
                     discussed in the report, the Department provided us with a number of
                     additional comments.

                     With regard to our assessment of the key elements required by the Results
                     Act, the Department agreed that the report was an accurate assessment of
                     Interior’s strategic plan as it was developed in June. While they agreed that
                     some additional work is needed, they emphasized that the strategic
                     planning process is an iterative process that is evolving and that more
                     recent drafts of the plan are filling some of the gaps identified in our


                     7
                      Bureau of Land Management Combined Comparative Financial Statements for Fiscal Years 1995 and
                     1996, U.S. Department of the Interior, Office of the Inspector General (Report No. 97-I-319, Jan. 1997).
                     Bureau of Indian Affairs Consolidated Financial Statements for Fiscal Years 1995 and 1996, U.S.
                     Department of the Interior, Office of the Inspector General, (Report No. 97-I-834, May 1997).



                     Page 13                   GAO/RCED-97-207R Department of the Interior’s Draft Strategic Plan
           B-277452




           report. They indicated that the plan will meet all statutory requirements of
           the Results Act when it is completed in September 1997.

           Interior raised serious concerns that the statements in the draft report
           about the reliability of its financial management systems and internal
           controls were too broad and were, therefore, misleading. It was not our
           intent to characterize the Department’s systems and controls as deficient
           on the whole. Accordingly, we revised the appropriate sections of the
           report to reflect specific areas where improvements are needed in systems
           and controls to help ensure the reliability of information used in the
           Results Act’s implementation and provided specific examples.

           Furthermore, while acknowledging some deficiencies in its financial
           management, the Department does not view these as being “major
           management challenges” as characterized in the draft report. The
           Department provided us with additional information to support its
           comments. Because of the timing and scope of the review, we have not yet
           had an opportunity to fully review and assess the Department’s progress in
           addressing past deficiencies. As a result, we modified the report to reflect
           these concerns. As part of our future work at Interior, we plan to review
           the effectiveness of the measures taken by the Department.


           As agreed with your offices, unless you publicly announce its contents
           earlier, we plan no further distribution of this report until 30 days from the
           date of this report. At that time, we will send copies of this report to the
           Ranking Minority Member of your Committees, to the Chairman and
           Ranking Minority Member of the House Resources Committee, the
           Secretary of Interior, and the Director, Office of Management and Budget.
           We will send copies to others on request.

           Please contact me at (202) 512-3841 if you or your staff have any questions
           concerning this report.

           Sincerely yours,




           Victor S. Rezendes
           Director, Energy, Resources
             and Science Issues
(141078)   Page 14            GAO/RCED-97-207R Department of the Interior’s Draft Strategic Plan
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