Congressional Testimony
STATEMENT OF
SEAN O'KEEFE
DEPUTY DIRECTOR
OFFICE OF MANAGEMENT AND BUDGET
SUBCOMMITTEE ON GOVERNMENT EFFICIENCY, FINANCIAL
MANAGEMENT AND INTERGOVERNMENTAL RELATIONS
HOUSE COMMITTEE ON GOVERNMENT REFORM
June 19, 2001
Mr. Chairman, thank you very much for inviting me to appear today
before
your subcommittee. For over half a decade, the House Committee on
Government
Reform has helped shepherd OMB and the agencies over the course of
implementing
the Government Performance and Results Act. We welcome your insights and
counsel,
and we appreciate your continuing leadership and commitment in this
endeavor.
Let me also acknowledge the leadership and effort of Senator Thompson
during
his years as Chairman of the Senate Committee on Governmental Affairs, and
the
active and ongoing role that Committee has played in overseeing and
assisting in
the implementation of this Act.
In 1993, Congress enacted the Government Performance and Results Act
to get
the Federal Government to focus Federal programs on performance. After 8
years
of experience, the use of performance information for program management
has been
discouraging. We plan to change this. To provide a greater focus on
performance,
the President?s top management initiative involves integrating performance
with
budget decisions. OMB will begin this effort in the context of the
FY 2003 budget
submission. We will work with agencies to select outcomes for a few
important
programs, the outputs that influence these outcomes, how much the outputs
cost,
and how program effectiveness could be improved.
Government-wide implementation of the Results Act began in earnest
in 1997,
with the transmittal of the first set of strategic plans and annual
performance
plans. The agencies have already prepared a second set of strategic plans,
and
will send the fifth set of performance plans -- for
FY 2003 -- to OMB in several
months. The second set of annual performance reports, covering
FY 2000, were
sent to the President and Congress this past March.
An FY 2000 performance report is governed by what an agency included
in its
FY 2000 performance plan. The Act does not allow agencies to engage in
retrospective
revisionism, such as adding new performance goals, omitting existing ones,
or
rewriting and tinkering with others. For its annual performance report, an
agency
is captive -- for better or worse -- to what was written in its
performance plan.
This does not mean we cannot learn and profit from reviews and critiques of
these
reports, in fact, this should improve the product. But the greater value
of assessments
such as those prepared by Maurice McTigue and his colleagues at the
Mercatus
Center will be in applying the findings and suggestions to future
performance
plans. For example, the Campbell Institute within Syracuse University's
Maxwell
School is studying the link between management capacity and performance in
government.
Patricia Ingraham lead an effort last year to grade the 50 States based
upon their
management capabilities. These efforts are a useful tool for both the
Committee
and the OMB to review when planning federal initiatives.
By our yardstick, simply measuring the quality of the plans and
reports, or
gauging the processes the agencies used to prepare these plans and reports
is only
part of the assessment we must make as we look at where we are and what
more we
have to do. The more important question is how the information in the
plans and
reports is used to manage the agencies, make resource, policy, and program
decisions,
and improve the efficiency and effectiveness of what the government
provides and
delivers.
OMB staff regularly have conversations with their government
counterparts in
other countries. The experience elsewhere, in countries such as Australia
and
Great Britain, is that it has taken from five to eight years to put
performance-based
management fully in place. So we are nearing that critical point when GPRA
must
take hold as an essential and valuable tool in the management of our
government.
I believe we are doing our part to make GPRA implementation a
success.
Let me outline the actions we are taking in this regard. First and most
critically
is the President's very clear signal that he wants his Administration and
our
government to be results-oriented. This was highlighted in February in the
President's
Budget Overview, "A Blueprint for New Beginnings", and buttressed in the
President's April
Budget transmittal. The forthcoming "President's Management and
Performance
Plan" will further reinforce the priority he has placed on this effort.
Within OMB, we have just completed 19 'Spring Reviews'. These
reviews were
an unprecedented look, both in their scope and detail, at the performance
of agency
programs across the government, and at what is needed to make some programs
more
effective. These reviews also identified those areas where, quite frankly,
we
are in need of better data before we can determine what, if anything, needs
to
be done to improve performance.
The Spring Reviews also aided us in selecting a group of outcome and
related output
goals on which we will focus during the Fall Review of the agency budget
requests.
Following Fall Review, OMB traditionally 'passes back' to an agency the
budget
amounts that would be included in the President's budget. As part of its
FY
2003 passback, OMB expects to include target values for the performance
goals
for the selected sets of outcome/output goals. Our intention is that the
number
of performance goals covered in passback will substantially increase in
future
years.
We are using the passback process to underscore the importance we
place on
fully integrating performance and budget. The passback values are informed
by
the budget and performance data received from the agency and reviewed by
OMB.
In pairing budget dollars with performance target levels, we will be
showing our
use of and reliance on program performance data in budget formulation.
Let me sketch several related initiatives for making our government
more results-oriented.
We will soon propose legislation to the Congress that will fully charge the
costs
of certain retirement and health benefits to an agency and its programs.
We would
like to begin this charging in FY 2003, and expand this full charging of
costs
in future years to cover support services, capital acquisition, and
hazardous
waste cleanup. This should provide managers with a much more accurate
picture
of what it costs to administer programs and operations, and promote greater
competition between the government and the private sector in conducting
activities
that are commercial in nature.
We will be using workforce planning to anticipate critical skills,
reduce
organizational layers, re-align staff for better service delivery, and
reward
employees for achieving results. We will be improving the reliability,
usefulness,
and timeliness of financial reports. And we will be making greater use of
performance-based
contracts. Together, these initiatives mark a sea-change in our use of
performance
information in managing the Federal government and giving the American
public the
results they deserve.
Mr. Chairman, that concludes my prepared statement. I will happy to
answer
any questions you may have.