Recent Experience with Performance Management in the United States

1. Recent Experience with Performance Management in the United States Expert Roundtables on Innovative Performance Measurement Tools: Integrated Executive Evaluations World Bank, Washington DC September 29, 2008 John Pfeiffer U.S. Office of Management and Budget jpfeiffer@omb.eop.gov

2. Presentation Purpose To describe the impacts of the United States Government’s recent performance improvement initiatives on policy making, institutional knowledge creation, accountability, and budgeting.

3. Federal Performance Initiatives Bush Administration management initiatives build on a long history of government reform, dating back to the end of the 19th century. For example: • 1883 – Civil Service Act passed. • 1921 – Bureau of the Budget created. • 1933-1951 – Roosevelt and Truman strengthened the White House staff, e.g., the Council of Economic Advisers • 1953-1981 – various governmental initiatives to improve government efficiency: • 1966 – Defense Secretary McNamara championed Programming, Planning, Budgeting Systems (PPBS) • 1972 – Bureau of the Budget became the Office of Management and Budget • 1976 – President Carter instituted Zero-Base Budgeting • 1993 – the Government Performance and Results Act required that agencies develop annual performance plans and report annual progress against these plans

4. Bush Administration Initiatives Two key efforts to make government program planning and management more performance-based: President’s Management AgendaFocused on: Strategic Management of Human Capital Competitive Sourcing Improved Financial Performance Expanded Electronic Government Performance Improvement (Budget and Performance Integration) Program Assessment Rating Tool (PART)

5. 1. President’s Management Agenda (PMA) • Announced in 2001, the five government-wide initiatives aimed to improve management at each agency by creating and institutionalizing: • Clear, specific performance goals—for individuals, projects, programs, and agencies—to help direct management efforts; • Systems of accountability to motivate better performance; and • Skills, disciplines, and information needed to achieve performance goals. • Required Cabinet Departments and agencies to designate a “Chief Operating Officer” (COO) with day-to-day responsibility for management. • Established the President’s Management Council as an integrating mechanism for policy implementation across government, headed by OMB’s Deputy Director for Management and comprised of the COOs.

7. BUDGET AND PERFORMANCE INTEGRATION (aka Performance Improvement Initiative)Criteria for Achieving GREEN Senior managers meet at least quarterly to examine reports integrating financial and performance information for all major Department responsibilities. Agency works to improve program performance and efficiency each year; Strategic plans contain a limited number of outcome-oriented goals and objectives. Annual budget and performance documents incorporate measures identified in the PART and focus on the information in the senior management report; Reports the full cost of achieving performance goals accurately in budget and performance documents and can accurately estimate the marginal cost of changing performance goals; Has at least one efficiency measure for all PARTed programs; Uses PART evaluations to direct program improvements and hold managers accountable for them, and uses PART findings and performance information to justify funding requests, management actions, and legislative proposals; and Less than 10% of agency programs receive a Results Not Demonstrated rating for two years in a row.

8. Executive Order 13450 – Improving Government Program Performance (November 13, 2007) • In 2007, the President signed an Order requiring each agency to designate a Performance Improvement Officer (PIO). • PIOs coordinate agency’s performance management activities: • Improve performance goals and plans. • Regularly assess progress, including evaluations. • Hold managers accountable for results. • Ensuring agency GPRA plans and reports are useful and transparent. • EO 13450 establishes an interagency Performance Improvement Council (PIC) that meets monthly to improve interagency collaboration on common problems.

9. Performance Improvement Council Working Groups 1. Improving Program Results • Issue:17% of programs fully achieve long-term and annual goals. Best practices for outcome and efficiency measures and quarterly meetings not identified. • Deliverable: Identify and share exemplary performance measures. Transform ExpectMore.gov into a more robust and useful database. 2. Improving Program Evaluation • Issue: 22% of programs have program evaluations that indicate program is effective. Few evaluations are well-designed.Deliverable: Agencies pilot a process to involve experts in early planning stages of evaluation to ensure rigor. 3. Improving Agency Reporting/Transparency • Issue: Many agencies’ annual reports (PARs) are ≥ 300 pages and should improve readability/transparency, and focus on outcomes and performance challenges. • Deliverable: By spring 2007, recommend guidance for 2008 PAR or 2008 PAR pilot including OMB guidance on validation of performance information.

10. PIC Working Groups (cont’d.) 4. Improving Accountability • Issue: Only 33% of agencies had fully certified senior career managers (Senior Executive Service) by FY07 and managers are not consistently held accountable for program goals. • Deliverable: Assess relationship between SES performance and PII goals and define “quality” SES goals. 5. Improving Small Agency Performance • Issue: Small agencies are not held accountable through the PMA scorecard. • Deliverable: Pilot PII scorecard ratings for interested small agencies.

11. Other Performance Management ImprovementsEnhanced Agency Planning • Ensured that annual agency strategic plans include an outcome-oriented goal in each strategic goal area. • Have directed agencies to move from program process and output measures to program outcome measures. • Agency program managers are being held accountable for program results

12. Improved Reporting and Transparency • Annual budgets and performance reports consistently incorporate performance results. • Relevant committees of Congress are briefed at least annually. • OMB/Inter-agency PIC Effort: • PAR Pilot 25-page Citizen’s Report • 2-page agency “Snapshots” • www.ExpectMore.gov

13. Began Regular Assessments • Conduct regular program assessments to determine effectiveness and program efficiency. • 55% of programs initially unable to measure results have improved. • Senior managers meet quarterly to review progress towards goals and determine needed actions on identified problems. • See example from EPA • Next Challenge: How agencies use actual performance data to improve performance. • See example from HUD

14. EPA Example – Quarterly Report

15. EPA Example – Quarterly Report

16. EPA Example – Quarterly Report

17. HUD Example – Use of Perf. Data

18. All Agency GPRA Plans/Reports and Budget Requests Linked on OMB Website http://www.whitehouse.gov/omb/part/agency_performance_addresses.html

19. Improvement Actions • All programs have improvement plans and actions for better performance (legislative, management and performance • Action taken, but not completed 2,325 55% • Completed 1,682 40% • Enacted 17 0% • Inactive 30 1% • No action taken 148 3% • Not enacted 36 1% Grand Total 4,238 100% • OMB/PIC Effort Create Milestones Tracking to ensure rigorous effort • Interior Example

20. Milestones Tracking

21. 2. Program Assessment Rating Tool (the PART) • An online questionnaire at the heart of the President’s Management Agenda. • Almost every Federal program (about 1,000) was PARTed during the FY2004 ─ FY 2009 budget cycles. • Seeks to use performance information to guide program management, design, and budget decisions. • A diagnostic tool used to assess program performance and to drive improvements. • Designed to provide a consistent approach to assessing and rating programs across the Federal government. • PART results help inform budget decisions and identify actions to improve results. • Agencies are held accountable by OMB for implementing annual PART follow-up actions, i.e., improvement plans, for each program. • PART guidance can be found at http://www.whitehouse.gov/omb/part

22. PART Ratings • PART assessments review overall program effectiveness, from design through implementation and results. • PART assesses each program on four components (purpose, planning, management, and results/accountability) and gives a score for each. The scores for each component are then weighted— results/accountability carries the greatest weight (50 percent), and the program is given an overall score. • A program is rated effective if it receives an overall score of 85 percent or more, moderately effective if the score is 70 to 84 percent, adequate if the score is 50 to 69 percent, and inadequate if the score is 49 percent or lower. The program is scored ‘‘Results Not Demonstrated,’’ if it lacks good performance measures or data for existing measures.

23. Performance Measures Are Central to the PART • Allow tailoring to the specific program • Results are the most valuable information “product” of the PART • Take most time in completing the PART • Biggest determinant of overall score and rating (50%) • Updated regularly to help keep PART information current

28. How OMB Manages the PART Initiative

29. PART Accomplishments PART has helped OMB and Federal Departments and agencies to: • Clarify program objectives and design and change the budget focus from inputs and outputs to outcomes. • Make budget requests and management decisions more performance-based. • Rate government programs on a consistent and comparable basis, helping to clarify trade-offs among competing spending priorities. • Deepen their knowledge of program performance, by collaborating closely in the ratings process. • Agree upon performance baselines, targets, and needed improvements. • Use the transparency of performance data to motivate programs to make improvements. • Demonstrate performance outcomes credibly by being willing to rate even popular programs as performing poorly.

30. Reasons for PART’s Success • OMB, a very powerful budget office attached to the White House, is the principal champion of the PART. • OMB has created an objective and credible process for measuring and assessing the performance of government programs --- very important where opposing politicians in the Congress and outside interest groups are highly influential. • OMB’s career budget analysts are intimately involved in the rating process. • OMB analysts’ educations enable them to understand and interpret monitoring and evaluation results when making PART ratings. • Most OMB analysts have advanced degrees in fields like public policy and administration, economics, law, and science. • Federal agencies generally have comprehensive, effective management and financial information systems. • Agencies take lead in creating the PARTs and collaborate with OMB in their completion, including design of improvement plans. • The Internet facilitates completion of the PART assessments and widespread dissemination and transparency of PART findings.

31. Challenges: Measurement • Clarifying program goals • Developing appropriate and useful performance measures • Uneven quality of performance measures • Increasing timeliness of performance reporting • Answering questions consistently

32. Challenges: Program Evaluation • Want to promote evaluation to measure and improve program design, implementation, and effectiveness, including cost-effectiveness.. • Evaluations are not used enough to assess impact and improve performance • Decision makers do not appreciate and, consequently, do not routinely invest in evaluations. • Technical complexity can make evaluations hard to understand and thus undermine confidence in results.

33. Challenges: Improvement Plans • Aggressiveness varies • Unclear how they impact program results (versus PART score) • Uneven attention to plans across agencies and OMB

34. Challenges: Improving Performance • Improving PART score versus improving performance • Ensuring that program managers are empowered and accountable • Assessing improvement plans fairly • Sharing good approaches and models

35. Challenges: Impact • Executive Branch • OMB and agency leaders need to continue systematic efforts to base management, funding, and authorization decisions on PART assessments and other evaluation results. • The Budget and Performance Integration management initiative provides a number of vehicles for institutionalizing such practices. • Congress • OMB and GAO have found that Congress has barely begun to utilize PART and other evaluation results for program oversight, legislative authorizations, or funding allocations (appropriations). • The burden is on their proponents to find ways to make them more relevant to legislative decision-makers and staff. • Crosscutting Analyses • Few opportunities for comparative assessments and collaboration among like programs have been little pursued so far.

36. Considerations in Implementing Performance-Based Reforms • Major reforms have enjoyed broad-based support. • Strong management leadership essential. • Technical assistance needed both before and during implementation. • Relationships with participating agencies must be collegial and collaborative. • Very difficult to use performance data to cut funding or impose sanctions; more feasible to redirect priorities or create alternatives. • Transparency of results an incentive for reform. • Progress takes time.