# Presentation: 245502

## President’s Management Agenda:Performance Improvement Initiative (previously Budget and Performance Integration) 

- Dr. Richard Beck,
- Director of Planning and Performance Management
- Mark Davis
- Office of Budget

## Agenda

- Why
- Pursuing performance improvement
- How:
- Program Assessment Rating Tool (PART)
- Activity Based Costing / Management (ABC/M)
- Quarterly reviews
- Representative Performance Measures and budget planning
- Our progress in the scorecard
- What’s Next

## Why pursue performance improvement

## WHY: Budget Performance Integration / Performance Improvement Initiative

- Use of programmatic performance information to:
- facilitate decision making
- increase transparency of decisions
- improve credibility of decisions
- demonstrate accountability
- Achieve quantifiable results (“performance”) and optimized efficiency in pursuit of a pre-defined plan

## Executive Order on Improving Government Program Performance (E.O. 13450, November 13, 2007)

- “Codifies” pursuit of the Performance Improvement Initiative
- Purpose:...”to improve the effectiveness and efficiency of the Federal Government and promote greater accountability of that Government to the American people”
- Policy:...”to spend taxpayer dollars effectively, and more effectively each year.  Agencies shall apply taxpayer resources efficiently in a manner that maximizes the effectiveness of Government programs in serving the American people.”
- Role of the Performance Improvement Officer includes:
- “...throughout each year...assess performance of each program and consider means to improve the performance and efficiency of such program...”

## President’s Management Agenda – Performance Improvement Initiative

- Senior agency managers meet at least quarterly to assess integrated financial and performance information
- Annual budget submissions include recommendations based on these quarterly integrated assessments, especially using PART and Strategic Plan information
- Report full cost of achieving performance goals and accurately estimate the marginal cost of changing performance goals
- Have at least one efficiency measure for all PARTed programs
- Use PART evaluations to direct program improvements; hold managers accountable for those improvements; justify funding requests, management actions, and legislative proposals
- No more than 10% of PARTed programs rated Results Not Demonstrated
- Maintain green
- Improve program performance and efficiency each year
- Use marginal cost analysis to inform resource allocations

**Use Budget and Performance Integration standards to improve programmatic performance**

## How: Use of Program Assessment Rating Tool (PART)

## Program Assessment Rating Tool

- OMB assessment of individual programs (within a bureau)
- “Programs” defined through negotiation with OMB
- Questions help assess the adequacy of the program’s
- purpose
- design / planning
- management
- performance / results
- Long-term
- Annual
- Efficiency
- Results published on ExpectMore.Gov website
- 10% of programs are effective
- 36% of programs are moderately effective
- 37% of programs are adequate
- 17% of programs are “not performing” – results not demonstrated
- It’s not going away, the Executive Order makes it law, so it’s here to stay

## Program Assessment Rating Tool Implementation

- Discussions are conducted at the program level with direct interaction between OMB and the program
- most effective transfer of information; ensures program accountability for results, findings, and fulfilling recommendations
- Includes assessment of the existence and effective use of performance measures by a program
- Most of our programs rated Results Not Demonstrated (13/67) are due to lack of, or what is considered by OMB examiners to be
- adequate performance measures
- and/or supporting results data
- Cost information is used especially as part of the assessment of the program’s efficiency in terms of how much more is being achieved in performance for less (or equal) funding
- PART is expected to be used by program managers for decision making and continual improvement
- results affect individual performance plan ratings

## Slide 10

## How: Use of Activity Based Costing / Management (ABC/M)

## Activity Based Cost / Management brings financial and performance information together for planning purposes

- ABC/M is a management tool shared across bureaus providing information on the cost of doing work and how that work aligns with the Department's strategic objectives
- More readily displays the costs of what an organization produces
- Describes cost drivers for each work activity, in addition to cost by object class (travel, personnel, materials, etc.)
- ABC/M information is more useful to managers as it relates more clearly to what they deal with on a day-to-day basis
- An organization can more easily measure how efficiently it is performing work and evaluate where changes might be needed

## ABC/M Applications for quarterly review and budget formulation

- Routinely review performance and use of funding at the program implementation level
- Fish and Wildlife Service has used activity based costing data to compare cost of administrative operations across regional offices; budget planning based on past and desired-future  performance
- Bureau of Land Management has used activity based costing data to compare cost of doing similar functions across states to find best practices
- National Park Service reviewing operations funding against organic intent of each NPS unit to determine new ways of optimizing application of funding while ensuring quality of operations
- Bureau of Reclamation reviews progress across the regions in meeting performance targets for the year; looks for where added action is needed to better ensure reaching predefined goals for the year
- Activity Based Costing data provides full cost of all direct and indirect funding sources
- direct program portion of the full cost is most informative for determining how much funding is needed to achieve more units of performance (i.e. the marginal cost)
- Bureaus provide performance targets as part of their budget submissions
- performance data, total-cost, and per-unit-cost for each performance measure over a six year window

## How: Use of Quarterly Reviews

## Quarterly review of resource use and performance

- estimate annual investment via ABC/M;
- review rate of expenditure regularly

**End Outcome Goal**
- are performance targets expected to
- be met by the end of the year

**Funding **
**Estimates**

**End**
**Outcome**
**Goal Targets **
**for Budget Year+ ?**

**Performance Budget**
**Request**

**PROGRAM IMPLEMENTATION / MANAGEMENT**
- (review quarterly)

**BUDGET PLANNING**

**Changes to **
**-- Program**
**-- Management**
**-- Resource allocations **
- to better achieve performance targets

- Plan

- Execute

**Quarterly review of resource use and performance**

## How: Use of Representative Performance Measures and Budget Planning

## Example: FY 2008 National Park Service Centennial Initiative

- Requested addition funding to:
- Meet the President’s Commitment to Fund New Levels of Excellence in the Parks
- Engage all Americans to Protect our Resource through Signature Projects and Programs
- Establish a critical base for park operations
- Reconnect people to their parks
- Sustain our stewardship responsibilities that reach beyond the national park system
- Adds $41M for seasonal employees, $20M at 20-25 parks to improve natural and cultural resource condition, $35M for improved maintenance, $3M to expand volunteers in parks

***Defines what will be purchased vs. WHAT COULD BE ACHIEVED***

## Provided for FY 2008 President’s Budget Request

## Slide 19

## Using Performance Information to Help Improve Planning and Programmatic Performance 

- Representative Performance Measures (RPMs) defined last year were analyzed from the 2007 PAR in tracking performance and cost from 2004
_*Uses information already being provided by bureaus*_
- Covers $7B of $10B “current” appropriations
- 26 RPMs were categorized based on performance and cost integration results
- Positive Performance
- Sustained Performance
- Challenged Performance
- Used to identify candidates with potential for improved performance to be explored for the FY 2008 PAR and the FY 2009/2010 budget planning process
- Further details provided via related Strategic Plan and designated PART performance measures

## Hierarchical Performance Assessment Using RPMs

**Hierarchical Performance Assessment Using RPMs**

## Relationship Between Costs & Performance Over Time

- Units of performance

**$’s**

- Fiscal Year

- performance trend

- annual costs

- _Actual_

- _Projected_

- 2004

- 2005

- 2006

- 2007

- 2008

## Representative Measure Performance Category Criteria 

**Positive Performance **
- Increasing performance at either level or decreasing cost
- OR** **
- Level performance at decreasing cost
**Sustained Performance**
- Sustained (“level”) performance and costs
- Trends in performance and costs change similarly (“parallel”)
- _Evaluate potential for increasing level of performance_
**Challenged Performance**
- Level of accomplishment appears inadequate
- Performance declining or level; cost increasing
- Performance data inconclusive or incomplete
- _Proposed for further exploration and budget planning_

## Summary of RPMs by Performance Category (for FY 2004-2007)

| Category | RPMs |  |  |  |
| --- | --- | --- | --- | --- |
| Positive Performance |  Stream/Shoreline Miles in Desired Condition
 Coal Mining Sites Free of Off-Site Impacts
 Science Supporting Resource Protection
 Acres Leased for Coal Development
 Wildfires Controlled |  |  |  |
| Sustained Performance |  Migratory Bird Species
 Acres Reclaimed from Coal Mining
 Federal & Indian Revenue Distribution |  |  Science Supporting Resource Use
 Science Supporting Hazard Management |  |
| Challenged
Performance |  

Desired level of accomplishment?

Cost increasing; performance not

Incomplete or inconclusive performance data |  Invasive Plant Species
 Acres in Desired Condition
 Threatened or Endangered Species
 Historic Structures in Good Condition
 Water Infrastructure Reliability/Condition
 Visitor Satisfaction
 Insular Area Revenues
 Fluid Mineral Leases with Approved APDs
 Grazing Permits
 Allowable Sale Quantity Timber
 Indian Trust Info Accurately Processed
 Probate Estates Closed
 Part 1 Violent Crime Incidents (Indian Country)
 BIE Schools Achieving AYP 
 Acres Treated for Fire Management
 Offshore Oil & Gas Sales |  |  |

## Invasive Plant Species

- Performance appears to be steady at a low percentage (2%).  Investigate viability and cost of increasing level of achievement above present rate
- Contributing programs:
- BLM Resource Management & Wildlife Habitat Restoration
- NPS Natural Resource Stewardship
- FWS National Wildlife Refuge System

*Desired Level of Accomplishment?*

## Our progress in the scorecard and what’s next

## Our progress in the Performance Improvement Initiative Scorecard

- Status is Yellow while Progress rating remains Green,
- because DOI is making progress in several areas for both short-term and long-term performance improvement actions.
- DOI has made the following progress:
- Improved integration of budget and performance information in budget process and materials and performance reports.
- Improved senior-level involvement in oversight of PART process and strategic plan reporting process.
- Begun to facilitate senior management’s focus on performance improvements by identifying select “representative” strategic plan performance measures and related costs.
- All PARTs and rePARTs completed in FY 2007 received a score of Adequate or higher.
- DOI has challenges in the following areas:
- DOI is working to further link incremental changes in performance with changes in funding.  This remains DOI’s most challenging ongoing task.
- Achieving the <10% RND milestone will not likely occur earlier than Q3 FY 2009.

## What’s Next

- Evaluation of trends in Representative Performance Measures to:
- Document Interior’s progress towards achieving its mission
- Determine areas of positive performance and where to evaluate the potential for improving program performance
- Continued pursuit of PART follow-on improvement action items
- Continued integration of performance information into funding decisions
- Managers held accountable for improving efficiencies and increased program performance
- Use quarterly reviews to track progress and determine where changes are needed

*facilitate decision making, increase transparency, improve credibility,*
*demonstrate accountability through results and optimized efficiency*