lofty goals of educating a work for ending hunger stop and drugs helping the homeless in the actual budget process itself there's an obvious need to link the budget outlays to intermediate outcomes that move us measurably towards achieving our goals committed to developing a culture of performance outcomes steering committee to develop the involved of the executive and legislative branch he would propose outcomes but they would be modified by the legislature as in the course of their deliberations what has resulted is been an appreciation i think by the executive agencies and the legislature of how they do not achieve their desired goals and the ability to allocate resources more effectively and  acquisition reform act of two thousand and nine to prove our defense dollars government performance is a bipartisan and inner branch issue supported by democrats and republicans multiple congresses and president those of us here today have the management and administration's chief performance officer jeffrey zients welcome mr science nice to have here today but i think everyone here can agree ideally government programs should function officially and that means providing the maximum level of services for the lowest possible cost but the common entirely justifiable view is that the phrase government efficiency is often a contradiction in terms that view is not entirely fair over the years congresses and administrations have tried by various measures to systematically evaluate programs out ways to duplicate and make the government work better of course without any particular striking exception the government always seems to come up well short of that goal so progress is clearly a need medicare is a classic example medicare has a critically important mission to provide health care for the elderly but has a thirty eight trillion dollars unfunded liability that means with all its good intentions the federal government has over promised benefits for future beneficiaries by thirty eight trillion dollars more than the program can actually pay and we just learned that medicare last year had a whopping improper payment rate of twelve point four percent that's forty seven billion dollars lost of fraud in a single year in a single government program and this comes after years of efforts to prevent fraud the great goal of medicare is to get the fraud rate down to ten percent and even that seems a bit lofty for this massive federal entitlement spending program of course to make matters worse in the meantime congress is about to add a trillion dollar new in health care entitlement that is similar in design to medicare and we're significantly expanding medicaid which is already bankrupting the states this is far from the first administration to propose such a program performance initiative and frankly this isn't the first such fiscally responsible sounding measure this administration has failed even as it continues to pursue enormous expansions in scope and cost the federal government no i do believe performance measures such as those we'll be discussing today can help highlight which programs are failing or are in need of reform but it cannot make the difficult political decisions to actually eliminate failing programs or more important restructure currently unsustainable entitlements so my concern is that mr best intentions and the genuine merits of performance based budgeting this initiative could be diminished to marginal tinkering to programs with major structural flaws or it might simply cover congress his failure to take real steps necessary to get control of the we should support them when programs do not work we need to fix them or and to accomplish this we need to measure the performance of programs  continually search for more effective and efficient ways to operate during my twenty years in the private sector as a c e o and advisor to see i found that leadership measurement and a motivated workforce create the foundation for good performance i'm confident the same is true in government congress and previous minute previous administrations laid some of the groundwork for government wide performance management including the clinton administration s in the bush administration's part the result is that today we have thousands of metrics and plans i believe the test of a performance management system is whether it is despite the extent in breath of these historic efforts the current system fails this test congress doesn't use it agencies don't use it and it doesn't produce meaningful information for the public there's too much focus on process and not enough on outcomes we do not track progress on goals which cut across agencies overall too much emphasis has been placed on producing performance information to comply a checklist of requirements this must change federal managers and employees at all levels must use performance goals and measures to set priorities monitor progress and diagnose problems the fundamental problem with the past performance improvements has been the lack of all lack of involvement of congress we would like to work with you to develop mechanisms to better use performance information to inform budget decision this committee has the ability to see the big picture and i believe there are opportunities to leverage your unique perspective to look across programs that are trying to achieve similar goals in better understand which are working and which are not also we plan to work with congress to build on promising formants management developments in state and local governments and other countries several states including oregon virginia texas and ohio show how government can clearly communicate state performance priorities track progress against goals and make results transparent to the public local governments including new york city and baltimore have affectively use performance management practices to improve outcomes and drive down costs other countries including the united kingdom offer instructive lessons we're committed to taking the best of what works in other governments in the private sector and in recent federal efforts to create a new performance management system this system will be the foundation for our efforts to improve the efficiency and effectiveness of the federal government as we develop this management system there are five key principles we will follow first senior leader ownership it is critical that senior agency leaders own the overall performance man different process and their agency goals and measurement secretaries and deputy secretaries will be charged with setting of agency goals will be held responsible for performance against those goals second cascading goals a clear line must link agency strategic goals and measurements to programs and individual employee third outcome oriented cross agency targets outcome oriented goals and measures connect government agencies to their missions similarly achieving broad government outcomes often requires contributions from multiple actors across different agencies for relentless review measurement has no value of it's not used to clear communication goals progress against targets and frequent reviews of performance against plans are essential these reviews must be performed at all levels of government transparency in a porton government goals requires the active engagement of congress the public and the overall government workforce transparency plays a critical role in creating accountability in stimulating idea while using these five principles the administration is committed to driving performance gains across the federal government we have already begun to move forward on several fronts in this year's spring budget guidance o m b asked every major agency to identify a small number of outcome oriented high priority performance goals which they intend to achieve in the next twelve to twenty four months senior leaders are actively involved in this effort including secretaries and deputy secretaries this level of involvement i believe this is a significant break from the past agency leaders will review their progress against their goals on and on the basis agencies have also identified goals such as climate change and homelessness that are high priority for multiple agencies and require close collaboration in june we launched the i t dash board which to place displays cost and schedule variance for every major federal government i t project the ip dashboards are already having an impact the v a has put on hold forty five over budget or behind schedule projects until it decides which to continue and which to terminate we plan to rollout similar dashboards for government other government functions in september the united states citizenship and immigration services set up a system that allows applicants to see their status via the web or email updates and the processing time of their case compared to other similar cases this makes what has been a new tory asli opaque process much more transparent we are encouraging agencies to identify other service areas which can benefit from similar customer facing system for certain types of programs ongoing measurement is not sufficient these programs require periodic in depth of valuations to determine their effectiveness on october seventh and be encouraged federal agencies to request f y two thousand and eleven funding to conduct significant pilot evaluations and strengthen agency evaluation capacity among the obama administration's cabinet and subcabinet appointments or several former governors and state officials who have experience using performance schools and measures to drive government performance we are enlisting van and other leaders across federal agencies to work together as a vanguard for federal performance management with particular emphasis on adopting best practices from state and performance management system as we move forward we will also identify current measurement efforts that are not used in our burden so we will either a limb in eight them or streamline this will include making the performance and accountability reports more useful by scaling back their hundreds of pages per agency per year i want to be is using performance information to inform budget decisions the president's f y two thousand and ten budget proposed reduced funding for the terminations of one hundred twenty one programs agency goals and relevant performance information are also informing our internal f y two thousand and eleven budget discussion overall across the last several months we've made progress in setting up our new performance management system and it begun to pilot key parts of it that said we have a lot of work to do to put in place a system that is truly used by key decision makers across government as we undertake these efforts we would like to work with the budget committee to make sure the information you receive from agencies serves you well we look forward to partnering with you as we learn more about the committee's performance improvement priorities we've already had productive conversations with members of this committee including representatives frater and why are and i want to thank the committee for holding this hearing and for your belief in improving federal performance i look forward to working with you to achieve this good aspects the part i think there's too much there are too many metrics they tend to we tend to measure in silos which is how we're organized as a government agency by program when many of our issues homelessness climate change employment programs tend to go across so we need the ability to go across into identifying the issue of the opportunity rather than the silo we need to be focused on outcomes oriented measures too often measures or input or process oriented outcomes based measures we need to make sure that we don't have too many i think the focus on too many things is ultimately to focus on the thing that we need to prioritize  and then do all this and be transparent and then make sure that people are using the system you're using it senior leaders across government are using it and that that use that attention then trickles down or cascades to the organization all the way to the individual employee so i think there's a decent foundation here but we need to take the pieces that fit with what i just described and also eliminate what doesn't move the clutter if you will very good points above have there been any of valuation done of those programs as to how those programs perform on their own and then come into other programs so that we can then say ok that issue's important now let's make sure we fund the programs that are four months where we want to see how agencies are tracking those milestones and if they are performing well you know we will obviously encourage continued strong performance if people are missing  it could play into a zero based budgeting exercise but actually it's a different take which is to say there are programs where we have measurement and we're seeing how they're performing against their targets and goals that i just described but at the same time is a step back and say how is this program doing versus other programs serving the same goal how is this program doing versus a control and therefore you need a rigorous evaluation of those programs periodically to understand what kind of return the taxpayer getting on on the dollar i don't think is as a generalization we do enough of valuation across government so the guidance encourages agencies to build their evaluation capabilities to start to work in cross agency groups to share best evaluations to be funded in the f y two thousand and eleven budget so i think evaluation dollars can have a very high return for all of us appreciate that if we can actually get congress and the ministration on the same page with performance think that's really at the heart of what you my team which is to make sure that where we are spending dollars we're spending them wisely programs that don't work  think it's hard to generalize but certainly i think looking at how efficient they are and insisting they become more efficient as has the private sector across time is a very good discipline i think you know one of the observations i have from twenty years in the private sector is a lot of the efficiency gains and service quality gains have been driven by information technology and there are pockets of information  technology sophistication and leading edge in the government but for the most part we're way behind and i think that we need to understand how we leverage information technology and other  contracting where you know we spend five hundred thirty billion dollars a year we put a stake in the ground the president put a stake in the ground on march fourth that we're going to save forty billion dollars by two thousand and eleven so we are right so it's not a train that i personally spend a lot of time on but what you're describing are the types of outcomes metrics that should be part of what we're doing you mentioned saving money and contracting  cost effectiveness with making the contracting process and open to all including small business i absolutely agree with the importance of small minority owned businesses in the contracting process the one contractor so i think increasing competition thing to contribute to increasing efficiency too often we rely on what are called high risk contracting vehicles so cost reimbursement contracts or in material contracts or as i said the contracts that are competed are all high risk vehicles we've asked every agency to reduce the percent by ten percent so i think that the sort of the the loose network that you described returning favors if you will i'm not sure how much of that exists but the extent that exist i would argue that and that's the kind of there's a kind of of over a thousand different programs so i think through the high priority form and school exercise that i described we've already identified several situations where they are coming to the table for the first time important goals outcomes based goals at the state level if they make public they benchmark their performance versus other states they have performance agreements with the folks who are running those agencies state that results have followed as you said they've been recognized by pew and other over and over again it's a well managed setting is a lot we can learn from the states and we want to build on the best of the states efforts oregon texas virginia come to mind cities baltimore your and other cities and then pockets of performance to the federal government and you know take sort of a best practice approach we don't need to reinvent the wheel but i think there's a lot to learn from virginia and other states dollars to bail out the private sector and in fact three hundred billion or so that is still out there in the private sector helping to alleviate their problems we have about two hundred ninety billion dollars in the american recovery   you know having spent my whole career in the other washington if you will in the local business community i do think there are things we can learn from the private sector but i do want to tell you that i bring a lot of humility to general council so i do spend a lot of time and i think a very important function and i think that we want them to continue to play the role they play so effectively at the same time i think they do have ideas about how we can prevent waste fraud and abuse some encouraging that community continue obviously the role it plays and to keep it very independent and strong at the same time start to bring for we will create many more together i think it is important to recognize that and to celebrate those while at the same time where there are problems were transparent and we don't cover them and we do things to fix those problems but i think recognition and reward  positive publicity is part of the package thank you very much dollars in savings is a goal and seven percent savings by two thousand and eleven and baseline bending and reducing dollars obligated under high risk no bid contracts by ten percent those are all pretty ambitious sector is very important value those dollars being spent but the issue of program evaluation and how you actually do plan in a time sensitive way to do the kind of evaluation of what's working and what isn't  each program by itself but in the context of what our priorities and goals are for that department for the nation you know it's a program we're working but it's doing something nice over there but really doesn't meet our basic goals that sort of that we've set for that department so even if the program is functioning well but does not meet our overall goals well what kind of actually going to take on that is really my first question and i did want to follow up on your comment about health i t knowledge that we cannot help but information technology that you're using to monitor programs again i assume in a time sensitive way and to create more efficiency within government if you also speak to your knowledge that it's a problem but two questions about that one is it takes investment to put in the kind of information technology are well aware of this because of the health information technology that i've worked on but that takes some cost to us spending money to get systems computerized really make sure the right software make sure it's interoperable make sure that that information publicly and used by managers to make decisions could you speak to not just acknowledging the importance of using technology information technology but then how you going to move it up the scale and then use it in a way to do the kind of timely evaluation of our programs i talked about in my first part of my question but i think the first part of what matters i think we're uncovering through that high priority performance goal exercise which programs really fit with those handful of priorities and that's the beginning of a prioritization exercise so that things that matter l either are not funded at all or funding is reduced to those areas and funding funneled to those areas that matter more the evaluation memo that went out from director  think right out the back door of what you're describing which is let's take everything that we've done historically on evaluation and make it transparent nothing's on the back shelf anymore let's build agency capabilities to do more evaluations let's we're hav agencies work together to evaluate programs or issues that run across agency and then we're going to make it part of the funding of two thousand and eleven budget is to find more evaluations i think we need more rigorous evaluation of what we're doing and some of those evaluations do take time but others take less time i think when we spend those dollars on evaluation to prioritize and do in those areas that we believe you know are most have the highest spend spent for a program to say they have to report back on their effectiveness and and cost agencies will do rigorous third party evaluations of how they're performing versus their own targets but also against alternatives and control samples so areas we are behind where we should be and i too yet we spend a lot of money we spend seventy six billion dollars a year on information technology and we have too many projects that are behind schedule or over budget  never are implemented or don't achieve their intended results now this is not unique to our sector it's far in the private sector also to do large scale i t but we need to really think through how we have the project management capabilities  to get this done we move pretty slowly on i t and as we all know technology moves fast so sometimes it takes several years just to begin a program a project and by the time we start it sometimes  a few generations behind we also need to have technology driven and owned by senior leaders when i ts done in a silo it's inevitably unsuccessful so we need to i believe improve project management from spec development through completion but again it's just it's not just getting the information posting transparency is important but it is in the use of that information to help inform decision absolutely the information different level of bang for the efficiency in the buck like to focus on a couple of things i r s i r s probably is the largest producer of savings available out there for us likely aren't focusing the personnel that we have in the best areas to gain the most efficiency because there are some people who probably owe the government thousand dollars in unpaid taxes and they're probably a lot of entities out there that the government so when it comes to expenditure programs would your agency be involved in trying to help him and how to best focus his attention so that a nonprofit agency that collecting money and that if we have a program like the first time homebuyer tax credit that we're not sending money off to a four year old to apply for a first time homebuyer tax credit so that we're not being defrauded out of those eight thousand dollars in tax credit that were given to americans let me let me start at the beginning of your question which is prioritization there are efforts and we talked about a few of them today the performance management system that's been the focus of the hearing today contract information technology inefficient and that's where we want to focus more of our energy to bring that same philosophy to the i r s there is a tax gap i think three hundred billion dollars and you know closing that tax gap is i'm sure important for the i r s and for all of us and within the i r s and the commissioner should be prioritizing to say where are the where is that intersection of it's big and i can get it done so that philosophy of systemic horizontal improvement but at the same time focusing in on some areas that need special attention and getting early results and returning in this situation dollars to the taxpayers dollars the government is exactly the philosophy that were involved i think many of us would have a great deal of interest in supporting observing what you do if we had a clear sense that in terms of trying to extract efficiency in the management of government we really went after the big i suspect wind is strapped doesn't have enough personnel to go out there and do all the work it needs to do and that's because too often you get a bad rap that just out there is a bad cop trying to get granny to pay her taxes when in fact there are many many very wealthy individuals or corporations that are not doing what granny has done and that's paid her taxes i would hope that you were able to find in the work that you do is that you will focus in on the big department which does all these no bid contracts or cost plus contracts which cost the taxpayers tremendous amount of dollars i r s and other agencies figure out what they need to do we should blame them because they don't have enough personnel to do the work some cases we should try to help them be more efficient but when you let two hundred fifty three hundred billion dollars go on an annual basis because it's an collect taxes that's probably the biggest the biggest inefficiency we can have a government but i agree with your boss meaning contracting saving forty billion dollars across two years of the five hundred thirty billion at some situations contracted out or outsource inherently governmental functions or areas that we need to make sure we have the capacity to perform our critical function so i  too much of a compliance mentality rather than let's use this to drive results and where that's happening we should either create something that passes a standard of we are going to use it to manage performance or we should get rid of it but it's just water and taking up time i think on acquisition one of the root cause problems is the workforce itself on acquisitions as we doubled contracting across the last five years  overly reliant on contractors a significant portion of the twenty three or twenty four agencies that are doing the pilot selected their acquisition organization if they have contractors doing acquisition so that that is an area it's not unusual to have contractors in the acquisition area doesn't mean that that's always incorrect but i think that it's it is dated so many of the agencies that area of people how do we do that well we've got it we've got to make it we have to have a hiring process that actually attracts the best and brightest not to take six months on average to hire someone you know my experience in the private sector is the best talent doesn't wait or for six months to find another home so we need to be able to hire the best talent hire the best down yet to streamline the process we need to make sure that we're providing enough training and and continuing education we can make sure we have an appraisal system that rewards those who are performing well and mabel's us to give out feedback in and potential out canceling for those who are underperforming so i think there's a lot that we need to do on the human resources side working closely with director barry have all the answers but how much how important a part of a senior manager or a managers time recruiting and coaching is how central it is to their performance in the private sector again with the exception