GAO United States

General Accounting Office

Washington, D.C. 20548

General Government Division

B-277593 

July 31, 1997

The Honorable Richard K. Armey

Majority Leader

House of Representatives

The Honorable John 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: The Results Act: Observations on the Department of the

Treasury’s July 1997 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

consultation with Congress as required by the Government Performance

and Results Act of 1993 (the Results Act). This letter is our response to

that request concerning the Department of the Treasury.1

Our overall objective was to review and evaluate the latest available

version of Treasury’s draft strategic plan. Specifically, we (1) assessed the

draft plan’s compliance with the Act’s requirements and its overall quality,

(2) determined if Treasury’s key statutory authorities were reflected,

(3) identified whether discussions about crosscutting functions and

interagency involvement were included, (4) determined if the draft plan

addresses major management problems, and (5) discussed Treasury’s

capacity to provide reliable information about its operations and

performance.

Background The Results Act seeks to shift the focus of federal management and

decisionmaking away from a preoccupation with staffing, activity levels,

1

In addition to the Treasurywide plan, 15 components within the Department had draft strategic plans

as of July 1, 1997. We only reviewed and report here on the Treasurywide plan.

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and tasks completed to a focus on results—that is, the real difference that

federal programs make in people’s lives. Under the Results Act, executive

agencies are required to develop (1) strategic plans by September 30, 1997;

(2) annual performance plans for fiscal year 1999 and beyond; and

(3) annual performance reports beginning March 31, 2000. The Act states

that agencies’ strategic plans should cover a period of at least 5 years and

that these plans should include, among other requirements, a set of

strategic goals. Although the intent of the Results Act is to have agencies

focus their strategic goals on results to the extent feasible, the Act does

not require that all of an agency’s strategic goals be explicitly

results-oriented.

As the chief financial agent of the U.S. government, Treasury administers

diverse programs that have governmentwide implications. Treasury,

among other things, produces and protects the currency; processes tax

returns; helps set tax, economic, and fiscal policies; enforces trade

agreements; regulates financial institutions; enforces alcohol, tobacco, and

firearm laws; and pursues criminals who launder money, threaten U.S.

borders, or use illegal weapons. Overall, Treasury collects about

98 percent of the revenue for the federal government. Because its

functions are so diverse, Treasury historically has not been managed

under a unifying mission and shared goals. Furthermore, this diversity of

functions raises a number of challenges for Treasury in developing a

comprehensive strategic plan that adequately addresses all of its

responsibilities.

Organizationally, Treasury is composed of 16 major units, including the

Internal Revenue Service (IRS), the Customs Service, the Secret Service,

and the Office of the Comptroller of the Currency, and headquarters

operations. In addition to the Department’s draft strategic plan, many of

the other components have developed their own draft strategic plans.

While the components’ draft plans were written before the Treasurywide

draft strategic plan, Department officials told us that the components’

plans were developed under Departmental guidance.

The Treasurywide strategic plan we reviewed is the Department’s initial

draft submission. The Results Act anticipated that it may take several

planning cycles to perfect the strategic plan process, and that strategic

plans would be continually refined as various planning cycles occur. Thus,

our comments reflect a snapshot status of the draft plan at a given point in

time. We recognize that developing a strategic plan is a dynamic process

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and that Treasury officials, with input from the Office of Management and

Budget (OMB) and congressional staff, are continuing to revise the draft.

Results in Brief Treasury’s initial draft strategic plan is incomplete and does not meet the

requirements of the Results Act. Of the six elements required by the Act,

the Treasury draft plan includes four. Of the four elements, two generally

meet the Act’s requirements but could be strengthened—the mission

statement and key factors external to the agency that could significantly

affect achievement of the strategic goals and objectives. The information

on the two other elements in the plan—goals and objectives and the

strategies to achieve these goals and objectives—is often too general and

vague to be used effectively by Treasury management, Congress, and other

stakeholders. Two elements—the relationship between long-term goals

and objectives and annual performance goals and a description of how

program evaluations were used to establish or revise strategic

plans—were missing from the draft plan we reviewed. Furthermore, the

draft plan does not adequately discuss critical management problems or

describe interagency coordination of crosscutting activities. Finally, our

work and that of Treasury’s Inspector General (IG) raises questions about

the Department’s capability to provide reliable information.

Two of the four elements that are included in the draft plan could be made

more specific to better meet the purposes of the Results Act and to be

more consistent with OMB Circular A-11, Part 2.2

 Treasury’s goals and

objectives are primarily general assertions that do not describe intended

outcomes. The strategies to achieve the goals and objectives do not fully

disclose what specific actions are to be taken, and by which component,

to attain the plan’s goals and objectives. The strategies almost always fail

to meet the Results Act requirements that the plan describe how the goals

and objectives are to be achieved, including a description of the processes,

technology, and other resources needed to meet the goals and objectives.

The draft plan appears to reflect consideration of Treasury’s major

statutory responsibilities. However, we noted that the draft plan is written

in such a general way that it is difficult to determine the extent to which

the plan is implementing the specifics of any particular statutory

responsibility.

2

OMB Circular A-11, Part 2, provides guidance to agencies in preparing and submitting strategic plans

and annual performance plans.

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The draft plan does not adequately address crosscutting issues and does

not mention whether Treasury coordinated with other federal departments

and agencies where they share related functions, such as law enforcement

programs in the Department of Justice or programs involving the tax

expenditures administered by IRS, such as the low-income housing and

research tax credits.

In addition, although a major part of the mission statement is focused on

management, the draft plan does not adequately address some of the

critical management problems facing Treasury that could affect its ability

to achieve its strategic goals and objectives. In recent years, we and others

have reported on many management challenges facing IRS and other

components of Treasury. For example, our most recent high-risk series of

reports identified eight Treasury management problems. The draft plan

could be improved if it more specifically addressed some of these major

management problems. In another example, the National Commission on

Restructuring the IRS identified problems with Treasury’s oversight of IRS.

Again, the draft plan does not provide specifics on how the problems are

to be resolved. While some of these issues may be addressed in

component plans, Treasury draft plan’s discussion of the management

mission is incomplete without some consideration of its role in resolving

these problems—some of which are long-standing.

We and the Treasury IG have long reported on problems with the reliability

of information systems—both program-related and financial—within the

Department. The draft plan identifies goals, objectives, and strategies

under Treasury’s management mission that are aimed at addressing the

capacity of the Department to provide reliable data and modernize

information systems. The draft plan does not address how data reliability

and information systems currently affect Treasury’s ability to measure

performance or provide necessary information to permit Congress to

assess the Department’s progress toward its goals.

Draft Strategic Plan

Does Not Have All of

the Required

Elements and Is Too

General

Treasury’s draft strategic plan does not have all of the elements required

by the Results Act, and its usefulness is limited because it is too general.

Treasury’s draft plan includes two elements—mission statement and key

external factors that may impact on achieving the plan’s goals and

objectives—that generally meets the Results Act’s requirements but could

be strengthened. The information provided in the draft plan on two other

elements—goals and objectives and the strategies for achieving the goals

and objectives—is too general to achieve the purposes of the Results Act.

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The draft plan is also missing two of the required six elements—a

discussion on how Treasury’s strategic goals and objectives and annual

performance goals will be linked and a description of how program

evaluations were used to establish strategic goals.

Two Elements Generally

Meet the Results Act’s

Requirements but Could

Be Strengthened

The draft plan’s mission statement and key external factors that could

affect the plan generally meet the requirements of the Results Act.

However, some additional information would be helpful to more fully

understand the complexity and diversity of Treasury’s responsibilities.

Mission Statement The Results Act and Circular A-11 state that an agency’s strategic plan is to

contain a comprehensive mission statement, defining the basic purpose of

the agency, with particular focus on its core programs and activities. In

addition, Circular A-11 states that the mission statement may include a

concise discussion of enabling or authorizing legislation as well as the

identification of issues that Congress specifically charged the agency to

address.

According to its draft plan, Treasury divided its mission into three major

programmatic missions, spanning the breadth of programs that it oversees.

Treasury’s missions are (1) economic—to promote prosperous and stable

American and world economies, (2) financial—to manage the

government’s finances, and (3) safety—to protect our financial systems

and our nation’s leaders and to foster a safe and drug free America. To

help ensure its ability to accomplish the goals and objectives for the

programmatic missions, Treasury’s draft plan has a fourth mission area of

managing—to continue to build a strong institution.

The draft plan does not include a discussion of enabling or authorizing

legislation. While the three programmatic missions generally cover

Treasury’s functions and responsibilities, the plan could be made more

useful if there was some linkage between these broad missions and the

missions of the Department’s components or its underlying statutory

authorities.

Key External Factors That

Could Affect the Achievement

of General Goals and

Objectives

The Results Act and Circular A-11 require that agencies identify and

discuss key factors, external to the agency and beyond its control, that

could affect its ability to achieve the goals and objectives in its strategic

plan. These factors, which can be economic, demographic, social, or

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environmental, are to be described and linked to a particular goal(s) with

details on how the achievement of the goal(s) will be affected by it.

Treasury’s draft plan includes a brief discussion on some of the key

external factors for each of its 13 goals but provides little detail on how

particular factors affect the achievement of specific goals. Between one

and six factors are discussed for each of the goals. In general, the list

appears to be representative of factors that could affect Treasury’s ability

to achieve its goals. To illustrate, Treasury lists changing demographics,

changing technology, and changes in the financial services industry as

among the key factors affecting the goal to promote domestic economic

growth. But the plan provides little, if any, detail on how the factors would

affect the achievement of Treasury’s goals or whether steps could be taken

to mitigate the impacts.

Two Elements Are Too

General to Achieve the

Purposes of the Results

Act

Treasury’s draft plan includes two of the key elements—goals and

objectives and strategies for achieving those goals and objectives, but

these are stated in very general terms and thus are not as useful as they

could be to achieve the purposes of the Results Act.

Goals and Objectives According to the Results Act and Circular A-11, a strategic plan is to

contain general goals and objectives for the major functions and

operations of the agency. These goals and objectives are to elaborate or

provide greater specificity on how an agency will carry out its mission

through its programs and activities. Also, the goals and objectives should

be sufficiently detailed to guide and direct agency staff toward actions that

fulfill the mission of the agency. Finally, the goals and objectives should

often be results-oriented, to the extent possible; that is, they should

attempt to focus on program outcomes, rather than outputs.

Although Treasury’s draft plan does provide linkages among its missions,

goals, and objectives, its goals and objectives are not specific enough to be

used effectively by Treasury management, Congress, or other

stakeholders. For example, under its financial mission, “manage the

government’s finances,” Treasury identified as a goal, “cost-effectively

finance the Federal government’s operations.” The only objective

associated with this goal is to “finance the Federal government in the most

cost-effective manner over the long term,” which is a restatement of the

goal. Although the goal and objective are clearly linked to the economic

part of the mission, the general manner in which they are stated makes it

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difficult for Congress and Treasury to assess the Department’s progress.

For example, without a definition of the term “cost effective,” it would be

difficult to determine when the goal is achieved or to measure progress

toward that end.

Furthermore, Treasury’s draft plan does not precisely state which

Department bureaus have responsibility for carrying out the goals and

objectives. A clearer discussion of which bureaus are responsible for

particular goals and objectives would allow for a comparison of the

individual bureaus’ strategic plans to ensure that their missions, goals, and

objectives are aligned with those of the Department.

Finally, Treasury’s draft strategic plan also includes several goals that are

not as results-oriented as they could be. For example, Treasury has a goal

to “fight violent crime,” which could be made more results-oriented by

explicitly stating the outcomes that are intended to be achieved through

the Department’s various efforts to combat violent crime. Although it is

not a specific requirement of the Results Act that all goals and objectives

be results-oriented, it is clearly the intent of the Act that agencies focus on

the outcome, or impact, of their programs whenever possible.

Strategies for Achieving Goals

and Objectives

Under the Results Act, strategic plans are to contain a description of how

the goals and objectives are to be achieved, including a description of the

operational processes, staff skills and technology, and the human, capital,

information, and other resources needed to achieve the goals and

objectives. This information would be useful in showing how the agency’s

activities, core processes, and resources are to be used to achieve the

strategic goals. According to Circular A-11, such strategies should also

contain schedules for significant actions and outline how the agency will

communicate strategic goals throughout the organization and hold

managers and staff accountable for achieving these goals.

Although Treasury’s draft plan lists strategies for each of its objectives, the

strategies do not meet the Results Act’s requirements or reflect

consistency with guidance in Circular A-11. Instead, the draft plan’s

strategies are mostly general statements that do not describe the

operational processes and resources needed to achieve the plan’s goals

and objectives. The strategies also do not outline how Treasury will

communicate strategic goals to its managers and staff and hold them

accountable for achieving these goals. For example, the strategy to “help

develop over the long term a secondary market for community and

economic development loans to enhance liquidity and market

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performance” does not describe the operational processes and resource

requirements or give any information on how staff are to be held

accountable.

As previously mentioned, Treasury’s draft plan has a management mission

area that includes goals and strategies focusing on staff, technology, and

other resource requirements to accomplish its other three mission areas.

However, the strategies in this section are too general to be useful. This is

because many strategies do not describe the resources needed to carry

them out, and none of them schedule significant actions. In addition, the

management strategies are not clearly linked to the specific goals and

objectives in the programmatic mission areas.

Furthermore, the draft plan does not always disclose which agency or

bureau will be involved in executing its strategies or whether interagency

coordination would be involved. Thus, it is difficult to evaluate resource

requirements for carrying out particular strategies.

Two Elements Are Missing

From Treasury’s Draft Plan

The following two elements are required by the Results Act and are

missing from the draft plan.

Relationship Between

Long-Term Goals and

Objectives and the Annual

Performance Goals

An agency’s strategic plan is to describe how the performance goals

included in its annual performance plans will be related to the goals and

objectives in the agency’s strategic plan. The Treasury draft plan we

reviewed did not have information that discusses the relationship between

goals and objectives and annual performance goals and measures. Such a

discussion is important in linking an agency’s long-term goals and

objectives in its strategic plan to the goals in its annual performance plan

to gauge progress. The Treasury draft plan’s overall usefulness is limited

because this discussion was not in the draft plan.

In a July 18, 1997, meeting, Treasury officials told us that performance

goals would be part of the Department bureaus’ strategic plans and not

part of the Treasurywide plan. To meet the Results Act requirements,

comply with Circular A-11 guidance, and help clarify the meaning of its

strategic goals and objectives, the draft plan could be improved if it

included (1) the type, nature, and scope of the performance goals to be

included in the performance plan; (2) the relationship between the

performance goals and the long-term goals and objectives; and (3) the

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relevance and use of performance goals in helping determine the

achievement of long-term goals and objectives.

Program Evaluation One of the purposes of the Results Act is to enable Congress to direct

resources to the programs and agencies that use them most effectively.

Program evaluations—defined in the Results Act as objective and formal

assessments of the results, impacts, or effects of a program or policy—are

a means to determine how effectively agencies are using their resources.

According to Circular A-11, the planned program evaluation section of the

strategic plan should briefly describe the program evaluations that were

used in preparing the strategic plan and outline (1) the general scope and

methodology for planned evaluations, (2) the key issues to be addressed,

and (3) a schedule for future evaluations.

Treasury’s draft plan neither discusses how program evaluations were

used to establish general goals and objectives nor provides a schedule for

future program evaluations. Program evaluations are particularly

important for a department such as Treasury, which shares functions with

other departments and agencies.

Key Statutory

Authorities Are

Generally Reflected in

Treasury’s Draft

Strategic Plan

Treasury’s draft plan appears to reflect consideration of most of the

Department’s major statutory responsibilities. Consistent with your

request, we did not attempt to identify whether all of Treasury’s statutory

responsibilities were reflected in the preliminary plan; rather, we focused

on whether the “major” responsibilities were addressed. The draft plan

addresses these responsibilities generally, and it contains only a few

specific references to the statutory bases for Treasury’s major functions

and operations. In fact, the draft plan does not cite Treasury’s (or its

bureaus’) general authorizing legislation. It does cite some of the laws that

Treasury is involved in implementing, but it does not explain how the

Department is implementing the specifics of any statutory authority. For

example, it is unclear from the draft plan how Treasury will “centralize

administrative offset of Federal payments by delinquent debtors as

mandated by the Debt Collection Improvement Act of 1996,” even though

the Department has taken steps to do so. It should be noted that the

Results Act does not require an agency’s strategic plan to contain a

compilation of statutory authorities of the agency, but Circular A-11 does

state that a plan may include a concise discussion of enabling or

authorizing legislation.

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Although the draft plan appears to reflect consideration of most of

Treasury’s major statutory responsibilities and to be generally consistent

with them, it should be noted that the draft plan is written in such a

general way that it is difficult to determine the extent to which the plan is

implementing the specifics of any particular statutory responsibility. The

draft plan does not provide any linkages between the stated goals and

objectives and any major statutory authorities that form the basis for

them.

Crosscutting

Activities Are

Inadequately

Addressed

Crosscutting activities are agency activities that share a common purpose

with activities in other agencies. Treasury, because of its broad statutory

authorities, shares many responsibilities with other executive agencies.

Also, several Treasury bureaus have overlapping programmatic

responsibility. Likewise, several tax expenditures administered by IRS

share similar goals with programs administered by other executive

agencies.

Treasury’s draft plan could do a better job of addressing crosscutting

program activities. In particular, the plan could better serve the purposes

of the Results Act by making it more clear how Treasury’s goals and

objectives relate to those of other federal agencies. We recognize that this

is Treasury’s initial plan and that including a complete discussion on

crosscutting programs is a not an easy task considering the array of such

programs in the Department.

Specifically, some crosscutting programs are not addressed in the draft

plan at all, while other crosscutting programs are discussed very generally.

The draft plan, for example, does not address how IRS’ law enforcement

programs should be coordinated with law enforcement programs in other

Department components or Justice. There is also no discussion of the

crosscutting nature of many tax expenditures administered by IRS, such as

the earned income tax credit, the low-income housing credit, and the

research credit. Where crosscutting issues are addressed, they are

addressed only in a general way. For example, Treasury lists as an

objective to “disrupt and dismantle drug smuggling operations.” As a

related strategy, Treasury lists that it will “continue participation in

productive Federal, State, and local anti-drug task forces.” No detail is

provided about which Treasury bureaus or other federal agencies will

participate in these task forces, nor what their respective responsibilities

will be. The draft plan does include some discussion on crosscutting

management functions within the Department in the management mission

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area; however, it does not discuss how the management functions support

Treasury programs in achieving their goals. For example, one strategy for

making wise information and technology investments is to “integrate

information gathering and storage with other agencies.” No detail is

provided about who at Treasury will have lead responsibility, what

agencies are included, or what programs would operate more successfully

as a result of such integration.

Treasury’s Draft

Strategic Plan Does

Not Adequately

Address Major

Management

Challenges

Over the years, we have reported on major management challenges facing

many of the agencies in Treasury. Congressional committees, the National

Commission on Restructuring the IRS, Treasury’s IG and others have also

reported on similar management problems confronting Treasury agencies.

The draft plan mentions some of the major management challenges

Treasury faces under the section entitled “Management Mission: Continue

to Build a Strong Institution.” However, the draft plan could be more

useful to Congress and other stakeholders if there was a clearer

presentation of the relationship between how Treasury’s critical

management problems are to be addressed and how they will facilitate the

Department’s achievement of its strategic goals and objectives.

Our 1997 high-risk series of reports identified eight major management

problems affecting Treasury’s operations.3

 Two of the

problems—computer security and the year 2000 conversion—are

governmentwide management challenges, four others were specific to IRS’

operations, one related to the Customs Service’s financial management

problems, and one related to the control of seized assets included in the

Treasury Forfeiture Fund.4

 The draft plan could be improved if it more

specifically addressed some of these major problems.

For example, under its objective to “make wise information technology

investments,” Treasury recognizes that it needs to accomplish the year

2000 conversion and incorporate information technology security as an

essential part of the systems development life-cycle process. But the draft

plan provides no specifics on who at Treasury would be responsible for

the success of these strategies, what resources would be required, or how

success would be measured.

3

High-Risk Series: An Overview (GAO/HR-97-1, Feb. 1997).

4

The year 2000 conversion refers to the need for computer systems to be changed to accommodate

dates beyond the year 1999.

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While the Treasury draft plan provides strategies for achieving its

management objectives, these strategies do not have the detail necessary

to determine precisely how the Department plans to address these

challenges. This is because, in most instances, the draft plan does not

indicate which Treasury bureau would be affected. For example, although

our past work has shown that financial management problems exist at IRS

and the Customs Service, the draft plan does not specifically address

them. Furthermore, it is unclear how Treasury’s IRS Management Board

will provide strategic leadership and ensure close oversight of IRS

modernization and performance improvement efforts.

While some of these issues may be addressed in component plans, a more

explicit discussion of Treasury’s role in resolving the Department’s

management challenges would be helpful. It is also unclear in many cases

to what specific end Treasury efforts are focused and how progress and

success in meeting Department objectives will be measured.

Treasury’s Capacity to

Provide Reliable

Information on the

Achievement of

Strategic and Program

Performance Is

Questionable

To efficiently and effectively operate, manage, and oversee its diverse

array of responsibilities, Treasury needs reliable data. Treasury and its

component bureaus rely on a number of automated management

information systems to carry out their roles. Our past work and that of

others has shown that in many cases a lack of readily accessible, quality

data raises questions about Treasury’s capacity to track and measure its

performance in achieving its strategic mission and goals. Treasury’s draft

plan could be improved if it more clearly addressed the Department’s data

reliability problems.

In its report on Treasury’s fiscal year 1996 financial statements, the

Treasury IG reported that material weaknesses continued to exist in the

internal controls structures of key bureaus, and that many component

entities lacked integrated financial management systems, which preclude

the integration of financial, budgetary, and performance data. Treasury’s

draft strategic plan attempts to address this problem with a strategy to

“align performance measurement, accounting, and budgeting data to

produce a cohesive financial information framework that institutionalizes

the Departmental performance management and decision making

process.” However, the strategy is not specific enough to indicate what

actions Treasury may be proposing and how the actions would affect its

ability to provide reliable information to measure the success made

relative to achieving the draft plan’s strategic goals and objectives.

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Furthermore, the strategies do not specifically address the long-standing

weaknesses in Treasury’s ability to provide reliable information needed to

carry out its programs that we have discussed in our previous reports on

component agencies, such as IRS and the Customs Service. For example,

IRS’ ability to access accurate and reliable information on taxpayers’

accounts have long affected its ability to collect delinquent taxes.5

Scope and

Methodology

We obtained a copy of the July 1, 1997, draft strategic plan that Treasury

provided to the House of Representatives staff team working with the

agency. We did not perform a comprehensive review of the draft strategic

plans of Treasury’s component agencies.

Our overall assessment of Treasury’s draft plan was generally based on

our knowledge of the Department’s operations and programs, our

numerous past and ongoing reviews of the Department’s agencies, and

other existing information available at the time of our assessment.

Specifically, the criteria we used to determine whether the draft plan

complied with the requirements of the Results Act were the Results Act

and Circular A-11. 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 as a tool.6

As you requested, we coordinated our work on Treasury’s key statutory

authorities and its capacity to provide reliable information with the

Congressional Research Service and the Treasury IG, respectively. We did

our work between July 2 and 28, 1997. Treasury officials provided oral

comments on a draft of this letter, which are reflected in the Agency

Comments section that follows.

A list of our major products related to selected Treasury agencies is on

pages 19 through 24.

Agency Comments

and Our Evaluation

On July 28, 1997, we met with and obtained comments from Treasury

officials, including the Director of the Office of Strategic Planning and the

Deputy Chief Financial Officer. The officials generally agreed with many of

our observations. The officials pointed out that they view the plan we

reviewed, which was entitled U.S. Department of the Treasury Draft

5

High Risk Series: Internal Revenue Service Receivables (GAO/HR-95-6, Feb. 1995).

6

Agencies’ Strategic Plans Under GPRA: Key Questions to Facilitate Congressional Review

(GAO/GGD-10.1.16, May 1997).

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Strategic Plan 1997-2002, as an overview plan for the Department and that

the full Treasury strategic plan consists of the overview and the strategic

plans of component bureaus and offices. On that basis, the Director of the

Office of Strategic Planning said that the level of detailed information we

envisioned being in the plan, such as strategies on how specific objectives

are to be achieved and information on resource requirements, is better

reflected in the component plans.

The Treasury officials said that they will revise the plan in light of many of

our observations. With regards to the two elements that were not included

in the plan we reviewed, Treasury plans to include information that would

(1) more clearly show how the Department’s goals and objectives link to

the goals and objectives of its bureaus and offices and better tie this

information to the components’ annual performance plan goals in the

Department’s budget and (2) reflect the Department’s view that program

evaluations are important in making the strategic planning process work,

but that details on program evaluations are better reflected in the plans of

the components that would be responsible for carrying them out. The

revised plan is also to include, among other things, strategies that will

address all high-risk management problems confronting Treasury and

more information on how the Department and components have

coordinated with stakeholders on crosscutting activities.

The officials also stated that Treasury should be recognized for its overall

Results Act implementation efforts. In particular, the officials told us that

Treasury has had performance plans in its annual budgets for the past 2

fiscal years and has completed one annual performance report based on

the performance plans—far ahead of the Act’s requirements. In addition,

they said that the performance report uses a common set of performance

measures, with the key measures being included in the Departmentwide

audited financial statements of all Treasury components. The Deputy Chief

Financial Officer said that, because an increasing number of bureaus are

now receiving unqualified opinions on their financial statements, data

reliability within the Department has improved. However, he said that

additional enhancements are still needed at certain bureaus and that the

annual performance plans are a better place to address their continuing

efforts in this area.

As arranged with your offices, unless you publicly announce its contents

earlier, we plan no further distribution of this letter until 30 days from its

issue date. At that time, we will send copies of this letter to the Minority

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Leader of the House of Representatives; Ranking Minority Members of

your Committees; the Chairmen and Ranking Minority Members of other

Committees that have jurisdiction over Treasury activities; the Secretary

of the Treasury; and the Director, Office of Management and Budget.

Copies will be made available to others on request.

Major contributors to this letter are listed in the enclosure. Please contact

me at (202) 512-9110 if you or your staff have any questions concerning

this letter.

Lynda D. Willis

Director, Tax Policy and

 Administration Issues

Enclosure

Page 15 GAO/GGD-97-162R Treasury’s Draft Strategic Plan
Enclosure 

Major Contributors to This Report

General Government

Division, Washington,

D.C.

Charlie W. Daniel, Assistant Director

Bryon S. Gordon, Senior Evaluator

Office of the General

Counsel, Washington,

D.C.

M. Rachel DeMarcus, Assistant General Counsel

Page 16 GAO/GGD-97-162R Treasury’s Draft Strategic Plan
Page 17 GAO/GGD-97-162R Treasury’s Draft Strategic Plan
Page 18 GAO/GGD-97-162R Treasury’s Draft Strategic Plan
Related GAO Products

Internal Revenue

Service

IRS Management IRS Management: Improvement Needed in High-Risk Areas (GAO/T-GGD-97-79,

Apr. 14, 1997).

High-Risk Series: IRS Management (GAO/HR-97-8, Feb. 1997).

IRS Operations: Critical Need to Continue Improving Core Business

Practices (GAO/T-AIMD-96-188, Sept. 10, 1996).

Internal Revenue Service: Business Operations Need Continued

Improvement (GAO/AIMD/ GGD-96-152, Sept. 9, 1996).

Managing IRS: IRS Needs to Continue Improving Operations and Service

(GAO/T-GGD/ AIMD-96-170, July 29, 1996).

IRS Operations: Significant Challenges in Financial Management and

Systems Modernization (GAO/T-AIMD-96-56, Mar. 6, 1996).

Tax Systems

Modernization

IRS Systems Security: Tax Processing Operations and Data Still at Risk Due

to Serious Weaknesses (GAO/AIMD-97-49, Apr. 8, 1997).

IRS High-Risk Issues: Modernization of Processes and Systems Necessary

to Resolve Problems (GAO/T-GGD-97-52, Mar. 4, 1997).

Tax Systems Modernization: Actions Underway But Management and

Technical Weaknesses Not Yet Corrected (GAO/T-AIMD-96-165, Sept. 10, 1996).

Tax Systems Modernization: Actions Underway But IRS Has Not Yet

Corrected Management and Technical Weaknesses (GAO/AIMD-96-106, June 7,

1996).

Tax Systems Modernization: Progress in Achieving IRS’ Business Vision

(GAO/T/GGD-96-123, May 9, 1996).

Tax Systems Modernization: Management and Technical Weaknesses Must

Be Overcome to Achieve Success (GAO/T-AIMD-96-75, Mar. 26, 1996).

Page 19 GAO/GGD-97-162R Treasury’s Draft Strategic Plan
Related GAO Products

Status of Tax Systems Modernization, Tax Delinquencies, and the

Potential for Return-Free Filing (GAO/T-GGD/AIMD-96-88, Mar. 14, 1996).

Tax Systems Modernization: Management and Technical Weaknesses Must

Be Corrected If Modernization Is to Succeed (GAO/AIMD-95-156, July 26, 1995).

Tax Systems Modernization: Unmanaged Risks Threaten Success

(GAO/T-AIMD-95-86, Feb. 16, 1995).

Financial Management Financial Management: Challenges Facing the IRS (GAO/T-AIMD-97-34, Jan. 9,

1997).

IRS Financial Audits: Status of Efforts to Resolve Financial Management

Weaknesses (GAO/T-AIMD-96-170, Sept. 19, 1996).

Financial Audit: Examination of IRS’ Fiscal Year 1995 Financial Statements

(GAO/AIMD-96-101, July 11, 1996).

Financial Audit: Actions Needed to Improve IRS Financial Management

(GAO/T-AIMD-96-96, June 6, 1996).

Financial Audit: Examination of IRS’ Fiscal Year 1994 Financial Statements

(GAO/AIMD-95-141, Aug. 4, 1995).

Financial Audit: Examination of IRS’ Fiscal Year 1993 Financial Statements

(GAO/AIMD-94-120, June 15, 1994).

Financial Audit: Examination of IRS’ Fiscal Year 1992 Financial Statements

(GAO/AIMD-93-2, June 30, 1993).

Compliance Issues Tax Administration: Earned Income Credit Noncompliance

(GAO/T-GGD-97-105, May 8, 1997).

Taxpayer Compliance: Analyzing the Nature of the Income Tax Gap

(GAO/T-GGD-97-35, Jan. 9, 1997).

IRS Tax Collection Reengineering (GAO/GGD-96-161R, Sept. 24, 1996).

Earned Income Credit: IRS’ 1995 Controls Stopped Some Noncompliance,

But Not Without Problems (GAO/GGD-96-172, Sept. 18, 1996).

Page 20 GAO/GGD-97-162R Treasury’s Draft Strategic Plan
Related GAO Products

Tax Administration: Tax Compliance of Nonwage Earners (GAO/GGD-96-165,

Aug. 28, 1996).

Internal Revenue Service: Results of Nonfiler Strategy and Opportunities

to Improve Future Efforts (GAO/GGD-96-72, May 13, 1996).

Tax Administration: IRS Tax Debt Collection Practices (GAO/T-GGD-96-112,

Apr. 25, 1996).

IRS Efforts to Control Fraud (GAO/GGD-96-96R, Mar. 25, 1996).

Taxpayer Compliance: Reducing the Income Tax Gap (GAO/T-GGD-95-176,

June 6, 1995).

Reducing the Tax Gap: Results of a GAO-Sponsored Symposium

(GAO/GGD-95-157, June 2, 1995).

Tax Administration: Tax Compliance Initiatives and Delinquent Taxes

(GAO/T-GGD-95-74 Feb. 1, 1995).

High-Risk Series: Internal Revenue Service Receivables (GAO/HR-95-6,

Feb. 1995).

Tax Administration: Electronic Filing Fraud (GAO/T-GGD-94-89, Feb. 10, 1994).

Tax Administration: IRS Can Improve Controls Over Electronic Filing

Fraud (GAO/GGD-93-27, Dec. 30, 1992).

Taxpayer Service and

Submission Processing

IRS’ 1996 Tax Filing Season: Performance Goals Generally Met; Efforts to

Modernize Had Mixed Results (GAO/GGD-97-25, Dec. 18, 1996).

Tax Administration: Alternative Filing Systems (GAO/GGD-97-6, Oct. 16, 1996).

The 1995 Tax Filing Season: IRS Performance Indicators Provide

Incomplete Information About Some Problems (GAO/GGD-96-48, Dec. 29,

1995).

Tax Administration: Electronic Filing Falling Short of Expectations

(GAO/GGD-96-12, Oct. 31, 1995).

Page 21 GAO/GGD-97-162R Treasury’s Draft Strategic Plan
Related GAO Products

Tax Administration: IRS Faces Challenges in Reorganizing for Customer

Service (GAO/ GGD-96-3, Oct. 10, 1995).

Telephone Assistance: Adopting Practices Used by Others Would Help IRS

Serve More Taxpayers (GAO/GGD-95-86, Apr. 12, 1995).

Tax Administration: Continuing Problems Affect Otherwise Successful

1994 Filing Season (GAO/GGD-95-5, Oct. 7, 1994).

Taxpayer Burden Tax Administration: IRS Is Improving Its Controls for Ensuring That

Taxpayers Are Treated Properly (GAO/GGD-96-176, Aug. 30, 1996).

Tax System: Issues in Tax Compliance Burden (GAO/T-GGD-96-100, Apr. 3,

1996).

Tax System Burden: Tax Compliance Burden Faced by Business

Taxpayers (GAO/T-GGD-95-42, Dec. 9, 1994).

Tax Administration: IRS Can Strengthen Its Efforts to See That Taxpayers

Are Treated Properly (GAO/GGD-95-14, Oct. 26, 1994).

U.S. Customs Service U.S. Customs Service: Oversight Issues (GAO/T-GGD-97-107, May 15, 1997).

Customs’ Office of International Affairs (GAO/NSIAD-97-146R, Apr. 25, 1997).

U.S. Customs Service: Office of Regulations and Rulings Has Yet to

Establish Performance Measures (GAO/T-NSIAD-97-115, Mar. 11, 1997).

Customs Modernization (GAO/AIMD-97-43R, Feb. 21, 1997).

Customs Service: Drug Interdiction Efforts (GAO/GGD-96-189BR, Sept. 26,

1996).

Customs Service: Status of the Implementation of Blue Ribbon Panel

Recommendations (GAO/GGD-96-163, Sept. 3, 1996).

Customs Service Modernization: Strategic Information Management Must

Be Improved for National Automation Program To Succeed (GAO/AIMD-96-57,

May 9, 1996).

Page 22 GAO/GGD-97-162R Treasury’s Draft Strategic Plan
Related GAO Products

Customs’ Reorganization (GAO/GGD-96-81R, Feb. 23, 1996).

Managing Customs: Efforts Under Way to Address Management

Weaknesses (GAO/GGD-95-73, Mar. 16, 1995).

Customs Service: Status of Reorganization and Modernization Efforts

(GAO/T-GGD/AIMD-95-70, Jan. 30, 1995).

Bureau of Alcohol,

Tobacco and Firearms

Federal Firearms Licensee Data: ATF’s Compliance With Statutory

Restrictions (GAO/ GGD-96-174, Sept. 11, 1996).

Alcohol, Tobacco and Firearms: Issues Related to Use of Force, Dealer

Licensing, and Data Restrictions (GAO/T-GGD-96-104, Apr. 25, 1996).

Federal Firearms Licensees: Various Factors Have Contributed to the

Decline in the Number of Dealers (GAO/GGD-96-78, Mar. 29, 1996).

Use of Force: ATF Policy, Training, and Review Process Are Comparable

to DEA’s and FBI’s (GAO/GGD-96-17, Mar. 29, 1996).

Financial Crimes

Enforcement Network

Money Laundering: A Framework for Understanding U.S. Efforts Overseas

(GAO/GGD-96-105, May 24, 1996).

Money Laundering: U.S. Efforts to Combat Money Laundering Overseas

(GAO/T-GGD-96-84, Feb. 28, 1996).

Money Laundering: Rapid Growth of Casinos Makes Them Vulnerable

(GAO/GGD-96-28, Jan. 4, 1996).

National Fine Center: Implementation of Criminal Debt System Presents

Challenges (GAO/ T-GGD-95-215, Sept. 19, 1995).

Money Laundering: Stakeholders View Recordkeeping Requirements for

Cashier’s Checks As Sufficient (GAO/GGD-95-189, July 28, 1995).

Money Laundering: Needed Improvements For Reporting Suspicious

Transactions Are Planned (GAO/GGD-95-156, May 30, 1995).

National Fine Center: Progress Made but Challenges Remain for Criminal

Debt System (GAO/AIMD-95-76, May 25, 1995).

Page 23 GAO/GGD-97-162R Treasury’s Draft Strategic Plan
Related GAO Products

Treasury Forfeiture

Fund

Asset Forfeiture: Historical Perspective on Asset Forfeiture Issues

(GAO/T-GGD-96-40, Mar. 19, 1996).

High-Risk Series: Asset Forfeiture Programs (GAO/HR-95-7, Feb. 1995).

Bureau of Engraving

and Printing and U.S.

Mint

Coin and Currency Production: Issues for Congressional Consideration

(GAO/T-GGD-97-146, June 26, 1997).

U.S. Mint: Commemorative Coins Could Be More Profitable (GAO/GGD-96-113,

Aug. 7, 1996).

Future of the Penny: Options for Congressional Consideration

(GAO/T-GGD-96-153, July 16, 1996).

A Dollar Coin Could Save Millions (GAO/T-GGD-95-203, July 13, 1995).

1-Dollar Coin: Reintroduction Could Save Millions If It Replaced the

1-Dollar Note (GAO/T-GGD-95-146, May 3, 1995).

Office of Comptroller

of the Currency and

Office of Thrift

Supervision

Bank and Thrift Regulation: Implementation of FDICIA’s Prompt

Regulatory Action Provisions (GAO/GGD-97-18, Nov. 21, 1996).

Bank Oversight Structure: U.S. and Foreign Experience May Offer Lessons

for Modernizing U.S. Structure (GAO/GGD-97-23, Nov. 20, 1996).

(268814) Page 24 GAO/GGD-97-162R Treasury’s Draft Strategic Plan
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