GAO United States

General Accounting Office

Washington, D.C. 20548

General Government Division

B-277427 

July 14, 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 Commerce’s June 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 Commerce.

Objectives, Scope,

and Methodology

Our overall objective was to review and evaluate the latest available

version of Commerce’s draft strategic plan. As you requested, we

(1) assessed the draft plan’s compliance with the Act’s six requirements

and its overall quality, (2) determined if the Department’s key statutory

authorities were reflected, (3) identified whether discussions about

crosscutting functions and coordination with other agencies having similar

functions were included, (4) determined if the draft plan addressed major

management challenges, and (5) provided a preliminary assessment of the

Department’s capacity to provide reliable information about performance.

We obtained the June 1997 draft strategic plan that Commerce provided to

the House of Representatives staff team working with the agency. As

agreed, our review of the Department’s draft plan was generally based on

previous work. In recent years, congressional requests for work at

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Commerce have generally been limited to examinations of discrete issues

relating to the Department’s components and functions, such as

preparations for the decennial census and the National Weather Service’s

modernization effort.

Our overall assessment of Commerce’s draft strategic plan was generally

based on our knowledge of Commerce’s operations and programs, our

reviews of the Department’s entities, and other existing information

available at the time of our assessment. Specifically, the criteria we used

to determine whether Commerce’s draft strategic plan complied with the

requirements of the Results Act were the Act itself, supplemented by the

Office of Management and Budget’s (OMB) guidance on developing the

plans (Circular No. A-11, Part 2). To make judgments about the overall

quality of the draft plan and its elements, we used our May 1997 guidance

for congressional review of the plans as a tool.1

 To determine whether the

draft plan contained information on interagency coordination and

addressed major management challenges, we relied on our general

knowledge of Commerce’s operations and programs and the results of our

previous reports.

A list of our major products related to Commerce’s operations is attached

to this letter. As you requested, we coordinated our work on the

Department’s key statutory authorities and its capacity to provide reliable

information with the Congressional Research Service and Commerce’s

Inspector General’s (IG) office, respectively. Commerce officials provided

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

Agency Comments section on page 15.

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

decisionmaking away from a preoccupation with staffing, activity levels,

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. The Results Act does not require that all of an agency’s

strategic goals be explicitly results oriented, although the intent of the Act

1

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

(GAO/GGD-10.1.16, May 1997).

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is to have agencies’ focus their strategic goals on results to the extent

feasible.

Commerce’s missions and functions are among the most diverse of the

cabinet departments in the federal government. They include

responsibilities for management and stewardship of national resources,

advancement of commerce, economic development, scientific research

and technology, and statistical information collection and dissemination.

Because of the diversity of its functions, Commerce historically has not

been managed on the basis of a unifying mission and shared goals.

Further, this diversity of functions raises a number of challenges for the

Department in its development of a comprehensive strategic plan that

adequately addresses all of its responsibilities.

Commerce chose a thematic approach to present its draft strategic plan.

Specifically, Commerce identified three themes that are linked to its

mission statement, which, according to the draft plan, collectively

“encompass the full breadth of the Department of Commerce’s mission.”

Under each theme, there are sections on (1) goals and objectives;

(2) partnership activities; (3) the economic contributions of the programs

under each goal; (4) the programs’ legislative bases; (5) the programs’

international aspects; and (6) current trends, opportunities, challenges,

and issues influencing the programs. Dispersed throughout each of these

six sections is a discussion on the responsibilities of the relevant

Commerce component’s programs.

Commerce’s strategic plan is currently in its fourth draft. The Results Act

anticipated that it may take several planning cycles to perfect the 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 and that Commerce officials, with input from OMB

and congressional staff, are continuing work to revise the draft.

Results in Brief Commerce’s draft strategic plan is incomplete in several important

respects. Of the six elements required by the Act, four are included in the

draft plan—a mission statement, goals and objectives, strategies to

achieving goals and objectives, and a discussion of key external

factors—but each of these has weaknesses, some more significant than

others. Two of the elements—the relationship between long-term goals

and objectives and annual performance goals and the description of

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program evaluations used to establish general goals and objectives and a

schedule for future program evaluations—are missing from the draft plan.

The draft plan provides much useful information on Commerce’s statutory

authorities. However, the draft plan could be more useful to Commerce,

Congress, and other stakeholders if it provided a more explicit discussion

of crosscutting activities and the major management challenges the

Department faces. Also, with respect to Commerce’s ability to provide

reliable program performance information, there is evidence that

Commerce’s capacity to measure achievement of its goals is questionable

in several respects.

The four required elements that are included in the draft plan contained

some, but not all, of the attributes that would be desirable to meet the

purposes of the Act and be consistent with OMB Circular A-11, Part 2.

Specifically:

• The mission statement includes the core functions of the Department and

mentions the role of businesses and universities as partners in the mission.

However, the mission statement does not address the important role also

played by other government entities.

• While there are useful linkages among themes, goals, objectives, and

responsible components, the goals and objectives are not as results

oriented as they could be. For example, the goal to “restructure export

controls for the twenty-first century” could be made more results oriented

by identifying the purpose of the restructuring (for example, to increase

export flexibility or, alternatively, better protect national security).

• The strategies to achieving the goals and objectives do not meet the

purposes of the Results Act and are not consistent with OMB guidance in

that, for example, the strategies do not discuss the resources needed to

achieve the goals identified.

• Many key external factors are discussed in the draft plan, but they appear

to be used to justify programs rather than to show how these factors may

affect the achievement of Commerce’s goals. In addition, some key

external factors that could affect the achievement of Commerce’s goals

are not identified.

The draft plan does not explicitly discuss information required by the Act

on the other two required elements. For one of these—relating long-term

goals and objectives to annual performance goals—the draft plan says

only that this type of information will be provided in annual budget

requests because, in the Department’s view, annual budget requests are

the more appropriate vehicle for such a discussion. For the other

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element—concerning a discussion of the past and future role of program

evaluations—the draft plan makes limited references in various sections to

a few studies, but those references do not respond to the Act’s

requirements. In particular, the draft plan does not describe how the

studies were used to establish general goals and objectives, nor does the

draft provide a schedule for future program evaluations. Under the Results

Act, an evaluation strategy is considered to be a critical source of

information for ensuring the validity and reasonableness of strategic goals,

as well as for designing improvement strategies when goals are not met.

The draft plan appears to reflect Commerce’s consideration of its major

statutory responsibilities and provides a separate section under each

strategic theme that spells out the statutory support for the goals

articulated and helps stakeholders understand the complexity and

diversity of Commerce’s activities. To Commerce’s credit, few, if any, of

the other draft strategic plans we have seen provided this much detail

about the agency’s statutory responsibilities.

Commerce shares responsibility for certain core national issues, such as

natural resources and environment or community and regional

development, with a number of other federal departments and agencies.

Despite the potential for program duplication or overlap generated by

such shared responsibilities, the draft plan does not address how these

crosscutting activities correspond to or intersect with those of other

agencies or whether such shared responsibilities were coordinated in the

development of the draft plan.

The draft plan also does not adequately account for the major

management challenges the Department faces, such as the need to

implement a sound financial management system to ensure that programs

are managed efficiently and effectively to achieve the goals identified in

the draft plan. The Department reported that its financial systems are

seriously outdated and fragmented and are unable to provide reliable

information. The Department’s financial management weaknesses

undermine its ability to generate needed information about program

performance and costs.

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Commerce’s Draft

Strategic Plan Does

Not Fully Achieve the

Purposes of the

Results Act, and the

Quality of Individual

Elements Could Be

Improved

Of the six elements required by the Results Act, four are included in

Commerce’s draft strategic plan—a mission statement, goals and

objectives, strategies to achieving goals and objectives, and key external

factors—but each of these could be improved. The other two required

elements of a strategic plan—the relationship between long-term goals and

objectives and annual performance goals and the description of program

evaluations used to establish general goals and objectives and a schedule

for future program evaluations—are missing from the draft plan.

Mission Statement The Results Act and OMB Circular A-11, Part 2, 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, the Circular states that the mission statement

may include a concise discussion of enabling or authorizing legislation, as

well as identification of issues that Congress specifically charged the

agency to address. Commerce’s mission statement, along with its three

strategic themes, includes the core functions of the Department, as

follows:

“The Department of Commerce promotes job creation, economic growth,

sustainable development, and improved living standards for all Americans,

by working in partnership with business, universities, communities, and

workers to:

1.Build for the future and promote U.S. competitiveness in the global

marketplace, by strengthening and safeguarding the nation’s economic

infrastructure;

2.Keep America competitive with cutting-edge science and technology and

an unrivaled information base; and, 3.Provide effective management and

stewardship of our nation’s resources and assets to ensure sustainable

economic opportunities.”

In its mission statement, Commerce recognizes the role played by

“business, universities, communities, and workers.” The statement seems

incomplete in this regard since other federal agencies and state and local

governments also play major roles. For example, Commerce shares

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responsibility for major budget functions with 14 other departments and

agencies.2

Goals and Objectives According to the Results Act, the strategic plan is to contain general goals

and objectives for the major functions and operations of the agency. The

goals and objectives are to elaborate or provide greater specificity on how

an agency will carry out its mission through its programs and activities.

Commerce’s draft plan provides linkages among themes, goals, objectives,

and responsible Commerce components. That is, for each of its strategic

themes, the Commerce draft plan lists general goals and objectives for

specific program efforts within Commerce agencies. For example, under

its first strategic theme, economic infrastructure, Commerce has identified

as a goal “enforce U.S. trade laws and agreements to promote free and fair

trade.” The objective associated with that goal is “expand trade law

enforcement and compliance monitoring.” Commerce’s International

Trade Administration (ITA), which has responsibility for promoting world

trade and strengthening the international trade and investment position of

the United States, is the Commerce component identified as having

responsibility for the objective.

While Commerce’s draft strategic plan includes a number of goals that are

results oriented, other goals are not as results oriented as they could be.

For example, one of the goals in the draft plan is to “implement the

President’s National Export Strategy in conjunction with the Trade

Promotion Coordinating Committee.” Commerce could make that goal

more results oriented by explicitly stating the outcome that is intended to

be achieved through the implementation of the President’s export strategy.

In another example, Commerce has a goal to set policies for managing the

federal use of the radio spectrum. Such efforts may be critically important

but do not directly relate to the result that is to be achieved. In a third

example, the goal to “restructure export controls for the twenty-first

century” could be made more results oriented by identifying the purpose

of the restructuring (for example, to increase export flexibility or,

alternatively, better protect national security).

Strategies for Achieving

Goals and Objectives

Under the Act, strategic plans are to briefly describe the operational

processes, staff skills, and technologies, as well as the human, capital,

information, and other resources, that are needed to achieve the goals and

2

Budget Issues: Fiscal Year 1996 Agency Spending by Budget Function (GAO/AIMD-97-95, May 13,

1997).

Page 7 GAO/GGD-97-152R Commerce’s Draft Strategic Plan
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objectives. According to OMB Circular No. A-11, Part 2, such strategies

should also outline how the agency will communicate strategic goals

throughout the organization and hold managers and staff accountable for

achieving these goals.

As one of its strengths, the Commerce draft plan links each of the

objectives of the general goals with a specific Commerce component and

the activities to be performed. For example, the draft plan links the

National Oceanic and Atmospheric Administration’s (NOAA) objective,

“examine the role of the ocean as a reservoir of both heat and carbon

dioxide to address a major source of uncertainty in climate models,” to the

goal “predict and assess decadal to centennial change.” Also, the goal to

“strengthen the intellectual property rights system and disseminate

intellectual information effectively” is linked to an objective for the Patent

and Trademark Office to “promote awareness of and provide effective

access to patent and trademark information.”

However, the draft plan does not identify how the strategic goals are to be

communicated throughout the organization and how managers and staff

will be held accountable for achieving the goals. Further, critical

information on the skills, technologies, and other resources required to

meet goals and objectives is not generally included. Such a discussion is

important because, in an era of fiscal constraint, an agency’s planning

processes should support an agency in making intelligent resource

allocation decisions that minimize, to the extent possible, the effect of

funding reductions on mission accomplishment.

Key External Factors Strategic plans are to identify and discuss key factors external to the

agency and beyond its control that could occur during the period covered

by the strategic plan and could significantly affect the agency’s

achievement of its strategic goals. Without this assessment, it would be

difficult to judge the likelihood of the agency achieving the strategic goals

and actions needed to better meet those goals. According to OMB Circular

No. A-11, Part 2, the agency should briefly (1) describe each key external

factor, (2) indicate its link with a particular strategic goal or goals, and

(3) describe how the factor could affect achievement of the goals.

The Commerce draft plan identifies external factors and in some

cases—although not consistently—indicates the linkages between the

factors and particular strategic goals. Moreover, the discussions of

external factors often appear to be focused on justifying the need for the

Page 8 GAO/GGD-97-152R Commerce’s Draft Strategic Plan
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programs rather than on identifying factors that may impede the

Department’s ability to achieve its strategic goals. For example, in

discussing its goal to sustain healthy coasts and clean coastal waters for

recreation and the production of seafood, Commerce recognized the

threat posed by increasing populations living on coastlines: “by 2010,

coastal populations will increase 65 % from 80 million in 1960 to

132 million. . . . Without NOAA’s information and management capabilities,

careless or uninformed development decisions will lead to . . . losses of

habitats for commercial and recreational species, . . . and degraded coastal

water quality.” This seems to offer a justification for current NOAA

programs rather than providing insights into how the growth in coastal

populations will affect NOAA’s ability to achieve Commerce’s goal.

Also, in describing its goal to monitor and assess international research

and development and the barriers faced by U.S. industrial sectors,

Commerce’s draft plan discusses the “increasing recognition of the

important role technology plays in generating economic growth. . . .

Internationally, other nations are implementing science and technology

policies to develop cutting-edge domestic industries and attract the

engines of economic expansion to their shores.” The draft plan discusses

how technology policy has changed from a tool for management of

research budgets to an important complement to economic and trade

policy, but it does not discuss how other nations’ technology efforts may

affect Commerce’s economic development goals.

Finally, some major external factors that appear to threaten Commerce’s

ability to achieve its goals are not discussed. For example, regarding the

goal to improve national and local census data, the draft plan does not

mention congressional concerns about the Census Bureau’s plan for

conducting Census 2000.

Relationship Between

Long-Term Goals and

Objectives and Annual

Performance Goals

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

included in the agency’s annual performance plans are related to the goals

and objectives in its strategic plan. Such a discussion is important to show

that the agency is striving to link long-term strategic goals to annual

performance plans and the day-to-day activities within the agency.

However, Commerce’s draft plan does not include the required discussion

of the relationship between long-term goals and the annual performance

goals. Instead, Commerce believes that “annual budget requests, which

can be more responsive to annual priorities and performance

Page 9 GAO/GGD-97-152R Commerce’s Draft Strategic Plan
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measures/targets, are the proper vehicle for that information to be

displayed and analyzed.”

Program Evaluations Commerce’s draft plan does not discuss how program evaluations were

used to establish general goals and objectives, nor does the draft provide a

schedule for future program evaluations. Program evaluations are defined

in the Results Act as objective and formal assessment of the results,

impact, or effects of a program or policy. Program evaluations are to

include assessments of the implementation and results of programs,

operating policies, and practices. According to OMB Circular No. A-11, Part

2, the plan’s program evaluation section should briefly describe program

evaluations that were used in preparing the strategic plan and outline

(1) the general scope and methodology for the planned evaluations,

(2) key issues to be addressed, and (3) a schedule for future evaluations.

While Commerce’s draft plan includes limited references to a few studies

that have been done on specific Commerce programs, a fuller discussion

would be needed to meet the purposes of the Act in this area.

Program evaluations are particularly important for a department like

Commerce that shares functions with many other departments and

agencies. One of the purposes of the Results Act is to enable Congress to

direct resources to the programs and agencies that use them to the best

effect. We reported in 1996 on a study of the effectiveness of the

Department of Commerce’s Economic Development Administration (EDA)

programs. The study found that income in the counties that received EDA

funding grew significantly faster than income in the counties that received

no aid.3

 However, when the researchers simultaneously considered EDA’s

programs and factors unrelated to EDA, they found that EDA’s programs had

a very small effect on income growth rates during the period that the aid

was received and had no significant effects in the 3 years after the aid

ceased.

3

Economic Development: Limited Information Exists on the Impact of Assistance Provided by Three

Agencies (GAO/RCED-96-103, Apr. 3, 1996).

Page 10 GAO/GGD-97-152R Commerce’s Draft Strategic Plan
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Key Statutory

Authorities Are

Generally Reflected in

Commerce’s Draft

Strategic Plan

The Commerce draft plan generally reflects the Department’s primary

statutory responsibilities. Considering the panoply of programs,

authorities, and components that fall under the aegis of the Department of

Commerce, we recognize the challenge presented by the need to craft a

comprehensive mission statement that captures all of the Department’s

significant responsibilities and presents them in a coherent, integrated

fashion. Although the Results Act does not require a statement of the

Department’s major statutory responsibilities, the draft plan denotes a

separate section under each strategic theme to spell out statutory support

for the goals articulated. This information helps stakeholders understand

the complexity and diversity of Commerce’s activities. To Commerce’s

credit, few, if any, of the other draft strategic plans we have seen provide

this much detail.

Crosscutting

Activities Are Not

Fully Discussed

Commerce’s shared responsibilities include, for example,

• natural resources and environment with the Departments of Agriculture,

Defense, the Interior, State, and Transportation; the Environmental

Protection Agency; and 3 independent agencies;

• commerce and housing credit with the Departments of Agriculture,

Housing and Urban Development, and Treasury; the General Services

Administration (GSA), the Small Business Administration (SBA), the Library

of Congress, and 10 independent agencies;

• community and regional development with the Departments of

Agriculture, Housing and Urban Development, the Interior, and Treasury;

GSA; SBA; and 6 independent agencies; and

• education, training, employment, and social services with the Departments

of Education, Health and Human Services, the Interior, and Labor;

National Aeronautics and Space Administration; the Library of Congress;

and 20 independent agencies.

Commerce’s draft strategic plan could do a better job of addressing

crosscutting program activities. The draft plan describes, in very general

terms, some of the existing “partnerships” and “synergy” between

Commerce agencies and various public and private entities. However, the

draft plan does not (1) adequately identify crosscutting activities in key

areas, (2) fully disclose Commerce’s coordination with the other federal

departments and agencies that share responsibility for these areas, or

(3) address Commerce’s progress in minimizing duplication or overlap in

these areas generated by such shared responsibilities. More specifically,

despite the potential for program duplication or overlap, the draft plan

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does not discuss how crosscutting program efforts correspond to or

intersect with Commerce’s established strategic themes, goals, and

objectives. For example:

• In the technology area, Commerce’s draft plan acknowledges some

potential overlap in radio spectrum and international telecommunications

activities but not in the access to and use of advanced

telecommunications. Specifically, the National Telecommunications and

Information Administration (NTIA) is responsible for, among other things,

managing federal government use of radio spectrum; and the Federal

Communications Commission is responsible for managing spectrum use

by others. However, the draft plan does not discuss the crosscutting

nature of NTIA’s efforts to promote the use of advanced

telecommunications, which is similar to the responsibilities of several

other agencies. For example, NTIA operates a grant program to promote the

use of advanced telecommunications in the public and nonprofit sectors,

and a number of other federal agencies support telecommunications

projects for similar constituencies. These agencies include the

Departments of Agriculture, Education, and Health and Human Services,

as well as the National Science Foundation.4

• Commerce has a lead role in promoting U.S. exports. Several other federal

agencies, including the Departments of Agriculture and Energy, the Trade

Development Agency, and the U.S. Export-Import Bank, also have

programs directed at promoting U.S. exports. The draft plan states that the

export promotion efforts of these agencies are coordinated under the

auspices of the Trade Promotion Coordinating Committee (TPCC), an

interagency mechanism chaired by the Secretary of Commerce. However,

the draft plan does not include a substantive discussion of how the

International Trade Administration’s (ITA) role in export promotion differs

from the roles of these other agencies. The draft plan also does not discuss

efforts on the part of these agencies to coordinate joint activities, such as

trade missions and trade fairs. Further, the draft plan does not address

how Commerce will further TPCC’s efforts to develop a unified budget that

supports a governmentwide export promotion strategy.5

 As we have

testified in the past, one obvious measure of the success of the unified

budget process would be the extent to which the unified budget changes

4

See, for example, Rural Development: Steps Towards Realizing the Potential of Telecommunications

Technologies (GAO/RCED-96-155, June 14, 1996).

5

The 1992 Export Enhancement Act required that TPCC establish a governmentwide strategy for

promoting U.S. exports and a unified budget that supports the strategic plan.

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the distribution of resources to the various priorities, programs, and

agencies.6

• The Commerce draft plan also does not acknowledge the export licensing

consultative responsibilities of other federal agencies. In addition, the

draft plan does not indicate how Commerce’s emphasis on restructuring

export controls to promote economic growth complements or contrasts

with the strong emphasis of two other organizations responsible for

licensing exports overseas on safeguarding against proliferation of

dual-use technology.7

Commerce’s Draft

Strategic Plan Does

Not Adequately

Address Major

Management

Challenges

Although the draft plan contains a section on current trends,

opportunities, challenges, and issues under each of the three strategic

themes, it does not adequately address major management challenges

facing the Department. We and Commerce’s IG have reported in recent

years that Commerce faces numerous serious management challenges.

Commerce could improve its draft plan by including an explicit discussion

of such challenges. Such a discussion would help to assure Congress and

other key stakeholders that Commerce has a clear roadmap for addressing

the serious management weaknesses that can undermine its ability to

achieve the Department’s strategic goals.

We recently worked with the Commerce IG to provide the Senate

Committee on Science, Transportation and Commerce with a joint

analysis of the 10 major management challenges facing the Department. Of

the 10 problem areas, Commerce’s draft strategic plan only mentions 4,

but it does not discuss how the problems will be addressed. The following

are among the management challenges that do not receive sufficient

attention in the draft plan.

• The National Institute of Standards and Technology’s (NIST) Capital

Improvements Facilities Program to upgrade NIST’s laboratories has

escalated in cost from $540 million to at least $940 million and will take at

least 4 years longer than originally projected.

• Along with Congress, OMB, Commerce’s IG, and others, we have repeatedly

urged NOAA to explore alternatives to using an agency-designed, -owned,

and -operated fleet for acquiring marine data. The IG recommended that

6

See Export Promotion: Initial Assessment of Governmentwide Strategic Plan (GAO/T-GGD-93-48,

Sept. 29, 1993). See also Export Promotion: Governmentwide Plan Contributes to Improvements

(GAO/T-GGD-94-35, Oct. 26, 1993); and Export Promotion Strategic Plan: Will It Be a Vehicle for

Change? (GAO/T-GGD-93-43, July 26, 1993).

7

These two organizations are the State Department’s Office of Defense Trade Controls and the U.S.

Nuclear Regulatory Commission.

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NOAA terminate its fleet modernization plan efforts. However, NOAA

continues to plan on investing millions of dollars in its aging in-house fleet,

rather than using those funds for more cost-effective alternatives.

• With the year 2000 fast approaching, the Census Bureau’s ability to design

and manage a satisfactory decennial census on time and at a reasonable

cost is in question. The Commerce Department has failed to convince

Congress that it can equitably and efficiently manage its proposed census

design. Consequently, this year we added the census to GAO’s

governmentwide list of high-risk programs.8

• We have issued numerous reports on problems with information

technology modernization at the National Weather Service (NWS) and have

included this area among our 25 high-risk areas in our February 1997

report. We consider NWS modernization to be high risk because of its

estimated $4.5 billion cost, its complexity, its criticality to NWS’ mission of

helping to protect life and property through early forecasting and warnings

of potentially dangerous weather, and its past problems.9

In addition to helping address risks associated with the NWS

modernization, the Paperwork Reduction Act of 1995 and the

Clinger-Cohen Act of 1996 direct agencies to implement a framework of

modern technology management based on practices followed by leading

private sector and public sector organizations that have successfully used

technology to dramatically improve performance and meet strategic goals.

Yet, it is not clear from Commerce’s draft plan how it intends to implement

these provisions and address any significant information security

weaknesses or the “year 2000 problem”—which concerns the need for

computer systems to be changed to accommodate dates beyond 1999.

Commerce’s Capacity

to Provide Reliable

Information on

Achievement of

Strategic and Program

Performance Is

Questionable

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

array of responsibilities, Commerce needs reliable data. Commerce relies

on a number of automated management information systems to carry out

its various roles. In its fiscal year 1996 Federal Managers’ Financial

Integrity Act Report, Commerce reported that it is not in compliance with

central agency requirements for a single, integrated financial system. In

addition, Commerce reported that its financial systems are considered a

material weakness, as these systems are seriously outdated and

fragmented; unable to provide timely, complete, and reliable financial

information; inadequately controlled; and costly and difficult to maintain.

8

High-Risk Series: Quick Reference Guide (GAO/HR-97-2, February 1997).

9

High-Risk Series: Information Management and Technology (GAO/HR-97-9, February 1997).

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In the report on the audit of Commerce’s fiscal year 1996 Consolidating

Financial Statements, the IG identified 11 material weaknesses in the

internal control structures of the Department and its bureaus. Because of

the material deficiencies in accounting policies, practices, internal

controls, data, and automated systems, Commerce’s IG was unable to

determine whether the fiscal year 1996 financial statements fairly

presented the Department’s financial position and the results of operations

and changes in its net position for fiscal year 1996.

In addition, the IG reported that many portions of the overview of

Commerce’s financial statement contained misleading or inaccurate

information. Several weaknesses pertaining to performance measures in

the overview were noted, including: (1) many performance measures were

not directly relevant to the components’ activities, (2) the performance

measures did not consistently portray a clear picture of the outcomes of

activities, and (3) the performance measures often did not include

benchmarks to allow the reader to compare statistics and evaluate the

results that the components achieved. The IG further noted that the

Department needs to take the necessary corrective actions to ensure that

its overview and financial statements properly reflect its operations.

To support the Results Act implementation and to ensure that the

Department is complying with federal cost-accounting system standards,

Commerce will need to relate costs to financial and program performance

data. Key requirements of the Chief Financial Officers Act are the

development of cost information to enable the systematic measurement of

performance and the integrations of systems (meaning program,

accounting, and budget systems).

Agency Comments

and Our Evaluation

We provided a copy of a draft of this letter to the Secretary of Commerce

for review and comment. On July 14, 1997, the Director for Budget,

Management and Information/Deputy Chief Information Officer provided

us with comments. He agreed with our observations as discussed below

and said that he found our suggestions constructive.

The Director said that he and his staff have seen a number of other

agencies’ plans and did not consider them to be as extensive as

Commerce’s. However, he agreed that Commerce’s draft plan does not

include the required discussion of the relationship between long-term

goals and the annual performance goals. He said this relationship is not

discussed because Commerce looks to the annual performance plan as the

Page 15 GAO/GGD-97-152R Commerce’s Draft Strategic Plan
B-277427 

appropriate vehicle for stressing that relationship but suggested that the

point may warrant further discussion between agencies, OMB, and

Congress. We believe that without this relationship, Congress, the agency,

and other stakeholders may not be able to assess progress toward

achieving long-term goals.

The Director also agreed that Commerce’s draft plan could do a better job

of addressing crosscutting program activities. He said that to date, most

agencies have devoted priority efforts to getting their internal strategic

planning activities underway effectively, and are only then able to begin

reaching out to other agencies with complementary programs or goals.

Regarding our statement that the draft Commerce plan does not

adequately account for its major management challenges, he said that

earlier drafts of the Commerce plan had a specific chapter on management

issues. Instead of retaining this chapter, Commerce chose to discuss the

importance of effective management in the conceptual framework

underlying its planning approach. It is Commerce’s view that management

initiatives should be undertaken in support of program missions, rather

than being viewed or conducted as “standalone” activities but they will

consider replacing that chapter.

We agree that management initiatives should be undertaken in support of

program missions, rather than being viewed or conducted as “standalone”

activities. A fuller discussion than the draft plan contains about the most

pressing management issues confronting the Department and how they

will be addressed is critical to providing Congress with assurance that

Commerce is positioned to meet its program missions, and we encourage

Commerce to integrate that perspective into its discussion, whether or not

it uses a separate chapter to do so.

Finally, the Director agreed that Commerce did not fully address the role

of program evaluation activities in setting goals and objectives and said

they will add a greater discussion of that in their next draft. Similarly, he

agreed that some of the goals and objectives were not as results-oriented

as they could be and said they will make changes where appropriate.

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

Leader of the House of Representatives; Ranking Minority Members of

Page 16 GAO/GGD-97-152R Commerce’s Draft Strategic Plan
B-277427 

your Committees; the Chairmen and Ranking Minority Members of other

Committees that have jurisdiction over Commerce activities; the Secretary

of Commerce; and the Director, Office of Management and Budget. Copies

will be made available to others on request.

Please contact me on (202) 512-8676 or J. Christopher Mihm, Acting

Associate Director, Federal Management and Workforce Issues, on

(202) 512-3236 if you or your staffs have any questions concerning this

letter.

L. Nye Stevens

Director, Federal Management and

 Workforce Issues

Page 17 GAO/GGD-97-152R Commerce’s Draft Strategic Plan
Page 18 GAO/GGD-97-152R Commerce’s Draft Strategic Plan
Page 19 GAO/GGD-97-152R Commerce’s Draft Strategic Plan
Page 20 GAO/GGD-97-152R Commerce’s Draft Strategic Plan
Related GAO Products

High-Risk Program: Information on Selected High-Risk Areas (GAO/HR-97-30,

May 16, 1997).

Federal Management: Addressing Management Problems at the

Department of Commerce (GAO/T-GGD/AIMD-97-115, May 14, 1997).

Budget Issues: Fiscal Year 1996 Agency Spending by Budget Function

(GAO/AIMD-97-95, May 13, 1997).

Statistical Agencies: Consolidation and Quality Issues (GAO/T-GGD-97-78,

Apr. 9, 1997).

High-Risk Series: Information Management and Technology (GAO/HR-97-9,

February 1997).

High-Risk Series: Quick Reference Guide (GAO/HR-97-2, February 1997).

Foreign Affairs: Perspectives on Foreign Affairs Programs and Structures

(GAO/NSIAD-97-6, Nov. 8, 1996).

Statistical Agencies: Statutory Requirements Affecting Government

Policies and Programs (GAO/GGD-96-106, July 17, 1996).

Managing For Results: Key Steps and Challenges In Implementing GPRA In

Science Agencies (GAO/T-GGD/RCED-96-214, July 10, 1996).

Federal Statistics: Principal Statistical Agencies’ Missions and Funding

(GAO/GGD-96-107, July 1, 1996).

Addressing the Deficit: Updating the Budgetary Implications of Selected

GAO Work (GAO/OCG-96-5, June 28, 1996).

Rural Development: Steps Towards Realizing the Potential of

Telecommunications Technologies (GAO/RCED-96-155, June 14, 1996).

Weather Forecasting: Recommendations to Address New Weather

Processing System Development Risks (GAO/AIMD-96-74, May 13, 1996).

Economic Development: Limited Information Exists on the Impact of

Assistance Provided by Three Agencies (GAO/RCED-96-103, Apr. 3, 1996).

National Export Strategy (GAO/NSIAD-96-132R, Mar. 26, 1996).

Page 21 GAO/GGD-97-152R Commerce’s Draft Strategic Plan
Related GAO Products

Government Statistics: Proposal to Form a Federal Statistical Service

(GAO/T-GGD-96-93, Mar. 22, 1996).

Weather Forecasting: NWS Has Not Demonstrated That New Processing

System Will Improve Mission Effectiveness (GAO/AIMD-96-29, Feb. 29, 1996).

Federal R&D Laboratories (GAO/RCED/NSIAD-96-78R, Feb. 29, 1996).

Former Soviet Union: Information on U.S. Bilateral Program Funding

(GAO/NSIAD-96-37, Dec. 15, 1995).

Community Development: Comprehensive Approaches and Local

Flexibility Issues (GAO/T-RCED-96-53, Dec. 5, 1995).

Decennial Census: Fundamental Design Decisions Merit Congressional

Attention (GAO/T-GGD-96-37, Oct. 25, 1995).

Commerce Dismantlement: Observations on Proposed Implementation

Mechanism (GAO/T-GGD-95-233, Sept. 6, 1995).

Community Development: Challenges Face Comprehensive Approaches to

Address Needs of Distressed Neighborhoods (GAO/T-RCED-95-262, Aug. 3,

1995).

Economic Development Programs (GAO/RCED-95-251R, July 28, 1995).

Government Reorganization: Observations on the Department of

Commerce (GAO/T-GGD/RCED/AIMD-95-248, July 25, 1995).

Government Reorganization: Issues Relating to International Trade

Responsibilities (GAO/T-GGD-95-218, July 25, 1995).

Government Restructuring: Identifying Potential Duplication in Federal

Missions and Approaches (GAO/T-AIMD-95-161, June 7, 1995).

Weather Forecasting: Radar Availability Requirements Not Being Met

(GAO/AIMD-95-132, May 31, 1995).

Export Promotion: Rationales for and Against Government Programs and

Expenditures (GAO/T-GGD-95-169, May 23, 1995).

Page 22 GAO/GGD-97-152R Commerce’s Draft Strategic Plan
Related GAO Products

Weather Forecasting: Unmet Needs and Unknown Costs Warrant

Reassessment of Observing System Plans (GAO/AIMD-95-81, Apr. 21, 1995).

Rural Development: Patchwork of Federal Water and Sewer Programs Is

Difficult to Use (GAO/RCED-95-160BR, Apr. 13, 1995).

Department Of Education: Information on Consolidation Opportunities

and Student Aid (GAO/T-HEHS-95-130, Apr. 6, 1995).

Multiple Employment Training Programs: Information Crosswalk on 163

Employment Training Programs (GAO/HEHS-95-85FS, Feb. 14, 1995).

Weather Forecasting: Improvements Needed in Laboratory Software

Development Processes (GAO/AIMD-95-24, Dec. 14, 1994).

Management Reform: Implementation of the National Performance

Review’s Recommendations (GAO/OCG-95-1, Dec. 5, 1994).

High Performance Computing and Communications; New Program

Direction Would Benefit From a More Focused Effort (GAO/AIMD-95-6,

Nov. 4, 1994).

Decennial Census: 1995 Census Test Presents Opportunities to Evaluate

New Census-Taking Methods (GAO/T-GGD-94-136, Sept. 27, 1994).

Food Safety: Changes Needed to Minimize Unsafe Chemicals in Food

(GAO/RCED-94-192, Sept. 26, 1994).

International Trade: Coordination of U.S. Export Promotion Activities in

Pacific Rim Countries (GAO/GGD-94-192, Aug. 29, 1994).

Rural Development: Patchwork of Federal Programs Needs to Be

Reappraised (GAO/RCED-94-165, July 28, 1994).

Weather Forecasting: Systems Architecture Needed for National Weather

Service Modernization (GAO/AIMD-94-28, Mar. 11, 1994).

Decennial Census: Promising Proposals, Some Progress, but Challenges

Remain (GAO/T-GGD-94-80, Jan. 26, 1994).

Export Promotion: Governmentwide Plan Contributes to Improvements

(GAO/T-GGD-94-35, Oct. 26, 1993).

Page 23 GAO/GGD-97-152R Commerce’s Draft Strategic Plan
Related GAO Products

Decennial Census: Test Design Proposals Are Promising, but Fundamental

Reform Is Still at Risk (GAO/T-GGD-94-12, Oct. 7, 1993).

Export Promotion: Initial Assessment of Governmentwide Strategic Plan

(GAO/T-GGD-93-48, Sept. 29, 1993).

Export Promotion Strategic Plan: Will it Be a Vehicle for Change?

(GAO/T-GGD-93-43, July 26, 1993).

Exchange Programs: Inventory of International Educational, Cultural, and

Training Programs (GAO/NSIAD-93-157BR, June 23, 1993).

Decennial Census: Focused Action Needed Soon to Achieve Fundamental

Breakthroughs (GAO/T-GGD-93-32, May 27, 1993).

Export Promotion: Improving Small Businesses’ Access to Federal

Programs (GAO/T-GGD-93-22, Apr. 28, 1993).

Export Promotion: Governmentwide Strategy Needed for Federal

Programs (GAO/T-GGD-93-7, Mar. 15, 1993).

Commerce Issues (GAO/OCG-93-12TR, Dec. 1992).

Export Promotion: Federal Approach Is Fragmented (GAO/T-GGD-92-68,

Aug. 10, 1992).

Decennial Census: 1990 Results Show Need for Fundamental Reform

(GAO/GGD-92-94, June 9, 1992).

Export Promotion: Overall U.S. Strategy Needed (GAO/T-GGD-92-40, May 20,

1992).

Export Promotion: U.S. Programs Lack Coherence (GAO/T-GGD-92-19, Mar. 4,

1992).

Export Promotion: Federal Programs Lack Organizational and Funding

Cohesiveness (GAO/NSIAD-92-49, Jan. 10, 1992).

(410159) Page 24 GAO/GGD-97-152R Commerce’s Draft Strategic Plan
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