United States General Accounting Office

GAO Testimony

Before the Subcommittee on Government

Management, Information and Technology

Committee on Government Reform and Oversight

House of Representatives

For Release on Delivery

Expected at

10:00 a.m. EST

Thursday

February 12, 1998

MANAGING FOR RESULTS

Observations on Agencies’

Strategic Plans

Statement of J. Christopher Mihm

Associate Director

Federal Management and Workforce Issues

General Government Division

GAO/T-GGD-98-66

Statement 

Managing for Results: Observations on

Agencies’ Strategic Plans

Mr. Chairman and Members of the Subcommittee:

I am pleased to be here today to discuss our assessment of the strategic

plans that executive agencies produced last September under the

Government Performance and Results Act of 1993 (Results Act) and the

current stage of Results Act implementation—annual performance

planning and measurement.

The approach to performance-based management and accountability

envisioned by the Results Act is a dynamic and iterative process in which

one stage builds on and reinforces the progress made at earlier stages. As

you know, under the Results Act, agencies first are to prepare long-term

strategic plans that set the general direction for their efforts. They

submitted the first cycle of their strategic plans to Congress and the Office

of Management and Budget (OMB) in September 1997. Agencies then are

to use these plans to prepare annual performance plans that lay out how

the day-to-day activities of managers and staff are to achieve long-term

strategic goals.

Agencies’ first annual performance plans are due to Congress after the

submission of the President’s fiscal year 1999 budget. A number of

agencies already have provided their annual performance plans to

Congress, and the rest are generally expected to do so before the end of

the month. OMB also is to prepare a federal government performance

plan, which is based on agencies’ plans and which OMB is to submit to

Congress with the President’s budget. That first federal government

performance plan was provided to Congress on February 2. Finally, the

Act requires that each agency report annually on the extent to which it is

meeting annual performance goals and the actions needed to achieve or

modify those goals that have not been met.

In the report that is being released today, we conclude that the strategic

plans that agencies produced in September 1997 provide a workable

foundation for Congress to use in helping to fulfill its appropriations,

budget, authorization, and oversight responsibilities and for agencies to

use in setting a general direction for their efforts.1

 After having reviewed

both agencies’ draft and September strategic plans, it was clear to us that

the active engagement of Members and congressional staff contributed

significantly to the progress agencies made in their strategic plans. Much

of this contribution was due to the congressional consultations that the

1

Managing for Results: Agencies’ Annual Performance Plans Can Help Address Strategic Planning

Challenges (GAO/GGD-98-44, Jan. 30, 1998).

Page 1 GAO/T-GGD-98-66
Statement 

Managing for Results: Observations on

Agencies’ Strategic Plans

Act requires as agencies develop their strategic plans, which—for the first

cycle of strategic plans—took place last spring and summer.

My comments are based on our large body of work in recent years on the

Results Act, in particular our assessment of the draft and September 30,

1997, strategic plans of the 24 agencies covered by the Chief Financial

Officers (CFO) Act; our recently issued congressional guide;2

 and our

continuing work with congressional committees on Results Act issues. On

the basis of that work, my statement will focus on (1) the extent to which

agencies’ strategic plans met statutory requirements, (2) critical planning

challenges that remain to be addressed, and (3) a discussion of how our

recent congressional guide for agencies’ annual performance plans can

facilitate congressional use of those plans and thereby advance the

implementation of the Results Act.

Agencies’ Strategic

Plans Generally Met

Statutory

Requirements

The Results Act requires that strategic plans include six broad

elements—mission statements, general goals and objectives, approaches

(or strategies) for achieving goals, a description of the relationship

between general goals and annual performance goals, key external factors,

and a description of the actual use and planned use of program

evaluations. In that regard, the strategic plans that agencies submitted in

September represent a significant improvement over the draft plans we

reviewed last summer. For example, we found that all but six of the draft

plans were missing at least one element required by the Results Act and

about a third were missing two of the six required elements. In contrast,

all 24 of the September plans we reviewed contained at least some

discussion of each element required by the Act. And in many cases, those

elements that had been included in the draft plans were substantially

improved. For example,

• the Department of Transportation explained more clearly how its mission

statement is linked to its authorizing legislation;

• the Small Business Administration clarified how it would assess progress

toward its strategic goals by stating when it would meet specific

performance objectives;

• the Nuclear Regulatory Commission better explained the scope of its

crosscutting functions by identifying major crosscutting functions and

interagency programs and its coordination with agencies, such as the

Department of Energy and the Environmental Protection Agency; and

2

Agencies’ Annual Performance Plans Under the Results Act: An Assessment Guide to Facilitate

Congressional Decisionmaking, Version 1 (GAO/GGD/AIMD-10.1.18, Feb. 1998).

Page 2 GAO/T-GGD-98-66
Statement 

Managing for Results: Observations on

Agencies’ Strategic Plans

• the Agency for International Development improved its discussion of

external factors, such as political unrest and natural disasters, that could

affect its achievement of strategic goals and that are beyond its control by

describing those factors and the way they can be offset by agency field

missions.

Critical Planning

Challenges Remain to

Be Addressed

Although all of the strategic plans that we reviewed contained at least

some discussion of each element required by the Results Act, we found

that critical planning challenges remain. Among these planning challenges

are the need to demonstrate (1) a clearly articulated strategic direction,

(2) the coordination of crosscutting program efforts, and (3) reliable data

systems and analytic capacity.

A Clearly Articulated

Strategic Direction

We found that the strategic plans often lacked clear articulation of the

agencies’ strategic direction, a sense of what they were trying to achieve,

and how they would achieve it. For example, we found that the goals and

objectives in many agencies’ strategic plans could be more results oriented

and stated in a way to better enable the agency to make a future

assessment of whether goals and objectives were being achieved. In

addition, the plans often did not establish linkages among planning

elements, such as goals, objectives, and strategies for achieving those

goals and objectives.

Another weakness of agencies’ strategic plans was incomplete and

underdeveloped strategies for achieving long-term strategic goals and

objectives. Specifically, we found that agencies did not always provide an

adequate discussion of the resources needed to achieve goals. In

particular, the role that information technology played, or can play, in

achieving agencies’ long-term strategic goals and objectives was generally

neglected in agencies’ strategic plans. For example, most of the

Department of Defense’s (DOD) goals and objectives rely on the effective

use of information technology to obtain a given goal as well as to measure

progress toward its achievement. DOD’s strategic plan would be

significantly enhanced if it more explicitly linked its strategic goals to a

strategy for improving management and oversight of information

technology resources. In addition, DOD’s strategic plan—as well as the

plans of other agencies—did not fully recognize the dramatic impact the

Year 2000 problem will likely have on DOD’s operations.3

3

On January 1, 2000, many computer systems, if not adequately modified, will either fail to run or

malfunction simply because the equipment and software were not designed to accommodate the

change of the date to the new millennium.

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Managing for Results: Observations on

Agencies’ Strategic Plans

The Department of State’s strategic plan also does not specifically address

the serious deficiencies in its information and financial accounting

systems. Rather, the plan notes, in more general terms, that it will take

several years for State to develop performance measures and related

databases in order to provide sufficient information on the achievement of

its long-term goals. We believe that information technology issues deserve

attention in strategic plans so as to provide assurance that agencies are

(1) addressing the federal government’s long-standing information

technology problems and (2) better ensuring that technology acquisition

and use are targeted squarely on program results.

Agencies can continue to address the critical planning challenges

associated with setting a strategic direction as they develop their annual

performance plans. Building on the decisions made as part of the strategic

planning process, the Results Act requires executive agencies to develop

annual performance plans covering each program activity set forth in the

agencies’ budgets.4

 Each plan is to contain an agency’s annual

performance goals and associated measures. If successfully developed,

those annual performance goals can function as a bridge between

long-term strategic planning and day-to-day operations, thereby assisting

agencies in establishing better linkages among planning elements. For

example, agencies can use performance goals to show clear and direct

relationships in two directions—to the goals in the strategic plans and to

operations and activities within the agency.

By establishing those relationships, agencies can (1) provide

straightforward road maps that show managers and staff how their daily

activities can contribute to attaining agencywide strategic goals, (2) hold

managers and staff accountable for contributing to the achievement of

those goals, and (3) provide decisionmakers with information on their

annual progress in meeting the goals. As agencies gain experience in

developing these annual performance goals, they likely will become better

at identifying and correcting misalignment among strategic goals,

objectives, and strategies within both their strategic and annual plans.

Coordinated Crosscutting

Program Efforts

A focus on results, as envisioned by the Results Act, implies that federal

programs that contribute to the same or similar results should be closely

coordinated to ensure that goals are consistent and, as appropriate,

4

The term “program activity” refers to the listings of projects and activities in the appendix portion of

the Budget of the United States Government. Program activity structures are intended to provide a

meaningful representation of the operations financed by a specific budget account.

Page 4 GAO/T-GGD-98-66
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Managing for Results: Observations on

Agencies’ Strategic Plans

program efforts are mutually reinforcing.5 We have found that

uncoordinated program efforts can waste scarce funds, confuse and

frustrate program customers, and limit the overall effectiveness of the

federal effort.6

 This suggests that federal agencies are to look beyond their

organizational boundaries and coordinate with other agencies to ensure

that their efforts are aligned and complementary.

Agencies’ strategic plans better described crosscutting programs and

coordination efforts than their draft plans did. Some of the strategic plans

we reviewed contained references to other agencies that shared

responsibilities in a crosscutting program area or discussed the need to

coordinate their programs with other agencies. These presentations

provide a foundation for the much more difficult work that lies

ahead—undertaking the substantive coordination that is needed to ensure

that those programs are effectively managed. However, although agencies

have begun to recognize the importance of coordinating crosscutting

programs, it is important that they undertake the substantive coordination

that is needed for the effective management of those programs. For

example, in an improvement over its draft plan, the Department of Labor’s

plan refers to a few other agencies with responsibilities in the area of job

training programs and notes that the agency plans to work with them. But

the plan contains no discussion of what specific coordination mechanism

Labor will use to realize efficiencies and implement possible strategies to

consolidate job training programs to achieve a more effective job training

system.

Our work has shown that the performance planning and measurement

stage of the Results Act’s implementation will offer a structured

framework to address crosscutting issues.7

 For example, the Act’s

emphasis on results-based performance measures as part of the annual

performance planning process should lead agencies to more explicit

discussions concerning the contributions and accomplishments of

crosscutting programs. Furthermore, if agencies and OMB use the annual

planning process to highlight crosscutting program efforts and provide

evidence of joint planning and coordination of those efforts, the individual

agency performance plans and the governmentwide performance plan

should help provide Congress with the information needed to identify

agencies and programs addressing similar missions.

5

Managing for Results: Using the Results Act to Address Mission Fragmentation and Program Overlap

(GAO/AIMD-97-146, Aug. 29, 1997).

6

The Government Performance and Results Act: 1997 Governmentwide Implementation Will Be

Uneven (GAO/GGD-97-109, June 2, 1997).

7

GAO/AIMD-97-146, August 29, 1997.

Page 5 GAO/T-GGD-98-66
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Managing for Results: Observations on

Agencies’ Strategic Plans

Once these programs are identified, Congress can consider the associated

policy, management, and performance implications of crosscutting

program efforts and whether individual programs make a sufficiently

distinguishable contribution to a crosscutting national issue. This

information should also help identify the performance and cost

consequences of program fragmentation and the implications of

alternative policy and service delivery options. These options, in turn, can

lead to decisions concerning department and agency missions and the

allocation of resources among those missions.8

Reliable Data Systems and

Analytic Capacity

Our previous work has shown that for agencies to set realistic goals, they

need to have reliable data during their planning efforts. They also need

reliable data, later, as they gauge the progress they are making toward

achieving those goals.9

 To provide such reliable data, agencies need a

strong performance measurement system. In addition, to provide feedback

on how well activities and programs contributed to achieving goals and to

identify ways to improve performance, agencies need a strong program

evaluation capacity.10 However, our work has found serious shortcomings

in agencies’ ability to generate reliable and timely data to measure their

progress in achieving goals and to provide the analytic capacity to use

those data.

The absence of both sound program performance and cost data and the

capacity to use those data to improve performance is a critical challenge

that agencies must confront if they are to effectively implement the

Results Act. Efforts under the CFO Act have shown that most agencies still

have a substantial amount of work to do before they are able to generate

the reliable, useful, relevant, and timely financial information that is

urgently needed to make our government fiscally responsible. The

widespread lack of available program performance information is equally

troubling. For example, in our June report on the implementation of the

Results Act, we included the results of a survey of managers in the largest

federal agencies. Our survey results indicated that fewer than one-third of

those managers said that results-oriented performance measures existed

to a great or very great extent for their programs.11

8

GAO/AIMD-97-146, August 29, 1997.

9

GAO/GGD-97-109, June 2, 1997.

10Managing for Results: Analytic Challenges in Measuring Performance (GAO/HEHS/GGD-97-138,

May 30, 1997).

11GAO/GGD-97-109, June 2, 1997.

Page 6 GAO/T-GGD-98-66
Statement 

Managing for Results: Observations on

Agencies’ Strategic Plans

Moreover, our work has shown that in agency after agency, efforts to

generate reliable data for measuring cost and results have been

disappointing.12 As this Subcommittee is well aware, the federal

government has had chronic problems harnessing the full potential of its

vast expenditures in information technology. Further complicating efforts

to collect reliable performance information is that many agencies must

rely on data collected by parties outside the federal government. In a

recent report, we noted that the fact that data were largely collected by

others was the most frequent explanation offered by agency officials for

why determining the accuracy and quality of performance data was a

challenge.13

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

agencies used and planned to use program evaluations that are to provide

feedback on how well an agency’s activities and programs contributed to

the achievement of its goals and to assess the reasonableness and

appropriateness of those goals. Although all of the strategic plans we

reviewed included some discussion of program evaluations, we found

weaknesses in those discussions. For example, many agencies did not

discuss how they planned to use evaluations in the future to assess

progress or did not offer a schedule for future evaluation as required by

the Results Act. In contrast, the National Science Foundation’s strategic

plan represents a noteworthy exception. The plan discusses how the

agency used evaluations to develop key investment strategies, action

plans, and its annual performance plan. It also discusses plans for future

evaluations and provides a general schedule for their implementation.

Agencies are also to discuss in their annual performance plans how they

will verify and validate the performance information that they plan to use

to show whether goals are being met. Verified and validated performance

information, in conjunction with augmented program evaluation efforts,

will help ensure that agencies are able to report progress in meeting goals

and identify specific strategies for improving performance.

12High-Risk Series: Information Management and Technology (GAO/HR-97-9, Feb. 1997).

13GAO/HEHS/GGD-97-138, May 30, 1997.

Page 7 GAO/T-GGD-98-66
Statement 

Managing for Results: Observations on

Agencies’ Strategic Plans

Our Guide Is Intended

to Assist Congress in

Using Agency

Performance Plans

At the request of the Chairmen of the House Committees on Government

Reform and Oversight, Appropriations, and the Budget, in May 1997, we

developed a guide to assist the congressional consultations on the

development of agencies’ strategic plans.14 As we entered the annual

performance planning and measurement stage of the Act, those Chairmen,

the Speaker of the House, the House Majority Leader, the Chairman of the

House Committee on Science, and the Chairmen of the Senate Committees

on the Budget and Governmental Affairs asked us to develop a guide to

help congressional decisionmakers both elicit the information that

Congress needs from agencies’ annual performance plans and assess the

quality of those plans. That guide was issued last week.15

Our guide to facilitate congressional decisionmakers’ use of agencies’

performance plans is organized around three core questions that

correspond to the Act’s requirements for performance plans. For each

core question, we identify issues that need to be addressed and present

key assessment questions that can help congressional users elicit the cost

and performance information that is relevant to their decisionmaking from

agencies’ performance plans:

• The first core question is—To what extent does the agency’s performance

plan provide a clear picture of intended performance across the agency?

This question has three related issues: defining expected performance;

connecting mission, goals, and activities; and recognizing crosscutting

efforts.

• The second core question is—How well does the performance plan

discuss the strategies and resources the agency will use to achieve its

performance goals? This question has two related issues: connecting

strategies to results and connecting resources to strategies.

• The third core question is—To what extent does the agency’s performance

plan provide confidence that its performance information will be credible?

This question also has two related issues: verifying and validating

performance and recognizing data limitations identified in the plan.

The answers to the questions are intended to facilitate a complete

assessment of agencies’ performance plans and address concerns that are

likely to be common across a variety of congressional users.

14Agencies’ Strategic Plans Under GPRA: Key Questions to Facilitate Congressional Review, Version 1

(GAO/GGD-10.1.16, May 1997).

15GAO/GGD/AIMD-10.1.18, February 1998.

Page 8 GAO/T-GGD-98-66
Statement 

Managing for Results: Observations on

Agencies’ Strategic Plans

In summary, Mr. Chairman, although agencies have generally met the

statutory requirements of the Results Act in their first cycle of strategic

planning, federal strategic planning—and Results Act implementation in

general—is still very much a work in progress. Some critical planning

challenges remain before the type of performance-based management and

accountability envisioned by the Results Act becomes the routine way of

doing business in the federal government. As they develop their annual

performance plans, agencies will likely need to revisit and improve upon

their strategic planning efforts. The annual performance plans offer the

opportunity for Congress and the agencies together to sustain the

momentum of the implementation of the Results Act and of

performance-based management.

We are pleased that Congress has turned to us to assist in the

implementation of the Results Act. Over the last few years, we have issued

a number of products on the key steps and practices needed to improve

the management of the federal government.16 These key steps and

practices are based on best practices in private sector and public sector

organizations. We look forward to continuing to support Congress’ efforts

to better inform its decisionmaking, improve the management of the

federal government, and strengthen accountability.

This concludes my prepared statement. I would be pleased to respond to

any questions you or other Members of the Subcommittee may have.

16See, for example, Executive Guide: Effectively Implementing the Government Performance and

Results Act (GAO/GGD-96-118, June 1996); Financial Management: Momentum Must Be Sustained to

Achieve the Reform Goals of the Chief Financial Officers Act (GAO/T-AIMD-95-204, July 25, 1995); and

Executive Guide: Improving Mission Performance Through Strategic Information Management and

Technology (GAO/AIMD-94-115, May 1994).

Page 9 GAO/T-GGD-98-66
Page 10 GAO/T-GGD-98-66
Page 11 GAO/T-GGD-98-66
Related GAO Products

Agencies’ Annual Performance Plans Under the Results Act: An

Assessment Guide to Facilitate Congressional Decisionmaking, Version 1

(GAO/GGD/AIMD-10.1.18, Feb. 1998).

Managing for Results: Agencies’ Annual Performance Plans Can Help

Address Strategic Planning Challenges (GAO/GGD-98-44, Jan. 30, 1998).

Managing for Results: The Statutory Framework for Performance-Based

Management and Accountability (GAO/GGD/AIMD-98-52, Jan. 28, 1998).

Managing for Results: Building on Agencies’ Strategic Plans to Improve

Federal Management (GAO/T-GGD/AIMD-98-29, Oct. 30, 1997).

Managing for Results: Critical Issues for Improving Federal Agencies’

Strategic Plans (GAO/GGD-97-180, Sept. 16, 1997).

Managing for Results: Using the Results Act to Address Mission

Fragmentation and Program Overlap (GAO/AIMD-97-146, Aug. 29, 1997).

Managing for Results: The Statutory Framework for Improving Federal

Management and Effectiveness (GAO/T-GGD/AIMD-97-144, June 24, 1997).

The Government Performance and Results Act: 1997 Governmentwide

Implementation Will Be Uneven (GAO/GGD-97-109, June 2, 1997).

Agencies’ Strategic Plans Under GPRA: Key Questions to Facilitate

Congressional Review, Version 1 (GAO/GGD-10.1.16, May 1997).

Performance Budgeting: Past Initiatives Offer Insights for GPRA

Implementation (GAO/AIMD-97-46, Mar. 27, 1997).

Executive Guide: Effectively Implementing the Government Performance

and Results Act (GAO/GGD-96-118, June 1996).

(410266) Page 12 GAO/T-GGD-98-66
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