United States Government Accountability Office

GAO Report to the Subcommittee on 

Government Management, Finance, and 

Accountability, Committee on 

Government Reform, House of 

Representatives 

PRESIDENT’S 

MANAGEMENT 

AGENDA 

Review of OMB’s 

Improved Financial 

Performance 

Scorecard Process 

November 2006 

 

GAO-07-95 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

November 2006

PRESIDENT’S MANAGEMENT AGENDA

Review of OMB’s Improved Financial 

Highlights of GAO-07-95, a report to the Performance Scorecard Process 

Subcommittee on Government 

Management, Finance, and Accountability,

Committee on Government Reform, 

House of Representatives

The President’s Management 

Agenda (PMA) focuses attention on 

ensuring resources entrusted to the 

federal government are well

managed and used wisely. The 

Office of Management and Budget

(OMB) developed standards to

measure success and a PMA 

scorecard that gives a “green”, 

“yellow” or “red score” by agency. 

Green indicates success, yellow 

indicates mixed results, and red 

indicates unsatisfactory results. 

For the Improved Financial 

Performance Initiative, GAO was 

asked to (1) study and evaluate 

OMB’s process and criteria for 

awarding a green score for current 

status and progress and (2) provide 

examples of how agency managers

use financial data to better manage

on a day-to-day basis. To fulfill 

these objectives, GAO interviewed 

OMB and agency officials and 

examined OMB and agency

documentation relevant to OMB’s 

scoring process. 

What GAO Recommends

To help strengthen OMB’s scoring 

process for the Improved Financial 

Performance Initiative, GAO made

two recommendations for OMB to 

establish a process to more

systematically document (1) the 

basis for all key decisions and 

judgments made in determining 

agency green scores and (2) the 

receipt and review and approval of

Green Plans, including updates,

used in the scoring process. OMB 

generally concurs with these 

recommendations. 

OMB has established a reasonable process for assessing and scoring 

agencies’ current status and progress (two separate scores) under the 

Improved Financial Performance Initiative of the PMA. OMB’s established 

scoring criteria address the fundamental aspects of sound financial 

management and are geared toward achievement of the goals envisioned in 

the Chief Financial Officers (CFO) Act. Seven of the nine current status 

scoring criteria (yellow criteria) are objective and verifiable using publicly 

available information. The remaining two green criteria are more subjective

and require OMB to make judgments about whether agencies (1) currently 

produce accurate and timely financial information that is used by 

management to inform decision making and drive results in key areas of 

operations and (2) have acceptable plans (referred to as a Green Plans) to 

continuously expand the routine use of financial data in decision making in 

additional areas of operations. GAO found OMB’s staff were actively 

engaged in the scoring process and met regularly with agency officials to 

discuss progress in meeting scoring criteria and to provide input into 

agencies’ efforts to expand the use of financial data in their day-to-day 

management of key agency operations. GAO also found opportunities for 

OMB to enhance the process by better documenting its assessments of the 

more subjective green scoring criteria and by systematically tracking the 

receipt and approval of key documents used in the process.

 

Agency officials generally supported the scorecard process and stated that it 

has helped to focus top management’s attention on financial management 

issues. The six agencies GAO visited (those with green scores as of 

September 30, 2004, as requested) provided examples on how they use

financial data as well as performance data to make management decisions 

related to controlling costs, budgeting, allocation of resources, and 

management of contracts and grants. Agency officials told GAO that some 

of the examples or activities demonstrated to GAO were also previously

demonstrated to OMB to show that the agency was using financial data to 

help inform management decision-making. OMB officials said they 

considered these and other examples in rendering the green scores. 

However, the documentation issues discussed above prevented GAO from 

specifically determining which examples were used by OMB in making these

scoring decisions. 

The Improved Financial Performance Initiative scorecard process has 

clearly been a catalyst to improve financial management and to encourage 

agency managers to use financial data to enhance decision making as 

envisioned under the CFO Act. Better documenting the key decisions would 

help strengthen what is already a useful management tool by helping ensure 

consistency and continuity in the process and would enhance the value of 

the process to external users. 

www.gao.gov/cgi-bin/getrpt?GAO-07-95.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Linda Calbom 

at (206) 287-4809 or calboml@gao.gov. 
Contents 

Letter 1

Results in Brief 3

Background 5

OMB Has a Reasonably Designed Scorecard Process, but 

Documentation of the Process Could Be Enhanced 8 

Agency-Provided Examples Describing the Use of Financial Data to 

Manage Programs 16 

Conclusions 19

Recommendations for Executive Action 19 

Agency Comments and Our Evaluation 19 

Appendix I September 30, 2006, Executive Branch Management 

Scorecard 21 

Appendix II Comments from the Office of Management and 

Budget 22 

Appendix III GAO Contact and Staff Acknowledgments 24 

Table 

Table 1: Dates When Agencies Received Their Current Status and 

Progress Green Scores 12 

Figures 

Figure 1: Improved Financial Performance Initiative Scorecard 

Criteria 10

Figure 2: Current Status Scores and Progress Scores for Improved 

Financial Performance Initiative 12 

Page i GAO-07-95 Scorecard Process
Abbreviations 

BAJA Budget Automation, Justification and Administration 

CFO Chief Financial Officer 

DOE Department of Energy 

EBSA Employee Benefits Security Administration 

Education Department of Education 

EPA Environmental Protection Agency 

ETA Employment and Training Administration 

FFMIA Federal Financial Management Improvement Act

FSA Federal Student Aid 

Labor Department of Labor 

NSF National Science Foundation 

OCFO Office of the Chief Financial Officer 

OMB Office of Management and Budget 

ORBIT OCFO Reporting and Business Intelligence Tool 

OSRTI Office of Superfund Remediation and Technology 

Innovation 

PAR performance and accountability report 

PMA President’s Management Agenda 

SSA Social Security Administration 

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reproduce this material separately. 

Page ii GAO-07-95 Scorecard Process
United States Government Accountability Office

Washington, DC 20548 

November 16, 2006 

The Honorable Todd R. Platts 

Chairman 

The Honorable Edolphus Towns 

Ranking Minority Member 

Subcommittee on Government 

 Management, Finance, and Accountability 

Committee on Government Reform 

House of Representatives 

In August 2001, the Bush administration launched the President’s 

Management Agenda (PMA) with the stated purpose of focusing attention 

on ensuring that the resources entrusted to the federal government are 

well managed and wisely used. The PMA targets five management 

initiatives—strategic management of human capital, competitive sourcing,

improved financial performance, expanded electronic government, and 

budget and performance integration. The Office of Management and 

Budget (OMB) developed criteria to measure success and a PMA 

scorecard to track agency progress for each of the five initiatives. The 

scorecard employs a traffic light grading system to indicate both the 

agencies’ current status in achieving the PMA goals and the periodic 

progress made by agencies for each of the five initiatives —”green” 

indicates success, “yellow” indicates mixed results, and “red” indicates 

unsatisfactory results. While the PMA is primarily intended to be an 

internal management tool to drive improvements for these five

management initiatives, the resulting scores are publicly disseminated on 

OMB’s Web site, in the annual Financial Report of the United States 

Government, and the annual Budget of the United States Government. 

The goals of the Improved Financial Performance Initiative (the focus of 

this report) are consistent with the goals envisioned in the Chief Financial 

Officers (CFO) Act, which, among other things, are to improve agencies’ 

financial management and provide for the production of complete, 

reliable, timely, and consistent financial information for use by the 

executive branch and Congress in the financing, management, and 

evaluation of federal programs. As of September 30, 2006, 8 of 26 agencies

scored by OMB had a green current status score in the area of Improved 

Financial Performance and 24 of 26 agencies had green progress scores. 

To better understand the process and criteria by which OMB assesses 

agencies in the area of Improved Financial Performance, you requested 

Page 1 GAO-07-95 Scorecard Process
that we (1) study and evaluate OMB’s process and criteria for awarding a 

green designation for current status and progress and (2) provide 

examples of how agency managers use financial data to better manage 

their agencies on a day-to-day basis for those agencies that had achieved a

green current status score for the Improved Financial Performance 

Initiative, as of September 30, 2004. At that time, six agencies had green

current status scores: the Departments of Education (Education), Energy 

(DOE),1

 and Labor (Labor); the Environmental Protection Agency (EPA); 

the National Science Foundation (NSF); and the Social Security 

Administration (SSA). 

To address the first objective and obtain an understanding of the scoring 

process, we interviewed OMB and agency officials and reviewed relevant 

literature, including documents available on OMB’s Web site and agency

performance and accountability reports (PAR), which include audited 

financial statements. We reviewed OMB’s published scorecard criteria and 

the reference guide OMB prepared to help agencies understand the green

criteria and prepare for discussions and demonstrations with OMB on how 

the agencies were meeting the scoring criteria. Also, we independently

assessed whether agencies had met the seven yellow current status 

scoring criteria. Initially, OMB would not provide us access to the key 

documents used in the scoring process because it considered these 

documents to be deliberative and predecisonal. These documents, which 

are described in the background section of this report, included the 

agency quarterly scorecards, Proud to Be documents, and Green Plans. 

After OMB received a draft of our report for comment describing this 

initial scope limitation, OMB granted us access to review these documents 

on its premises but still would not provide us access to its written 

comments on agency plans or other communications, such as emails, 

relating to the scoring determinations. This particular restriction did not

significantly limit our ability to fulfill the objectives of this review. 

To address the second objective, we reviewed agency documents, 

including agency PARs. We interviewed agency officials and attended 

briefings by personnel of the six agencies in our review, at which officials 

demonstrated examples of how financial information was used to make 

decisions about their programs. However, we did not determine how 

 1

DOE’s current status score was downgraded to red in December 2005 because it received 

a disclaimer of opinion on its fiscal year 2005 consolidated financial statements and was 

not in compliance with the Federal Financial Management Improvement Act (FFMIA). 

DOE’s current status score remained red as of September 30, 2006. 

Page 2 GAO-07-95 Scorecard Process
widespread the use of these examples was throughout the agencies. We 

also did not verify that the use of the information ultimately resulted in 

better decisions or better-managed programs. We did not obtain 

information from the agencies that obtained a green current status score 

for Improved Financial Performance subsequent to September 30, 2004, 

including the Department of Commerce, the Department of State, the 

General Services Administration, and the Smithsonian Institution. 

We performed our work in accordance with generally accepted 

government auditing standards. We conducted our initial work from April 

2005 through March 2006. We updated our work from July 2006 through

November 2006 after OMB provided us access to the agency quarterly 

scorecards, Green Plans, and Proud to Be documents. 

Overall, OMB has established reasonable scoring criteria and helpful 

guidance describing what agencies must do to achieve “green scores” for 

the Improved Financial Performance Initiative. OMB has also designed and 

implemented a quarterly scoring process to assess whether agencies have

met these criteria and are making progress in expanding the routine use of 

financial data in management decision making in key areas of operations. 

OMB’s established scoring criteria address the fundamental aspects of 

sound financial management and require clean audit opinions, sound 

internal controls, compliance with applicable laws and regulations, and 

financial systems that are compliant with federal standards. Seven of the 

nine current status scoring criteria (i.e., the yellow or compliance criteria) 

relate to these aspects and are objective and verifiable using publicly 

available information. The remaining two green or results criteria are more 

subjective and require OMB’s staff to make judgments about whether the 

criteria have been satisfied. These two criteria require agencies to 

(1) demonstrate that they currently produce accurate and timely financial 

information that is used by management to inform decision making and 

drive results in key areas of operations and (2) have a plan (referred to as

a Green Plan) to continuously expand the routine use of financial data in

decision making in additional areas of operations. We found OMB’s staff 

were actively engaged in this scoring process and met regularly with 

agency officials to discuss progress in meeting the scoring criteria and to 

provide input into agencies’ data expansion efforts. 

Results in Brief 

While OMB’s scoring process is reasonable and useful as an internal 

management tool, we did note some opportunities for OMB to enhance the 

process. Specifically, the factors supporting OMB’s key decisions and 

judgments relating to the more subjective green criteria were not fully 

Page 3 GAO-07-95 Scorecard Process
documented. Some of the factors were discussed in the documentation 

OMB made available for our review, but OMB officials had to provide us 

with additional verbal explanations in order for us to better understand 

the rationale for awarding the green scores. Further, the Green Plans and 

updates to these plans, which are key documents used in the scoring 

process, lacked evidence of OMB’s review and approval. Also, there was 

no formalized process to track the receipt of Green Plans or subsequent 

updates. Consequently, it was difficult to readily identify the most current

plan on file. To help ensure consistency and continuity in the scoring 

process over time and as the staff involved change, it would be 

advantageous to OMB to more systematically document these and other 

factors that are critical to these decisions. 

Agency managers we contacted generally supported the Improved 

Financial Performance Initiative because it has helped to focus top 

management’s attention on the financial management challenges 

confronting the agencies. Managers and staff at each of the six agencies 

we visited provided examples of how they were currently using financial

as well as performance data to make management decisions related to 

controlling costs, budgeting, allocating resources, and managing contracts

and grants. These activities, if performed routinely, provide management 

with valuable, decision-enhancing information. For example, Education’s 

office of Federal Student Aid (FSA) developed an activity-based cost 

accounting system to better analyze and manage its costs. As a result, FSA 

reported to us that it had reduced the unit cost for loan consolidations 

from $115 per unit to $66 per unit over an 18-month period. Agency 

officials told us that some of the examples or activities demonstrated to us 

were also previously demonstrated to OMB to show that the agency was 

using financial data to help inform management decision making. 

However, because of the documentation issues discussed above, we were 

not able to determine specifically which example or examples formed the 

basis for OMB’s green decisions. 

To help strengthen OMB’s scoring process for the Improved Financial 

Performance Initiative, we recommend that the Director of OMB direct the 

Office of Federal Financial Management to establish a process to more 

systematically document

• the basis for all key decisions and judgments made in determining 

agency green scores and

• the receipt and review and approval of Green Plans, including updates 

used in the scoring process. 

Page 4 GAO-07-95 Scorecard Process
We provided a draft of this report for comment to the Director of OMB. We 

also provided applicable sections of the draft report to officials of 

Education, DOE, Labor, EPA, NSF, and SSA. In comments on a draft of 

this report, OMB stated that it generally concurs with these 

recommendations and outlined steps it is taking in response to our 

recommendations. 

In August 2001, the President launched a Management Reform Agenda to

“address the most apparent deficiencies for which the opportunity to 

improve performance is the greatest.” OMB, in conjunction with the 

President’s Management Council, developed standards for success in each 

of five governmentwide initiatives. The five governmentwide initiatives 

include strategic management of human capital, competitive sourcing, 

improved financial performance, expanded electronic government, and 

budget and performance integration.

Background 

OMB utilizes an Executive Branch Management Scorecard to track results 

toward achieving the goals of the PMA. The scorecard, issued quarterly, 

employs a traffic light grading system. Scores for each of the five 

initiatives are given for both “current status” and “progress.” Initial scores 

were developed in 2001 for 26 executive agencies, including 23 of the 24

CFO Act agencies, the U.S. Army Corps of Engineers, the Smithsonian 

Institution, and OMB itself.2

 The first current status scorecard was issued 

by OMB on September 30, 2001, while progress scores were first issued on

June 30, 2002. See appendix I for the September 30, 2006, OMB scorecard.

There are separate current status criteria for each of the five

governmentwide initiatives. Scores for “current status” are based on the 

scorecard standards for success developed by OMB with input from the 

President’s Management Council3

 and experts throughout government and 

 2

The Department of Homeland Security was added to the scorecard after it was established 

on January 24, 2003, and the Federal Emergency Management Agency was deleted from the 

scorecard after becoming a part of the Department of Homeland Security effective 

March 1, 2003. 

3

The President’s Management Council advises and assists the President in ensuring that

government reform is implemented throughout the executive branch. The Council’s

functions include improving overall executive branch management; coordinating 

management-related efforts to improve government; ensuring the adoption of new 

management practices in agencies; and identifying examples of, and providing mechanisms 

for, interagency exchange of information about best management practices. 

Page 5 GAO-07-95 Scorecard Process
academe. According to OMB, these standards have been refined based on 

continued experience implementing the PMA. For all five governmentwide 

initiatives, OMB assesses an agency’s “progress” on a case-by-case basis 

against the deliverables and time lines established for each initiative. The 

green, yellow, and red score criteria range from successfully implementing 

plans to plans being in serious jeopardy of failure absent significant 

management intervention. 

This report, as requested, focuses on the Improved Financial Performance 

Initiative, which OMB has described as a management tool. Under this 

initiative, agencies are expected to implement integrated financial and

performance systems that routinely produce information that is timely, 

useful, and reliable to facilitate better performance measurement and 

decision making. This should help achieve the goals that Congress 

established in the CFO Act, including

• provide for improvement, in each agency of the federal government, of 

systems of accounting, financial management, and internal controls to 

ensure the issuance of reliable financial information and to deter fraud, 

waste, and abuse of government resources and 

• provide for the production of complete, reliable, timely, and consistent 

financial information for use by the executive branch of the 

government and Congress in the financing, management, and

evaluation of federal programs. 

Agency quarterly scorecards; corrective action plans; Green Plans, 

including updates; annual Proud to Be documents; and the annual PAR 

plus some additional documentation are used by OMB in the scoring 

process for the Improved Financial Performance Initiative. The following 

summarizes the content of these documents and describes how they relate

to one another. 

The agency quarterly scorecards have three columns and are prepared 

using a standardized template. The first column shows the current status 

color score and a checklist that shows whether an agency has met each of 

the green and yellow criteria. The second column shows the progress 

color score and some of the factors for the score, including actions taken 

and actions planned to expand the use of financial data in day-to-day 

operations. The third column provides space for general comments, 

including comments on the status of efforts to prepare or update the 

agency Green Plans, matters relating to individual initiatives, and in some 

cases explanations for changes to agency’s scores. 

Page 6 GAO-07-95 Scorecard Process
An agency is required to file a corrective action plan when it has a material

weakness or has received a current status red score. Corrective action 

plans state how an agency plans to correct its financial management 

deficiencies. Filing the corrective action plan may enable an agency to 

obtain a green score for progress.4

The Green Plan is a living document that an agency will periodically 

update and expand. It acts as the agreement between OMB and the agency 

on the agency’s near- and long-term areas of focus and what key actions 

and goals will be tracked on the quarterly agency scorecard. Green Plans 

must be approved by OMB. Beginning in fiscal year 2005, for current 

status, if an agency has a yellow score, and therefore is working toward a 

green score, or had a green score, it is required to provide OMB a Green 

Plan. 

Agencies submit the Proud to Be document to OMB in June following a 

standardized template. It documents the goals an agency would be proud 

to achieve during the next 12 months. There is a section for each PMA 

initiative (all five management areas), which gives the status for the 

Standards for Success (scoring criteria) and lists key milestones. For the 

Improved Financial Management sections the following information is 

included: (1) checklists for green and yellow standards, (2) key milestones 

for the last quarter of the current fiscal year and the first three quarters of

the next fiscal year and also ongoing items, and (3) key results that the 

agency would be proud to achieve. These milestones cover initiatives 

included in the agency Green Plans. 

The PAR is completed each November and, among other things, contains

an agency’s annual financial statements and the related independent 

auditor’s report on those statements. It also includes the auditors report 

on internal controls and compliance with laws and regulations. The PAR is 

the principle support for whether the yellow criteria have been met. 

According to an OMB official, the specific documentation maintained by

OMB to support the Improved Financial Performance scores varies by 

agency and can include but is not limited to the following: 

 4

See Implementation Guide for OMB Circular A-123, Management’s Responsibility for 

Internal Control, Appendix A, Internal Control over Financial Reporting, 41-45 (July 2005), 

for detailed guidance regarding corrective action plans. 

Page 7 GAO-07-95 Scorecard Process
• agency quarterly scorecard; 

• the Green Plan (beginning first quarter fiscal year 2005); 

• Proud to Be document; 

• PAR (also includes the major management challenges used by OMB to 

see if agency plans are dealing with these challenges); 

• corrective action plans (submitted by an agency if there is a material 

weaknesses in its financial performance); 

• reports on Anti-Deficiency Act violations;5

• written OMB questions and the agency’s responses; and 

• briefing documentation, including slides and system screen prints. 

OMB has developed reasonable scoring criteria and helpful guidance 

describing what agencies must do to achieve “green scores” for the 

Improved Financial Performance Initiative. OMB has also designed and 

implemented a quarterly scoring process to assess whether agencies have

met these criteria and are making progress in expanding the routine use of 

financial data in management decision making in key areas of operations. 

Implementation of OMB’s scoring process has clearly been a catalyst to 

improve financial management and to encourage agency managers to use 

financial data to enhance decision making as envisioned under the CFO 

Act. While OMB’s scoring process is reasonable and useful as an internal 

management tool, based on the six agencies we reviewed, we noted some 

opportunities for OMB to enhance its documentation of the scoring 

process. 

OMB has developed reasonable scoring criteria for the Improved Financial 

Performance Initiative. Separate criteria exist for the current status and 

progress scores. There are seven yellow (or compliance) criteria and two

additional green (or results) criteria that must be satisfied to receive a 

green current status score. The seven yellow criteria address the 

fundamental aspects of sound financial management and require clean

audit opinions, sound internal controls, compliance with laws and 

regulations, and financial systems that comply with federal standards. 

Most of the yellow criteria are assessed annually and are verifiable using 

the agencies’ annual PARs. OMB considers meeting the yellow criteria as a 

proxy for having timely, reliable financial information. The two additional 

OMB Has a 

Reasonably Designed 

Scorecard Process, 

but Documentation of 

the Process Could Be 

Enhanced 

OMB Has Reasonable 

Scoring Criteria and 

Helpful Guidance for 

Developing Green Plans 

 5

The Anti-Deficiency Act generally prohibits agencies from making obligations and

expenditures in excess of the appropriations or apportionments of appropriations made to

them. 31 U.S.C. §§ 1341, 1342, 1349-51, 1511-1519. 

Page 8 GAO-07-95 Scorecard Process
green criteria are more subjective and require OMB to make judgments 

about whether the agencies have met the criteria. These green criteria 

require agencies to (1) demonstrate that they currently produce accurate 

and timely financial information that is used by management to inform 

decision making and drive results in key areas of operations and (2) have 

plans (i.e., the Green Plans) to expand the routine use of financial 

information in decision-making in additional areas of operations. 

According to an OMB official, the progress scores depend on agencies’ 

success in implementing the Green Plan initiatives or corrective actions 

needed to address identified financial management weaknesses (when an 

agency has not achieved a green current status score) within established 

milestones. Based on OMB’s criteria, if an agency is successfully 

implementing its plans within expected time frames, the agency will 

receive a green progress score. Conversely, if an agency’s plans are not 

likely to achieve the objectives or if there are significant slippages in 

meeting the milestones, the agency would receive a yellow or possibly 

even a red progress score. 

Current status and progress criteria in effect as of the December 31, 2005,

scorecard, when the last change was made to the scoring criteria, are as 

shown in figure 1. 

Page 9 GAO-07-95 Scorecard Process
Figure 1: Improved Financial Performance Initiative Scorecard Criteria 

a

Although OMB guidance calls for auditors to provide negative assurance when reporting on an 

agency system’s FFMIA compliance, as stated in GAO, Financial Management: Improvements Under 

Way but Serious Financial Systems Problems Persist, GAO-06-970 (Washington, D.C.: Sept. 26, 

2006), we believe that a statement of positive assurance is a statutory requirement under FFMIA. In 

addition, negative assurance may provide the false impression that the agencies’ systems 

substantially comply with the requirements of FFMIA. FFMIA is set forth at 31 U.S.C. § 3512 note. 

The Improved Financial Performance Initiative current status criteria have

evolved over the years, while the progress criteria have remained 

substantially the same. The following are key changes that OMB has made 

to the current status criteria: 

• As of September 30, 2004, the yellow criteria were amended to require 

an unqualified opinion on the agency’s financial statements. For fiscal 

Page 10 GAO-07-95 Scorecard Process
years 2001 through 2003, the yellow criteria required only an opinion 

on the financial statements.6

• For the first quarter of fiscal year 2006, the yellow criteria for internal 

control weaknesses and the Federal Managers’ Financial Integrity Act7

were changed from “no material weaknesses” to “no repeat material 

weaknesses.” According to an OMB official, the criteria were revised to 

incorporate the December 21, 2004, revision to OMB Circular No. A123, Management’s Responsibility for Internal Control, effective in 

fiscal year 2006. This official added that agencies can report material 

weaknesses pursuant to OMB Circular No. A-123 without fear of their 

green current status score for Improved Financial Performance being 

negatively affected. 

• For the first quarter of fiscal year 2006, the words “and timely” were 

added to the second green criterion, which now reads “currently 

produces accurate and timely financial information.” 

A summary of the initial and September 30, 2006, quarterly current status 

and progress scores for the Improved Financial Performance Initiative for 

the 26 government agencies scored by OMB is shown in figure 2. 

 6

For example, a qualified opinion would have been acceptable under the previous criteria 

but not under the current criteria. A qualified opinion relates to a nonpervasive departure

from generally accepted accounting principles or a nonpervasive scope limitation. 

7

31 U.S.C. § 3512 (c), (d). 

Page 11 GAO-07-95 Scorecard Process
Figure 2: Current Status Scores and Progress Scores for Improved Financial 

Performance Initiative 

Table 1 shows when the six agencies we reviewed first received a green 

score for current status and progress for the Improved Financial 

Performance Initiative. 

Table 1: Dates When Agencies Received Their Current Status and Progress Green

Scores 

Agency 

Current status—date 

agency received first 

green score 

Progress—date agency 

received first green score 

National Science Foundation 9/30/2001 6/30/2002

Environmental Protection 

Agency 

6/30/2003 9/30/2002

Social Security Administration 6/30/2003 6/30/2002 

Department of Education 12/31/2003 12/31/2002

Department of Energy 6/30/2004 6/30/2002

Department of Labor 9/30/2004 6/30/2002 

Source: OMB scorecards. 

Page 12 GAO-07-95 Scorecard Process
Since receiving its Improved Financial Performance Initiative green scores 

for current status and progress, each agency included in our review, 

except for DOE and Labor, has maintained its quarterly green scores 

through September 30, 2006. DOE received a red current status score for 

the Improved Financial Performance Initiative as of December 31, 2005. 

DOE received the red score because the agency received a disclaimer of 

opinion from its auditor on its fiscal year 2005 consolidated financial 

statements, meaning that the auditor was unable to express an opinion, 

and was not in compliance with FFMIA. DOE implemented a new financial 

accounting system in April 2005 and adopted a new chart of accounts. 

Because of various issues with the system, DOE was unable to provide 

accurate financial data and could not always provide supporting 

documents required for the audit. This limited the scope of the auditor’s 

work. DOE continued to receive a red current status score through 

September 30, 2006. 

DOE received a yellow progress score for the Improved Financial 

Performance Initiative as of March 31, 2005. This score returned to green

as of June 30, 2006. Additionally, Labor’s progress score slipped from 

green to yellow as of March 31, 2006, but rebounded the next quarter. For

both agencies, the quarterly agency scorecards provided explanations for 

the change in these progress scores. 

In July 2005, OMB issued a reference guide, entitled Achieving Green in 

Financial Performance, to help agencies understand the green current 

status criteria and what is required to prepare an acceptable Green Plan to

satisfy these criteria. Agency officials told us that the guidance was helpful 

to them. Specifically the guidance provides the following information. 

First, it explains what is required to meet the green current status criteria 

for (1) producing accurate timely financial information used by 

management to inform decision making and drive results in key areas of 

operations and (2) implementing a plan to continuously expand the scope 

of its routine data used to inform management decision making in 

additional crucial areas of operations. Second, it lists three primary areas 

of information and related detailed components of these areas for each 

initiative in the agencies’ Green Plans that must be approved by OMB to 

satisfy the green criteria. These areas are 

• financial (or business) goals that are critical to management,

• how data are used strategically to achieve the goals, and 

• how success is measured (e.g., reduce cost, increase efficiency) to 

provide evidence that the desired goal is being achieved. 

Page 13 GAO-07-95 Scorecard Process
Third, the guidance gives agencies some general assistance concerning 

discussions with OMB, including demonstrations and describing how the 

criteria are being met. Finally, the guidance provides examples of 

initiatives accepted by OMB under the green criteria. According to an 

OMB official, the guidance is currently being revised and will include 

additional examples of initiatives accepted by OMB in determining green 

scores. 

The useful guidance provided to agencies for implementing the Improved 

Financial Performance Initiative, combined with the specific criteria 

established by OMB, result in a reasonably designed scorecard process for 

this PMA initiative. 

Enhanced Documentation 

Would Benefit the Overall 

Scoring Process 

While OMB’s scoring process is reasonably designed and useful as a 

management tool, we noted some opportunities for OMB to enhance its 

documentation of the process for determining green scores and to help 

ensure consistency and continuity of the process over time and as the staff

involved changes. Specifically, 

• key factors supporting OMB’s green designations were not fully 

documented;

• there was little evidence that the Green Plans and updates to these 

plans, which are key documents used in the scoring process, had been

reviewed and approved by OMB; and 

• there was no formalized process to track the receipt of Green Plans or 

subsequent updates. 

As discussed earlier, to obtain and maintain a green current status score, 

an agency must satisfy OMB’s seven yellow criteria plus two additional 

green criteria. We were able to independently assess whether the six 

agencies in our review had met OMB’s generally objective yellow criteria 

as of September 30, 2004, and December 31, 2005. This was done using 

publicly available agency PARs that included agency audit reports and 

information from OMB on when they received agency interim financial

reports. However, for the other green current status criteria as well as the 

progress score criteria, which are more subjective, we could not tell from

the documentation made available to us by OMB the basis for their overall 

agency assessments or key decisions or judgments made during the 

scorecard process. For example we could not determine which initiatives 

were used by OMB to satisfy the green score criteria for agencies in our 

review. OMB officials discussed with us factors they considered in 

determining if agencies satisfied the green current status criteria, and 

Page 14 GAO-07-95 Scorecard Process
these explanations seemed reasonable. We found that OMB staff have 

been actively engaged in the scoring process and meet regularly with the 

agencies to discuss the agencies’ progress in meeting the scoring criteria 

and to provide input into agencies’ data expansion efforts. According to an 

OMB official, OMB uses emails to provide agencies written comments on 

agency Green Plans in addition to comments provided during meetings 

with agencies, but these communications were not made available to GAO 

for review. However, this OMB official also stated, they do not document 

specifically how an agency satisfied the green current status or progress 

criteria including what key activities or initiatives for using financial data

for decision-making purposes were involved. 

In addition, we could not discern how OMB evaluates and determines the 

sufficiency of individual initiatives or activities, in relation to key 

operations of the agency as a whole, when awarding a green current status 

score. OMB’s green current status criteria include implementing the Green 

Plan to continuously expand the scope of an agency’s routine data use to 

inform management decision making. According to OMB’s Green Plan 

guidance, this requires agencies to provide evidence that information is 

actively being used to help them achieve results in key areas of operations. 

An OMB official stated that OMB personnel have reviewed agency Green 

Plans and are satisfied that the plans meet the criteria for covering certain 

levels of operations. However, the levels of operations that were required 

to satisfy the criteria were not defined. In addition, the official stated that 

there is no written documentation or explanation of how an agency has 

covered a certain level of operations and therefore was justified in 

receiving a green current status score. Documenting these types of key 

assessments would help ensure consistency and continuity in OMB’s 

process for awarding the green scores. This documentation would be 

particularly important when changes are made in OMB staff involved in

the scoring process. 

During our review, we also found that OMB could not readily identify the 

most current Green Plans or updates to the Green Plans for the six 

agencies in our review. For example, we were given access to a Green 

Plan for each of the six agencies and were told by an OMB official that 

they were the current plans. We later saw more recent Green Plans for two 

of the six agencies. We were subsequently given access to updates to 

Green Plans for three of these agencies. However, it was unclear whether 

these were the current updates or if there were any other updates, and two 

Green Plans were marked “DRAFT.” Further, the plans that were provided

to us by OMB lacked evidence of any review or approval by OMB. 

Page 15 GAO-07-95 Scorecard Process
An OMB official acknowledged that OMB had no systematic way of 

tracking Green Plans, including identifying what is the current agency

Green Plan. This official added that the only way OMB personnel have for 

tracking Green Plans or updates to Green Plans is their written analysis of

Green Plans or updates that are provided to agencies but were not 

available to us. A systematic method for tracking Green Plans and 

documenting the review of the plans would help ensure that OMB 

personnel can readily identify the most current Green Plan on file and 

whether the plan has been approved by OMB. 

Officials in the six government agencies we contacted generally supported 

the scorecard process saying it helped to focus top-level management 

attention on financial management issues. Managers and staff at each of 

the six agencies we visited provided examples of how their respective 

offices were using financial as well as performance data to make 

management decisions involving controlling costs, preparing budgets, 

allocating resources, and managing contracts and grants. They also 

demonstrated some of the system capabilities that facilitated using 

financial data in the management decision-making process, including some 

of the automated mechanisms used to disseminate data to staff and 

managers in a timely manner. These officials said that many of the 

examples provided to us were also provided to OMB for the quarterly 

scoring process. However, because of previously discussed documentation

limitations, we were not able to determine specifically which example or 

examples formed the basis for OMB’s green decisions. 

Agency-Provided 

Examples Describing 

the Use of Financial 

Data to Manage 

Programs 

The following are highlights of some of the examples provided to us by the 

six agencies. 

• EPA officials in the Office of the Chief Financial Officer (OCFO) 

demonstrated to us the Web-based OCFO Reporting and Business 

Intelligence Tool (ORBIT), which according to EPA officials, integrates 

financial, administrative, and program performance information to 

assist agency managers in making decisions about their programs and 

operations. One of ORBIT’s features is a Management Dashboard, 

which provides users with a quick view of EPA’s financial and 

budgetary status and presents information in a series of charts and 

graphs called analytics to alert managers to situations out of normal 

ranges. For example, the appropriation utilization alerts analytics alerts 

a user with a red light if more than 50 percent of an annual 

appropriation has been obligated early in a fiscal year. 

Page 16 GAO-07-95 Scorecard Process
• NSF officials told us that data in grantee financial reports, submitted to 

NSF through FastLane, a real-time Web-based system, showed that 

approximately 10 percent of NSF’s grantees reported a cash balance at 

the end of each reporting quarter. This means that grantees had either 

up to a 10-day cash reserve, which NSF permits, or in some cases over 

the 10-day reserve which NSF considers to be excess cash. NSF 

officials added that monitoring procedures, which they implemented 

during fiscal year 2005, produced a recovery of over $3.2 million in 

excess cash held by grantees and a 33 percent decrease in the number 

of grantees reporting cash on hand. 

• A DOE Office of Environmental Management official described to us 

how its Web-based Budget Automation, Justification, and 

Administration (BAJA) tool automatically generates and facilitates 

changes to its annual Congressional Budget Submission. Using BAJA, 

the effects of data changes automatically flow throughout the 

document, making the process much quicker and more reliable than 

the old manual process.

• An SSA official described to us how he used workload information 

from SSA’s Unified Measurement System and other financial

information, such as real-time budget allocation and expenditure data, 

to reallocate workloads (i.e., claims to be processed) among two 

different field offices to better match the available staff resources. He 

told us that in past years, SSA managers did not have the allocation 

tools that are currently available. The availability of current budget 

allocation and spending data enabled him to consider the estimated 

costs of moving staff versus moving the work. 

• Officials from Labor’s Employee Benefits Security Administration 

(EBSA) told us how they use obligation data from DOLAR$ (Labor’s 

core accounting system) and unit cost data from CAM (Labor’s cost 

accounting system)8

 to allocate funding resources and otherwise 

manage their business in situations where EBSA is uncertain about the 

amount of funding it will have for a year when the amount of its annual 

appropriation is not known until later in the fiscal year. Using the 

DOLAR$ and CAM data for equivalent prior periods and adjusting for 

mandatory cost increases (e.g., payroll and rent), EBSA managers told 

us that they (1) determine the amount of program costs that EBSA can 

 8

For more information on CAM, see GAO, Managerial Cost Accounting Practices:

Leadership and Internal Controls Are Key to Successful Implementation, GAO-05-1013R 

(Washington, D.C.: Sept. 2, 2005). 

Page 17 GAO-07-95 Scorecard Process
afford to finance within the constraints of that funding level; (2) assess 

whether special or extraordinary measures, like a hiring freeze, 

furloughs, or reducing or eliminating certain commitments, are needed 

to remain within that funding level; and (3) then target resources to 

achieve the program’s objectives. 

• Officials from Education’s FSA office told us they developed an 

activity-based cost accounting system to better manage FSA’s costs. 

According to the FSA officials, they used unit cost information 

developed from the cost system as a tool to renegotiate and

consolidate several contracts relating to the administration of FSA’s 

direct loan program and reduced FSA’s unit cost for loan 

consolidations from $115 per unit to $66 per unit, over a period of 18 

months. 

• Labor’s Employment and Training Administration (ETA) officials 

described to us how they used financial information to help manage 

construction contracts for the $1.4 billion Job Corps program. ETA 

officials showed us an example of a report that contains contractor 

information, such as company name, contact person, narrative of the

scope of work, and planned and actual schedule dates, along with 

financial information such as budget, authorized spending, and 

contract modification amounts. ETA officials said they use this report 

to track costs and schedule data in order to make decisions related to 

the contracts during monthly meetings between the contractor and Job 

Corps management. 

• EPA officials in the Office of Superfund Remediation and Technology 

Innovation (OSRTI) demonstrated to us the Web-based system called 

Superfund eFacts, which extracts information from a database

containing general program information on Superfund sites across the 

nation and also contains financial information from EPA’s Integrated 

Financial Management System. OSRTI staff showed us eFact’s ability to

drill down to detailed financial information, such as obligation amounts 

related to a site, by clicking on charts and spreadsheets from a listing 

of Superfund sites. EPA officials told us the information in the charts is 

updated nightly and that prior to the implementation of eFacts, 

managers could only get hard copy reports on an ad hoc basis from a 

contractor and that the program and financial information in eFacts 

allows for information to get to managers much faster than in the past, 

saving time and money.

Page 18 GAO-07-95 Scorecard Process
The PMA has generally been viewed positively by agencies because of the

attention it has brought to long-standing management deficiencies, 

including financial management. OMB has established reasonable scoring 

criteria and helpful guidance for the Improved Financial Performance 

Initiative and designed a reasonable scoring process to assess whether 

agencies have met these criteria and are making progress in expanding the 

routine use of financial data in management decision making in key areas 

of operations. The scorecard process has clearly been a catalyst to 

improve financial management and to encourage agency managers to use 

financial data to enhance decision making as envisioned under the CFO 

Act. Better documenting the key decisions would strengthen what is 

already a useful internal management tool by helping ensure consistency 

and continuity in the process and would enhance the value of the process 

to external users. 

To help ensure consistency and continuity in the Improved Financial 

Performance Initiative scoring process over time and as the staff changes, 

we recommend that the Director of OMB direct the Office of Federal 

Financial Management to take the following two actions: 

• establish a process to more systematically document the basis for all 

key decisions and judgments made in determining agency green scores, 

and 

• establish a process to document the receipt and review and approval of 

Green Plans, including updates used in the scoring process. 

Agency Comments and Our Evaluation

In written comments on a draft of this report, OMB’s Controller stated she 

generally concurs with our recommendations and outlined steps OMB is 

taking in response to these recommendations. We also discussed technical 

comments with OMB officials, which we have incorporated in the final 

report as appropriate. OMB’s written comments are reproduced in 

appendix II.

We are sending copies of this report to the Director of the Office of 

Management and Budget; the Secretaries of Education, Energy, and Labor; 

the Administrator, Environmental Protection Agency; the Director, 

National Science Foundation; the Commissioner of Social Security; and 

other interested parties. Copies will be made available to others upon 

Conclusions 

Recommendations for 

Executive Action 

Agency Comments 

and Our Evaluation 

Page 19 GAO-07-95 Scorecard Process
request. In addition, this report will be available at no charge on the GAO 

Web site at http://www.gao.gov. 

If you or your staffs have any questions about this report, please contact 

me at (206) 287-4809 or calboml@gao.gov. Contact points for our Offices 

of Congressional Relations and Public Affairs may be found on the last 

page of this report. Major contributors to this report are acknowledged in 

appendix III. 

Linda Calbom

Director, Financial Management and Assurance, 

and Western Regional Director 

Page 20 GAO-07-95 Scorecard Process
A

Branch M

ppendix I: September 30, 2006, Executive

anagement Scorecard 

Page 21 GAO-07-95

Appendix I: September 30, 2006, Executive 

Branch Management Scorecard 

 Scorecard Process
Appendix II: Comments from the Office of Appendix II: Comments from the Office of Management and Budget 

Management and Budget 

Page 22 GAO-07-95 Scorecard Process
Appendix II: Comments from the Office of

Management and Budget 

Page 23 GAO-07-95 Scorecard Process
Appendix III: GAO

A

 Contact and Staff 

cknowledgments 

Page 24 GAO-07-95

Appendix III: GAO Contact and Staff 

Acknowledgments 

Linda Calbom, (206) 287-4809 or calboml@gao.gov

Staff members who made key contributions to this report include Phil 

McIntyre, Assistant Director; Donald Campbell; Richard Cambosos; Lisa 

Cyre; Abe Dymond; and Diane Morris. 

 Scorecard Process

GAO Contact 

Acknowledgments 

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