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THE PRESIDENT’S MANAGEMENT AGENDA: ARE

AGENCIES GETTING TO GREEN?

HEARING

BEFORE THE

SUBCOMMITTEE ON GOVERNMENT EFFICIENCY

AND FINANCIAL MANAGEMENT

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

FEBRUARY 11, 2004

Serial No. 108–155

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

DAN BURTON, Indiana

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

DOUG OSE, California

RON LEWIS, Kentucky

JO ANN DAVIS, Virginia

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

ADAM H. PUTNAM, Florida

EDWARD L. SCHROCK, Virginia

JOHN J. DUNCAN, JR., Tennessee

NATHAN DEAL, Georgia

CANDICE S. MILLER, Michigan

TIM MURPHY, Pennsylvania

MICHAEL R. TURNER, Ohio

JOHN R. CARTER, Texas

MARSHA BLACKBURN, Tennessee

——— ———

——— ———

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. ‘‘DUTCH’’ RUPPERSBERGER, Maryland

ELEANOR HOLMES NORTON, District of

Columbia

JIM COOPER, Tennessee

——— ———

———

BERNARD SANDERS, Vermont

(Independent)

MELISSA WOJCIAK, Staff Director

DAVID MARIN, Deputy Staff Director/Communications Director

ROB BORDEN, Parliamentarian

TERESA AUSTIN, Chief Clerk

PHIL BARNETT, Minority Chief of Staff/Chief Counsel

SUBCOMMITTEE ON GOVERNMENT EFFICIENCY AND FINANCIAL MANAGEMENT

TODD RUSSELL PLATTS, Pennsylvania, Chairman

MARSHA BLACKBURN, Tennessee

STEVEN C. LATOURETTE, Ohio

CANDICE S. MILLER, Michigan

MICHAEL R. TURNER, Ohio

——— ———

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

MAJOR R. OWENS, New York

CAROLYN B. MALONEY, New York

EX OFFICIO

TOM DAVIS, Virginia HENRY A. WAXMAN, California

MIKE HETTINGER, Staff Director

LARRY BRADY, Professional Staff Member

AMY LAUDEMAN, Clerk

MARK STEPHENSON, Minority Professional Staff Member

(III)

C O N T E N T S

Page

Hearing held on February 11, 2004 ....................................................................... 1

Statement of:

Johnson, Clay, III, Deputy Director for Management, Office of Management and Budget ........................................................................................... 5

McSlarrow, Kyle, Deputy Secretary, Department of Energy ........................ 29

Letters, statements, etc., submitted for the record by:

Johnson, Clay, III, Deputy Director for Management, Office of Management and Budget, prepared statement of ................................................... 7

Maloney, Hon. Carolyn B., a Representative in Congress from the State

of New York, prepared statement of ........................................................... 60

McSlarrow, Kyle, Deputy Secretary, Department of Energy, prepared

statement of ................................................................................................... 31

Platts, Hon. Todd Russell, a Representative in Congress from the State

of Pennsylvania, prepared statement of ...................................................... 3

Towns, Hon. Edolphus, a Representative in Congress from the State

of New York, prepared statement of ........................................................... 56

(1)

THE PRESIDENT’S MANAGEMENT AGENDA:

ARE AGENCIES GETTING TO GREEN?

WEDNESDAY, FEBRUARY 11, 2004

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON GOVERNMENT EFFICIENCY AND

FINANCIAL MANAGEMENT,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 2 p.m., in room

2247, Rayburn House Office Building, Hon. Todd R. Platts (chairman of the subcommittee) presiding.

Present: Representatives Platts, Towns, and Maloney.

Staff present: Mike Hettinger, staff director; Dan Daly, counsel;

Larry Brady and Tabetha Mueller, professional staff members;

Amy Laudeman, legislative assistant; Sarah D’Orsie, clerk; Adam

Bordes, minority professional staff member; and Jean Gosa, minority assistant clerk.

Mr. PLATTS. This hearing of the Government Reform Subcommittee on Government Efficiency and Financial Management will come

to order. Our ranking member, Mr. Towns, is on his way and will

be here shortly, and we will turn to him for his opening statement

once he arrives.

As elected representatives of the people, we have a responsibility

to use taxpayer dollars in the most efficient, effective manner possible. Only by better understanding how these dollars are spent

and managing the Federal Government in a more transparent, results-oriented way, can we begin to govern with accountability.

President George Bush’s management agenda is the most aggressive attempt by any administration to achieve this goal, and I certainly commend the administration for its steadfast efforts in this

area. The administration’s Program Assessment Rating Tool

[PART], implemented for the first time last year, seeks to tie funding sources to outcomes at the program level. PART is a key tool,

not only in the President’s management agenda, but also as part

of the broader performance-based accountability effort encompassed

by the Government Performance and Results Act [GPRA].

The vision behind GPRA was an effective, efficient government

that produced tangible results, results that would form the basis

for budgetary decisions. GPRA was intended to serve as a firm

foundation on which to build a structure of performance management, and the President’s management agenda is a logical evolution in bringing about such reform. The budget and performance

integration aspect of the President’s management agenda brings us

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closer than ever to one of the most elusive, yet critical goals—linking performance to budgeting decisions.

PART, as it has been implemented in the last two budget cycles,

is a proven and effective management tool. Agencies now understand what is expected of them in the PART process and are beginning to manage for results. This year, unlike last, a number of

budget decisions can be directly linked to the use of the PART, but

there is still a long way to go. The PART, as a budgetary tool, continues to evolve.

Results should certainly be an important factor underlying budget decisions. Efforts to infuse performance-oriented information into

the allocation of resources will, by definition, provide better informed budget decisions, as well as help to improve the programs

being reviewed.

Today we will hear from two senior administration officials with

unique perspectives on the implementation of the President’s management agenda and PART. Clay Johnson, Deputy Director for

Management at the Office of Management and Budget, is responsible for implementing these reforms governmentwide and brings a

broad perspective. From the agency perspective, Deputy Secretary

of Energy Kyle McSlarrow is here to provide the subcommittee

with specific information on successful reforms at the Department

of Energy. I would like to thank each of you for your attendance

and participation in this hearing and also for your extensive preparation and your written testimonies that you have submitted.

[The prepared statement of Hon. Todd Russell Platts follows:]

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Mr. PLATTS. With Mr. Towns not being present yet, I think what

we will do is go ahead and swear in our witnesses and allow you

to begin your opening statements. Then we will come back to Mr.

Towns at the time he arrives and you have concluded your testimony.

If I could ask our two witnesses to stand and any staff who will

be advising you as part of your testimonies here today to also stand

and raise your right hands.

[Witnesses sworn.]

Mr. PLATTS. The clerk will reflect that both witnesses affirmed

the oath.

Again, we appreciate your substantive written testimonies that

will complement your oral testimonies here today. We would ask

that you stay to roughly 5 minutes, but you bring valuable insights

to this performance assessment process and so I’d rather we go

long and you get a chance to share your thoughts than have you

worry specifically about the 5-minute rule.

I would also like to highlight for all of our attendees here today

a little bit about each of your backgrounds.

Clay Johnson is the Deputy Director of OMB. Previously, Mr.

Johnson served the President as an assistant for Presidential personnel. From 1995 to 2000, Mr. Johnson worked for then Governor

Bush, first as his appointments director and then as his chief of

staff. In addition, he has held a number of prominent positions in

the private sector. Again, we’re delighted to have you here and to

have your expertise shared with the committee. So if you would

like to proceed with your testimony.

STATEMENT OF CLAY JOHNSON III, DEPUTY DIRECTOR FOR

MANAGEMENT, OFFICE OF MANAGEMENT AND BUDGET

Mr. JOHNSON. Mr. Chairman, thank you for having us. We, Congress and the executive branch, can make the Federal Government

results-oriented, which is what you talked about in your opening

comments. We both of us, Congress and the executive branch, are

accustomed to focusing on the amount of money we are spending

as a validation for how much the Federal Government is committed

to an objective. But the better measure of our commitment is not

how much we are spending, or even how hard we are working. The

better measure is what results we achieve on behalf of the American people.

We can assess the performance of every Federal program, and if

a program is not working as intended, we can work together to decide what to do about it. We can review and evaluate the cost of

each program and activity, and if the cost is not considered to be

satisfactory, we can work to reduce it to more acceptable levels.

We can assess how government assets are being managed, maintained and deployed. We can assess the service levels we provide

our customers—our citizens, taxpayers, State and local governments, and businesses—and if the service levels are not considered

to be satisfactory, we can work to make them acceptable.

We can create a results-oriented government, one that assesses

its performance, controls costs, and manages assets and service levels to better serve the taxpayers and citizens. We can do this and

we have begun to do so.

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The President’s management agenda, and its executive branch

management scorecard, help us do this. We are holding agencies

accountable for becoming results oriented. Perhaps the most important achievement of the PMA, so-called, is the fact that many agencies are now using meaningful program performance information in

their budget and management decisionmaking. In particular, a

third of the government’s major agencies meet regularly to use performance information to make program management decisions.

Agencies, such as the Agriculture Department, Education, HHS,

Department of Justice, Transportation, VA, EPA, GSA, NASA, Energy Department, agencies are using information gleaned from program assessments to identify program strengths and weaknesses

and take appropriate action. Their assessments have improved program results. These assessments are causing us to ask consistently

whether programs are working and, if not, what we should do

about them.

One of the most visible factors affecting a program’s performance

is funding. But I believe far too much attention is devoted to how

much we are spending rather than how much we are getting for

what we spend. Over time, funding should be targeted to program

that can prove they achieve measurable results. I have included a

table with my written testimony that shows not only all of the

PART ratings, but the funding recommended for each assessed program in the President’s 2005 budget. As you will see from that document, a PART rating does not today, nor should it ever, result in

an automatic funding decision. Indeed, a rating of ‘‘Ineffective’’ or

‘‘Results Not Demonstrated’’ may suggest that greater funding is

necessary to overcome identified shortcomings, while a program

rated ‘‘Effective’’ may be in line for a proposed funding decrease because we have higher priorities or have already achieved the desired result.

The PART is a vehicle for improving program performance. It

builds on the strong foundation laid by the Government Performance and Results Act. Without the strategic and performance planning agencies conducted under this important law, there would be

no basis on which to judge an agency’s performance management

practices or the goals by which it measures success. The PART reinforces the law’s important requirements to set outcome-oriented

goals and measure progress against those goals.

We will continue to improve agency and executive branch implementation of GPRA by insisting GPRA plans and reports meet the

requirements of this law and the high standards set by the PART.

Codification of the requirement to conduct assessments of program

performance would be a welcome complement to the statutory management framework laid by GPRA, easy for me to say.

As more and more program assessments are conducted, the vast

majority of budget and management decisions will be significantly

influenced by information about how programs are performing.

Agencies will be better able to describe to Congress and the taxpayer what his or her funding is purchasing and will be managing

so that each year improvements in efficiency and service delivery

can be documented. This is our goal, yours and ours—a results-oriented government. Thank you.

[The prepared statement of Mr. Johnson follows:]

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Mr. PLATTS. Thank you, Mr. Johnson.

Next we have Mr. Kyle McSlarrow. Mr. McSlarrow is the Deputy

Secretary of Energy. Prior to this assignment, he served as Chief

of Staff to Energy Secretary Abraham.

As Deputy Secretary, Mr. McSlarrow serves as the Chief Operating Officer of the agency and serves on the President’s Management Council. Prior to joining DOE, Mr. McSlarrow served as vice

president of Grassroots.com, as chief of staff to the late U.S. Senator Paul Coverdell, as well as deputy chief of staff and chief counsel for Senator Majority Leaders Bob Dole and Trent Lott between

1995 and 1997.

Again, thank you for your presence here today. You may proceed.

STATEMENT OF KYLE MCSLARROW, DEPUTY SECRETARY,

DEPARTMENT OF ENERGY

Mr. MCSLARROW. Thank you, Mr. Chairman. I am pleased to be

here to discuss how the Department of Energy seeks to achieve the

goals of the President’s management agenda, and especially how

we are integrating performance and budget.

Would you like me to hold?

Mr. PLATTS. Actually, why don’t you continue with your opening,

and then, Mr. Towns, we will come to you for your opening statement.

Mr. TOWNS. OK. I will just submit it for the record.

Mr. PLATTS. OK. Great. Please continue.

Mr. MCSLARROW. When the President issued his management

agenda in 2001, the PMA scorecard released by OMB rated the Department as ‘‘red’’ in the status column for all five PMA initiatives.

Three years later, in the most recent scorecard, the Department received all ‘‘yellow’’ ratings.

The reason is simple. The President’s vision for ensuring that the

Federal Government is efficiently run and results-oriented forced

the Department to make management improvement a top priority.

As a result of the President’s leadership, we are seeing results and

continuing our progress toward making the Department performance-driven.

We believe we have accomplished a great deal in implementing

the PMA over the past 3 years. And in the interest of time, I am

going to skip over some of this and would be happy to answer questions about it.

One point I do want to make is that, in addition to what is commonly thought of as the five PMA initiatives, an important part

that we have focused on is project management, which is really inseparable from some of the other initiatives. We have issued a departmental directive that establishes a common Department-wide

framework for managing capital asset acquisitions and a manual

that provides detailed guidance and procedures. Each month I receive a project status report which identifies all under-performing

projects in the Department’s portfolio and I meet personally with

the senior leaders responsible for these projects. The reason I raise

this is a very simple one. DOE is largely a contractor operated

agency. We have over 100,000 contract employees and about 14,000

Federal employees. So how we manage contracts is integral to everything else we do.

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When it comes to budget and performance integration, we have

issued a new strategic plan which reflects the Department’s overarching mission to advance the national, economic, and energy security of the United States and includes milestones toward achieving that mission. The DOE section of the fiscal year 2005 budget

request is based upon our strategic plan and displays how each dollar we spend supports our goals in each of these mission areas.

Under GPRA, the Government must maintain public accountability in a consistent manner across all Federal programs. The PART

process is helping the government fulfill that mandate. For all of

its forward thinking, GPRA does not include a forcing mechanism

to validate the quality of performance measures or to require managers to be accountable for meeting commitments. I believe PART

strengthens GPRA by requiring managers to report on results, indeed, one-half of the total PART score is based on demonstrated results, and mandating performance data into budget justifications.

Codifying a requirement that Federal programs be assessed

would strengthen GPRA and ensure that the effort to increase accountability is continued. However, it is important that OMB and

the agencies have the flexibility to determine how assessments are

to be conducted.

The Department of Energy, for our part, has embraced the PART

approach. To date, we have conducted PART reviews for over half

our programs. We will continue on an ambitious schedule and will

use the results to help make better informed programmatic, budget, and management decisions.

I will close there, Mr. Chairman.

Thank you.

[The prepared statement of Mr. McSlarrow follows:]

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Mr. PLATTS. Thank you, Secretary McSlarrow.

I would like to start maybe with kind of a broad question to both

of you from a governmentwide versus an agency perspective. Clearly, we all share the goal of performance-based management and the

benefits of it. What do you think is the greatest obstacle to achieving this goal? Is it accurately defining what the outcomes are we

are going to assess for a program? Is it getting program managers

and agency heads to really understand the benefits of it and buy

into the approach in a true good faith manner? Is it resistance of

Congress to really act on the information shared and incorporate

it into budgeting decisions? What would be your thoughts on the

greatest obstacle to this effort?

Mr. JOHNSON. Yes. [Laughter.]

Mr. PLATTS. All the above. A small challenge.

Mr. JOHNSON. A small challenge. I think the biggest challenge is

to just change habits. Right now when the focus is on money, not

what the money buys, we have very specific reference points—$500

million, $5 billion, $50,000—a very specific number. When we focus

on results, we oftentimes have very imprecise information. The

Federal Government is involved in a lot of things that are hard to

measure, and so we are going to find ourselves in situations where

we have 10 or 5 or 15 different measures that get at whether a program is working or not, but it will not be an exact measure of it

is an A-minus or it is a B-plus or whatever. But it is much more

relevant and much more productive and steers us toward more

meaningful decisions, I believe, for the benefit of the taxpayer.

So what we, Congress and the executive branch, agencies, have

to get in the habit of is adapting to the new process where we have

more relevant information but oftentimes less precise information,

and just get in the habit of our asking ourselves in budgetary decisions, of authorizing, appropriating decisions, does this work, what

do we know about it based on the fact that it does or does not

work, based on the fact that we do not know whether it works or

not, and based on a whole lot of other factors: What should we do

about the structure of this program, what should we do about its

management, what should we do, if anything, about its appropriations level.

But it is, in general, a new habit, a new way of thinking about

budgets, a new way of agencies interacting with Congress, a new

way of agencies interacting with themselves. There was a great

deal of resistance when we first started talking about this with

agencies 21⁄2 years ago within agencies. They were fearful of focusing on results. I believe they probably conjectured that if you were

associated with a program that did not perform, you were history

and the program was likely to get zeroed out and you would be

without a role in that agency. And they have found that is not the

case. The focus is on not getting rid of things that do not work, but

making things work that do not. But it is just a new thought process, it is a new series of habits that I think we are all capable of

doing. Agencies have made that transition and I have every confidence that Congress will do the same, with a lot of help from us.

Mr. PLATTS. Secretary McSlarrow, from the department perspective.

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Mr. MCSLARROW. I think the last point that Director Johnson

just made is an important one; which is, this is about cultural

change. Getting those managers who reported to me, who were,

frankly, fearful about going out and objectively and honestly rating

themselves and others, was difficult but I think we have gotten

over it. And we still have work to do, to change the mindset that

you are going to be rewarded for fixing problems. Once people got

that, I think then it went along a lot more smoothly. That is always I think going to be an ongoing challenge.

In terms of the challenges that face PART in general, there is

really one macro and one micro. The macro one I think is, and, obviously, for OMB and others in this hearing, involves our efforts to

get to this point. But for this to work, we have to have every constituent part working together. People have to appreciate and treat

the PART process with credibility and respect, and that obviously

includes a huge role for Congress.

The micro challenge is one that we have struggled with a lot. We

had, in fact, a whole day retreat just trying to come to grips with

it about a year ago. And that is, how do you ensure that the people

who are making the judgments are making the right judgments.

Somebody has to make a judgment. But you should not be the

judge of your own program, rather it should be somebody else on

the outside. In this case, it is OMB. But how do you ensure that

they are well-equipped to make judgments in which you can have

some confidence, and how do you make sure that those judgments

all across the programs are consistent with one another in a way

that the scores actually mean something? And from where I sit, we

have made tremendous progress so that I am comfortable with how

I am being graded and I am comfortable that these are apples to

apples comparisons. But I think that is always going to be a work

in progress.

Mr. PLATTS. You both touched on a number of issues I want to

expand on in more detail. But before I get into some of the specifics, in the broad sense, and maybe first within the departments

and agencies, it sounds like you have made efforts with managers

to get them to understand that this is really a management tool.

And a rating of ineffective does not mean no money, it may mean

that we realize that you do not have enough money to achieve your

goal, or it might mean that you need to rethink how you are spending that money.

Mr. MCSLARROW. Right.

Mr. PLATTS. And it sounds like with your departmental retreat

trying to develop that process and to educate the people on the

front lines. What efforts have been made with Congress? Because,

Mr. Secretary, as you said, everybody has to buy into this, everybody has to place true faith in the merits of these assessments for

it to work in the end. What dialog may be between the administration and the appropriators especially, or with authorizing committee chairs, is there a process ongoing now with Members of Congress?

Mr. JOHNSON. To move us in general toward the direction of focusing on results?

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Mr. PLATTS. Yes. To better understand what PART is all about

and how it can be an asset and a benefit to decisionmakers here

on the Hill as well as within the departments and agencies.

Mr. JOHNSON. All right. Well, agencies work with their individual appropriators. Maybe that is the most important issue, important factor. Like NASA has been very successful working with the

VA-HUD Appropriations Subcommittee, and yet other agencies in

VA and HUD are less far along. And it is largely a function of the

fact that Sean O’Keefe and his staff work very, very aggressively

and closely with the appropriation subcommittees to get them to

make that transition, to understand what was not to be feared and

how it was better to focus on these things rather than those things.

And so, there is individual agencies working with their appropriators that could be going on, and we are helping them wherever

we can.

We have called on specific subcommittee chairmen and Members

to address questions they have about performance budgets and

they want reassurances from us and agencies that we are going to

help them make that transition. OMB is also meeting with Governmental Affairs, Government Reform staffs and Members, and

Budget Committee staffs and Members, and other leadership members in the House and Senate to talk about what does it mean to

have a Federal Government that is focused on results. Where do

we think we have the opportunity, I would suggest without regard

to who is President, where do we think we have an opportunity to

be 5 years down the road and what does that mean for Congress,

what does that mean for employees, what does that mean for taxpayers. I think it means all good things to be results-oriented versus not to be results-oriented. This is to be pursued, not to be

feared.

So there is general background information, there is general

seeking out input from employee groups, from Members of Congress and from their staffs, and then there is specific action with

agencies and their appropriators on specific budget issues.

Mr. PLATTS. And we talked briefly before we started about some

of the language in the appropriations report language.

Mr. JOHNSON. Right.

Mr. PLATTS. Clearly, there has been some better acceptance or

appreciation for the performance-based approach than elsewhere

even within the same appropriations bill. Is that just you think it

is going to take some time to change that mindset and to better

understand what they are being offered?

Mr. JOHNSON. Yes. It is our responsibility to help appropriations

subcommittees make that change. They are used to seeing things

lined up a certain way, and when all of a sudden they get it a different way, I would be resistant, too. Well, they need help, and it

is our responsibility, the agencies’ responsibility to help them make

that transition. But I am without any doubt that 2 years, 3 years

from now all these appropriations subcommittees will be using performance budgets and be glad they are doing so, in my opinion.

Mr. PLATTS. I have some followups, but I would like to yield to

the gentleman from New York, our ranking member, Mr. Towns.

Mr. TOWNS. Thank you very much, Mr. Chairman. Mr. Johnson,

let me make it sort of clear, I remain concerned that PART may

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be used as a political tool for negatively assessing various social

programs that are not viewed favorably by the administration but

that continue to provide meaningful and vital services to many of

my constituents. I guess a classic example would be HOPE VI programs, Even Start would be another one, and the Federal Perkins

Loan Program, they are all zeroed out in funding in the President’s

budget because they were deemed ineffective under the PART evaluation. Can you explain to me why such conclusions were reached

when you can talk to anybody anywhere and their views are different. Can you tell me how you arrived at that?

Mr. JOHNSON. I know a little bit about Hope VI, I do not know

about the other programs. So let me respond just briefly to Hope

VI, but then respond in general to your question, if that would be

all right.

Mr. TOWNS. Sure.

Mr. JOHNSON. Hope VI, as I understand it, accomplished its designed purpose. It established a goal and it accomplished that purpose. But also, I believe it has been shown year after year that

there was no further contribution being made to the greater goal

of the housing goal that it was associated with. There is strong

commitment in the administration to the housing goal, that I cannot specify in detail, that you are familiar with. And the feeling

was that program, that money was not doing anything to help further the pursuit of the accomplishment of that goal. The commitment to the goal still remains strong. That program did not contribute to the accomplishment of that goal.

Let me give you another example about a program that I am familiar with that has to do with Adult Literacy. My understanding

it, and my first-hand experience is that adult literacy programs do

not work. At best, they work about 25 percent of the time. We

spend $300 million or $500 million a year on adult literacy and yet

they are successful a pitifully small percent of the time. There the

conclusion is we would like adult literacy. We are not successful

now at teaching adults how to read. We need to figure out how to

do that better. Maybe we structure the program differently, maybe

we provide for more accountability, maybe we get rid of the current

program and replace it with another program. But what we are

doing now does not work.

So my sense of it, my view of Hope VI is what we hoped to accomplish in this housing area, what Hope VI was originally designed to accomplish, it either already accomplished or there was

no evidence to suggest that it was accomplishing its desired goal

and that a different program, some alternative program or another

program that already existed should be looked to, to accomplish

that goal.

It is about our ability to accomplish the overall goal, not to maintain existing programs. The commitment to these goals remains

large. And the fact that we eliminate a program, an education program or a housing program, does not mean there is not a commitment to the goal, it means it was determined that those 13 out of

the 65 programs that have recommended for elimination were considered to be ineffective at accomplishing the objective. The other

52 programs that have been recommended for elimination were not

necessarily because of results, it was because they were entirely

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duplicative, it was because they had accomplished the goal, because

it was not a high priority. But there were 13 of the 65 where the

primary reason was that they just do not work. But that does not

mean that we are not committed to the objective. It means that

those programs were not considered to be effective at achieving the

goal.

Mr. TOWNS. Let me just go at it another way. I am going to mention another program, I am going to leave that alone for a minute.

EPA programs OMB evaluated under PART, 13 programs were

given a rating of ‘‘Results Not Demonstrated,’’ right. The summary

of the assessment of the nonpoint source grant program states that

the administration will significantly reduce funding in recognition

of increased spending on nonpoint source pollution through USDA

Farm Bill programs. I am concerned that the Farm Bill programs

alone simply are not sufficient to meet the need for grants to clean

up nonpoint source pollution. Let me be candid. EPA’s responsibility to implement and enforce the Clean Water Act, that is their responsibility, not the USDA. That is the kind of stuff that bothers

me. And I hear you, but when I look at that, would EPA not be

in a better position to do that than USDA?

Mr. JOHNSON. Again, I am sorry, I apologize for not knowing the

particulars of that program. But I would be glad to get back and

respond to you particularly about that program as soon as we get

back to the office and we will put something in writing and send

it to you, sir.

Mr. TOWNS. Yes. I just have lot of problems here, Mr. Chairman,

because when you look at the fact that when you talk about programs like HOPE VI and other programs that do a lot of things in

terms of being designed to bring down crime, and then when you

find a situation where that is not the case that it has brought down

and you say the program has achieved its goals, see, that is the

problem I have. I mean, what are you evaluating here? I just think

that maybe some politics might be entering the picture. That is

what I am really having some difficulty with. And then you have

other programs, for instance, that have joint kind of funding from

State, local, and of course Federal, and then of course when you

wipe out, I am not sure as to how this will work. Could you further

convince me? I know my time has expired, Mr. Chairman, but let

me just get an answer.

Mr. JOHNSON. As I mentioned, we have been talking to congressional staff members and we will soon be talking to their Members,

and one of the questions we ask them is, is it likely that a resultsoriented government is going to be well thought of by Congress?

And the focus, the answer that we got back, and I was kind to hear

it, is that focusing on program results or agency results is good, it

is what we should all be aspiring to do. We define what our goal

is, not necessarily what our program goal is, but what are the overall objectives—what are the President’s priorities, what are Congress’ priorities, what kind of funding, what kind of programs we

have to address those larger objectives. Are we then accomplishing

those objectives? If we are not accomplishing those objectives, then

Congress or somebody else can decide that is not a priority for us.

But as long as it is a priority, we have to figure out how to make

those programs work. And if we cannot make those programs work,

41

we need to recommend that they be suspended and that the money

be spent elsewhere or that something else be done with the money,

give it back to the taxpayers, we spend it on something else, we

structure a different program to approach that objective.

I do not believe it necessarily has to be driven by politics. I think

the debate has to be what is the intended result, what is the intended change in the status quo that we seek, would the result of

this combination of, in this case, housing programs accomplish

that, how are each of the programs contributing to the desired result. If they are not contributing the desired result, the desired result which Congress and the executive branch has said is a worthy

goal, then we need to figure out more effective ways of spending

that money, more effective programs designed to get at the desired

result. So I do not think that there is any more risk than normal

for politics to be involved in what goes on here. In fact, I think it

makes the debate potentially much less focused on politics and

much more focused on intended outcomes.

Mr. TOWNS. Well, let me say this and then I yield back, Mr.

Chairman. I just think it is EPA’s responsibility to implement and

enforce the Clean Water Act and then I just cannot see USDA assuming the responsibility when EPA is in a much better position

to do it than anybody, they have the experts. That just does not

make any sense to me. I might as well be honest with you.

Mr. JOHNSON. Yes. And I will be glad to get back to you with all

that. I really just do not know anything about it.

Mr. TOWNS. OK. Good. I yield back, Mr. Chairman.

Mr. PLATTS. Thank you, Mr. Towns. Let me expand on Mr.

Town’s question. One of the challenges, and it is about kind of

changing our mindset and how we look at decisions, you referenced

Even Start, as an example, as deemed ineffective and being zeroed

out, family literacy programs. If we look at it only in the light of

we are assessing that program, saying we are going to stop investing in literacy, it would I think maybe seem possibly more partisan

oriented or a partisan agenda verses policy oriented. Because if you

look at it in the big picture and the goal is how we best achieve

that goal, my understanding is the administration in zeroing out

Even Start recommended and did move all of its money to an Early

Reading First program. And that is the key with the PART process.

As you look at the big picture, it is how do we truly achieve literacy

for these families and their children. And if we do it in the big picture, it kind of all fits together in a more logical sense than if you

look at that individual program. Am I accurate in that kind of summary of the important approach of how we look at PART and not

just at individual programs, but what is the goal of that program

and how best to achieve it?

Mr. JOHNSON. Right. I would agree with that summary, and I

think particularly any program that is recommended for elimination in the field of education. I do not think anybody would say

that President Bush or the administration is not committed to all

things related to education. But we are committed to being results

oriented. And if we are spending money on a program that does not

help us achieve the desired result, literacy or whatever it is, then

we should find a more effective way to pursue that desired outcome.

42

Mr. PLATTS. And that is certainly going to be one of the challenges for everybody and I think particularly for Members of Congress. As one who is familiar with Even Start, I saw that and said,

well, what is this here? It seems like that is a significant change

and we need to look at it more to see if it is something we think

we can better achieve the goal by putting those funds into another

program that is focused on a similar effort, or not.

Mr. JOHNSON. Right.

Mr. PLATTS. And I think that is something that does not happen

overnight because it is not the way we have looked at program

funding historically here on the Hill.

Let me get into some of the way you are going about the PART

process. And as it went into second year and about I guess a third

of the original class of PART programs being re-reviewed, how did

you decide what 80 or so programs would get that second review?

What went into that decisionmaking?

Mr. JOHNSON. Well, the agencies decide if they believe there is

likely to be a change in assessment of a program. Because maybe

at the beginning they did not have performance measures, now

they do, they have thought about it and they have come up with

some other ways, they have changed the way it is managed, they

have changed the way it is structured. And when they believe there

is to be a change in the way the program is to be PARTed, they

ask for it to be reassessed. So it is in the agency’s best interest to

have current readings of all their programs. And if they have been

working to change the status, the performance, the measurement

of the outcomes, they request a reassessment. So it is initiated by

the agency.

Mr. PLATTS. How about as you go into the new third round and

which ones are selected? Really not just the third, but what you are

looking at for the 4th, 5th year, kind of in the bigger picture of the

selection process. Same thing, that it is really agency driven?

Mr. JOHNSON. It is both. I think a lot of different things drive

that. One is, agencies will say, well this one comes up for reconsideration, or we have a lot of questions about this program or how

these programs work together. So they will ask for several programs to be PARTed in the same year so we have that information

with which to better inform the dialog. In other cases, this year we

are going to focus on programs of economic development, and job

training, and I think rural water across the boards, so will be sure

to PART a number of those programs so we can get a cross-agency

look at it. In other cases, it is just pick the next ones, or some

agencies want to the large programs first and do the smaller programs toward the end. That last 20 percent is going to be probably,

in general, much smaller programs than we have analyzed in the

previous 4 years. But a number of different things go into that

agency and OMB decision on which ones to PART.

Mr. PLATTS. And that kind of leads into the comparisons, like

economic development programs, and in the big picture, where

OMB plays a role, is what you are doing to look at kind of the

cross-cutting, not just looking at economic development at Commerce but in every agency. It seems like to have a good understanding whether this program is better served by shutting that

down and moving the funds over here, the closer they are PARTed

43

together the more informed your decision is going to be. Where do

we stand in that kind of cross-cutting approach?

Mr. JOHNSON. Well PART is one way to look at programs dealing

with the same general issue. The White House has been looking for

the last year at programs that touch and deal with the issue of disadvantaged youth. There are hundreds of programs and hundreds

of billions of dollars of money that directly or indirectly go to that

issue. And a good number of them have been PARTed. Even if they

had all been PARTed, PART would only be one of the factors you’d

look at. Because you might have a bunch of programs that work,

but yet a big part of the issue related to disadvantaged youth may

not be addressed by all of our programs and maybe we are double

addressing something over here. So it is how individual programs

work and how consistently their performance measures relate to

one another and so forth. That is one of the factors we look at, but

it is only one of them. There is no magic in a PART. Low score

means this, high score means that. It is one of the things we look

at.

It was the White House’s desire to look at disadvantaged youth

that prompted that analysis, it was not the fact that we had PARTed all these programs, because we had not. We had PARTed, as it

turned out, I think a majority of the programs. But we are going

to specifically look at economic development this next year, and so

we try to look at all that because we think there is a great opportunity there. We know there are a lot questions there about in almost every agency there are tens of billions of dollars and is there

a way to do economic development more effectively.

Mr. PLATTS. Yes. The number is maybe like 300 or so different

economic development programs.

Mr. JOHNSON. Yes, I do not know. It is some incredible number

of.

Mr. PLATTS. Yes. Given that government efficiency is part of our

subcommittee title, it seems like we are probably not being the

most efficient to have that many different programs supposedly focused on the same goals. So I think getting to that cross-cutting

where it is looking at the service being provided will further

strengthen the PART process and the actions or benefits that come

from it.

Mr. Secretary, how about within the Department of Energy, in

your own department’s process of which programs you are doing

the second year? I think you had a couple that were re-reviewed.

How did you specifically as an agency make those decisions?

Mr. MCSLARROW. Well, we did. If it were up to me, I would try

to do PART for everything. And I would try to do it every year because I want to build as many datapoints to actually see why

things are happening. OMB allowed as how that might just completely swamp the system, and, frankly, it is a good day when I can

have OMB cry uncle. [Laughter.]

The budget is already out; so I guess I can say that. But what

we are trying to do is, we have four major agency missions, and

so what we are trying to do is touch on each of the major food

groups. And as we go through that process, we are going to try and

add new ones to it. And it is going to be a balance, and I do not

know exactly how it will be struck, but it will be balanced between

44

adding new ones and then making sure that we re-PART last

year’s, or certainly ones that were done 2 years ago. I would not

want to go beyond the 2-year period. That would be time to see

whether or not people have implemented the corrective action and

actually gotten results from the PART itself. If you go much beyond

that, I think you just sort of lose any focus you might have.

So, as I say, I think we are fairly ambitious in what we want to

do. Our view is that in addition to all the other good things that

the PART process is doing that we are discussing here today, this

is just a great management tool for us. Even if OMB were not making us do it right now, we would do it now.

Mr. JOHNSON. Making you do it?

Mr. MCSLARROW. In a cooperative way. You know, it is just good

management.

Mr. PLATTS. One of the issues that we have been looking at kind

of separate from PART is the financial management systems out

there. Some agencies, departments have made great strides and

are in great shape, and others continue to try to get their hands

around having good information to provide decisionmaking from

the financial management side. If you are PARTing a program that

is in that category, SBA or some that have clearly identified challenges in the financial management, how is that impacting your

ability to really get an idea of whether they are doing a good job?

Or is that more likely to come up in the ‘‘Results Not Demonstrated’’ because you do not have the information? And maybe

again, from the department and the broader perspective, if you

both could address that.

Mr. MCSLARROW. Well, in most cases where we have ‘‘Results

Not Demonstrated,’’ I do not think this is entirely the case with

every one, but with most of them we just simply were not able to

get to the point where we could figure out what the performance

metrics really were. In other words, people had performance

metrics, that included things like, ‘‘how many grants did we get out

the door?’’ ‘‘Did we spend all the money that Congress appropriated?’’ And getting to the next level of what are the grants actually doing was harder in some areas than others, particularly with

applied R&D. And so the difference between last year and this year

for some of those programs, particularly our scientific programs, is

we were able to get to that next level.

In terms of the financial management, that certainly has aspects

to it because the cost accounting, knowing the value of a product

you are getting or the output you are putting out, is something that

we are trying to grapple with. It tends in my mind to be something

that is largely driven by other portions of the President’s management agenda. But, and this is probably important to note here, it

is also true that all of these things work together. In other words,

human capital is applicable to all the other PMA initiatives, including the PART process, as PART is to human capital. And so they

all do integrate. But at the end of the day, the financial management side has a lot of huge challenges. Those are substantive challenges that we have to fix through the President’s management

agenda and then what PART does is tell us whether or not we are

actually accomplishing it.

45

Mr. PLATTS. And then, Mr. Johnson, before you respond, your

comment about getting to that here’s how much we spent and who

got the grant and then really getting to did they achieve any goal,

Maurice McTeague, one of our witnesses last week and last year,

I mean, really, the accountability of outcomes and really which is

I think exactly what we are after here, is you can show us where

you spent the money and how much you spent, but what outcomes

were achieved for it. That is exactly what I think all of us are after,

and I think we have maybe a greater challenge here on the Hill

to embrace that approach. But that approach that your department

is taking is exactly what I think we need to do.

Mr. JOHNSON. On that point, counting the number of grants they

got out the door is an easier number to come by than all this research that they are doing, what are we getting for that, that is

very hard to get at.

Mr. PLATTS. Right.

Mr. JOHNSON. And so that was the earlier point I was making,

suggesting, was that less precise, harder to define, but more relevant.

Mr. PLATTS. And that creates some of the challenge in Mr.

Towns’ question about if it is more subjective, the argument that

maybe it is more politicized is more arguable. But I think the point

that it is, but that is what we are really after. It is the benefit from

the money spent, not just that we spent it as we said we would,

but did we actually achieve a benefit for the taxpayers.

Mr. JOHNSON. My answer to your basic question, first question,

is that a number of agencies, DOD, HHS, HUD I think, are several

years away from having the kind of financial management system

that they want to have. So that hampers them a measuring, assigning cost to specific programs or parts of programs. But that

should not hamper them from measuring the results that are being

achieved by programs. So I think the primary shortcoming in the

absence of a good, sound financial management system is the ability to measure financial performance or efficiency of programs, but

it should not hamstring us from measuring effectiveness of programs. So that is the basic, most important thing. Until we start

measuring results, we cannot measure results divided by spending,

so we can still focus in the next 2, 3, or 4 years until we get good

financial performance systems on doing a better job of managing

results and then start looking at the cost to achieve those results.

Mr. PLATTS. In the end it will present a better or more complete

picture I guess as we get hand-in-hand, those good financial management tools in place and that information is part of the review.

Mr. JOHNSON. Yes. Right.

Mr. PLATTS. I guess that somewhat relates to a GAO recommendation about a governmentwide strategic plan and that

GPRA should be amended to require that in addition to the individual plans. Would that approach, if we amended GPRA to have that

governmentwide strategic plan, kind of complement well the idea

of using PART, cross-cutting the services we are after, economic development, job training, or whatever it may be, would that type of

strategic plan be an asset to what we are looking to do under

PART?

46

Mr. JOHNSON. OMB’s feeling is that the budget currently is every

year the President’s strategic plan. The administration talks about

it considers its priorities to be and how recommended spending

lines up relative to those priorities. And if programs are not contributing to the pursuit of those objectives, how we propose dropping them, or expanding them, or keeping them the same, or whatever. So we approach the budget, the administration does, as if its

budget is to serve as a strategic plan. And we are not sure we understand what the argument is for an additional planning document.

Mr. PLATTS. That the budget and PART being incorporated into

that budget really is flowing from that administration identified

strategic plan.

Mr. JOHNSON. Right. Right.

Mr. PLATTS. The challenge—I apologize, we keep touching on different things and I’m jumping around here a little bit. I want to

get to the codification issue and, if we are going to do that, how

do we approach it. But on the approach we are taking, the difficulty in assessing like the grants, of how to assess whether it was

a good outcome or not, or what is the exact outcome we are assessing, how do you do that where there is a program that has more

than one intended goal, and how do you assess it if it is economic

development and job training related and doing cross-cutting comparison, how do you line it up? What is the suggestion of how you

are approaching that, and it might of course be more departmentspecific than the broad governmentwide.

Mr. JOHNSON. I am counting on you. [Laughter.]

Mr. MCSLARROW. It is an interesting thing that, of course, you

can have programs that have multiple goals. But if you get right

down to it, you should not. In other words, when we first came to

the Department 3 years ago we asked people: What do you think

the mission is? We had a million different answers. Well, the answer the Secretary has given people and what we are implementing is national security. All of that cascades down to the program

level. If things are cobbled together that really should not be, then

they ought to be separated. So there is a management choice that

you face as you go through this. I would not let the management

organizational structure drive how you do PART. PART form

should follow function. I probably cannot come up with anything

more cliche than that at the moment. But nonetheless, PART

should be viewed as a tool that is following the other decisions that

you are making. And so there may be many different aspects to a

particular goal, but if it is truly a coherent mission and some kind

of unit that is an integrated whole, you can judge that, and you can

judge that using the assessment rating tool.

Mr. PLATTS. And am I understanding you correctly that PART

also may help to identify—if you are looking at a program that has

these various objectives, goals that maybe should not be under that

same program, that you can, again from a management of that program, say this one should be over here, and this one should be its

sole responsibility. Is that something you are seeing from your

PART process?

Mr. MCSLARROW. We do. And it is broader than that. One reason

why I was saying we would do this anyway now that we have seen

47

the results, is that once you start asking these kinds of questions,

it is amazing the answers you get. It is that simple. It could be exactly what you just described, or it could be other pieces of information. This is a discipline that now everybody must follow, because

I have put all this into the performance criteria for how I judge

performance decisions for personnel, whether it is SES or GS. And

so now, all the way down the line people are turning around and

asking the same sets of questions, and you never know what you

are going to get. And so it has been useful in churning up some

other decisions.

Mr. PLATTS. My staff being always on top of things, I should reference when we talk about financial management and some of the

challenges out there, the information they have given me is the

DOE’s realignment of your financial operations through the A–76

process, and with the Federal employees winning the competition

and projected to save $30-plus million to taxpayers, that I should

highlight that fine financial management being conducted within

your department.

Mr. MCSLARROW. Thank you. We are proud of it. We are proud

that our in-house team won. We were able to reduce the costs, we

were able to streamline from over 10 different financial management sites down to 3, and, as you said, we are going to save the

Government some money and provide all the service. So it was a

win-win all the way around.

Mr. PLATTS. And it is a good story for employees out there. A–

76 is often looked at as kind of the enemy and it can be really a

great partner in helping employees strengthen their work and in

the goals they achieve and the services they provide for the funds

spent of taxpayer money.

Mr. MCSLARROW. If I can, I think you raise an important point,

which is that in my view there is no hidden agenda here. This is

good management all the way around. And I think that is as true

for A–76 as it is for the PART process. We just had a discussion

about whether or not it hides a different agenda. Just from our Department’s perspective, I do not need the PART tool to make a policy decision. The President sets a vision without using the PART

tool. We all know what that is and people can agree or disagree.

But the question is are you doing what you said you were going

to do, and under performance metrics are you accomplishing it.

And just to give you a counter example. I think most people

would associate our administration with oil and gas. I am for more

of it. They probably do not associate us with renewable energy. And

yet we have done the PART scores, the two that got rated ineffective were oil and gas, the renewable energy programs all got rated

very highly, and our funding decisions reflect that result. Oil and

gas funding was substantially decreased because we could not in

good conscience continue to throw money at that until we fixed the

problem. Ideologically, that is not where I am. But that was a policy neutral tool helping us try to figure out that we have a problem

and now we need to try to fix it.

Mr. PLATTS. And I think maybe the challenge as we go through

this process is the cynicism of Capitol Hill or Washington that

there has to be a hidden agenda. You know, you are really just

doing it for merit? That does not make sense. And I think you

48

make the argument for why I commend the administration for the

management agenda in total and for PART especially, is you are

making your decisions more transparent, not less. Because the

President has the authority for political reasons to do this or that,

but, as you are saying, you are going to lay out the facts of these

assessments and be willing to defend our assessments and our actions based on them. That is a more transparent government,

which to me is a more accountable government for all American

taxpayers.

Let me move to the codification. I share the statements that you

have made in your testimonies and the importance of codification.

The GAO when they have done the review and looked at GPRA

and how it has kind of transpired over the 10 years, and the importance that they found placed on the statutory requirements of

GPRA from Federal managers knowing that it is here to stay and

not going to be subject to this administration versus the next, that

seems to argue pretty well in favor of codifying the PART process

as well.

One of the concerns we have heard last week and I think you

both share, and maybe you could expand on it, is how we go about

that and how restrictive or nonrestrictive we are if we are going

to codify programmatic reviews as a complement to GPRA.

Mr. JOHNSON. I think we do not restrict ourselves if we codify

the concept of program reviews, periodic program reviews. I think

it would be a mistake to lock in on one best way to do it. The

PART, we like it. Is it perfect? No. These programs are really hard

to measure and as we get smarter about it we will make tweaks

in the PART system. We get smarter every year, and we are going

to be smarter 2 years, 4 years from now about this. And maybe we

will not call it the PART, but the concept of asking ourselves do

these programs work, at what cost, and if they are not considered

to be satisfactory, what are we going to do about them, I think that

process, asking those questions, executive branch and Congress,

codifying that process is a very good idea. And I think it adds substance to the process envisioned by GPRA. It allows us to look at

large strategic questions and get the more detailed answers, this

part of the energy conservation works, this one does not, so more

of this, less of that. As you look at it by program, there is more

action oriented kinds of things—funding, management, structure of

programs—that can be looked at as a way to better pursue the

strategic goals that are laid out in GPRA.

Mr. PLATTS. Mr. Secretary.

Mr. MCSLARROW. Well, on the general point, I will defer to my

leader to my right. But the only other thing I would say from an

agency perspective, he was quite right to chide me for saying OMB

makes us, the truth is it has been a cooperative process all along.

It has been a cooperative process not just in the ratings themselves, but in how we have developed PART, and it is a work in

process. So the only point I would say is that having the principle

codified makes sense to me, but the low should allow for the flexibility, because we are all learning. As I say, this is a work in

progress that is getting better. I would not want to get hamstrung.

I think we are making good progress. We should be allowed to continue.

49

Mr. PLATTS. How about in approaching it that we not define how

to go about it, but timeframes. Right now, we are kind of on a timeframe of once in 5 years a program, at a minimum, will be reviewed, and perhaps, because of being re-PARTed, maybe two or

three times in that timeframe. That there be a minimum requirement that as part of this programmatic review that every program

has to be done at least once in 5 years, and perhaps for identification by the administration of high priority programs maybe it

should be more current than 5 years, maybe it is once in 2 or 3

years. Thoughts on that type of language?

Mr. JOHNSON. I think I want to get back to you about the high

priority more frequently. I have not really thought about that. I

think the idea of a frequency of review is a good idea. I think the

idea of maybe talking about in the legislation the areas to perhaps

be addressed in any kind of performance assessment, to look at

performance and the availability of performance measures and efficiency measures, and management acceptability, and fit with the

mission, and so forth, I think those kind of issues could be referenced in the legislation. But the idea of some programs being

done more frequently, I am going to have to get back to you on

that. It sounds like a good idea, but I really have not thought about

it.

Mr. PLATTS. When you talk about the area, are you talking about

those specific, how you look at something, or the area meaning——

Mr. JOHNSON. For any given program, I think what PART does

is it looks, amongst other things, at are there performance measures, relative to those measures, does the program produce the intended results, what is the assessment of the management of the

program, is the program consistent with the mission of the department or agency, and maybe if there is some deficiency in there. I

think it might be good to reference those aspects of any given program as things that are important to consider in assessing a program, but not specify the specific means by which those aspects are

looked at.

Mr. PLATTS. Secretary McSlarrow.

Mr. MCSLARROW. That is the same thing I would add.

Mr. PLATTS. What about specific requirements on the cross-cutting approach, that, yes, it is once every 5 years, but it is in this

year you should do all economic development together, or all job

training, too prescriptive?

Mr. JOHNSON. If the purpose of that question is can we be more

effective economic developers, how do the individual programs perform is one of the pieces of information we would look at. We might

define what is effective economic development, we might look at

what aspects of that definition of a successful economic development effort do we now touch on with programs that we have, do

those programs work or not, are there some areas we do not address, is it too scattered across agencies. There are a lot of different

aspects to look at. If the general focus is on economic in general,

PART is one piece. So maybe the bigger question is if the Congress

said or if executive branch said we want to look at all of economic

development, an Executive order or a request from Congress, or

whatever form it takes, PART would be a piece of information we

would look at, but it would not be the total of the analysis.

50

Mr. PLATTS. How about a requirement, if a part of a program is

deemed ineffective, of mandatory re-PARTing? Again, if you want

to get back to us and give some thought to some of the specifics

that we looked at based on our hearings last year and this year,

but is that again making it mandatory that you have to re-PART?

Mr. JOHNSON. I think a program now is re-PARTed when the

agency believes that the situation has changed, that they have

worked to improve something, or they believe something might

have deteriorated. So if the result is not demonstrated, if they all

of a sudden get performance measures the next year which would

raise that part of the score, they would call for a re-PART. Then,

all of a sudden, if they are able to demonstrate the next year that

they are able to actually perform as defined by those measures,

that would call for a re-PART, and then if they were actually able

to reduce the cost of that or develop performance for cost-effectiveness information. So, in some cases it would be re-PARTed because

it would be the status would change every year. Right now, it is

triggered by it is re-PARTed if it changes. If the status has not

changed, then the score does not change and it is not reassessed.

Mr. PLATTS. So keeping discretion at the agency level and OMB,

with the administration is going to be an important part of that decisionmaking process?

Mr. JOHNSON. Right. One of the things we say at OMB, and I bet

you the agencies feel the same way, is the PART score is nice, but

that is just a means to an end. The most important part of any of

the PART review process is the recommended next steps; do we

change the management, do we change the structure, do we try to

build more accountability into it, do we change the way we, do we

want to write left-handed instead of right-handed, what do we

want to do differently. And it is the quality and aggressiveness of

that followup by the agency, it is the so what of it all. You got a

medium score, a bad score, a results not demonstrated score, what

is the so what of that? What is the agency doing to make that score

go up, to produce a more assured result as a result of that program

existing and money being appropriated to fund that program.

So what we have done, because we are now in the second year

so we have some things to followup from last year, we have a process that we will be very actively involved in this year to periodically sit down with the agencies and say let’s go over all the programs, the quality of the followup, have we got performance measures that we did not have, have we changed the management as

we said we were going to do, have we structured, whatever. And

so it will be in those discussions where decisions will be made by

the agency, that for the presentation the point will be made by the

agency we have changed the situation with this program, let’s redo

the score on this and we will re-PART it. But the key is that we

build that habit in of reviewing, agencies reviewing with OMB, as

they like to do, looking over their shoulder just to make sure that

they are doing it aggressively and regularly and paying attention

to all the things, the followup actions that they said they were

going to engage in.

Mr. PLATTS. Secretary McSlarrow, it sounds from your previous

statements that your department’s look at re-PARTing is that your

managers have kind of well understood and bought into the imporVerDate 11-MAY-2000 10:48 Jul 15, 2004 Jkt 000000 PO 00000 Frm 00054 Fmt 6633 Sfmt 6633 D:\DOCS\94256.TXT HGOVREF1 PsN: HGOVREF1
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tance of this and the benefits of doing this for your agency. So

whether it is mandated that you are required in the timeframe of

more than once in 5 years for high priority, that really once you

have that mindset that this is helping you better manage, making

it mandatory in that sense really is probably not as critical because

you have that acceptance of the program’s benefits.

Mr. MCSLARROW. I think that is true. And I have to say, to the

extent we have been successful through this process, it has been

because our career SES leadership has adopted this as their own.

Clay says very often that we are moving from the time where it

is the President’s PMA to an agency’s management initiative. The

same thing is true of PART. The value of PART is apparent in so

many ways that we have not even had a chance to talk about today

to these managers that I think it will continue on. But, as we all

know, things change, people have new initiatives. That is why I

think there is a value in having something put in GPRA that just

sends that signal that this is something that we should stay on top

of. But it is quite possible at DOE, for example, we may be doing

our ‘‘PART’’ even if they do not actually all end up in an OMB

agency PART process, just because we decide we want to do that

and because it may be easier just to have that cycle on an annual

basis. And we have not decided, you know, we are only in the second year of this right now. But I think the more the agencies are

invested in this, the better and the more likely it is going to be

something that institutionally stays around.

Mr. PLATTS. To followup on the specific benefits, and you kind of

touched on to your managers, that relate to your department, you

seem to have had some success in trying to assess what appear to

be difficult outcome definitions regarding regulated activities and

research and development efforts. And that being a big part of your

department’s mission responsibility, what do you think the success

is behind your department’s efforts and what do you think would

be important for other departments to be aware of in how they are

looking at their regulated activities or their R&D programs?

Mr. MCSLARROW. The first thing is the simplest, which is just

the nature of scores themselves. We were rated all red at the beginning of this administration. That kind of gets your attention.

This is not well known, but the President meets with each cabinet

officer each year and goes over their ratings. So it has his and my

full attention. So No. 1, that is what makes a difference. Everybody

understands that this is going to happen and we are going to

march forward and get to green.

The second part of it is, as you point out——

Mr. PLATTS. The analogy there being, if you are a fifth grader

and you know you are going to actually get tested on what you

read, you are probably going to make more certain that you read

it when that test day is coming up. Simple human nature.

Mr. MCSLARROW. Right. There was a certain amount of that, and

I do not mean to trivialize this, but there was a certain amount of

going through the motions with GPRA. It really was not producing

change. It was not that it was not doing good things, it was, but

not changing the results. And I think that is what is different

about this process. As you point out, the hard thing for us has

been, and will continue to be, how do you judge R&D, how do you

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judge basic R&D and applied R&D. We actually led the effort, with

OMB, on behalf of the Government to try to develop the kind of criteria by which you could judge the success of applied R&D. And I

would say that we have been modestly successful. But that is always a very tough thing to do. It is easier to sort of say, well, we

are going to run this big science accelerator and we are going to

throw a bunch of neutrons at a target and we are going to learn

something. It is hard to pin down a Nobel Prize winner and say

what exactly are you going to learn. He looks at you like you are

an idiot. But the truth is that——

Mr. PLATTS. Even if he told me, I probably would not know what

he told me.

Mr. MCSLARROW. You would not understand anyway, right. I

know I would not. But at the end of the day, it turns out that if

you actually sit down and walk through this, you learn quite a lot

about what it is you can accomplish and what are achievable objectives and then you can throw those into a performance plan. And,

as I say, it is still a work in progress. But I think we have gone

a long way toward achieving that, which is one reason why last

year we were ‘‘Results Not Demonstrated’’ on those science projects

and this year they scored quite highly, and it was mainly the performance metrics.

Mr. PLATTS. Is the President’s Management Council that you

serve on an avenue to share that with your counterparts elsewhere

in the administration?

Mr. MCSLARROW. It is. Director Johnson is the chairman of that

Council. We meet monthly, and we have retreats and we talk. We

each have sort of lessons learned and we have talked a lot particularly about the applied R&D, because, obviously, it is not something that is just DOE, there are other big science agencies or

agencies with big science budgets. So it is something we try to export. And, frankly, the philosophy of all of the President’s management agenda has been instead of having 10 agencies doing the

same thing at once, to pick one who is a team leader and have the

rest of them work with that agency on an initiative, as we were the

team leader for applied R&D. And we are doing that in other respects as well.

Mr. PLATTS. Two other specific followups to your department.

The recent GAO report talked about agencies having difficulty

meshing GPRA and PART in that strategic plan approach with

more programmatic review. Is that something that you are experiencing? Or are you kind of ahead of the game and are better seeing

how they complement each other as opposed to being kind of separate and independent efforts?

Mr. MCSLARROW. I do not think we have had any problem meshing the two together. As I say, the political and the career management leadership have seen this from the beginning. The only part,

and this just echoes what Director Johnson said earlier, that I

think we needed to get past was the idea that if everybody says

we are for budget and performance integration, well the proof of

the pudding is making that document be the budget itself. And I

think that is the one difference that people were not expecting

about what the administration did, put the performance plan and

make that the budget and combine those two documents. So that

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is how we believe we have satisfied the GPRA requirement. But obviously there are other people who have different views on that.

Mr. PLATTS. I hope that we see more embracing of your approach

of the complement and how they go hand-in-hand, because I do

think they are kind of a great one-two effort in that broad strategic

approach and then how that translates down to individual programs.

Earlier we talked in a broad sense about communications with

the administration and Congress on performance budgeting and

the PART process and how it can benefit decisionmakers here on

the Hill. What has been your specific department’s experience with

your appropriators and how that has gone, and how you have communicated with them on your PART process?

Mr. MCSLARROW. I would say it is a mixed bag. As you say, we

have both gone to at our appropriators, and Clay has led a team

of us and invited me to come along to try to make presentations

on what we are doing. I would say there is a certain amount of

skepticism by the appropriators. And it is kind of understandable,

I mean, we are only in the second year now. Essentially, up until

this last week, you had one data point. And I think as they see that

we are actually using this and that we are using it in a way that

is credible and transparent, they will begin to trust the information

we give them. And it is not that anybody is saying we do not trust

it, it is I would just say not fully embraced. And it is obviously a

mixed bag and it depends on who you are talking to, what staff or

whatever. But I would say it is better and more positive this year

than it was last year. And I would expect that by next year it will

be better still.

Mr. PLATTS. And hopefully that will be shared up here, the efforts from the congressional side being an open-minded approach

from not just appropriators, but from my fellow authorizers as well

on the various committees.

Director Johnson, in your testimony you touched on the improper

payments aspect and the progress being made there. I was wondering if you could give a general update of kind of where you think

we are. Because whether it be part Improper Payments Act, you

know, a law kind of moving forward, and I guess later this year,

November 2004, being the timeframe for everybody coming on

board, in the times that we are in and with the deficit projections

that we are seeing, kind of tracking every dollar that we can is

something that is important. And when I look at the numbers, you

shared roughly $35 billion per $1 trillion in expenditure, if you

translate that to a $2.4 trillion budget, that is in line with the

numbers we have been hearing, that we are up in the $60 to $80

billion range of improper payments every year. It certainly is important for us to go after that. I was wondering if you can give us

a general update on where we stand on that issue.

Mr. JOHNSON. Well the general update is on the $1 trillion in

programs and the $35 billion, which is $30 billion too much and $5

billion too little, so it is a net savings of $25 billion, but the total

that is erroneous is $35 billion. Programs are being developed to

eliminate that erroneous payment level. And then agencies are

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ments there, and then action plans will be developed. One of our

challenges here is to get out of the business, get way beyond the

business of well, it was this percent, it needs to be this percent,

and some time or other it will come down. We need to try to be

very specific about when the desired result will be, when we can

possibly achieve it, when will we implement, what kind of program,

what kind of cause of error from this level to zero, and then get

the payment level down to the, as the bill called for it, level. A lot

of these programs will be politically controversial because they deal

with money going out to people in need. And if their money is going

to people in need that is going to them in error, some people will

not want to stop that payment. And we will have those debates and

Congress will decide in discussion with the executive branch

whether we pursue that or not, and there will be a lot of discussion. But we are moving forward to develop action plans to reduce

or to improve accuracy of payments to as near 100 percent as possible.

Mr. PLATTS. I appreciate the acknowledgement of the sensitivities in some. The earned income tax credit program, which my

memory is about an estimated 30 percent of improper payments. It

is really a disservice to those who need that assistance that we are

providing assistance to those not entitled to it. But trying to address that problem is going to be politically sensitive.

Mr. JOHNSON. Yes. The politically naive answer that is if these

people are getting the payment, as opposed to the law calls for this

smaller group, let’s change law, and if you want them to get it, let’s

vote on it and get this large group to get the payment. But if the

law calls for this, our responsibility is to see that the law is being

implemented. But that is again politically naive, idealistic way of

thinking of things.

Mr. PLATTS. I am one who believes that idealism should remain

here in Washington and we should not give up on that approach.

Mr. JOHNSON. When the D.C. Idealist Club gets together——

Mr. PLATTS. There will not be all whole lot of us there.

Mr. JOHNSON. It would not be a very large group. [Laughter.]

Mr. PLATTS. Well, we will build on it. Identifying that timeframe,

that is driven by where each department is or each program is?

Mr. JOHNSON. Yes, it is.

Mr. PLATTS. So it is not across the board by this date?

Mr. JOHNSON. Right. Yes.

Mr. PLATTS. OK. That is something that we will continue to look

at. I think Linda Springer is going to be up in the next month or

so with us and we will probably further explore it with her as well.

But your having touched on it, I appreciate your kind of giving us

that update.

Mr. JOHNSON. Be sure to give her very specific questions and

come prepared to answer, because I think we will be in a position

to do that. I’m not, she will be.

Mr. PLATTS. In several different departments or programs, where

they are?

Mr. JOHNSON. Right.

Mr. PLATTS. Great. I am checking to, you know, end the hearing

and find out that my staff really wanted something else addressed

that I did not. But I really appreciate the testimony here today,

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and most importantly your work out there across the government,

Director Johnson, and Secretary McSlarrow, in the Department of

Energy specifically, for you. I commend you personally and the administration in total for this effort because the more we can focus

truly on the outcomes we are achieving for the money we are

spending, I think the better we are serving the people who sent us

here to do this work. On that, I think that is the approach when

people spend their own money in that household budget. They do

not just want to know, yes, I paid X dollars to these companies, but

did I get something I thought I was going to get for paying that

money out, was the service expected provided, or the goal achieved.

President Bush and the whole administration is to be commended for your efforts. And as a subcommittee, we certainly look

forward to continuing to work with both of you to advance this effort and to fine tune it, and to look at things we can do such as

codifying this broad programmatic approach so that the benefits

are long enjoyed by future taxpayers and, in the end, programs are

running efficiently and effectively.

Mr. JOHNSON. Great.

Mr. PLATTS. We will keep the record open for 2 weeks. If there

are any additional comments you want to share perhaps on specific

questions on the codification issue, we would welcome those.

I appreciate all who were in attendance today.

This hearing stands adjourned.

[Whereupon, at 3:40 p.m., the subcommittee was adjourned, to

reconvene at the call of the Chair.]

[The prepared statements of Hon. Edolphus Towns and Hon.

Carolyn B. Maloney, and additional information submitted for the

hearing record follow:]

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