GAO United States

General Accounting Office

Washington, D.C. 20548

Resources, Community, and

Economic Development Division

B-277376 

July 10, 1997

The Honorable Richard K. Armey

Majority Leader

House of Representatives

The Honorable John Kasich

Chairman, Committee on the Budget

House of Representatives

The Honorable Dan Burton

Chairman, Committee on Government Reform

 and Oversight

House of Representatives

The Honorable Bob Livingston

Chairman, Committee on Appropriations

House of Representatives

Subject: Results Act: Observations on USDA’s Draft Strategic Plan

On June 12, 1997, you asked us to review the draft strategic plans

submitted by the cabinet departments and selected major agencies for

consultation with the Congress as required by the Government

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

response to that request concerning the draft strategic plan for the U.S.

Department of Agriculture (USDA).

Objectives, Scope,

and Methodology

Specifically, you asked us to review USDA’s draft plan and assess

(1) whether it fulfills the requirements of the Results Act and to provide

our views on its overall quality; (2) whether it reflects USDA’s key statutory

authorities; (3) whether it reflects interagency coordination for

crosscutting programs, activities, or functions that are similar or

complementary to other federal agencies; (4) whether it addresses

management problems we have previously identified; and (5) the adequacy

of USDA’s data and information systems for providing reliable information

for measuring results.

We obtained the May 1997 draft strategic plan that USDA provided to

congressional committees. USDA’s draft strategic plan includes a

Department-wide strategic overview as well as the 30 plans for the mission

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areas, subagencies, and staff offices that make up the Department. We

reviewed the Department-wide strategic overview and the 16 subagency

plans that are directly related to accomplishing USDA’s mission and

implementing its programs. These 16 subagency plans cover the seven

primary mission areas of USDA: Farm and Foreign Agricultural Services;

Food, Nutrition, and Consumer Services; Food Safety; Marketing and

Regulatory Programs; Natural Resources and Environment; Research,

Education, and Economics; and Rural Development.1

It is also important to recognize that USDA’s final plan is not due to the

Congress and the Office of Management and Budget (OMB) until

September 1997. Furthermore, the Results Act anticipated that it might

take several planning cycles to perfect the process and that the final plan

would be continually refined as future planning cycles occur. Thus, our

findings reflect a snapshot status of the draft strategic plan at this time. We

recognize that developing a strategic plan is a dynamic process and that

USDA, OMB, and congressional staff are continuing to revise the draft.

Our overall assessment of USDA’s draft strategic plan was generally based

on our knowledge of USDA’s operations and programs, our numerous

reviews of the Department, and other existing information available at the

time of our assessment. Specifically, the criteria we used to determine

whether USDA’s draft strategic plan complied with the requirements of the

Results Act were the Results Act, supplemented by OMB’s guidance on

developing the plans (OMB Circular A-11, Part 2). To make judgments about

the overall quality of the plan and its components, we used our May 1997

guidance for congressional review of the plans (GAO/GGD-10.1.16). To

determine whether the plan contained information on interagency

coordination and addressed management problems previously identified

by GAO, we relied on our general knowledge of USDA’s operations and

programs, and the results of our previous reports. In determining whether

USDA’s draft strategic plan reflects the Department’s major statutory

responsibilities, as you requested, we coordinated our review with the

Congressional Research Service and reviewed material in USDA’s 1998

budget explanatory notes for an overview of the Department’s primary

functions and activities. To determine whether USDA had adequate systems

in place to provide reliable information on performance, we reviewed the

Department-wide plan for financial management and the subagency plans

for the Chief Financial Officer and the Chief Information Officer. We also

relied on the results of our previous reports and those from USDA’s Office

of Inspector General.

1

The Rural Development mission area has one combined plan for all three component subagencies.

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Background With an operating budget of about $57 billion, USDA is one of the largest

civilian agencies. USDA administers over 200 programs that cover a wide

range of issues related to food and agriculture. Among other things, USDA’s

programs support farmers’ incomes, stabilize domestic markets, promote

U.S. exports, manage national forests, conserve agricultural lands, provide

access to food for low-income households, improve the nutritional status

of the American people, ensure a safe food supply, and support research

for the development of new agricultural products and processes. The

programs are administered by 18 subagencies in seven mission areas.

The diverse nature of USDA’s programs raises a number of challenges in

developing a comprehensive and exhaustive strategic plan that adequately

addresses all the responsibilities falling under the Department’s purview.

To best address the wide range of program activities and functions that

support its mission and respond to the Results Act, USDA chose to develop

as its draft strategic plan a Department-wide strategic overview that is

accompanied by the 30 plans for the mission areas, subagencies, and staff

offices that constitute the Department. The Department-wide strategic

overview lays out the overall mission and goals for the Department, and

the subagency plans provide greater detail on the missions and the goals

of the individual subagencies, as well as reflect the multifaceted and

multidimensional nature of the subagencies that together make up the

Department.

USDA’s Department-wide strategic overview defines the common mission

for the Department as follows: “To enhance the quality of life for the

American people by supporting production agriculture; promoting a safe,

affordable, nutritious, and accessible food supply; caring for agricultural,

forest, and range lands; supporting sound development of rural

communities; providing economic opportunities for farm and rural

residents; and expanding global markets for agricultural and forest

products and services.” The Department-wide strategic overview presents

four overall goals for accomplishing the Department’s mission: (1) expand

economic and trade opportunities for agricultural producers and other

rural residents; (2) ensure a safe, affordable, nutritious, and accessible

food supply; (3) provide sensible management of natural resources; and

(4) promote good government by providing USDA’s services efficiently and

effectively.

The Results Act requires that an agency’s strategic plan contain the

following six critical components: (1) a comprehensive mission statement;

(2) agencywide long-term goals and objectives for all major functions and

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operations; (3) approaches (or strategies) and the various resources

needed to achieve the goals and objectives; (4) a relationship between the

long-term goals and objectives and the annual performance goals; (5) an

identification of key factors, external to the agency and beyond its control,

that could significantly affect the achievement of the strategic goals; and

(6) a description of how program evaluations were used to establish or

revise strategic goals and a schedule for future program evaluations.

For the purpose of this report, we consider USDA’s draft strategic plan to be

a combination of the Department-wide strategic overview and the included

subagency plans.

Results in Brief Overall, USDA’s draft strategic plan does not fulfill the requirements of the

Results Act. The draft plan in many cases does not include the six

elements required by the Results Act and generally lacks some key

attributes necessary for a quality strategic plan. USDA’s overall mission and

goals are contained in the Department-wide strategic overview; the

overview refers the reader to the subagency plans for information on the

six required elements. However, only one of the subagency plans we

reviewed contains all six required elements. USDA’s draft strategic plan also

falls short in several other areas necessary for achieving the purposes of

the Results Act. Among other things, the draft strategic plan lacks an

emphasis on externally focused goals and objectives; adequate,

quantifiable performance measures; and good linkages between the

subagencies’ goals and the Department’s overall goals.

USDA’s draft strategic plan reflects consideration of the key statutes

authorizing the Department’s programs. However, USDA’s draft strategic

plan does not generally contain clear linkages between the stated goals

and objectives and the Department’s relevant major statutory

responsibilities. The Results Act does not require agencies’ strategic plans

to contain a statement of statutory authorities. However, we believe that

including such linkages may facilitate a better understanding of the

diversity and complexity of USDA’s overall mission, goals, and objectives.

We could not determine, from the information presented in the draft plan,

the extent to which interagency coordination with federal agencies, both

within and outside the Department, occurred in the strategic plan’s

formulation. Similarly, it is unclear whether an assessment of duplicative

and overlapping functions was performed in developing the subagencies’

goals and objectives. USDA’s Department-wide strategic overview

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acknowledges the role of USDA subagencies that carry out similar and/or

complementary functions, but it does not recognize the role of other

federal agencies. On the other hand, many of the subagency plans

generically recognize the role of other federal agencies in accomplishing

their missions. However, there is little evidence in either the

Department-wide strategic overview or the subagency plans to suggest

that the subagencies coordinated with other agencies—within or outside

of USDA—when developing their goals and objectives.

USDA’s draft strategic plan addresses some but not all of the high-risk

issues and management problems we have previously identified.

Generally, information on how USDA will address these high-risk issues and

management problems, such as the need to reduce losses in the farm loan

program, is included as goals and objectives in the subagency plans.

However, USDA’s draft strategic plan does not address some management

issues, such as the need to reform milk marketing orders, improve the

management of agricultural trade programs, and strengthen financial

controls under credit reform.

USDA is not yet in a position to provide reliable data to measure some of its

performance goals because many of its information, accounting, and

financial management systems are inadequate, and long-standing problems

with these systems have not been corrected. Moreover, many of the

performance measures to be used by USDA’s subagencies have not yet been

developed sufficiently so that we can determine whether the data needed

to measure performance are already available or will be available in the

future.

USDA’s Strategic Plan

Does Not Yet Fulfill

the Requirements of

the Results Act

A significant amount of work still needs to be done before USDA’s draft

strategic plan can fulfill the requirements of the Results Act. USDA’s draft

strategic plan does not contain all six elements required by the Results

Act. In addition, the draft strategic plan does not represent a

comprehensive strategy to accomplish USDA’s mission because it lacks

some of the key attributes necessary for a quality strategic plan. USDA’s

Draft Plan Does Not Contain All Six Required Elements

USDA’s Department-wide strategic overview provides a mission statement

for USDA and lays out four general goals and their related subgoals. Each

subgoal contains some information on the subagencies within USDA that

provide support for accomplishing the goal and some of the major

initiatives to be undertaken under the goal. The Department-wide strategic

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overview refers to the subagency plans for information on strategies for

achieving the goals; the relationships between long-term goals and annual

performance goals; key factors external to the subagency that could affect

the achievement of the goals; and the use of program evaluations to

establish goals and to modify them in the future.

However, our review of the 16 subagency plans for the seven mission

areas shows that, except for one plan, none of the subagency plans

contain all six key elements required by the Results Act. The only

subagency plan that contains all six elements is the plan for the Food and

Consumer Service. Overall, the Food and Consumer Service’s plan

provides a good starting point to begin the strategic planning process for

this subagency. The 15 subagency plans not providing information for all

six elements contain two elements each—a mission statement and goals

and objectives—but the information provided for the other four key

elements varied as follows:

• Seven of the 15 subagency plans do not provide information on the

resources needed to achieve goals and objectives.

• None of the 15 subagency plans provide sufficient information on the

relationships between the long-term goals and annual performance goals;

most plans indicate that this information is being developed.

• Seven of the 15 subagency plans do not provide information on external

factors beyond the control of the subagency that could affect the

achievement of the goals.

• Thirteen of 15 subagency plans allude to the fact that program evaluations

may be used to modify goals and objectives in the future, but none

describe the general scope and methodology for the evaluations, key

issues that would be addressed during the evaluations, or the timing for

the evaluations.

While many of the subagency plans include sections that should have

covered information on the required elements, the information actually

provided is incomplete and often not relevant or directly linked to the

goals and objectives stated in the plans. Merely having a subheading for a

required element does not ensure that the requirements of the Results Act

have been satisfied. For example, almost all of the 16 subagency plans

include a section that discusses the external environment facing the

subagency, but only about half of the plans provide any indication of how

these external factors could affect the subagency’s ability to accomplish

specific goals and objectives. Because external factors can influence the

achievement of a goal directly and significantly, not including a discussion

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of these factors could invalidate the assumptions underlying a goal.

Similarly, providing a schedule of future program evaluations is important

not because it is required but rather because without these evaluations a

subagency cannot have the confidence that it has set the right goals and

that its strategies will be effective in achieving these goals.

Observations on the

Overall Quality of the Plan

Collectively, the Department-wide overview and the subagency plans are

not yet sufficient to provide a comprehensive strategy for USDA or to

achieve the purposes of the Results Act, such as improved management,

program effectiveness, and public accountability and confidence in the

agency, for the following reasons:

• As stated previously, many of the subagency plans are incomplete. We

found a significant amount of variation in the level of completeness of the

subagency plans. Until these plans are complete, they cannot provide an

overall guide to help subagencies set priorities and allocate resources

consistent with these priorities.

• Some of the subagency plans provide incomplete descriptions of the

strategies to be used to achieve goals and objectives. The general goals

and objectives should elaborate how the subagency is carrying out its

mission, outline planned accomplishments, and schedule their

implementation. Without fully descriptive strategies, it is unclear how the

subagencies will achieve their stated goals and objectives. For example,

the Rural Development plan states, as one of its objectives, that it will

develop demographic, natural resource, infrastructure, or program data on

rural communities and analyze these data to determine barriers and

opportunities. However, the strategy to carry out this objective only states

that the Rural Development mission area will identify data sources and

describe the methodology for analysis.

• Some subagency plans contain goals and objectives with results that are

beyond the subagency’s span of influence. For example, the Foreign

Agricultural Service’s plan ties the accomplishment of many of its goals

and objectives to an increase in the value of U.S. exports. The achievement

of this performance goal depends on a number of external factors, some of

which may be more significant than the subagency’s programs and

functions. At a minimum, these external factors should be recognized in

the subagency plans and linked to particular goals.

• Only a few subagency plans include clear linkages between the

subagencies’ goals and objectives and the contributions of these goals and

objectives to the Department’s major goals. These linkages are important

because the goals and objectives set out the long-term programmatic

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policy and goals of the Department as a whole and are important for

providing direction and guidance to the staff toward actions that fulfill the

overall mission of the Department. For example, the plans for the

Agricultural Research Service and Cooperative State Research, Education,

and Extension Service contain good linkages between the subagency goals

and the contributions of these goals to USDA’s overall goals.

• USDA’s strategic plan lacks a clear emphasis on externally focused goals.

For example, two subagency plans—the Agricultural Marketing Service

plan and the Grain Inspection, Packers and Stockyards Administration

plan—fail to include any goals and objectives that are logically related to

accomplishing the subagencies’ missions. In addition, less than half of the

goals stated in four other subagency plans were directly related to their

missions. While the Results Act does not preclude the development of

agency goals that are process oriented, the formulation of goals that relate

to the accomplishment of an agency’s mission are important because the

process of formulating goals provides an opportunity for the agency to

identify programs that are essential to the accomplishment of its mission

as well as those activities that can be eliminated, reduced in scope, or

transferred to another agency.

• Some of the goals and objectives in the subagency plans are not

measurable and may preclude a future assessment of whether the goals

have been or are being achieved. While not all the goals must be stated in a

quantitative fashion, some of the goals in the subagency plans are stated

so broadly that they are inherently unmeasurable, either directly or

through the use of performance measures. This problem was particularly

evident in the four subagency plans related to the Research, Education,

and Economics mission area. Some of the stated goals and objectives may

be difficult to measure as stated in the subagency plans, while the results

of others may not be easily assessed in the short-term.

• Many of the performance measures are either missing, not useful, or

incomplete, making a comprehensive assessment of performance and

results difficult. For example, the Forest Service’s plan contains no

performance measures, while the Animal and Plant Health Inspection

Service’s plan provides performance measures for only a few objectives.

Although some of the subagency plans provide information on

performance measures, the information is not sufficient to show the

relationship between the subagency’s strategic goals and the performance

goals to be included in its annual performance plans.

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Key Statutory

Authorities Are

Reflected in USDA’s

Strategic Plan

USDA’s draft strategic plan reflects consideration of the key statutes

authorizing USDA’s programs. However, the Department-wide strategic

overview and the subagency plans do not generally contain clear linkages

between the stated goals and objectives and USDA’s relevant major

statutory responsibilities. The Results Act does not require a statement of

major statutory responsibilities to be included with the agency’s goals and

objectives.2

 Nonetheless, we believe that including such linkages in the

subagency plans may facilitate a better understanding of the diversity and

complexity of USDA’s overall mission and goals and objectives. For

example, the Animal and Plant Health Inspection Service—a subagency

within the Marketing and Regulatory Programs mission area—provides

some links between its stated goals and its statutory authorities. As a

result, it was clear why a seemingly unrelated goal, such as ensuring the

humane care and treatment of pets, was included as a goal for a subagency

within USDA. Such linkages may also help ensure that the subagency is

stating goals and objectives that are related to its mission and statutory

authorities. For example, we found that the plans for the Agricultural

Marketing Service and the Grain Inspection, Packers and Stockyards

Administration—two other subagencies within the Marketing and

Regulatory Programs mission area—provide no links between the stated

goals and objectives and the key statutory authorities.

USDA’s Strategic Plan

Does Not Contain

Adequate Information

on Interagency

Coordination

USDA’s draft strategic plan provides little evidence to suggest that

interagency coordination occurred to address the issues of duplication and

overlap when preparing the plan. Although the Department-wide strategic

overview provides information on the role of various USDA subagencies in

accomplishing each of the Department’s four overall goals, it does not

acknowledge the role of other government agencies that support and/or

complement these goals. Our previous work has shown that a number of

USDA’s programs and functions are similar and/or complementary to those

of other agencies. For example, USDA’s strategic overview does not

acknowledge the role of the Food and Drug Administration or the Centers

for Disease Control in supporting USDA’s efforts to ensure a safe food

supply. Similarly, there is no reference to the role of the Environmental

Protection Agency, Bureau of Land Management, or the Fish and Wildlife

Service in helping USDA achieve its natural resource management and

conservation goals. In addition, although USDA is a significant participant in

governmentwide initiatives relating to trade policy and promotion and

food security—together with the U.S. Trade Representative, Agency for

2

OMB Circular A-11 suggests that an agency’s mission statement may include a brief discussion of the

agency’s enabling or authorizing legislation; this suggestion, however, does not extend to the

statement of goals and objectives.

Page 9 GAO/RCED-97-196R USDA’s Draft Strategic Plan
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International Development, and Department of State—the roles of these

agencies are not acknowledged in the Department-wide strategic

overview.

The subagency plans generally acknowledge the role of other federal

agencies—both within and outside of USDA—as being necessary for the

subagencies to accomplish their stated missions. However, the subagency

plans do not provide information to determine to what extent coordination

with other agencies has occurred or whether an assessment of duplicative

and overlapping functions was performed in developing the subagencies’

goals and objectives. Instead, the roles of other agencies are usually not

linked to the goals and objectives stated in the subagency plans and often

ignored completely. For example, the Farm Service Agency’s and the

Natural Resources Conservation Service’s plans both fail to recognize that

the success of the Conservation Reserve Program depends on each

subagency’s successfully carrying out its respective responsibilities.

USDA’s Strategic Plan

Addresses Some

Previously Identified

Management

Problems

USDA’s draft strategic plan addresses some of the high-risk issues and

major management problems we have previously identified, but it does not

address all of them. Some of the program-specific issues that we have

raised in the past are generally included in the goals and objectives of the

subagency plans and include the following:

• In 1991, and again in 1997, we reported our concerns that the growing

concentration in the meatpacking industry could lead to an increase in

greater use of anticompetitive practices, such as price-fixing, by buyers.3

The Grain Inspection, Packers and Stockyards Administration’s plan

includes an objective to monitor the performance and structure of the

livestock, meat, and poultry industries and to investigate anticompetitive

practices to ensure that dominant firms do not adversely affect

competition in these markets.

• In 1995, we reported that controls and procedures for authorizing and

monitoring retailers that participate in the Food Stamp Program have not

deterred nor prevented fraudulent activities.4

 The Food and Consumer

Service plan includes an objective to improve program integrity in order to

increase claims collections and reduce the incidence of fraudulent activity.

3

Packers and Stockyards Administration: Oversight of Livestock Market Competitiveness Needs to be

Enhanced (GAO/RCED-92-36, Oct. 16, 1991); Packers and Stockyards Programs: USDA’s Response to

Studies on Concentration in the Livestock Industry (GAO/RCED-97-100, Apr. 23, 1997).

4

Food Assistance: Reducing Food Stamp Benefit Overpayments and Trafficking (GAO/RCED-95-198,

June 23, 1995).

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• In 1992, and again in 1994, we reported that USDA’s farm loan programs

were highly vulnerable to waste, abuse, and mismanagement, resulting in

billions of dollars in losses to the federal government.5

 The Farm Service

Agency’s plan includes one objective to reduce losses from the farm loan

program.

• Since 1981, we have issued a series of reports about our concerns with the

federal crop insurance program, including the lack of compliance with

program requirements, inadequate controls over companies’ claim

adjustment practices, and actuarial soundness of premium rates.6

 The Risk

Management Agency’s plan includes objectives to (1) improve the

effectiveness of the subagency’s compliance function, (2) implement a

process to ensure that underwriting principles and alternative reinsurance

agreements are reevaluated periodically, and (3) continually improve the

actuarial soundness and overall effectiveness of insurance programs.

• Since 1996, we and the Office of Inspector General have identified

shortcomings in the Forest Service’s accounting and financial data and

information systems.7

 The Forest Service’s plan includes an objective to

develop a sound financial system that will meet federal accounting

standards and provide overall financial accountability.

On the other hand, we noted some important omissions in the Agricultural

Marketing Service’s and Foreign Agricultural Service’s plans. The

Agricultural Marketing Service’s plan does not include a goal or objective

to reform the milk marketing order system. Since 1988, we have reported a

number of times on the need to reform this system because it is outdated.8

Because this program was created in 1937, when the structure of the dairy

industry was significantly different than it is today, milk marketing orders

have resulted in excess production and the inequitable treatment of some

producers. To address these concerns, the Federal Agriculture

5

Farmers Home Administration: Billions of Dollars in Farm Loans Are at Risk (GAO/RCED-92-86,

Apr. 3, 1992); Debt Settlements: FmHA Can Do More to Collect on Loans and Avoid Losses

(GAO/RCED-95-11, Oct. 18, 1994).

6

Analysis of Certain Operations of the Federal Crop Insurance Corporation (CED-81-148, July 30,

1981); Crop Insurance: Overpayment of Claims by Private Companies Costs the Government Millions

(GAO/RCED-88-7, Nov. 20, 1987); Crop Insurance: Additional Actions Could Further Improve

Programs’ Financial Condition (GAO/RCED-95-269, Sept. 28, 1995); Crop Insurance: Opportunities

Exist to Reduce Government Costs for Private-Sector Delivery (GAO/RCED-97-70, Apr. 17, 1997).

7

Forest Service (GAO/AIMD-97-11R, Dec. 20, 1996); Forest Service’s Financial Data Limitations

(GAO/RCED-96-198R, June 19, 1996); Forest Service Decision-Making: A Framework for Improving

Performance (GAO/RCED-97-71, Apr. 29, 1997).

8

Milk Marketing Orders: Options for Change (GAO/RCED-88-9, Mar. 21, 1988); Milk Pricing: New

Method for Setting Farm Milk Prices Needs to Be Developed (GAO/RCED-90-8, Nov. 3, 1989); Federal

Dairy Programs: Information on Dairy Pricing and Related 1995 Farm Bill Issues (GAO/RCED-95-97BR,

Mar. 27, 1995).

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Improvement and Reform Act of 1996 requires USDA to make reforms to the

milk marketing order system. It is unclear why USDA did not include this

issue either as a goal or an objective in the plan, especially when the

subagency is currently in the process of developing options to implement

the mandated reforms, which must be completed in 1999. Similarly, the

Foreign Agricultural Service’s plan does not recognize the numerous

problems we have identified in agricultural trade programs.9

 In the past,

we have concluded that these programs have been poorly managed, lack

internal controls, and need greater accountability. However, the draft

strategic plan does not provide a clear strategy on how these problems

will be addressed.

In addition, we have identified significant Department-wide problems in

information technology, accounting, and financial management, but USDA’s

draft strategic plan does not adequately recognize and address some of

these problems. For example, with regard to information technology

issues, we have reported that although USDA has spent nearly $8 billion on

information technology resources over the past 10 years, it has not

effectively planned or managed these investments and, as a result, has

wasted millions of dollars.10 To address this issue, the strategic plan for

the Chief Information Officer (CIO) contains general goals and outlines

actions for improving the acquisition and management of information

technology. However, the CIO’s strategic plan lacks quantifiable

performance measures, time frames and milestones, and resources needed

to accomplish these goals, as well as an explanation of how these goals are

specifically linked to the subagencies’ plans.

Similarly, with regard to financial management issues, USDA has a

long-standing history of deficiencies in its accounting and financial

management systems, including nonintegrated financial systems;

inaccurate reporting; and ineffective controls leading to disclaimed,

adverse, or qualified Inspector General audit opinions on financial

statements. To address these issues, USDA has developed a

Department-wide financial management plan that recognizes and

addresses some of the Department’s major weaknesses in its accounting

and financial management systems. However, we found that this plan does

not provide clear strategies on how USDA will address credit reform issues.

9

Farm Bill Export Options (GAO/GGD-96-39R, Dec. 15, 1995); U.S. Department of Agriculture: Foreign

Agricultural Service Could Benefit From Better Strategic Planning (GAO/GGD-95-225, Sep. 28, 1995);

Agricultural Trade: Significance of High-Value Products as Agricultural Exports (GAO/GGD-93-120,

Aug. 10, 1993).

10USDA Information Management: Extensive Improvements Needed in Managing Information

Technology Investments (GAO/T-AIMD-97-90, May 14, 1997).

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We believe that this is a critical financial management issue for USDA

because the Department makes billions of dollars in loans every year.

While the plan identifies a methodology for strengthening the subagency’s

controls for establishing and reestimating loan subsidy costs, as required

by the Federal Credit Reform Act of 1990 and the Statement of Federal

Financial Accounting Standards, No. 2, Accounting for Direct Loans and

Loan Guarantees, it does not provide a clear strategy for eliminating the

material weaknesses identified in the Inspector General’s financial audit

reports on credit reform.

Furthermore, we have reported in the past that USDA has not allocated

adequate resources to fully comply with the Chief Financial Officers (CFO)

Act and Government Management Reform Act.11 These resource

limitations are not recognized in USDA’s strategic plan and will continue to

preclude USDA from generating reliable financial data.

USDA Does Not

Currently Have

Adequate Systems to

Provide Reliable

Information for

Measuring Results

Given the long history of problems with USDA’s information, accounting,

and financial management systems, we believe that USDA does not have

adequate systems at this time to develop reliable information for

measuring subagencies’ performance and results. Therefore, until the

problems we have identified in the past (some of which are stated above)

are corrected, USDA will not be able to produce reliable data, which are

essential for the development of useful performance measures. In

addition, the CFO Act requires the development of cost information to

enable the systematic measurement of performance and the integration of

program, accounting, and budget systems.

Moreover, as part of the financial audit required by the CFO Act, the

Inspector General has reported on inadequate controls over USDA’s

performance measures data. For example, the Inspector General found

that the Forest Service did not have sufficient internal controls over

recording and compiling performance measures data and as a result could

not ensure that accurate and reliable measures were reported in the

subagency’s annual report. The Inspector General attributed these

weaknesses to the Forest Service’s lack of adequate reviews, policies, and

procedures to ensure that the data are reliable.

In addition, USDA’s draft strategic plan has not yet been developed

sufficiently to identify all of the data needed to measure performance. This

is because (1) not all goals and objectives in the draft plans are stated in a

11Agriculture’s CFO Act Implementation (GAO/AIMD-95-238R, Sept. 29, 1995).

Page 13 GAO/RCED-97-196R USDA’s Draft Strategic Plan
B-277376 

manner that is measurable and (2) while a few subagencies have

developed useful performance indicators, many of the subagency plans

either have no performance indicators or have incomplete ones. We also

noted this concern in our June 1997 report on governmentwide

implementation of the Results Act.12 We reported that the lack of

results-oriented performance information to use as a baseline complicates

agencies’ efforts to set appropriate targets. USDA, in particular, had to

eliminate some performance measures because it did not have a way to

collect data for these measures.

Agency Comments We provided copies of a draft of this report to USDA for review and

comment. We met with USDA’s Acting Chief Financial Officer and other

officials, who told us that overall the Department has made significant

progress in developing a strategic plan that meets the requirements of the

Results Act. While they agreed that additional work is needed, they

emphasized that the strategic planning process is an iterative process that

is evolving, and they expect that USDA’s strategic plan will continue to

improve with each planning cycle.

However, USDA expressed two principal concerns with the draft report.

First, the officials disagreed with our statement that the plan does not

adequately address information technology issues that we have previously

identified. We continue to believe that while the draft strategic plan for the

Chief Information Officer discusses general goals and outlines actions for

improving the acquisition and management of information technology, it

lacks specificity in terms of performance indicators, time frames, and

resources. Moreover, it is not clear how the goals discussed in the Chief

Information Officer’s plan are specifically linked to the subagency plans.

We have added language to our comments on USDA’s draft strategic plan to

clarify our concerns. Second, USDA stated that the Foreign Agricultural

Service was not aware of any outstanding recommendations by us relating

to management problems. We believe that a number of issues and

recommendations relating to management problems at the Foreign

Agricultural Service have not yet been adequately addressed by the

subagency. Our concerns and recommendations have been stated in

various reports, including our 1995 report entitled U.S. Department of

Agriculture: Foreign Agricultural Service Could Benefit from Better

Strategic Planning (GAO/GGD-95-225, Sept. 28, 1995). USDA also provided us

12The Government Performance and Results Act: 1997 Governmentwide Implementation Will Be

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

Page 14 GAO/RCED-97-196R USDA’s Draft Strategic Plan
B-277376 

with some technical comments that have been incorporated into the

report, as appropriate.

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

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

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

Minority Members of your Committees; the Chairmen and Ranking

Minority Members of the Senate Committee on Agriculture, Nutrition, and

Forestry and the House Committee on Agriculture; the Secretary of

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

will also be made available to others upon request.

Please contact me at (202) 512-5138 if you or any of your staff have any

questions concerning this report. Major contributors to this report are

Stephen M. Cleary, Eileen M. Cortese, Anu K. Mittal, and Dale A. Wolden.

Robert A. Robinson

Director, Food

 and Agriculture Issues

(150731) Page 15 GAO/RCED-97-196R USDA’s Draft Strategic Plan
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