a

GAO

United States General Accounting Office

Testimony

Before the Subcommittee on Government Efficiency, 

Financial Management and Intergovernmental Relations 

Committee on Government Reform

House of Representatives

For Release on Delivery

10:30 a.m. EST

Friday

February 15, 2002

MANAGING FOR 

RESULTS

Next Steps to Improve the 

Federal Government’s 

Management and 

Performance

Statement of J. Christopher Mihm

Director, Strategic Issues

GAO-02-439T
Page 1 GAO-02-439T 

Mr. Chairman and Members of the Subcommittee:

I am pleased to be here today to discuss the President’s Management 

Agenda to improve the management and performance of the federal 

government. The federal government is one of the largest, most complex, 

and diverse organizations in the world, facing a wide range of challenges in 

responding to a number of key trends, such as globalization, changing 

security threats, and demographic changes. Especially in light of the tragic 

events of September 11, federal agencies will need to work better with 

other governmental organizations, nongovernmental organizations, and the 

private sector, both domestically and internationally, to achieve results. 

Focusing on accountable, results-oriented management can help the 

federal government use this network to deliver economical, efficient, and 

effective programs and services to the American people.

My central point today is that the administration’s plan to use the Executive 

Branch Management Scorecard to highlight agencies’ progress in achieving 

management and performance improvements embodied in the President’s 

Management Agenda is a promising first step. However, it is important to 

recognize that many of the challenges the federal government faces are 

long-standing and complex, and will require sustained attention. 

Therefore, as this subcommittee has emphasized by the topic of this 

hearing, the value of the scorecards is not in the scoring, but in the degree 

to which scores lead to sustained focus and demonstrable improvements. 

This will depend on continuing efforts to assess progress and maintain 

accountability to ensure that agencies are able to, in fact, improve their 

performance.

As agreed with the subcommittee, my statement today will: 

• discuss the administration’s scorecard approach to address five 

crosscutting management initiatives, 

• describe the key elements that our work suggests are particularly 

important in implementing and sustaining management improvement 

initiatives so that they genuinely take root and eventually solve the 

problems they are intended to fix, and 

• highlight the need for transparency and congressional oversight to 

provide the continuing attention needed to improve management and 

performance across the federal government.
Page 2 GAO-02-439T 

The Administration’s 

Scorecard Provides a 

Starting Point for 

Improving Federal 

Management 

The objective of the Executive Branch Management Scorecard is to provide 

a tool that can be used to track progress in achieving the President’s 

Management Agenda. Using broad standards, the scorecards in the 

president’s budget grade agencies’ performance regarding five 

governmentwide initiatives, which are:

• strategic management of human capital,

• competitive sourcing,

• improved financial performance,

• expanded electronic government, and

• budget and performance integration.

Central to effectively addressing the federal government’s management 

problems is recognition that the five governmentwide initiatives cannot be 

addressed in an isolated or piecemeal fashion separate from the other 

major management challenges and high-risk areas facing federal agencies.1

 

As stated in the President’s Management Agenda, they are mutually 

reinforcing. More generally, the initiatives must be addressed in an 

integrated way to ensure that they drive a broader transformation of the 

cultures of federal agencies. At its essence, this cultural transformation 

must seek to have federal agencies become less hierarchical, process 

oriented, stovepiped, and inwardly focused; and more flat, partnerial, 

results oriented, integrated, and externally focused.

The focus that the administration’s scorecard approach brings to improving 

management and performance is certainly a step in the right direction. As 

we have seen by your example, Chairman Horn, in calling attention to 

agencies’ financial management, the year 2000 computer concerns, and 

computer security issues by grading agencies on their progress, this 

approach can create an incentive to improve management and 

performance. Similarly, we have found that our high-risk list has provided 

added emphasis on government programs and operations that warrant 

urgent attention to ensure our government functions in the most 

economical, efficient, and effective manner possible. 

1

 U.S. General Accounting Office, DOD Financial Management: Integrated Approach, 

Accountability, and Incentives Are Keys to Effective Reform, GAO-01-681T (Washington, 

D.C.: May 8, 2001).
Page 3 GAO-02-439T 

The President’s Management Agenda focuses on important challenges for 

the federal government. The items on the agenda are consistent in key 

aspects with the federal government’s statutory framework of financial 

management, information technology, and results-oriented management 

reforms enacted during the 1990s. In crafting that framework, Congress 

sought to provide a basis for improving the federal government’s 

effectiveness, financial condition, and operating performance.2

 Moreover, I 

believe it is worth noting the clear linkages between the five 

governmentwide initiatives and the nine program-specific initiatives 

identified by the administration, and the high-risk areas and major 

management challenges that were covered in GAO’s January 2001 

Performance and Accountability Series and High-Risk Update.3

 For 

example, we have designated strategic human capital management as a 

governmentwide high-risk area that presents a pervasive challenge 

throughout the federal government, and this is also one of the president’s 

governmentwide initiatives. Our work has found strategic human capital 

management challenges in four key areas, which are:

• strategic human capital planning and organizational alignment;

• leadership continuity and succession planning;

• acquiring and developing staffs whose size, skills, and deployment meet 

agency needs; and

• creating results-oriented organizational cultures.

In the area of improved financial performance, we have continued to point 

out that the federal government is a long way from successfully 

implementing the statutory reforms Congress enacted during the 1990s. 

Widespread financial management system weaknesses, poor 

recordkeeping and documentation, weak internal controls, and the lack of 

cost information have prevented the government from having the 

information needed to effectively and efficiently manage operations or 

accurately report a large portion of its assets, liabilities, and costs. 

Agencies need to take steps to continuously improve internal control and 

underlying financial and management information systems to ensure that 

2

 U.S. General Accounting Office, Managing for Results: The Statutory Framework for 

Performance-Based Management and Accountability, GAO/GGD/AIMD-98-52 (Washington, 

D.C.: Jan. 28, 1998).

3

 U.S. General Accounting Office, Performance and Accountability Series, GAO-01-241 

through 262 (Washington, D.C.: January 2001). U.S. General Accounting Office, High-Risk 

Series: An Update, GAO-01-263 (Washington, D.C.: January 2001).
Page 4 GAO-02-439T 

managers and other decision makers have reliable, timely, and useful 

financial information to ensure accountability; measure, control, and 

manage costs; manage for results; and make timely and fully informed 

decisions about allocating limited resources.

Another of the administration’s initiatives is to integrate performance 

review with budget decisions, with a long-term goal of using information 

about program results in making decisions about which programs should 

continue and which to terminate or reform. The Office of Management and 

Budget (OMB) has changed the presentation of the president’s budget to 

provide added focus on whether programs are effective, and a management 

focus is present throughout the budget document’s discussions of the 

agencies. In our observations of agencies’ efforts to implement the 

Government Performance and Results Act (GPRA) and the Chief Financial 

Officers Act, more agencies were able to show a direct link between 

expected performance, resources requested, and resources consumed.4

 

These linkages help promote agencywide performance management efforts 

and increase the need for reliable budget and financial data. However, our 

work has also shown that additional effort is needed to clearly describe the 

relationship between performance expectations, requested funding, and 

consumed resources. The uneven extent and pace of development should 

be seen in large measure as a reflection of the mission complexity and 

variety of operating environments across federal agencies. Describing the 

planned and actual use of resources in terms of measurable accurate 

results remains an essential action that will continue to require time and 

effort on the part of all agencies, working with OMB and Congress.

The administration has identified areas where it believes the opportunity to 

improve performance is greater. However, as stated in the president’s 

budget, “The marks that really matter will be those that record 

improvement, or lack of it, from these starting points.” The administration 

has pledged to update the scores twice a year and to issue a mid-year report 

during the summer. Updates and future reports will be important in 

ensuring that progress continues as agencies attempt to improve their 

performance. It is key that rigorous criteria be applied to ensure that, in 

fact, progress has been made.

4

 U.S. General Accounting Office, Managing for Results: Agency Progress in Linking 

Performance Plans With Budgets and Financial Statements, GAO-02-236 (Washington, 

D.C.: Jan. 4, 2002).
Page 5 GAO-02-439T 

Key Elements in 

Implementing and 

Sustaining 

Management Reforms

According to the administration, the President’s Management Agenda is a 

starting point for management reform. As such, we have drawn upon our 

wide-ranging work on federal management issues to identify elements that 

are particularly important in implementing and sustaining management 

improvement initiatives. These elements include: (1) demonstrate 

leadership and accountability for change, (2) integrate management 

improvement initiatives into programmatic decision making, (3) use 

thoughtful and rigorous planning to guide decisions, (4) involve and 

empower employees to build commitment and accountability, (5) align 

organizations to streamline operations and clarify accountability, and (6) 

maintain strong and continuing congressional involvement (which will be 

covered in the next section).5

 These six elements have applicability for 

individual federal agencies, and the central management agencies, each of 

which plays a fundamental part in implementing reforms and improving 

federal government performance.

Demonstrate Leadership 

and Accountability For 

Change

One of the most important elements of successful management 

improvement initiatives is the demonstrated, sustained commitment of top 

leaders to change. Top leadership involvement and clear lines of 

accountability for making management improvements are critical to 

ensuring that the difficult changes that need to be made are effectively 

implemented throughout the organization. The unwavering commitment of 

top leadership in the agencies will be especially important to overcoming 

organizations’ natural resistance to change, marshalling the resources 

needed in many cases to improve management, and building and 

maintaining the organizationwide commitment to new ways of doing 

business. 

Sustaining top leadership commitment to improvement is particularly 

challenging in the federal government because of the frequent turnover of 

senior agency political officials. As a result, sustaining improvement 

initiatives requires commitment by senior career executives, as well as 

political leaders. Career executives can help provide the long-term focus 

needed to institutionalize reforms that political executives’ often more 

limited tenure does not permit. 

5

 U.S. General Accounting Office, Management Reform: Elements of Successful 

Improvement Initiatives, GAO/T-GGD-00-26 (Washington, D.C.: Oct. 15, 1999).
Page 6 GAO-02-439T 

The Office of Personnel Management’s (OPM) amended regulations that 

place increased emphasis on holding senior executives accountable for 

organizational goals provide an opportunity to reinforce leadership and 

accountability for management improvement. Specifically, the amended 

regulations require agencies to hold executives accountable for results; 

appraise executive performance on those results balanced against other 

dimensions, including customer satisfaction and employee perspectives; 

and use those results as the basis for performance awards and other 

personnel decisions. Agencies were to implement their policies for the 

senior executives for the appraisal cycles that began in 2001.

Although the respective departments and agencies must have the primary 

responsibility and accountability to address their own issues, leaders of the 

central management agencies have the responsibility to keep everyone 

focused on the big picture by identifying the key issues across the 

government and ensuring that related efforts are complementary rather 

than duplicative. The top leadership of OMB, OPM, the General Services 

Administration (GSA), and the Department of the Treasury need to 

continue to be involved in developing and directing reform efforts, and 

helping to provide resources and expertise to further improve 

performance.

Integrate Management 

Improvement Initiatives into 

Programmatic Decision 

Making

To be successful, management improvement initiatives must be part of 

agencies’ programs and day-to-day actions. Traditionally, the danger to any 

management reform is that it can become a hollow, paper-driven exercise 

where management improvement initiatives are not integrated into the dayto-day activities of the organization. The administration has recognized 

this danger and encouraged agency leaders to take responsibility for 

improving the day-to-day management of the government. Integrating 

management issues with budgeting is absolutely critical for progress in 

government performance and management. Such integration is obviously 

important to ensuring that management initiatives obtain the resource 

commitments needed to be successful. More generally, however, the 

budget process is the only annual process we have in government where 

programs and activities come up for regular review and reexamination. 

Integration also strengthens budget analysis by providing new tools to help 

analysts review the relative merits of competing agency claims and 

programs with the federal budget.
Page 7 GAO-02-439T 

The management issues in the president’s agenda have both 

governmentwide and agency-specific components. Those aspects of the 

problem that are governmentwide and cut across agency boundaries 

demand crosscutting solutions as well. Interagency councils such as the 

President’s Management Council, Chief Financial Officers’ Council, the 

Chief Information Officers’ Council, the Human Resources Management 

Council, the President’s Council on Integrity and Efficiency, and the Joint 

Financial Management Improvement Program can play central roles in 

addressing governmentwide management challenges. As I have noted in a 

previous testimony, interagency councils provide a means to help foster 

communication across the executive branch, build commitment to reform 

efforts, tap talents that exist within agencies, focus attention on 

management issues, and initiate improvements.6

 

Use Thoughtful and 

Rigorous Planning to Guide 

Decisions

The magnitude of the challenges that many agencies face call for thoughtful 

and rigorous planning to guide decisions about how to improve 

performance. We have found, for example, that annual performance plans 

that include precise and measurable goals for resolving mission-critical 

management problems are important to ensuring that agencies have the 

institutional capacity to achieve results-oriented programmatic goals. On 

the basis of our long experience examining agency-specific and 

governmentwide improvement efforts, we believe the improvement plans 

that agencies are to develop in conjunction with tracking their progress in 

achieving the goals of the President’s Management Agenda should establish 

(1) clear goals and objectives for the improvement initiative, (2) the 

concrete management improvement steps that will be taken, (3) key 

milestones that will be used to track the implementation status, and (4) the 

cost and performance data that will be used to gauge overall progress in 

addressing the identified weaknesses. 

While agencies will have to undertake the bulk of the effort in addressing 

their respective management weaknesses, the improvements needed have 

important implications for the central management agencies as well. OMB, 

OPM, GSA, and Treasury will need to remain actively engaged throughout 

the planning and implementation of the president’s initiatives to ensure that 

agencies bring to bear the resources and capabilities to make real progress. 

6

 U.S. General Accounting Office, Government Management: Observations on OMB’s 

Management Leadership Efforts, GAO/T-GGD/AIMD-99-65 (Washington, D.C.: Feb. 4, 

1999).
Page 8 GAO-02-439T 

These four agencies, therefore, need to ensure that they have the 

capabilities in place to support and guide agencies’ improvement efforts. 

These capabilities will be critical in helping agencies identify the root 

causes of their management challenges and pinpointing specific 

improvement actions, providing agencies with tools and additional 

support—including targeted investments where needed—to address 

shortcomings, and assisting agencies in monitoring and reporting progress. 

For example, OMB can assist agencies in developing and refining useful 

performance measures and ensuring that performance information is used 

in deliberations and key decisions regarding agencies’ programs. OPM can 

provide tools for agencies to use in better gauging the extent to which 

federal employees understand the link between their daily activities and 

agencies’ results. In this regard, OPM has announced a major internal 

restructuring effort driven in large part by the need to provide better 

support and resources to agencies.

Involve and Empower 

Employees to Build 

Commitment and 

Accountability

Agencies can improve their performance by the way that they treat and 

manage their people, building commitment and accountability through 

involving and empowering employees. All members of an organization 

must understand the rationale for making organizational and cultural 

changes because everyone has a stake in helping to shape and implement 

initiatives as part of agencies’ efforts to meet current and future challenges. 

Allowing employees to bring their expertise and judgment to bear in 

meeting their responsibilities can help agencies capitalize on their 

employees’ talents, leading to more effective and efficient operations and 

improved customer service. However, our most recent survey of federal 

managers found that at only one agency did more than half of the managers 

report that to a great or very great extent they had the decision-making 

authority they needed to help the agency accomplish its strategic goals.
Page 9 GAO-02-439T 

Effective changes can only be made and sustained through the cooperation 

of leaders, union representatives, and employees throughout the 

organization. We believe that agencies can improve their performance, 

enhance employees’ morale and job satisfaction, and provide a working 

environment where employees have a better understanding of the goals 

and objectives of their organizations and how they are contributing to the 

results that American citizens want. In that regard, our work has identified 

six practices that agencies can consider as they seek to improve their 

operations and respond to the challenges they are facing. 7

 These are: 

• demonstrating top leadership commitment;

• engaging employee unions;

• training employees to enhance their knowledge, skills, and abilities;

• using employee teams to help accomplish agency missions;

• involving employees in planning and sharing performance information; 

and

• delegating authorities to front-line employees.

Align Organizations to 

Streamline Operations and 

Clarify Accountability

Successful management improvement efforts often entail organizational 

realignment to better achieve results and clarify accountability. Agencies 

will need to consider realigning their organizations in response to the 

initiatives in the President’s Management Agenda. For example, as 

competitive sourcing, e-government, financial management, or other 

initiatives lead to changes in how an agency does business, agencies may 

need to change how they are organized to achieve results.

In recent years, Congress has shown an interest in restructuring 

organizations to improve service delivery and program results and to 

address long-standing management weaknesses by providing authority and 

sharpening accountability for management. Most recently, Congress 

chartered the Transportation Security Administration in November 2001 

and required:

• measurable goals to be outlined in a performance plan and their 

progress to be reported annually;

7

 U.S. General Accounting Office, Human Capital: Practices That Empowered and 

Involved Employees, GAO-01-1070 (Washington, D.C.: Sept. 14, 2001).
Page 10 GAO-02-439T 

• an undersecretary who is responsible for aviation security, subject to a 

performance agreement, and entitled to a bonus based on performance; 

and

• a performance management system that included goals for managers 

and employees.

Transparency and 

Congressional 

Oversight Are 

Necessary to Achieve 

Results

In implementing the President’s Management Agenda, it will be important 

to ensure that information is available so that Congress, other interested 

parties, and the public can assess progress and help to identify solutions to 

enhance improvement efforts. As stated in the president’s budget, “The 

Administration cannot improve the federal government’s performance and 

accountability on its own. It is a shared responsibility that must involve the 

Congress.” Therefore, transparency will be crucial in developing an 

effective approach to making needed changes.

It will only be through the continued attention of Congress, the 

administration, and federal agencies that progress can be sustained and, 

more importantly, accelerated. Support from Congress has proven to be 

critical in sustaining interest in management initiatives over time. 

Congress has, in effect, served as the institutional champion for many of 

these initiatives, providing a consistent focus for oversight and 

reinforcement of important policies. 

Making pertinent and reliable information available will be necessary for 

Congress to be able to adequately assess agencies’ progress and to ensure 

accountability for results. Key information to start with includes the 

agencies’ improvement plans that are being developed to address the 

agencies’ scores. Congress can use these improvement plans to engage 

agencies in discussions about progress that is being made, additional steps 

that need to be taken, and what additional actions Congress can take to 

help with improvement efforts.

More generally, effective congressional oversight can help improve federal 

performance by examining the program structures agencies use to deliver 

products and services to ensure that the best, most cost-effective mix of 

strategies are in place to meet agency and national goals. As part of this 

oversight, Congress can identify agencies and programs that address 

similar missions and consider the associated policy, management, and 

policy implications of these crosscutting programs. This will present 

challenges to the traditional committee structures and processes. A 

continuing issue for Congress to consider is how to best focus on common 
Page 11 GAO-02-439T 

results when mission areas and programs cut across committee 

jurisdictions.

Conclusions In summary, Mr. Chairman, serious and disciplined efforts are needed to 

improve the management and performance of federal agencies. 

Highlighting attention through the President’s Management Agenda and the 

Executive Branch Management Scorecards are steps in the right direction. 

At the same time, it is well recognized that consistent progress in 

implementing these initiatives will be the key to achieving improved 

performance across the federal government. In implementing the 

President’s Management Agenda, the elements highlighted during this 

testimony should be considered and adapted as appropriate in view of the 

fact that experience has shown that when these elements are in place 

lasting management reforms are more likely to be implemented that 

ultimately lead to improvements. Finally, Congress must play a crucial role 

in helping develop and oversee management improvement efforts 

throughout the executive branch. Congress has proven to be critical in 

sustaining management reforms by monitoring implementation and 

providing the continuing attention necessary for management reform 

initiatives to be carried through to their successful completion. 

Mr. Chairman, we are pleased that you and your colleagues in Congress 

have often turned to GAO for assistance on federal management issues and 

we look forward to continuing to assist Congress and agencies in this 

regard. We have issued a large body of reports, guides, and tools on issues 

directly relevant to the President’s Management Agenda. We will be issuing 

additional such products in the future that should prove also helpful to 

Congress and agencies in improving federal management and performance.

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

any questions that you or other members of the subcommittee may have.

Contacts and 

Acknowledgment

For further contacts regarding this testimony, please contact J. Christopher 

Mihm at (202) 512-6806. Individuals making key contributions to this 

testimony included Jacqueline Nowicki, Susan Ragland, and Aonghas St 

Hilaire.

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