```
                                                                 
Managing for Results: Efforts to Strengthen the Link Between	 
Resources and Results at the Administration for Children and	 
Families (10-DEC-02, GAO-03-9). 				 
                                                                 
Encouraging a clearer and closer link between budgeting,	 
planning, and performance is essential to improving federal	 
management and instilling a greater focus on results. Through	 
work at various levels within the organization, this report on	 
the Administration for Children and Families (ACF)--and its two  
companion studies on the Nuclear Regulatory Commission		 
(GAO-03-258) and the Veterans Health Administration		 
(GAO-03-10)--records (1) what managers considered successful	 
efforts at creating linkages between planning and performance	 
information to influence resource choices and (2) the challenges 
managers face in creating these linkages.			 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-9						        
    ACCNO:   A05699						        
  TITLE:     Managing for Results: Efforts to Strengthen the Link     
Between Resources and Results at the Administration for Children 
and Families							 
     DATE:   12/10/2002 
  SUBJECT:   Performance measures				 
	     Planning programming budgeting			 
	     General management reviews 			 
	     OMB Program Assessment and Rating Tool		 

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GAO-03-9

                                       A

Report to the Chairman, Subcommittee on Government Efficiency, Financial
Management and Intergovernmental Relations, Committee on Government
Reform, House of Representatives

December 2002 MANAGING FOR RESULTS Efforts to Strengthen the Link Between
Resources and Results at the Administration for Children and Families

GAO- 03- 9

Letter 1 Results in Brief 3 Background 5 Scope and Methodology 11 The
Current Budget and Planning Process 12 Performance Information Influences
Program, Budget, and Staffing

Decisions in Various Ways 18 Linking Resources to Results Is an Evolving
Process 24 Agency Comments 26

Appendixes

Appendix I: Efforts to Strengthen the Link between Resources and Results
in the ACF West- Central Hub, Dallas Regional Office 28 Background 28
Budgeting and Planning in Dallas Is an Integrated, Interactive

Process Focused on Results 30

Appendix II: Efforts to Strengthen the Link Between Resources and Results
in the ACF Pacific Hub, San Francisco Regional Office 36 Background 36
Strategic Planning at Region 9 Seeks to Engage, Inform, and Educate

Staff 38

Appendix III: Objectives, Scope, and Methodology 42 Glossary 45 Tables
Table 1: Responsibilities of Key Offices and Positions for Strategic

Planning, Budgeting, and Regional/ Headquarters Operations 10 Table 2: Key
Elements in Work Planning, Fiscal Years 1998- 2002 39

Figures Figure 1: ACF Organizational Chart 8 Figure 2: ACF*s Budget and
Planning Process 13

Figure 3: OPRE GPRA Template 15 Figure 4: Excerpt from Hub Work Plan 18
Figure 5: West- Central Hub Organization Chart 29 Figure 6: Key Components
of Dallas* Strategic Planning Process 31

Figure 7: Excerpts from the West- Central Hub Regional Work Plan and
Dallas OCSE Program Plan 34 Figure 8: Results- Based Information Tracking
System Report 35 Figure 9: San Francisco Regional Office Structure 37

Abbreviations

ACF Administration for Children and Families ATO Office of Administration
and Technology CAA Community Action Agency CIRCLE Center for Improving the
Readiness of Children for Learning and Education

CSBG Community Services Block Grant CSE Child Support Enforcement CYDU
Children and Youth Development Unit FRC Federal Regional Council GABI
Grant Application and Budget Review Instrument GPRA Government Performance
and Results Act HHS Department of Health and Human Services OCS Office of
Community Services OCSE Office of Child Support Enforcement OLAB Office of
Legislative Affairs and Budget OMB Office of Management and Budget OPRE
Office of Planning, Research and Evaluation ORO Office of Regional
Operations PART Program Assessment Rating Tool PSU Program Support Unit
QAT Quality Assurance Team RBITS Results- Based Information Tracking
System RHY Runaway and Homeless Youth ROMA Results Oriented Management and
Accountability SBC Secretary's Budget Council SCHIP State Children's
Health Insurance Program S& E Salaries and Expense SRR Secretary's
Regional Representative SSU Self- Sufficiency Unit TANF Temporary
Assistance for Needy Families T/ TA Training and Technical Assistance

Letter

December 10, 2002 The Honorable Stephen Horn Chairman, Subcommittee on
Government Efficiency, Financial Management and Intergovernmental
Relations Committee on Government Reform House of Representatives Dear Mr.
Chairman: During the past decade, Congress and the Executive Branch have
sought to improve federal management and instill a greater focus on
results. Through enactment of a number of major management reforms,
Congress has created a statutory framework with the Government Performance
and Results Act of 1993 (GPRA) as its centerpiece. 1 One of GPRA*s major
purposes is to encourage a closer and clearer linkage between planning,

performance* i. e., results* and the budget process. Each administration
takes a slightly different approach to implementing results management.
Improving the integration of budget and performance is a high priority
initiative included in the President*s Management Agenda. 2 A central
piece of that is the Office of Management and Budget*s (OMB) new
diagnostic tool, the Program Assessment Rating Tool (PART). PART is
designed to provide a consistent approach to reviewing program design,
planning, and goals development as well as program management and results.
OMB expects to use PART assessments in considering department and agency
budget submissions for the fiscal year 2004 President*s Budget request to
Congress. 3 In a number of different reports to the Congress, GAO has
examined different aspects of the resources- to- results linkage. A series
of three

1 Other significant legislation includes the Chief Financial Officers Act
of 1990 (CFO Act) and related legislation, which created a structure for
the management and reporting of the government*s finances; and the
Clinger- Cohen Act of 1996 and Paperwork Reduction Act of 1995, which
required agencies to take an orderly, planned approach to their
information

technology needs. 2 The President*s Management Agenda, which by focusing
on 14 targeted areas* 5 governmentwide goals and 9 program initiatives*
seeks to improve the management and performance of the federal government.
3 Office of Management and Budget, Program Performance Assessments for the
FY 2004 Budget, M- 02- 10, (Washington, D. C.: July 16, 2002).

reports described agencies* progress over a 4- year period in linking
performance plans, budgets, and, in the most recent report, financial
statements. 4 We found that between fiscal years 1999 and 2002, agencies
progressed significantly in showing a direct link between expected
performance and requested program activity funding levels through
structural changes or cross- walks* the first step in defining the
performance consequences of budgetary decisions. We concluded that
additional effort was needed to more clearly describe the relationship
between performance expectations, requested funding, and consumed
resources. Furthermore, we said that the uneven extent and pace of
developing these relationships were reflective of mission complexity and
differences in operating environments across the government. Finally, we
observed that describing the planned and actual use of resources in terms
of measurable results was an essential long- term effort that would take
time and adaptation on the part of all agencies. In another approach to
defining performance and resource integration, we

developed a framework of budget practices that we believe can contribute
to an agency*s capacity to manage for results. 5 We viewed these practices
as desirable dimensions of budgeting that could be implemented in many
different ways to reflect the characteristics and circumstances of a
particular agency. Both our assessments of performance and budget account
alignments and the framework of budget practices have led to the next
phase of work and the subject of this report. This report* one of a group
of three* looks at the resources- to- results link from the perspective of
agency managers charged with making the linkage happen.

The objectives of this report on Administration for Children and Families
(ACF) within the Department of Health and Human Services (HHS) and its two
companion studies on the Veterans Health Administration within the
Department of Veterans Affairs and the Nuclear Regulatory Commission, are
to document (1) what managers in these three agencies considered 4 U. S.
General Accounting Office, Performance Budgeting: Initial Experiences
Under the

Results Act in Linking Plans with Budgets, AIMD/ GGD- 99- 67 (Washington,
D. C.: Apr. 12, 1999); U. S. General Accounting Office, Performance
Budgeting: Fiscal Year 2000 Progress in Linking Plans with Budgets, AIMD-
99- 239R (Washington, D. C.: July 30, 1999); 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).

5 U. S. General Accounting Office, Results- Oriented Budget Practices in
Federal Agencies, GAO- 01- 1084SP (Washington, D. C.: August 2001).

successful efforts at creating linkages between planning and performance
information to influence resource choices and (2) the challenges they face
in doing so. For the purposes of this report, we take a broad view of
performance information* possible sources include GPRA, program

evaluations, grant applications, and statistical information about program
funding and grantees. We neither evaluated their choices nor critiqued
their processes. Instead, we asked managers to describe when and how
planning and performance information was included in the budget cycle, to
explain what strategies were used and why, and to provide evidence that
there was a related programmatic effect. A third purpose was to show that
there are multiple ways to get at these linkages, and that there can be
successful applications even if progress in budget and performance
integration is

uneven. Budgeting is and will remain an exercise in political choice, in
which performance can be one, but not necessarily the only, factor
underlying decisions. However, efforts to infuse performance information
into resource allocation decisions can more explicitly inform budget
discussions and focus them* both in Congress and in agencies* on expected
results, rather than on inputs. We believe that showcasing agencies*
successes with and challenges in integrating budgeting and planning may
prove useful to other agencies; Congressional authorizing, appropriation,
and oversight committees; and OMB in the shared goal of strengthening the
link between program performance and resources. Results in Brief ACF*s
fiscal year 2002 budget request is linked to its GPRA goals but, in
general, formulation is not guided by past program performance. That is,

the process does not begin with an evaluation of past program performance
to inform the upcoming year*s budget request. Thus, budget and performance
planning are clearly related but are not fully integrated with each other.
Budget and performance plans are based on departmental

budget and planning guidance which is jointly reviewed by and, as needed,
supplemented by ACF*s Office of Legislative Affairs and Budget (OLAB) and
Office of Planning, Research and Evaluation (OPRE). ACF budget and
planning officials told us that they communicate frequently and work
closely together to ensure consistency in the budget and performance plan.
Budget and planning align more closely after ACF sends the budget request
and performance plan to the department for review. At that point, HHS and
ACF work together to ensure that the budget and plan are consistent and
support each other. Unlike budget formulation, budget execution largely

occurs in the regional offices, where resource allocation is often driven
by program performance. Many strategies play critical roles in ACF*s
efforts to strengthen the link between resources and results across a
number of the agency*s main functions. Officials we interviewed in ACF*s
Head Start, Child Support Enforcement (CSE), and Community Services Block
Grant (CSBG) programs noted that decisions at the programmatic level are
influenced by performance. For instance, they said that training and
technical assistance (T/ TA) money is often allocated based on needs and
grantee performance.

Creative partnerships and collaborative strategies help ACF work with
grantees towards common goals and further the administration*s agenda. The
knowledge regional offices possess about their states* and grantees*
capacity to provide services can also play a critical role in resource

allocation. Finally, ACF regional managers and staff in the San Francisco
and Dallas offices report that organizing and allocating staff around
agency goals and priorities allows them to link their day- to- day
activities to longerterm results and outcomes and to be better able to
respond to emerging issues and work more efficiently. Budget and
performance integration is a long- term process* ACF

continues to build on its successes and learn from its challenges as it
moves towards institutionalizing the practice of linking resources and
results. Although ACF must still overcome some difficult barriers, it has
begun to identify and implement mitigation strategies for some of these
issues. For example:

 ACF conducts much of its work through *third parties** states,
localities, and other nonfederal service providers* which often limits the
extent to which ACF can influence national performance goals and can
seriously complicate data collection. To improve program management and
accountability, ACF has had success in collaborating with its partners to
develop national performance goals and building data collection capacity
at the state and local levels. Collaboration and partnerships have also
raised awareness as to the importance of collecting and reporting
performance data in a uniform fashion.

 Isolating a particular program*s effect on outcomes can be difficult
when it is part of a multipronged effort. ACF programs are often only part
of a network of federal, state, and local efforts to address serious
health and social concerns, and attributing a particular outcome to a
particular program can be difficult. Further, these issues require long-

term investments, the effects of which may not be known for many years.
Measuring the annual effects of these collective investments much less any
one part is often difficult and may not be particularly useful. ACF has
addressed this issue by using program evaluations to help isolate the
effects of a particular program, strengthening the link

between outputs and outcomes, and identifying intermediate outputs and
outcomes to help measure program performance.

 Finally, the organizational culture change necessary to support the
linkages between resources and results takes time, and wide- scale
implementation and institutionalization of performance- based management
is clearly a work in progress. It appears, though, that change is
beginning to take root. As a result of increased training and education,
some managers and staff reported a noticeable difference in the use and
understanding of outcomes versus outputs. In many cases, performance
agreements for both managers and staff are tied to GPRA

goals, and are increasingly associated with progress towards achieving
outcomes. We presented a draft of this report to HHS for comment. HHS
officials generally agreed with our findings and provided technical
clarifications, which were made as appropriate.

Background ACF, a major program office within HHS, is responsible for
programs that promote the economic and social well- being of low- income
and

disadvantaged children, families, and their communities. Headed by the
Assistant Secretary for Children and Families, ACF*s seven program offices
6 and various staff offices offer policy direction, information services,
and funding through a variety of grants to third- party service providers
such as state and local governments and nongovernmental organizations. Of
the more than $45 billion provided for in fiscal year 2002, over 85
percent went to just five program areas administered by third parties:
Temporary Assistance for Needy Families ($ 16.7 billion), Head Start ($
6.5 billion), Foster Care and Adoption Assistance ($ 6.6 billion),

6 The seven program offices are the Office of Family Assistance; the
Administration on Children, Youth and Families; the Office of Child
Support Enforcement; the Office of Refugee Resettlement; the
Administration on Developmental Disabilities; the Administration for
Native Americans; and the Office of Community Services.

Child Care ($ 4.8 billion), and Child Support Enforcement and Family
Support ($ 4 billion).

ACF*s work is driven by the four GPRA goals indicated in its annual
performance plan: (1) increase economic independence and productivity for
families, (2) improve healthy development, safety, and well being of
children and youth, (3) increase the health and prosperity of communities
and tribes, and (4) build a results- oriented organization. 7 As we have
previously reported, 8 ACF linked these goals to its funding request by
aggregating and consolidating program activities from multiple budget
accounts and linking the associated funding requests to sets of
performance goals, which it referred to as *objectives* of these four main
goals. In fiscal year 2002, ACF*s leadership also established nine key

priorities to provide targeted opportunities for collaboration on
missioncritical crosscutting activities. 9

As figure 1 shows, ACF is headquartered in Washington, D. C., and has 10
regional offices within five broad geographic areas of the country known
as hubs. 10 Regional offices contain about 50 percent of all ACF employees
and are responsible for administering most of ACF*s programs and ensuring
that program and administrative funds are spent in accordance with ACF
goals and initiatives. Headquarters is responsible for setting policy,
budget formulation, strategic planning, and legislative affairs. Table 1
describes in further detail the responsibilities of key offices and
positions as they pertain to strategic planning and budgeting as well as
regionalheadquarters operations and relations.

7 In their technical comments on a draft of this report, HHS officials
said that in May 2002, ACF*s fourth goal was revised to: *Manage resources
to improve performance.* 8 GAO- 02- 236.

9 These nine priorities are: (1) fatherhood, (2) healthy marriage, (3)
faith- based/ community initiatives, (4) positive youth development, (5)
next phase of welfare reform, (6) enhancing early literacy of children,
(7) rural initiative, (8) prevention, and (9) One Department.

10 As of October 1, 2002, ACF eliminated its hub structure. ACF will
operate in a 10 regional office structure in alignment with the HHS One
Department initiative. While ACF plans to reassign functions currently
performed at the hub level to the regional offices, it does not

intend to eliminate efficiencies that have been realized from cross-
regional partnerships. In fact, ACF plans to build on the benefits of
these partnerships, including cost efficiencies, innovation, and knowledge
expansion.

Figure 1: ACF Organizational Chart

Executive Secretary Office Office of Deputy

Assistant Secretary for Administration

Office of Administration

Office of Family

on Children, Child

Assistance Youth and

Support Families

Enforcement (CSE Program)

Head Start (HS)

Office of Planning, Research and

Evaluation (OPRE)

New York a Southeast Hubs and

Northeast Regional

hub Boston

hub Offices Philadelphia

HHS interview locations ACF interview locations Other ACF locations No
hierarchical relationship

Source: GAO and ACF.

Secretary, Health and Human Services

Assistant Secretary, Administration for Children and

Families Office of Deputy

Assistant Secretary for

PCMR Policy and External Affairs

Office of Administration

Administration Office of

Office of Refugee

on for

Community Legislative Resettlement

Developmental Native

Services Affairs and Disabilities

Americans (OCS)

Budget (CSBG)

(OLAB) Office of

Office of Regional

Public Affairs Operations

(ORO) HHS/

HHS/ WestCentral SRR

Pacific SRR

Midwest Hub a Hub a

Hub Dallas a San

Atlanta Chicago Francisco a Kansas City

Denver Seattle Programs

ATO HS CSE OCS QAT HS CSE and Units Legend: a Denotes location of Hub
Director ATO: Administration and Technology Office HHS/ SRR: HHS
Secretary*s Regional Representative PCMR: President*s Committee on Mental
Retardation QAT: Quality and Assurance

Tabl e 1: Responsibilities of Key Offices and Positions for Strategic
Planning, Budgeting, and Regional/ Headquarters Operations Office
Responsibilities Headquarters

Office of Legislative Affairs  Designs and develops budget- estimating
models and procedures to project future program costs for and Budget
(OLAB) mandatory and entitlement programs in order to justify ACF program
budgets and policy.

 Provides guidance to ACF program and staff components in preparing
material in support of budget development and negotiates budget issues
with the department and OMB.

 Manages the preparation of ACF*s administrative (salaries and expense)
budget.  Requests apportionments from OMB for appropriated funds, issues
allotments to program and staff offices, and manages internal ACF funds
control.

Office of Planning, Research,  Supports ACF*s strategic planning. and
Evaluation (OPRE)  Collects, compiles, analyzes, and disseminates data.

 Provides coordination and leadership in implementing GPRA.  Provides
guidance, analysis, technical assistance, and oversight to ACF programs
and across programs on planning, performance measurement, and research and
evaluation methodologies.

Office of Regional Operations  Oversees the performance and operation of
all regional offices. (ORO)  Presents regional administrative (salaries
and expense) budgets to OLAB.

 Coordinates with program offices on regional strategies and implementing
program initiatives.  Supports Hub directors and regional administrators
in establishing and implementing crosscutting program initiatives.

Regions

Hubs  Functionally consolidate 10 regional offices to reduce duplication
and improve service delivery.  Each hub leader is a Senior Executive
Service Hub Director who is accountable for all ACF results within the
hub.

Secretary*s Regional  Liaisons between HHS agency regional offices and
headquarters. Representatives (SRR)  Represents the department in direct
official dealings with state, local, and tribal governmental officials

and offices as well as nongovernment organizations. Source: GAO based on
ACF documents.

As a subordinate unit in HHS, ACF is not an independent entity; its
processes, activities, and goals must be seen in the context of the
general strategic direction in which HHS is moving. For example, HHS*
requirement that its agencies provide performance information with agency
funding requests for fiscal year 2003 is an outgrowth of the GPRA planning
process and recent attention to the need for timely and reliable
performance

information with which to evaluate programs. In keeping with its One
Department initiative, HHS* desire to present a more standardized
performance plan for fiscal year 2004 requires its constituent agencies to

reduce their total number of performance measures by at least 5 percent

while simultaneously increasing their outcome measures by at least 5
percent. The need to respond effectively to these and other priorities and
initiatives has led to changes in ACF*s work planning processes and/ or
how performance is evaluated in the regional offices we visited.

Many factors affect the nature of ACF*s budget and planning process. For
example, much of ACF funding, including to some extent, how
*discretionary* funds may be spent, is directed by statute. For example,
because of the prescriptive nature of the funding requirements in the Head
Start authorizing legislation, nearly 20 percent of the $338.5 million
increase Head Start received in fiscal year 2002 was designated for
teacher salary increases. This limits the extent to which ACF controls how
Head Start funds are spent.

Further, over 70 percent of ACF*s budget funds mandatory programs in which
funding levels are determined by formula for disbursement or eligibility
rules regardless of program performance. However, ACF officials told us
that, as required by HHS, ACF has taken steps to connect resources and
performance by linking the incremental request to key ACF priorities and
goals. 11 While this does not explicitly lead to performance- based budget
decisions, linking funding requests to expected performance is, as we have
previously reported, 12 the first step in defining the performance
consequences of budget decisions. As discussed later in this report, it is
during budget execution, for mandatory and discretionary programs alike,
that ACF*s use of training and technical assistance (T/ TA) and travel
funds and use of staff resources currently show the strongest link between
resources and results.

Scope and To address the objectives in this report, we selected two
regional offices

Methodology (Region VI, Dallas, and Region IX, San Francisco) and three
diverse

programs (Head Start, Child Support Enforcement, and the Community
Services Block Grant) that represent ACF*s self- described best examples
of

11 Although budget officials told us that ACF*s focus on the budget is
primarily incremental, they pointed out that program officials regularly
focused on a program*s base budget. HHS officials said that reviewing the
base budget is useful in thinking about strategic direction and that GPRA
is a constant reminder of how a program*s total budget is employed. ACF
and HHS officials told us that program reauthorizations also provide an
opportunity to focus on base budgets.

12 GAO- 02- 236.

how managers used performance information to inform the resource
allocation process. We also obtained staff and management views on the
challenges to further budget and performance integration. More detailed
information on our scope and methodology, including fuller descriptions of

the programs we studied, is in appendix III. A glossary follows that
appendix.

We conducted our work from January through May 2002 in accordance with
generally accepted government auditing standards.

The Current Budget Formulation of ACF*s budget and its performance plan
are closely related

and Planning Process but they are not fully integrated. ACF*s budget and
performance plan are

based on joint budget and planning guidance issued by HHS in the spring,
and the funding request is linked to ACF*s GPRA goals. However,
formulation does not begin with evaluating past program performance to
inform the upcoming year*s budget request and performance plan. Budget and
planning become more closely aligned when the budget request and annual
performance plan are sent to the HHS budget and planning staff for

review. Finally, allocating resources based on performance is most
integrated into day- to- day management during budget execution, which is
largely decentralized to the regional offices. (OLAB and OPRE, ACF*s
budget and planning offices, respectively, play small roles in this part
of the

process.) Figure 2 depicts a timeline for a typical ACF budget and
planning cycle as well as the roles and responsibilities of the various
key players at each stage of the process.

Figure 2: ACF*s Budget and Planning Process Year 1 Budget

Spring HHS and ACF issue joint formulation

guidance on annual budget and process

planning process Program units

Program units supply information

(Budget) OLAB OPRE (Planning) supply information

Formulates the annual Formulates the annual

Regional offices

budget performance plan Regional offices

supply information supply information

Informal communication

Budget Summer

Budget and performance plan review

are sent to HHS process

HHS and ACF ensure that proposed plan and budget are in agreement.

ACF presents its budget to Secretary's Budget Council

Submission Fall/

Secretary submits budget to OMB/

Winter to OMB

passback Year 2 Congressional

Spring/ appropriations

Summer process and budget approval

Final Budget and Performance

Plan Budget

Fall execution

OLAB plays a

Budget and planning

OPRE plays a minimal role are more fully integrated

minimal role

in the regions Source: GAO analysis.

Budget Formulation and ACF*s GPRA planning process follows the budget
process and must be

Performance Planning Are completed according to the budget timeline, but
formulation does not

Closely Related but Are Not begin with a formal look- back at program
performance to help shape the

Completely Integrated upcoming year*s budget request and performance plan;
thus, the processes

are not yet completely integrated. However, ACF does link its funding
requests for program activities to GPRA goals. OLAB and OPRE work together
to review and clarify the HHS budget and planning guidance, and, as
appropriate, distribute supplemental guidance throughout ACF. Also,
officials describe frequent communication throughout the formulation
process. This is in keeping with practices we have previously reported as
those an agency can use to link performance information to the budget
process. 13

OLAB is responsible for developing headquarters* salaries and expense (S&
E) budgets with input from program offices. Meanwhile, program offices and
regions develop program budgets and regional S& E budgets, respectively,
with OLAB ensuring that these budgets align with assumptions outlined in
HHS guidance. OLAB also ensures that ACF*s budget package as a whole
supports ACF*s priorities and the department*s and OMB*s external
monitoring and reporting requirements.

OPRE oversees the preparation of ACF*s annual performance plan and
provides guidance, analysis, and T/ TA to the program units as they
develop the plan*s substance. For example, in addition to HHS* guidance*
which includes a standardized format for the performance plan and a
description of the types of information to be included in each section*
OPRE provides a template that combines an example of an ACF program
performance plan with a section- by- section explanation of HHS guidance,
as well as tips on content. Figure 3 shows an excerpt from OPRE*s
template, with shaded

areas representing OPRE*s explanations and guidance. 13 GAO- 01- 1084SP.

Figure 3: OPRE GPRA Template

Performance targets for FY 2004 should be consistent with available
resources and program implementation strategies. If trend data indicate
that the FY 2003 targets were too ambitious or too limited, consider
revising and project FY 2004 targets based on these revisions. FY 2002
targets are final and cannot be revised. Include any missing actual
performance data from FY 2000 and 2001.

Reference Actual

(page # in Performance Measures Tar ide 2004

8. 1a. Increase by 1% over the previous FY 0

year the number of volunteer hours FY 0

contributed by CSBG consumers in one FY 02: 28

FY 0 or more community groups. (expressed

FY 0

Include new

FY 01: 27. 7

data

in million of hours) FY 00: 28. 9

FY 00: 3/ 02 FY 99: 28. 6

FY 99: 27. 46 FY 98: 26. 86 FY 97: 27 FY 96: 28. 06

Source: Source: ACF ACF fiscal fiscal year year 2004 2004 planning
planning guidance. guidance.

Budget Formulation and The alignment between budget and planning increases
during the second Performance Planning Are

phase of ACF budget formulation when HHS planning staff works with ACF
More Closely Related during

to help ensure that the proposed plan and budget are consistent. As an
Departmental Review

example, senior HHS planning staff described an instance last year in
which the ACF draft performance plan showed a particular discretionary
program improving its performance by 5 percent a year, but HHS questioned
the feasibility of the performance goal since ACF did not request
additional funds for that program. ACF agreed to revisit this goal

but, because it was set collaboratively with states, did not change it. 14
HHS also requires its operating divisions to present their budgets to the
Secretary*s Budget Council (SBC). The Council is chaired by the Assistant
Secretary for Budget, Technology, and Finance, and made up of HHS
assistant secretaries and other members of HHS senior leadership. The
presentations provide an opportunity for each HHS operating division to
present its budget and discuss its proposals for addressing the
Secretary*s initiatives such as fatherhood and healthy marriages. Based on
these presentations, the Council makes recommendations on HHS* budget
package. HHS budget staff refines these recommendations and presents a
final budget package to the Secretary for his decision.

HHS also uses the SBC presentations in the push to more closely relate
budget formulation and program performance. Last year, for the first time,
HHS required its agencies to present to the Council performance
information on their programs. In this first effort, capturing the quality
of program results without overwhelming the Secretary with information
proved difficult. As a result, the presentation did not afford information
robust enough to use at the program level* the level at which the
Secretary makes decisions. In hopes of better informing the fiscal year
2004 budget process, and in

light of OMB*s decision to publish PART ratings for selected federal
programs in the 2004 budget, HHS officials told us that they required the
operating divisions to score their 31 selected programs using PART. These
scores, along with PART scores independently derived by HHS staff and, 14
In their technical comments on a draft of this report, HHS officials said
that because many

programs in ACF generally do not receive funding increases from year to
year (i. e., levelfunded), programs and grantees are encouraged to improve
both efficiencies and effectiveness as a way of improving performance.
This year, HHS officials said, ACF revised the goal to less than 5
percent* a level still believed to encourage improved performance.

where available, OMB PART scores were included in the SBC budget
presentations. When the Secretary received the SBC*s budget
recommendations, PART assessments for 31 of HHS*s approximately 300
programs were also available. Officials hoped that structuring the
information this way would make it easier for the Secretary to use.

Allocating Resources Based Budget and planning are more fully integrated
during budget execution;

on Performance Is Most that is, at the operational level in the regions
where ACF programs are

Integrated into Day- to- day generally administered on a day- to- day
basis. While the budget execution Management of ACF

process varies among hubs and regions, all regions are required to develop
and operate according to work plans that link program and agency goals
Programs

and objectives with expected performance. Regions are expected to spend
their funds in accordance with these plans which are to articulate
activities and projects to be completed that year and how projects connect
to key ACF priorities and goals. 15 Figure 4 depicts an excerpt from a hub
work plan.

15 During budget execution, OLAB ensures compliance with the department*s
system of funds control by requesting apportionments, providing allotments
and allowances, and responding to external monitoring and reporting
requirements. Also, OLAB is responsible for centrally administered budget
items such as salaries, benefits payments, and rents. In contrast,
regional offices* role during budget execution is to make resource
decisions that support planned performance consistent with program goals
and objectives.

Figure 4: Excerpt from Hub Work Plan

WEST- CENTRAL HUB FY2002 KEY PRIORITIES MATRIX

Hub Outcomes Hub Performance Hub Key Activities Tmeline

Status Overarching Objective: Helping men become responsible, committed,
involved fathers and helping

1. FATHERHOOD/ HEALTHY MARRIAGE

couples who choose marriage for themselves to develop the skills and
knowledge to form and sustain healthy marriages

OUTCOME #1 Interim

All Programs Performance

. Showcase model approaches/ programs at all appropriate Ongoing Pending

Indicator .

Ongoing Pending . arch

responsible father involvement Ongoing Pending

Source: ACF West- Central Hub fiscal year 2002 key priorities matrix.

Performance In the offices we visited, ACF employs various strategies to
help ensure

Information Influences that resource allocation is driven by program
performance, thus strengthening the link between resources and goals. At
the program level,

Program, Budget, and ACF officials told us that training and technical
assistance (T/ TA) and Staffing Decisions in

salaries and expense funds are often allocated based on program Various
Ways

performance and needs. Collaborative strategies are used at both the local
and federal levels to more effectively address common goals and strengthen
resource allocation decisions. Finally, managers and staff in

both regions told us that organizing and allocating staff resources based
on agency goals and program needs helps them feel connected to and
responsible for the results their programs achieve as well as the national
priorities towards which they are working.

Regions Allocate T/ TA and Dallas and San Francisco regional staff
prioritize and allocate T/ TA S& E Funds Based on

resources according to agency goals and program needs. For example,
Program Performance and

Dallas staff uses the Head Start Monitoring and Tracking System and the
Needs

annual Child Support Enforcement (CSE) self- assessments and financial
audits to identify grantees that have or are likely to have T/ TA needs
during the fiscal year. Based on these assessments, staff create and
follow work plans that focus their efforts on those grantees throughout
the year.

Identifying problems early and working collaboratively helps address and
correct issues promptly and constructively.

These strategies pay off even when a grantee can not be saved. Dallas
officials told us that in Head Start they believe relationships forged
with grantees are largely responsible for the ability of program managers
to convince a grantee voluntarily to relinquish its grant* a less costly
and time- consuming process than if ACF were to forcibly terminate a
grant. For example, last fiscal year ACF discovered that a Head Start
grantee overspent its prior year federal Head Start funds. ACF explained
to the

grantee that it was unable to provide the grantee with additional funding
for its Head Start program. Because the grantee could not run its program
without receiving additional funds, ACF recommended that the grantee
consider relinquishing the grant. As a result of ACF's recommendation, the
grantee voluntarily relinquished its program due to financial
mismanagement. Dallas officials estimate that the federal government can
save as much as $50, 000 in legal fees for each grant that is relinquished
versus terminated. Further, ACF officials told us, Head Start children and

families experience less disruption in service delivery when a grant is
relinquished rather than terminated.

San Francisco officials told us that they are beginning to use the new
Grant Application and Budget Review Instrument (GABI) in conjunction with
other information to compare actual grantee performance to performance
targets. GABI*s national cost data help identify applicants with unusually
high administrative costs, teacher/ classroom ratios, etc.

Collaborative Strategies and ACF was better able to achieve CSE program
goals by partnering with

Knowledge Help Achieve states to create a CSE national strategic plan
based on common goals. ACF

Program Goals and reports that states and ACF developed and agreed upon
the plan*s four

Strengthen Resource goals, related objectives, and indicators. These
goals, objectives, and

indicators are aligned with the CSE- related portion of the ACF GPRA
Allocation Decisions

performance plan. Because ACF and states define and measure the CSE
program*s achievements with the same yardstick, they now work together
towards a common purpose.

Furthermore, the GPRA performance measures are the same as those used to
determine each state*s CSE incentive payment. In theory, these payments
are intended to reward states that meet the performance measures. As a
result, states have an incentive to work towards the GPRA measures and ACF
can report on state and program performance and explicitly show

what level of program performance was achieved nationally for the level of
funding in a particular year.

Even though a large percentage of funds is driven by formula or
eligibility, strategies that leverage resources from a variety of sources
and knowledge about grantees* capacity to deliver services can lead to
more informed resource allocation decisions during budget formulation and
execution. For example, the administration planned to request funds in
fiscal year 2002 for a new program for maternity group home services. ACF
had internal discussions as to the legislative authority under which the
funds should be requested. Both the Runaway and Homeless Youth Act (RHY)
and Temporary Assistance for Needy Families (TANF) programs were mentioned
as possible candidates. Although at first TANF seemed the more natural
choice, ACF ultimately requested the program funding under RHY based on
information from regional officials about the state agencies and community
providers in their regions as well as their ability to successfully
administer these programs* information that headquarters staff may have
been too far removed from program implementation to observe. 16
Theoretically, this money will be better spent and program goals are more

likely to be achieved than if the funds were appropriated through TANF.
The Dallas and San Francisco regional offices also described several
performance- informed resource allocation decisions that occurred during
budget execution. For example, the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996 gave tribes the opportunity to run

their own CSE programs. These programs are directly related to ACF*s first
and third GPRA goals: to increase economic independence and productivity
for families (goal 1) and to increase the health and prosperity of
communities and tribes (goal 3). ACF has begun to direct resources to
activities that will prepare tribes to fully support these programs. For
example, Dallas officials told us that Dallas* record for achieving
results and its experience with CSE tribal demonstration projects and
special improvement projects were part of the reason it received
additional funds from headquarters in fiscal year 2001 to develop and
pilot a training curriculum for new federal tribal child support
specialists; the program was subsequently approved by the CSE program
office for use nationwide.

16 Although no funds were appropriated for a new program providing
maternity group home services, Congress, in fiscal year 2002, appropriated
$88 million for RHY activities and encouraged ACF to deliver services
similar to those for which it requested funds through RHY*s existing
program activities.

In fiscal year 2002, the West- Central Hub again received additional funds
to assess tribal/ state court relationships within the Hub and identify
best practices to be shared nationwide. Regional staff works towards
achieving ACF goals and moving the administration*s agenda forward by
expending T/ TA resources on assisting

state and local programs that are already providing compatible services.
For example, in Texas, Dallas staff helped the state incorporate the
administration*s *Good Start, Grow Smart* early literacy initiative into
the

training curriculum for the CIRCLE 17 initiative, an existing early
literacy training program for Texas Head Start teachers. Similarly, San
Francisco staff worked with Arizona state officials to tap into existing
programs in Arizona aimed at increasing young fathers* financial
responsibility for their

children and use these programs as a vehicle to support the
administration*s initiatives to promote responsible fatherhood and healthy
marriages. Arizona has implemented a program that helps couples learn
relationship, communication, and listening skills to promote healthy
marriages.

Through participation in and representation on interagency councils, ACF
seeks to use its resources more efficiently to achieve its goals that cut
across HHS and other federal departments. For example, the San Francisco
region participates in the Region IX Federal Regional Council (FRC), an
interagency body that seeks to foster efficiency and effectiveness through
intergovernmental and public/ private partnerships to achieve
administration goals and priorities. After determining that several of its
federal agency members were planning community events to address the
administration*s faith- based initiative, FRC established a working group
to share information and coordinate activities, and ACF engaged with other
FRC members to organize a youth seminar on the topic. ACF also
participated in FRC task forces to address economic

development, social, health, and environmental issues in North Richmond
and East Palo Alto, two low- income communities in the San Francisco
region. These efforts have resulted in community improvements such as
expanded Head Start services, employment of TANF recipients, and holiday
toy and book drives for needy children. Region 9 officials also 17
Launched in 1999, the Center for Improving the Readiness of Children for
Learning and

Education (CIRCLE) is a partnership program between the University of
Texas and the Texas Education Agency to emphasize early literacy and get
kids ready for kindergarten.

participated in community meetings in both areas and provided information
on ACF funding opportunities, programs, and services in North Richmond. In
addition, San Francisco is involved in an FRC initiative focused on
employment and economic development strategies in the San Joaquin Valley
in support of the administration*s effort to move the welfare reform
agenda forward. Similarly, the HHS Regional Managers* Council helps HHS
agencies and components in Region IX work together to achieve crosscutting
goals. For example, the Centers for Medicare and Medicaid Services, ACF,
and the Health Resources and Services Administration

joined forces to address State Children*s Health Insurance Program (SCHIP)
and Medicaid issues to increase enrollment among underserved minority
children. ACF*s Office of Community Services (OCS) and its Regional
Liaison initiative further illustrate the value of collaboration in
achieving outcomes and goals. To promote the Community Services network*
agencies that create, coordinate, and deliver programs and services to
low- income Americans* as an asset to other regional activities and to
address crosscutting needs at the local level, ACF*s OCS and Dallas
piloted an OCS Regional Liaison in 1997. Based on the success of the
pilot, OCS liaisons were designated in each region in 1998. As an example
of the central role played by the liaisons, the lead liaison in Dallas was
instrumental in

developing a Head Start Early Alert System that was eventually implemented
nationwide. 18 OCS also seeks to broker support for community concerns and
goals and to leverage network resources to help fulfill the
administration*s initiative on community partnerships. For example, OCS
has partnered with the Health Resources and Services Administration to
improve services to low- income people by bringing together community
health centers and CAAs to address health concerns at the community level.
To address awareness and access concerning public benefits for the aging
and disabled community, OCS has

partnered with the National Council on Aging and the faith- based
community on education and outreach efforts.

18 Because 40 percent of Head Start programs nationwide are administered
by Community Action Agencies (CAA), Dallas focused its early alert system
on CAA/ Head Start programs as a way both to help Head Start grantees
avoid losing their grants and to assist individual CAAs when usual T/ TA
channels have not worked. Strengthening CAAs reportedly has had spillover
benefits to other programs and services because of the number and breadth
of federal programs CAAs often administer.

OCS, in partnership with the Community Services network, created *Results
Oriented Management and Accountability* (ROMA). OCS describes ROMA as a
goal- oriented framework that binds and holds accountable a local network
of community action agencies in a

standardized way while allowing them the flexibility to develop their own
processes and outcomes consistent with local preferences and state
objectives. ROMA is based on the six national performance goals related to
the Community Services Block Grant (CSBG) program and balances family-,
community-, and agency- level program outcomes. Although participation in
ROMA itself is voluntary, the CSBG statute requires all states to
participate in a performance measurement system by fiscal year 2001*
either ROMA or another one. OCS is trying to achieve full ROMA

implementation in time for the fiscal year 2003 CSBG program
reauthorization.

Organizing and Allocating Creating a flexible workforce that can work
across program boundaries

Staff Resources Based on allows staff to work together to achieve outcomes
and focus on total

Program Goals and Needs performance throughout a state rather that on
individual program

Help Connect Staff to outcomes. Most of the ACF/ San Francisco office is
organized into *state teams* in which staff are responsible for multiple
programs within a subset

Desired Outcomes of states in the region rather than being responsible for
a single program

across the region. Officials told us that this organization allows them to
shift duties as necessary when agency priorities shift. For example, an
employee on the Arizona/ Nevada team was able to shift from working with
Nevada on child support issues to working with Arizona on the Child and
Family Services Review, a labor- intensive effort, where more staff were
needed. In other instances, staff were able to focus on ACF*s crosscutting
priorities (e. g., strengthening marriage), which support the purposes of
various programs, rather than on each individual program to meet the

administration's vision for ACF. On the California team, staff primarily
responsible for the TANF and Child Care programs actively work together
and support each other as needed.

Dallas created *21st Century Specialists,* employees with
multidisciplinary, broadly defined position descriptions that allow them
to carry out a variety of functions within and across programs because
their position descriptions set general performance standards not tied to
specific functions or programs. Dallas officials reported that, given the
opportunity to explore and implement new ways to achieve goals, staff have
begun to identify crosscutting opportunities and form natural partnerships
among programs in order to achieve desired outcomes.

Linking Resources to While ACF has progressed in better aligning its
resources with program

Results Is an Evolving goals and desired results, almost all managers and
staff we spoke with

recognized that strengthening the link between resources and results is a
Process

work in progress, and that many challenges still need to be addressed
before ACF can more fully integrate budget and planning. ACF has
identified several significant barriers to further linking resources and
results, including the effects third- party providers have on its ability
to either influence program outcomes or to collect and report program
performance information; difficulties in determining a particular
program*s effectiveness; and the organizational culture change required to
support more results- oriented operations. ACF has begun to identify and
implement mitigation strategies to address these issues.

Third- Party Issues Limit ACF conducts much of its work through *third
parties** states, localities,

ACF*s Ability to Work and other non- federal service providers* which
often limits the extent to

towards National which ACF directly influences program outcomes. This is
especially true

Performance Goals and to since many ACF programs by law provide grantees
flexibility in how

federal funds may be spent. Although program activities must meet the
Collect, Verify, and Report

general federal purposes of the program, ACF*s grantees are able to make
Performance Information funding choices that may not support the
achievement of specific national performance goals or performance targets.

Third- party issues can also affect ACF*s ability to report on program
results promptly and consistently. For a number of major programs, ACF
relies on state administrative data systems for performance information.
In many

cases, final reports are due 90 to 120 days or more after the federal
fiscal year ends, creating a delay in available data. Moreover, many
programs contain voluntary requirements that give grantees great
flexibility in reporting. As previously discussed, ACF has successfully
used collaborative strategies to get providers to buy into and work
towards national priorities.

ACF has worked to help its service providers develop an understanding of
ACF*s GPRA responsibilities and the importance of consistent, prompt, and
accurate performance data collection and reporting. ACF used ROMA to
respond to the administration*s emphasis on results- based, client-
focused accountability and enjoyed a 75 percent implementation rate by
fiscal year

1999 even though participation in a performance measurement system was not
required until fiscal year 2001. When data collection issues arose as one
of the most significant barriers to full ROMA implementation, OCS pledged

to use a significant portion of its technical assistance resources and
administrative support activities to implement ROMA across the network,
including helping grantees increase their capacity for data collection and
reporting.

ACF is also working with the HHS Data Council to assess unmet data needs
for major programs, and, using the collaborative methods described in this
report, is progressing in getting grantees to agree to consistent data
definitions and reporting requirements for some programs. Difficulty
Isolating a

Since ACF is part of a network of federal, state, local, and Particular
Program*s Effect

nongovernmental efforts aimed at improving long- term social health and on
Outcomes Affects ACF*s social outcomes, attributing a particular outcome
to any particular effort

Ability to Determine can be a great challenge. Further, because outcomes
may not be known for

many years, annually measuring the results of these collective investments
Program Effectiveness

much less any one part is often difficult and may not be particularly
useful. To help mitigate these problems, ACF uses information from program
evaluations and has also begun to identify intermediate outcomes and
monitor progress towards them. For example, Head Start is currently
undergoing a 6- year study intended to establish evidence of a link
between

outputs and outcomes for the Head Start program. The study will compare
outcomes for Head Start children to non- Head Start children while
controlling for socioeconomic factors, parenting practices, and
demographics. It will then determine conditions that positively or
negatively affected the outcomes. ACF and regional staff have also offered
training to their employees to help them better understand and articulate

the link between program outputs and outcomes, and to develop intermediate
performance outcomes and targets necessary to show progress towards
longer- term goals. Organizational Culture

ACF and HHS officials repeatedly told us that the culture change necessary
Change Seen as Needed to

to support and strengthen the linkages between resources and results takes
Strengthen Performance

time but is beginning to take root. Some managers and staff reported a and
Budget Integration Is a

noticeable difference over time in employees* understanding of and ability
to define measurable outcomes linked to agency goals and initiatives as
Slow Process

well as a desire to hold employees accountable for achieving results. For
example, goal- oriented, project- based work plans have become the
standard in the regions we visited. Also, performance contracts for both

managers and staff are now or soon will be tied to agency goals and
initiatives, and are viewed as increasingly focused on outcomes.

Managers and staff also report a clearer understanding of the difference
between outputs and outcomes, and the use of outcome measures is becoming
more common. For example, after providing the training described above on
program outputs and outcomes, San Francisco managers reported noticeable
improvement in the use and nature of outcomes described in unit workplans.
In Dallas, employees are beginning

to create their own performance goals* stepping stones to longer- term
goals* for which they are held accountable each year. Regional managers
told us that they have also begun to help program staff break down 5- year
program outcomes into 1- year targets geared towards elements states and
grantees can accomplish within the reporting time frame.

Agency Comments We requested comments on a draft of this report from The
Policy Exchange/ Institute for Educational Leadership and the Department
of

Health and Human Services. The Policy Exchange agreed with the substance
of the report and we incorporated its technical comments as appropriate.
It also made suggestions for future GAO work in this area. HHS generally
agreed with the substance of the report and submitted technical comments
that were incorporated as appropriate. HHS disagreed with our use of the
term *budget execution* to describe their regional offices* role in
resource allocation decisions, which they characterize as *program
implementation.* We view budget execution as a management

function that is broader than those activities traditionally performed by
a central budget office. A glossary of terms can be found at the end of
this report.

In addition, we provided drafts of the Dallas and San Francisco regional
office appendixes to the appropriate regional officials for technical
review and have incorporated their comments where appropriate.

As agreed with your office, we are sending copies of this report to the
Secretary of Health and Human Services, appropriate Congressional
committees, and other interested parties. We will make copies available to

others upon request. In addition, the report will be available at no
charge on the GAO website at http:// www. gao. gov.

Please contact me on (202) 512- 9573 or Denise Fantone, Assistant
Director, on (202) 512- 4997 if you or your staff have any questions about
this report. Major contributors to this report were Amy Friedlander,
Jackie Nowicki, Keith Slade, and James T. Whitcomb.

Sincerely yours, Paul L. Posner Managing Director, Strategic Issues
Federal Budget Analysis

Appendi xes Efforts to Strengthen the Link between Resources and Results
in the ACF WestCentral

Appendi x I

Hub, Dallas Regional Office Background The Administration for Children and
Families* (ACF) West- Central Hub is responsible for carrying out ACF
programs and initiatives in the 11- state Hub area. 19 When the Hub was
created in 1996, the Hub Director created program teams in its two
regional offices* Dallas and Denver* and assigned lead program
responsibilities to each region based on its

strengths. Thus, Dallas has the lead for the Developmental Disabilities,
Runaway and Homeless Youth, Technology, and Early Head Start programs.
Denver has the lead for Child Welfare, Child Care, and Head Start

programs. Also, cross- Hub teams, using staff from both regions,
coordinate crosscutting issues and provide a unified approach to meeting
the needs of states and other grantees in the Hub. Figure 5 shows how the
West- Central Hub is organized. The Regional Hub Director is located in
Dallas and is responsible for providing leadership and

guidance to all partners (for example, grantees, state, and local
governments) in the Hub. Dallas (Region VI) serves Arkansas, Louisiana,
New Mexico, Oklahoma, and Texas. Denver (Region VIII) serves Colorado,
Montana, North Dakota, South Dakota, Utah, and Wyoming. Dallas* Office of
Administration and Technology (ATO) *owns* the strategic

planning process. ATO provides guidance to program staff with regard to
approaching key activities and projects, measuring and monitoring
performance, and achieving outcomes highlighted in the work plan. ATO also
holds training and workshops throughout the year to help program units and
staff understand regional goals and strategies. Two program offices in
each region support and administer ACF grantees and programs in the Hub.
19 The 11 states in the ACF West- Central Hub include: Arkansas, Colorado,
Louisiana, Montana, New Mexico, North Dakota, Oklahoma, South Dakota,
Texas, Utah, and Wyoming.

Figure 5: West- Central Hub Organization Chart Dallas Office

Denver Office Associate Regional Hub Director

Community Administrative

Deputy Regional for Administration

Services Support

Administrator for and Technology

Office of Early Childhood Programs

Information Technology Strategic Management

Head Start Human Resources

Early Head Start Budget and Procurement

Child Care Facilities and Administration

West- Central Director for Office of

Regional Hub Community Programs

Director Denver

Regional

Head Start

Deputy Administrator

Early Head Start

Regional

Youth Programs

Hub Director

Deputy Regional Administrator for Office of State and Director for Office
of

Tribal Programs State and Tribal Programs

Dallas Denver

Child Support Child Care

Financial Financial

Child Welfare Child Support

Management Management

TANF Child Welfare

Resource Resource

TANF Team

Team Developmental Disabilities

West- Central Hub Teams

Hub Teams are comprised of staff members from across the Hub in various
programs to contribute to a unified Hub approach to meeting the needs of
ACF Partners.

Child Support Tribal

Financial Technology

Head Start and Enforcement

Team Management

Team Early Head Start

Team Team

Team Source: ACF West- Central Hub.

Budgeting and Strategic planning in Dallas is a dynamic process that is
sensitive to

Planning in Dallas Is an changing circumstances in the region and
headquarters. The Hub work plan is developed via a strategic planning
process dependent on top- down

Integrated, Interactive guidance from senior leadership and bottom- up
input from staff. Aligning

Process Focused regional staffing responsibilities with the goals in the
work plan has

on Results encouraged innovation among staff and clearer linkages between
resources

and results. The regional work plan and Dallas* project management systems
reinforce these linkages. Strategic Planning

Strategic planning in Dallas is an integrated and evolving process. When
Incorporates Top- Down

planning and implementing projects that support the work plan, Dallas
Guidance and Bottom- Up

leadership and staff continually reevaluate evolving priorities and Input

circumstances affecting their work. As new needs, priorities, or project
ideas surface during the year, key activities and associated resources are
adjusted as necessary. ATO ensures that it is an inclusive process
resulting in a work plan tied to ACF goals and priorities, built from the
bottom up, and reflective of senior leadership*s guidance. The strategic
planning process reflects program staff perspectives on the needs of
grantees and the communities they serve as well as benefits from their
first- hand

knowledge of strategies that have been successful. ATO encourages
collaboration in developing the work plan by sponsoring work sessions and
staff meetings throughout the year. Managers told us that working on
activities and projects that contribute to national goals has become

important to staff over time. An inclusive strategic planning process
appears to help maintain a focus on outcomes by making the resulting
dayto- day activities meaningful for staff.

To assist staff with strategic planning, ATO developed Managing for
Results: A Guide for Strategic Management Within the West- Central Hub.

The guide focuses on the critical elements of successful strategic
planning, successful implementation of the strategic plan, and monitoring,
evaluation, and review of the strategic plan. Figure 6 shows the key
elements of Dallas* strategic planning process.

Figure 6: Key Components of Dallas* Strategic Planning Process

Strategic planning

Evaluation and reporting

Resource planning: dollars, employees,

Key

capital, information

components

technology Performance monitoring and data collection

Development and implementation

In practice, the cycle may not be sequential. This graphic shows the
interrelationship between key components. Planning and budgeting are
interactive. Source: ACF West- Central Hub.

Dallas Has Encouraged Rethinking staffing in two key ways has encouraged
employee innovation

Staffing Innovation and and strengthened the Hub*s focus on results,
according to managers. New

Accountability *21st Century Employee* positions have multidisciplinary,
broadly defined

position descriptions that allow staff to carry out a variety of functions
within and across programs. These new positions have provided staff with
the opportunity to take a crosscutting view among programs and identify
opportunities to form natural partnerships in order to achieve outcomes.
Also, linking employees* day- to- day activities to goals and priorities
through such instruments as outcome- based employee performance

contracts has brought encouraging results to the region. For example,
managers report that employees have a stronger sense of contribution and
responsibility towards achieving program goals. Focusing on outcomes
rather than process and outputs creates an opportunity for individuals to
exercise their creativity and run with new project ideas, and helps to
hold staff accountable for results in the region.

To help staff develop performance contracts clearly aligned with
organizational goals, Dallas* Employee Communication and Performance
Management Team created a resource guide that provides results- based
tools and techniques for developing performance contracts that align with

organizational goals. 20 Employee performance plans tie into the Regional
Hub Administrator*s performance contract, which in turn is tied to the
work plan. The guide helps employees distinguish between activities* the
actions used to produce results* and accomplishments, which are the value-
added results produced by the activities. The guide also illustrates how
to measure and monitor performance and accomplishments included in
performance contracts.

Regional Work Plans and Work plans and project management systems
reinforce the link between

Project Management resources (inputs) needed to complete projects
(activities) aimed at

Systems Reinforce the Link achieving goals (outcomes). Annually, program
offices create program

between Inputs, Activities, plans on which the regional work plan is
based. Built in a matrix format,

the work plan reinforces the linkage between regional goals and
objectives, and Outcomes

including GPRA goals, with outcome measures, performance indicators, and
the key activities necessary to achieve regional goals and objectives.
Also, the key activities are linked to timelines and status indicators
noting, for example, when an activity has been completed. Key activities
in the program plans crosswalk to the work plan, which tends to contain
more

broadly defined regional- level activities. Program units request funding
for projects that contribute to the activities in the regional work plan
and program plans, thus completing resources- results linkage. Projects
and their associated funding are tracked in Dallas* project management
system, the Results- Based Information Tracking System (RBITS). RBITS
tracks how project funds are spent and also shows the connection between
the project, regional goals, ACF goals, and HHS goals.

RBITS is a real- time project management system to help staff better link
resources with results throughout the year. RBITS tracks budgeted vs.
actual spending, including remaining funds on a project basis. These data
are used to *find* leftover funds that can be shifted from completed
projects to new projects or priorities. Also, RBITS historical spending
data

can provide baseline information for projecting future project cost
estimates. For example, the cost of a 6- month technical assistance
project

20 Results- based tools and techniques include, for example, tree
diagrams, which can be used to break broad goals into the detailed actions
needed to achieve them.

in Austin can be reasonably estimated with RBITS historical data. RBITS
projects are coded in various ways (for example, by HHS goal, ACF goal,
key priorities, staff person, date) allowing ATO to generate various
reports from the database; RBITS reports are accessible to everyone
working in the region.

Figure 7 shows portions of the fiscal year 2002 West- Central Hub regional
work plan (also called the key priorities matrix) and Dallas Office of
Child Support Enforcement (OCSE) fiscal year 2002 program plan for the
fatherhood and healthy marriage initiatives. The shaded *key task* in the
program plan crosswalks to the shaded *key activity* in the regional work
plan. The shaded area of the RBITS report in figure 8 on the adjacent page
illustrates examples of projects that support the key tasks and activities
described above, and shows how the Dallas Regional Office tracks spending
associated with these activities.

Figure 7: Excerpts from the West- Central Hub Regional Work Plan and
Dallas OCSE Program Plan

WEST- CENTRAL HUB FY2002 KEY PRIORITIES MATRIX

Hub Outcomes Hub Performance Hub Key Activities Tmeline

Status 1. FATHERHOOD/ HEALTHY MARRIAGE

Overarching Objective: Helping men become responsible, committed, involved
fathers and helping couples who choose marriage for themselves to develop
the skills and knowledge to form and sustain

OUTCOME #1 Interim Performance

.

Ongoing Ongoing Indicator .

Ongoing Pending . rch

responsible Ongoing Pending

*

Child Support Enforcemen

report provides examples of projects that

FY 2002 Strategic Plan

support the key tasks and activities.

West Central Hub/ Dallas

II. Promote Fatherhood and Healthy Marriages

Project Approach: Provide effective collaboration between OCSE and other
ACF Programs and faith- based/ community- based programs and ACF Minority
Communities to promote the fatherhood and marriage initiative in the West
Central Hub. Partner with at least two States to submit 1115 demonstration
projects promoting fatherhood and healthy marriage at the community level
through collaboration with community and faith- based organizations. Key
Tasks:

. Encourage marriage and stable family formation in OCSE programs

. Attend and participate in workshops/ panels at National, State, and
local conferences

. Convene State staff and interested parties to discuss fatherhood and
marriage strategy development and implementation

Source: Source: ACF ACF West West- Central Central Hub. Hub. Legend: CSE:
Child Support Enforcement

RBITS: Results- Based Information Tracking System

Figure 8: Results- Based Information Tracking System Report

WEST- CENTRAL HUB - Project Code: CS- 2 FY2002 Location: Hub Project Name:
Promote Fatherhood and Healthy Marriages Project Duration: 10/ 1/ 01 to 9/
30/ 02

Linkage: Priority: Fatherhood HHS Goal: 2 HHS Objective: 2. 2 ACF
Objective: 3 Project Lead: Lead Location: Dallas Leadership Sponsor:
Project Scope: Provide effective collaboration between OCSE and other ACF
Progra

Co fai Project Deliverable: Project Outcome: (1) Increase participation of
faith- based organizations in marriage and fatherhood initiatives in West-
Central Hub States

Implement at least two large urban community projects to promote/
implement healthy marriage and strengthened fatherhood strategies through
the 1115 demonstration process (3) Increase incidences of marriage between
parents following paternity establishment in the child support enforcement
program in at

least two states (4) Increase unemployed/ underemployed fathers paying
child support through child support enforcement programs in at least two
states

TASK / ACTIVITY ASSIGNED TO RESOURCE EST. COST START END REMARKS STATUS
Third Annual Southwestern Fatherhood T TRAINING $350.00 1/ 30/ 02 2/ 1/ 02
PENDING Conference 2002

Travel Agency Transaction Fee t FEES $4.49 1/ 30/ 02 2/ 1/ 02 PENDING To
attend the Third Annual Southwestern t TRAVEL $761.90 1/ 30/ 02 2/ 1/ 02
PENDING Fatherhood Conference 2002

PROJECT*S ESTIMATED COST TOTAL = $5, 481.31 Thursday, August 01, 2002
"Projects and Tasks Report" Page 2 of 2

Source: Source: ACF ACF West- West- Central Central Hub. Hub

Efforts to Strengthen the Link Between Resources and Results in the ACF
Pacific Hub,

Appendi x II

San Francisco Regional Office Background The Pacific Hub office, located
in San Francisco, comprises the Administration for Children and Families*
(ACF) Region 9 (San Francisco) and Region 10 (Seattle). The Hub Director
oversees overall Hub operations and is directly responsible for overseeing
the Region 9 office. The Hub Director has no line authority over the
Regional Administrator who runs the Seattle office. 21 Thus, the Hub
Director relies on cooperation with the other regional offices to effect
change in Region 10.

Region 9 is organized into three units: a Program Support Unit (PSU), a
Self- Sufficiency Unit (SSU), and a Children and Youth Development Unit
(CYDU). The Quality Assurance Team (QAT) in PSU coordinates the

development of work plans, provides program technical support, and gives
technical assistance to states on sampling plans and data validation. SSU
and CYDU provide program and financial management services, technical
administration, and technical assistance to states and grantees in the
administration of the ACF grant programs for which states and grantees are
responsible. 22 Figure 9 shows the Region 9 organizational structure. 21
Region 9 serves the states and federally recognized tribes of Arizona,
California, Hawaii,

and Nevada; the territories of Guam and American Samoa; and the Federated
States of Micronesia, the Marshall Islands, the Commonwealth of the
Northern Mariana Islands, and the Republic of Palau. Region 10 serves the
states and federally recognized tribes of Alaska,

Idaho, Oregon, and Washington. 22 SSU is responsible for TANF, CSE, the
Child Care and Development Fund, Foster Care and Adoption Assistance,
Child Welfare, Child Abuse and Neglect, and Developmental

Disabilities. CYDU is responsible for programs such as Head Start and
Runaway and Homeless Youth.

Figure 9: San Francisco Regional Office Structure

Hub Director Director CYDU

Director SSU Manager - RHY &

Manager - PAC Team Deputy RA

AZ/ NV/ PAC HS Team Lead for CC, CW & Ex. Sys.

Director PSU Associate Director

Associate Director Associate Director

Manager - CA HS Team Manager - AZ/ NV Team

Manager - CA Team Grants Officer

Lead for TANF & DD Lead for CS

Customer Service Team Associate Director

Admin. Quality Assurance Team

Public Inquiries/ Public Relations IT, Work Planning, Statistician

OCS Liaison/ Training/ Reports Source: ACF Region 9. Legend: AZ: Arizona
CA: California CC: Child Care CS: Child Support CW: Child Welfare CYDU:
Children and Youth Development Unit DD: Developmental Disabilities Ex.
Sys: External Systems HS: Head Start NV: Nevada OCS: Office of Community
Services PAC: Pacific Team PSU: Program Support Unit RA: Regional
Administrator RHY: Runaway and Homeless Youth TANF: Temporary Assistance
for Needy Families

Strategic Planning at Officials told us that the goal of strategic
planning in the region is to create

Region 9 Seeks to processes that link resources to results while engaging,
informing, and

educating staff as to the value of focusing on program outcomes. To this
Engage, Inform, and

end, they have embarked on several efforts: (1) organizing staff into
state Educate Staff

teams to allow a more integrated approach to service delivery, (2)
developing regional work plans that link activities to priorities and
goals and focus on outcomes, and (3) issuing accomplishment reports linked
to the regional work plan. They said that, as a result, Region 9 is poised
to use strategic planning as a management tool to improve results and
allocate resources.

State Teams Provide a Region 9 officials told us that they have
reorganized to create state teams*

Flexible, Crosscutting rather than program- focused teams* to allow better
integration, more

Approach to Service efficient use of resources, and better customer
service. They said that these

Delivery teams allow them to be more flexible and to more easily recognize
and take

advantage of the natural program linkages. In turn, staff can help
grantees take advantage of these linkages in their own programs. For
example, Region 9 staff helped Arizona use Head Start programs as vehicles
to

strengthen the role of young fathers in their children*s lives* something
that would be traditionally viewed as a Child Support Enforcement (CSE)
program goal. State- based teams allow Region 9 to shift its focus when
agency priorities shift and focus on ACF priorities (e. g., strengthening
marriage) rather than specific programs to meet the administration's
vision for ACF. The reorganization also helped the office to continue
providing service despite increases in workload and reductions in staffing
levels at the regional office* from more than 100 in the early 1990s to
approximately 65. Lastly, managers report that their staff are now able to
provide a single point of contact for grantees in a state, which is
particularly important for Indian tribes.

The Work Planning Process Over time, Region 9 officials told us that they
have tried to guide the work

Strives to Link Activities to planning process and the work plans
themselves to link more closely to the

Goals and Strengthen the Government Performance and Results Act (GPRA),
involve staff at all

Focus on Outcomes levels, and focus more directly on outcomes. Officials
said that the early work plans (pre- fiscal year 1998) were simply a list
of strategies to be

achieved, organized by major ACF priorities. Recently, these work plans
have become a way of showing how the region plans to allocate resources to
specific activities to achieve GPRA goals and the Secretary*s crosscutting
initiatives. The Hub more recently has also adopted this

approach. The plans have also begun to include expected outcomes by which
the Hub and region can measure the extent to which they have achieved
their stated goals. Table 2 describes some key elements of the work
planning process and work plans in fiscal years 1998 to 2002. Table 2: Key
Elements in Work Planning, Fiscal Years 1998- 2002

FY 1998 FY 1999 FY 2000 FY 2001 FY 2002 Plans linked to ACF priorities
Plans linked to GPRA goals/ crosscutting priorities

Regional plan compiled Teams developed ACF priorities explicitly

Plans reflect regional Crosscutting priorities by QAT * no program

regional work plans linked to ACF GPRA

office and headquarters strengthen efforts to staff involvement.

based on QAT template. goals in regional work key activities.

utilize Hub resources, not plan.

just regional resources. Focus on outcomes Staff gains increased Plans and
reports are Cost/ funding sources begins to emerge. awareness of GPRA.
streamlined. Hub plan created to

Focus on outcomes is address crosscutting further strengthened.
priorities.

Source: GAO analysis.

A senior planning official described the following progression of San
Francisco*s work plans and work planning process. Prior to fiscal year
1998, work planning in Region 9 consisted of individual, activity- based
unit work plans. In fiscal year 1998, in an attempt to reduce the workload
of program staff, they were not required to participate in creating work
plans. Instead, QAT compiled a regional work plan and linked the
activities to the seven key priorities ACF had at the time. The region
found that, in addition to less accurately reflecting the region*s work,
the centralized process weakened the staff*s connection between their work
and program goals.

Beginning in fiscal year 1999, work planning was turned back to the
program units, but QAT provided a work plan template to help the units
create more uniform plans focused more on outcomes rather than outputs.
Managers said this cultural shift was one of the most important changes in
the region. To help people understand and articulate the difference

between program outputs and outcomes, QAT provided voluntary training
sessions. Senior leadership views the staff*s ability to understand and
articulate the difference between the two as a major breakthrough* one
that was key to helping staff understand how their performance affects
program performance and results, and an important step in holding people
accountable for results.

In fiscal year 2000, in keeping with the way headquarters program units
and senior leadership plan and report, ACF required the regions to
crosswalk their activities to ACF*s four GPRA goals. San Francisco was
able to accomplish this because the seven key priorities* to which Region
9*s work plan was connected* clearly linked to the goals. Regional
managers told us that this helped staff make the connection between their
work and ACF*s larger GPRA goals in a way they had not been able to
before. Also, on its own initiative, the Pacific Hub created a work plan
(in addition to the regional work plan) to address crosscutting
initiatives and to better

leverage Hub resources. The region continued to strengthen its work plan
in fiscal year 2001 by further developing an emphasis on outcomes, and by
streamlining its work plans and reports. We observed that the fiscal year
2001 work plan also indicated, for each outcome, key activities to be
completed by the region

and by headquarters. Managers told us that they began to see staff change
the way they thought about their work* the planning process was becoming
more than just a process.

Fiscal year 2002 was a transition year: ACF's new leadership created nine
crosscutting priorities to which the work plans were to be linked. Region
9 included activities related to these priorities in its work planning.
Managers view the crosscutting nature of the new priorities as another
step forward in their previous efforts to design activities that use Hub
resources rather than regional resources. For each activity, the 2002 Hub
plan also began to flesh out costs, funding sources, and timelines for
completion.

Accomplishment Reports Region 9 officials told us that accomplishment
reports link to work plans

Link to Work Plans and Help and further involve staff in the strategic
planning process, reminding staff

Reinforce Outcomes of how their work relates to program outcomes and
achieving agency goals. They said that initially the process included
mostly upper

management with varying involvement or participation from staff, but that
staff has increasingly participated in reporting. For example, in past
years, the Hub Director sent "accomplishment reports" to headquarters that
summarized information on the achievements of the regional office. In
fiscal year 2000, the regional work plan was amended to include a section
for accomplishments specifically linked to strategic resources in the work
plan, and staff responsible for the achievement kept the plan up- to-
date.

Similar to the work plans, Region 9*s accomplishment reports are organized
by initiatives and goals, and have become less process- oriented and more

outcome- oriented over time. For example, the fiscal year 1998
accomplishment report to headquarters, the region's first, reports on the
activities performed, not the outcomes achieved by staff. The fiscal year
1999 accomplishment report began to focus on outcomes by using measures to
quantify objectives. In fiscal year 2000, headquarters required that
senior staff tie accomplishment reports to their own performance. Region 9
officials said that although accomplishment reports were not

required for fiscal years 2001 and 2002, Region 9 provided them anyway and
the Hub Director used that information to support her own fiscal year 2001
performance report; she is expected to do the same for fiscal year 2002.

Region 9 Is Poised to Use Its After 5 years of strategic planning efforts,
Region 9 has progressed in

Work Plan to Manage More institutionalizing the link between day- to- day
activities and program

Effectively outcomes. Under strong senior leadership, the region has begun
to take the

next step* using its work plan to manage more effectively. The Pacific Hub
participated in OPRE training in April 2002 to learn how to use the annual
GPRA plan as a performance management tool. Specifically, the training

was meant to help staff use the performance plan to more effectively
target training and technical assistance resources, provide a framework
for aligning the administration's key priorities with its mission and
goals, and provide opportunities for cross- program collaboration. To this
end, OPRE focused on models for linking inputs, activities, outputs, and
outcomes as a tool for the regions to develop their work plans. The
planned agenda for an upcoming video conference includes developing models
on how to achieve

the results in their work plans.

Appendi x III

Objectives, Scope, and Methodology To address the objectives in this
report, we asked the Administration for Children and Families (ACF) to
identify several regional offices and programs that they felt best
represented how managers used performance information to inform the
resource allocation process. Using their suggestions as a guide, we then
selected for inclusion in our study two regional offices (Region VI,
Dallas, and Region IX, San Francisco) and three

diverse programs (Head Start, Child Support Enforcement, and the Community
Services Block Grant).

Head Start, 23 begun in 1965, is a $6.5 billion discretionary, federally
administered categorical grant program the primary goal of which is to
promote the school- readiness of children in low- income families. ACF
administers the Head Start program through the Head Start Bureau and ACF*s
regional offices nationwide. ACF awards grants directly to local agencies,
which provide a wide range of program services* educational, medical,
dental, nutrition, mental health, and social services* to lowincome
preschool children and their families. The approximately 1,400 service
providers include public and private school systems, community action
agencies and other private nonprofit organizations, local government
agencies, and Indian tribes. The program supports ACF Goal 2: to improve
healthy development, safety, and well- being of children and youth.

The Child Support Enforcement (CSE) program was established in 1975 under
Title IV- D of the Social Security Act. It is a mandatory federal program
administered or managed by states, whose mission is to ensure

that children are financially supported by both their parents. State and
local governments work towards establishing paternity and support orders,
locating parents, and enforcing support orders. The Office of Child
Support

Enforcement (OCSE) is responsible for overseeing the program, which
includes providing support to states. The CSE program received almost $4
billion in funding for fiscal year 2002. Collections reached $18.9 billion
in fiscal year 2001, but OCSE reported that about $89 billion in child
support was legally owed but unpaid at the end of fiscal year 2000. The
federal government and the states share both the administrative costs of
operating the program and any recovered costs and fees at the rate of 66
percent federal and 34 percent state. The $4 billion in CSE funding
includes a $450 million incentives program. The Child Support Performance
and Incentive

23 Head Start is authorized by Title VI, Subtitle A, Chapter 8, Subchapter
B of the Omnibus Budget Reconciliation Act of 1981 (P. L. 97- 35).

Act of 1998 changed the basis for awarding incentives from cost-
efficiency to rewarding achievement of five performance- based outcome
measures. In fiscal year 2000, one- third of the incentive payments
awarded to those states that met the performance standards were based on
the new formula

and the remaining two- thirds were based on the old formula. The phase- in
will be completed by fiscal year 2002. CSE supports ACF Goal 1: to
increase economic independence and productivity for families.

The Office of Community Services (OCS) provides support and assistance to
states and grantees that provide a range of human and economic development
services and activities at the state and local levels. Working through
community action agencies (CAAs) and community development

corporations, OCS programs seek to reduce poverty, revitalize low- income
communities, and empower low- income individuals and families to become
self- sufficient. The $650 million Community Services Block Grant is the
primary community service program through which grantees receive OCS
funds. 24 To help focus on results, OCS relies on Results Oriented
Management and Accountability (ROMA), a goal- oriented framework that
binds and holds accountable CAAs in a standardized way while allowing them
the flexibility to develop their own processes and outcomes consistent
with local preferences and state objectives.

We reviewed budget and planning documents for the programs and regions in
our study, including strategic plans, annual performance plans,
performance reports, budgets, and work plans. We also reviewed a variety

of reports for general background information on (1) recent administration
initiatives, (2) GPRA implemention, (3) recent public administration
literature, and (4) GAO reports on prior case studies and general
management reviews. We also obtained staff and management views on the
challenges to further budget and performance integration. We conducted
structured interviews

with agency budget, program, and planning officials in each region and
program we studied. We also interviewed departmental budget and planning
staff with ACF oversight responsibilities. Among other things, we asked
about (1) roles and responsibilities, (2) how performance

24 The Community Services Block Grant was established by Title VI,
Subtitle B of the Omnibus Budget Reconciliation Act of 1981 (P. L. 97-
35), and was most recently amended and reauthorized through the Community
Opportunities, Accountability, and Training and Educational Services Act
of 1998 (P. L. 105- 285).

information was used in program, resource, and staffing decisions, (3) how
planning and budgeting were related, and (4) challenges they faced to
further budget and performance integration. The following bureau, offices,
regions, and programs were included in our review.

 The Department of Health and Human Services* (HHS) Office of the
Assistant Secretary for Budget, Technology and Finance, and the Office of
the Assistant Secretary for Planning and Evaluation.

 ACF*s Office of Legislative Affairs and Budget, Office of Planning,
Research, and Evaluation, and Office of Regional Operations.  ACF*s Head
Start Bureau (Head Start program); the Office of

Community Services (Community Services Programs); and the Office of Child
Support Enforcement (Child Support Enforcement program).

 ACF*s West- Central Hub, Dallas Regional Office in Texas, and the
Pacific Hub, San Francisco Regional Office in California.

Although we broadly summarize the views of these officials for reporting
purposes, their observations may not necessarily be generalized across
ACF. Regarding ACF*s responses about its specific budgeting and planning

strategies and practices, where possible, we reviewed supporting
documentation. However, we did not observe the actual implementation of
these processes and therefore cannot independently verify that they
function as indicated in the supporting documentation.

We requested comments on a draft of this report from HHS and The Policy
Exchange/ Institute for Educational Leadership. These comments are
discussed in the letter. In addition, we provided drafts of the Dallas and
San Francisco Regional Office appendixes to regional officials for
technical

review and have incorporated their comments where appropriate. We
conducted our work from January through May 2002 in accordance with
generally accepted government auditing standards. A glossary can be found
at the end of this report.

Glossary Annual Performance Plan Yearly plans that set annual goals with
measurable target levels of performance. Base Budgeting A technique that
requires public officials to periodically justify and reaffirm

the particular program (and its entire budget) under consideration.
Usually used in contrast to incremental budgeting, which takes previous
year*s amounts as given.

Block Grants Grants that provide funds for a wide range of activities
within a broadly defined functional area.

Budget Execution The process of developing operating plans for the
upcoming fiscal year; implementing the plans by allocating, obligating,
monitoring, and reallocating budgetary resources; and reporting on the
resulting obligations and outlays.

Budget Formulation The process of developing an agency*s budget request
for inclusion in the President*s budget request and its supporting
justifications for Congress.

Categorical Grants Grants designed to stimulate and support programs in
specific areas of national interest.

Discretionary Discretionary appropriations refer to budgetary resources
provided in Appropriations/ Spending

appropriation acts. Discretionary spending refers to outlays controlled
through the congressional appropriation process.

Incremental Budgeting Viewing the budget request with reference to the
amount provided for the previous fiscal year. An assumption that most
activities in the current budget will be continued and new initiatives
will be financed from additional resources, not from cutbacks in existing
programs. (See Base Budgeting above.)

Mandatory Spending/ Amount Mandatory spending refers to outlays for
entitlement programs such as food stamps, Medicare, and veterans*
pensions. By defining eligibility and setting the benefit or payment
rules, Congress controls spending for these programs indirectly rather
than directly through the appropriations process. Also referred to as
*direct spending.* Mandatory amount generally means budget authority or
budget outlays. Congress and the President cannot increase or decrease
this type of spending without changing existing substantive law.

Outcome A description of the intended result, effect, or consequence that
will occur from carrying out a program or activity. Output A description
of the level of activity or effort that will be produced or

provided over a period of time or by a specified date. Performance
Budgeting The general concept of linking performance information with
budget

requests (or, with resources). Program, Project, or Activity An element
within a budget account.

(450094)

a

GAO United States General Accounting Office

The Administration for Children and Families* (ACF) budget and performance
planning processes are clearly related but are not fully integrated.
Budget and planning align more closely after ACF sends the budget request
and performance plan to the Department of Health and Human Services for
review. Finally, unlike budget formulation, budget execution largely
occurs in the regional offices, where resource allocation is often driven
by program performance.

Officials in ACF*s Head Start, Child Support Enforcement, and Community
Services Block Grant programs described three general ways in which
decisions at the programmatic level are influenced by performance: (1)
training and technical assistance money is often allocated based on needs
and grantee performance, (2) partnerships and collaboration help ACF work
with grantees towards common goals and further the administration*s
agenda, and (3) organizing and allocating regional staff around agency
goals allow employees to link their day- to- day activities to longer-
term results and outcomes.

While ACF must overcome some difficult barriers to further budget and
performance integration, it has begun to identify and implement mitigation
strategies for some of these issues. For example,

 ACF conducts much of its work through nonfederal service providers,
which often limits the extent to which ACF can influence national
performance goals and can seriously complicate data collection. To address
this, ACF has successfully collaborated with providers to develop national
performance goals and build data collection capacity. This has also raised
awareness of the importance of collecting and reporting performance data
uniformly.

 Since ACF programs are often only part of a network of long- term
federal, state, and local efforts to address serious health and social
concerns, attributing a particular outcome to a particular program can be
difficult. ACF has addressed this issue by using program evaluations to
help isolate the effects of a particular program, strengthening the link
between outputs and outcomes, and identifying intermediate outputs and
outcomes to help measure program performance.

 The organizational culture change necessary to support the linkages
between resources and results takes time, but change is beginning to take
root. Some managers and staff reported a noticeable difference in the use
and understanding of outcomes versus outputs, and outcomebased performance
agreements for managers and staff are becoming more common.

MANAGING FOR RESULTS

Efforts to Strengthen the Link Between Resources and Results at the
Administration for Children and Families

www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 09. To view the full report,
including the scope and methodology, click on the link above. For more
information, contact Paul Posner at (202) 512- 9573 or Denise Fantone at
(202) 512- 4997.

Highlights of GAO- 03- 09, a report to the Chairman, Subcommittee on
Government Efficiency, Financial Management, and Intergovernmental
Relations, Committee on Government Reform, House of Representatives

December 2002

Encouraging a clearer and closer link between budgeting, planning, and
performance is essential to improving federal management and instilling a
greater focus on results. Through work at various levels within the
organization, this report on the Administration for Children and Families
(ACF)-- and its two companion studies on the Nuclear Regulatory Commission
(GAO- 03- 258) and the Veterans Health Administration (GAO- 03- 10)-
records (1) what managers considered successful efforts at creating
linkages between planning and performance information to influence
resource choices and (2) the challenges managers face in creating these
linkages.

Page i GAO- 03- 9 Link between Resources and Results at ACF

Contents

Contents

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Appendix I

Appendix I Efforts to Strengthen the Link between Resources and Results in
the ACF WestCentral Hub, Dallas Regional Office

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Appendix I Efforts to Strengthen the Link between Resources and Results in
the ACF WestCentral Hub, Dallas Regional Office

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Appendix I Efforts to Strengthen the Link between Resources and Results in
the ACF WestCentral Hub, Dallas Regional Office

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Appendix I Efforts to Strengthen the Link between Resources and Results in
the ACF WestCentral Hub, Dallas Regional Office

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Appendix I Efforts to Strengthen the Link between Resources and Results in
the ACF WestCentral Hub, Dallas Regional Office

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Appendix I Efforts to Strengthen the Link between Resources and Results in
the ACF WestCentral Hub, Dallas Regional Office

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Appendix I Efforts to Strengthen the Link between Resources and Results in
the ACF WestCentral Hub, Dallas Regional Office

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Appendix II

Appendix II Efforts to Strengthen the Link Between Resources and Results
in the ACF Pacific Hub, San Francisco Regional Office

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Appendix II Efforts to Strengthen the Link Between Resources and Results
in the ACF Pacific Hub, San Francisco Regional Office

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Appendix II Efforts to Strengthen the Link Between Resources and Results
in the ACF Pacific Hub, San Francisco Regional Office

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Appendix II Efforts to Strengthen the Link Between Resources and Results
in the ACF Pacific Hub, San Francisco Regional Office

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Appendix II Efforts to Strengthen the Link Between Resources and Results
in the ACF Pacific Hub, San Francisco Regional Office

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Appendix III

Appendix III Objectives, Scope, and Methodology

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Appendix III Objectives, Scope, and Methodology

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Glossary Page 46 GAO- 03- 9 Link between Resources and Results at ACF

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