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| <title> - THE GOVERNMENT PERFORMANCE AND RESULTS ACT: SENSIBLE GOVERNMENT FOR THE NEXT CENTURY</title> | |
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| [House Hearing, 105 Congress] | |
| [From the U.S. Government Publishing Office] | |
| THE GOVERNMENT PERFORMANCE AND RESULTS ACT: SENSIBLE GOVERNMENT FOR THE | |
| NEXT CENTURY | |
| ======================================================================= | |
| HEARING | |
| before the | |
| COMMITTEE ON | |
| GOVERNMENT REFORM | |
| AND OVERSIGHT | |
| HOUSE OF REPRESENTATIVES | |
| ONE HUNDRED FIFTH CONGRESS | |
| FIRST SESSION | |
| __________ | |
| FEBRUARY 12, 1997 | |
| __________ | |
| Serial No. 105-2 | |
| __________ | |
| Printed for the use of the Committee on Government Reform and Oversight | |
| 39-381 U.S. GOVERNMENT PRINTING OFFICE | |
| WASHINGTON : 1997 | |
| ____________________________________________________________________________ | |
| For Sale by the Superintendent of Documents, U.S. Government Printing Office | |
| Internet: bookstore.gpr.gov Phone: toll free (866) 512-1800; (202) 512�091800 | |
| Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001 | |
| COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT | |
| DAN BURTON, Indiana, Chairman | |
| BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California | |
| J. DENNIS HASTERT, Illinois TOM LANTOS, California | |
| CONSTANCE A. MORELLA, Maryland ROBERT E. WISE, Jr., West Virginia | |
| CHRISTOPHER SHAYS, Connecticut MAJOR R. OWENS, New York | |
| STEVEN H. SCHIFF, New Mexico EDOLPHUS TOWNS, New York | |
| CHRISTOPHER COX, California PAUL E. KANJORSKI, Pennsylvania | |
| ILEANA ROS-LEHTINEN, Florida GARY A. CONDIT, California | |
| JOHN M. McHUGH, New York CAROLYN B. MALONEY, New York | |
| STEPHEN HORN, California THOMAS M. BARRETT, Wisconsin | |
| JOHN L. MICA, Florida ELEANOR HOLMES NORTON, Washington, | |
| THOMAS M. DAVIS, Virginia DC | |
| DAVID M. McINTOSH, Indiana CHAKA FATTAH, Pennsylvania | |
| MARK E. SOUDER, Indiana TIM HOLDEN, Pennsylvania | |
| JOE SCARBOROUGH, Florida ELIJAH E. CUMMINGS, Maryland | |
| JOHN SHADEGG, Arizona DENNIS KUCINICH, Ohio | |
| STEVEN C. LaTOURETTE, Ohio ROD R. BLAGOJEVICH, Illinois | |
| MARSHALL ``MARK'' SANFORD, South DANNY K. DAVIS, Illinois | |
| Carolina JOHN F. TIERNEY, Massachusetts | |
| JOHN E. SUNUNU, New Hampshire JIM TURNER, Texas | |
| PETE SESSIONS, Texas THOMAS H. ALLEN, Maine | |
| MIKE PAPPAS, New Jersey ------ | |
| VINCE SNOWBARGER, Kansas BERNARD SANDERS, Vermont | |
| BOB BARR, Georgia (Independent) | |
| ------ ------ | |
| Kevin Binger, Staff Director | |
| Daniel R. Moll, Deputy Staff Director | |
| Judith McCoy, Chief Clerk | |
| Phil Schiliro, Minority Staff Director | |
| C O N T E N T S | |
| ---------- | |
| Page | |
| Hearing held on February 12, 1997................................ 1 | |
| Statement of: | |
| Armey, Hon. Richard, House Majority Leader................... 33 | |
| Hinchman, James, acting Comptroller General of the United | |
| States, accompanied by Chris Mihm, Assistant Director, | |
| Federal Management Issue Area, General Accounting Office... 11 | |
| Koskinen, John, Deputy Director for Management, Office of | |
| Management and Budget...................................... 51 | |
| Letters, statements, etc., submitted for the record by: | |
| Armey, Hon. Richard, House Majority Leader, prepared | |
| statement of............................................... 37 | |
| Burton, Hon. Dan, a Representative in Congress from the State | |
| of Indiana, prepared statement of.......................... 3 | |
| Hinchman, James, acting Comptroller General of the United | |
| States, prepared statement of.............................. 13 | |
| Horn, Hon. Stephen, a Representative in Congress from the | |
| State of California, prepared statement of................. 9 | |
| Koskinen, John, Deputy Director for Management, Office of | |
| Management and Budget: | |
| Information concerning congressional consultations....... 75 | |
| Prepared statement of.................................... 54 | |
| Morella, Hon. Constance, a Representative in Congress from | |
| the State of Maryland, prepared statement of............... 68 | |
| Sessions, Hon. Pete, a Representative in Congress from the | |
| State of Texas, prepared statement of...................... 48 | |
| THE GOVERNMENT PERFORMANCE AND RESULTS ACT: SENSIBLE GOVERNMENT FOR THE | |
| NEXT CENTURY | |
| ---------- | |
| WEDNESDAY, FEBRUARY 12, 1997 | |
| House of Representatives, | |
| Committee on Government Reform and Oversight, | |
| Washington, DC. | |
| The committee met, pursuant to notice, at 10:05 a.m., in | |
| room 2154, Rayburn House Office Building, Hon. Dan Burton | |
| (chairman of the committee) presiding. | |
| Present: Representatives Burton, Shays, Horn, Mica, Davis | |
| (VA), Shadegg, Sanford, Sununu, Sessions, Pappas, Snowbarger, | |
| Barr, Condit, Sanders, Maloney, Barrett, Norton, and Holden. | |
| Staff present: Kevin Binger, staff director; Dan Moll, | |
| deputy staff director; John Rowley, general counsel; Jonathan | |
| Yates, counsel; Kristine Simmons and Jane Cobb, professional | |
| staff members; Judy McCoy, chief clerk; Teresa Austin, | |
| assistant clerk/calendar clerk; Mark Stephenson, minority | |
| professional staff; and Jean Gosa, minority administrative | |
| staff. | |
| Mr. Burton. We have the most important members of the | |
| committee here, so far, so we'll go ahead and start. Good | |
| morning, and welcome to the first Government Reform and | |
| Oversight full committee hearing of the 105th Congress. I am | |
| pleased that the first order of business on our full committee | |
| oversight agenda is the Government Performance and Results Act, | |
| or GPRA. | |
| We will, henceforth, be calling this the Results Act for | |
| simplicity purposes. I want everybody to understand what we're | |
| talking about when you talk about GPRA. People probably think | |
| it's some kind of a disease, and we don't want that to happen, | |
| so we'll call it the Results Act. For some of us this is | |
| familiar territory and for others it's brand new. But for all | |
| of us on both sides of the aisle and at both ends of | |
| Pennsylvania Avenue, the Results Act is the key to reforming | |
| government now and into the next century. | |
| The Government Performance and Results Act requires | |
| agencies to set performance goals and eventually tie their | |
| budgets to their performance. This is a sound business practice | |
| that we should have been employing for a long time. This act | |
| has the force of law to make agencies do what they should be | |
| doing anyway, knowing what their mission is and fulfilling that | |
| mission in the most efficient, cost-effective manner possible. | |
| The subtitle of this hearing is Sensible Government for the | |
| Next Century. And that is exactly what the Results Act is | |
| about--a government that makes sense and is based on | |
| performance and results. I hope this hearing will send a signal | |
| to the administration and to American taxpayers that this | |
| committee is very serious about using the act to make sure | |
| citizens are getting what they expect and pay for from Federal | |
| programs. | |
| Throughout the 104th Congress, Chairman Steve Horn of the | |
| Government Management Subcommittee worked diligently to oversee | |
| the results process. Mr. Horn's efforts have taken the | |
| important first step of educating Members of Congress and the | |
| American people about this act. It is essential that members of | |
| this committee and the other committees in Congress begin to | |
| understand what the Results Act is and what role they must play | |
| if it is to be implemented successfully. | |
| Agencies are required under the law to consult with | |
| Congress on their strategic goals and plans, which must | |
| formally be submitted to Congress in September. Every committee | |
| in the House and Senate needs to take an active and immediate | |
| role in the consultative process. The key to the Results Act is | |
| that it requires a cooperative effort among agencies, Congress | |
| and, most importantly, the people that are affected by these | |
| Federal programs. | |
| To highlight the importance with which the House leadership | |
| regards this Results Act, we will be pleased, before too long, | |
| to welcome the House Majority Leader, Richard Armey, to speak. | |
| Mr. Armey will be here, probably, in about 10 or 15 minutes, so | |
| I will save his introduction for that time. We're happy to have | |
| him and we regret that his minority counterpart, Richard | |
| Gephardt, was unable to join us due to a scheduling conflict. | |
| Following the majority leader, we will welcome the Acting | |
| Comptroller General of the General Accounting Office, Mr. James | |
| Hinchman, who will explain the requirements of the Results Act | |
| and how we in Congress can use it as a vital oversight tool. | |
| Finally, John Koskinen the Deputy Director of the Office of | |
| Management and Budget, will testify regarding the priority the | |
| administration has placed on the Results Act implementation and | |
| the general readiness of agencies to comply with the act. | |
| Since Mr. Armey is not yet here, I would like to now | |
| recognize Mr. Waxman, who isn't here, he's detained at another | |
| meeting--the ranking member of the subcommittee. Mrs. Maloney, | |
| I think, has his statement and one of her own. So we'll now | |
| recognize Mrs. Maloney for her own statement. | |
| [The prepared statement of Hon. Dan Burton follows:] | |
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| [GRAPHIC] [TIFF OMITTED] T9381.003 | |
| [GRAPHIC] [TIFF OMITTED] T9381.004 | |
| Mrs. Maloney. Thank you very much, Mr. Chairman, and thank | |
| you for holding this hearing on the Government Performance and | |
| Results Act. The Results Act is landmark legislation which has | |
| enjoyed wide bipartisan support since its passage in 1993. | |
| The act is approaching a critical period of implementation, | |
| and I am hopeful that bipartisanship will continue. The Results | |
| Act is that latest in a series of laws, such as the Chief | |
| Financial Officers Act and the Inspector General Act, meant to | |
| improve performance and reduce waste, fraud and abuse in the | |
| Federal Government. | |
| It is intended to improve the efficiency and the | |
| effectiveness of the Federal Government and to begin a cultural | |
| change in the Federal workforce by forcing the agencies to | |
| focus on results. Mr. Chairman, I am pleased you are holding | |
| this hearing at a time when government is getting fewer and | |
| fewer resources yet being expected to do at least as much as it | |
| always has. Improving the efficiency and effectiveness of the | |
| Federal Government is more important than ever. | |
| I would just like to add that I am pleased that you are | |
| starting the committee work on this important piece of | |
| legislation. It happens to be the very first piece of | |
| legislation that I managed on the floor of the House of | |
| Representatives in 1993. And it was also a cornerstone in Vice | |
| President Gore's Reinventing Government, which has worked so | |
| far to make government more effective and cost effective and | |
| productive, even as we have moved, really, to the smallest | |
| workforce in many years, since President Kennedy was in office. | |
| It will force our agencies to plan better, to come forward | |
| with their priorities, and it will allow us to analyze their | |
| results. And I--it's a sensible, important bill. I look forward | |
| to working with you on oversight of it. The importance that you | |
| place on it is underscored by the fact that the Majority | |
| Leader, Mr. Armey, will be here. And I look forward to his | |
| testimony. In appreciation of time restraints, I'll put my | |
| formal remarks in the record. Thank you. | |
| Mr. Burton. Without objection, your remarks will be entered | |
| into the record. | |
| And I'd just like to say to Mrs. Maloney that, as you can | |
| see, we are reaching out to the minority right off the bat | |
| because this is one of your pet projects. Now, I'd like to | |
| recognize the chairman of the Government Management, | |
| Information, and Technology Subcommittee, a good friend and a | |
| very fine legislator, Mr. Horn, who held a number of hearings | |
| on the Results Act in the 104th Congress. And I'm sure he'll | |
| continue to be a leader in this Congress as well. Mr. Horn. | |
| Mr. Horn. Thank you very much, Mr. Chairman, for holding | |
| this hearing and your generous comments. I welcome this hearing | |
| as a beginning step in what I think can be a sea change in the | |
| way our government works. The Government Performance and | |
| Results Act may be landmark legislation, in that it can | |
| simplify and de-mystify our processes of government. | |
| It does this by forcing Federal agencies to explain what | |
| they intend to do with the tax dollars we give them and by | |
| measuring whether the agencies then live up to their word. The | |
| goal of this law can be summed up in one word: accountability. | |
| That is, this law creates the ability for government to | |
| actually account for the money it raises in taxes and then | |
| spends on a vast array of programs. | |
| That goal may seem elementary to many Americans. Families | |
| and businesses go through the exercise on a routine basis. But | |
| for the Federal Government this is a startling and even | |
| wrenching exercise. Under this law, every Federal agency must | |
| ask itself some basic common sense questions: What are we | |
| doing? Should we be doing it? Can we do it better? Can we do it | |
| cheaper? | |
| Under this law, every Federal agency must establish clear, | |
| realistic and understandable goals, and they must establish | |
| effective ways to measure performance. Instead of focusing | |
| solely on the bare minimum requirements of complying with the | |
| law, they will be expected to produce real results, and they | |
| will have to produce real balance sheets that can be verified | |
| by outside auditors and understood by ordinary taxpayers. | |
| The Government Performance and Results Act has the | |
| potential to produce enormous change, particularly as it is | |
| connected with other landmark laws such as the Chief Financial | |
| Officers Act. These laws, for the first time, put a premium on | |
| good management. They are the beginning steps in reversing the | |
| Federal Government's long legacy of inattention, indifference, | |
| and, at times, incompetence in managing the Nation's affairs. | |
| But Mr. Chairman, I also want to note that there's another | |
| important fundamental change underway, and it's demonstrated by | |
| this hearing. That change is the commitment we're making here | |
| in Congress to give real life and energy to these laws through | |
| vigorous oversight of Federal agencies. The fact that the | |
| Majority Leader, Mr. Armey, is here today is an illustration of | |
| that commitment. | |
| Tomorrow, the Subcommittee on Government Management, | |
| Information, and Technology, which I chair and Mrs. Maloney | |
| serves as the ranking Democrat, will continue this process with | |
| our opening hearing on the 25 high risk Federal agencies | |
| identified by the General Accounting Office. The subcommittee | |
| will hold extensive hearings on these programs and agencies | |
| over the next 2 years. | |
| In short, Mr. Chairman, there's a lot of work to do. I'm | |
| grateful for your support of this effort, and I thank you. | |
| [The prepared statement of Hon. Stephen Horn follows:] | |
| [GRAPHIC] [TIFF OMITTED] T9381.005 | |
| [GRAPHIC] [TIFF OMITTED] T9381.006 | |
| Mr. Burton. I thank Mr. Horn. I'd just like to say to all | |
| the Members who are here, including the new Members, that we | |
| will introduce all of you and tell of your backgrounds this | |
| afternoon, at our organizational meeting, but because of time | |
| constraints this morning and because of other meetings that are | |
| being held, we'll hold your very important introductions until | |
| later. | |
| Our next witness, pending the arrival of the majority | |
| leader, is the distinguished Acting Comptroller General of the | |
| General Accounting Office, James Hinchman. GAO has done some | |
| outstanding work tracking the implementation of the Results Act | |
| to date. We look forward to Mr. Hinchman's testimony this | |
| morning on the requirements of the act and how it can serve as | |
| an essential oversight tool for Congress. | |
| Mr. Hinchman has with him an associate. And Mr. Hinchman, | |
| if you'd like to introduce him at this time, I'd appreciate it. | |
| Mr. Hinchman. Thank you, Mr. Chairman. It's a pleasure to | |
| be here this morning. | |
| Mr. Burton. Before you start your statement, would you mind | |
| standing and being sworn in? | |
| Mr. Hinchman. Of course. | |
| Mr. Burton. This is a common practice we have here. Would | |
| you raise your right hand? | |
| [Witnesses sworn.] | |
| Mr. Burton. OK. You may proceed, Mr. Hinchman. | |
| STATEMENT OF JAMES HINCHMAN, ACTING COMPTROLLER GENERAL OF THE | |
| UNITED STATES, ACCOMPANIED BY CHRIS MIHM, ASSISTANT DIRECTOR, | |
| FEDERAL MANAGEMENT ISSUE AREA, GENERAL ACCOUNTING OFFICE | |
| Mr. Hinchman. As I said, thank you, Mr. Chairman. It is a | |
| pleasure to be here this morning. With me is Chris Mihm, | |
| Assistant Director in GAO's Federal Management Issue Area. And | |
| we and GAO, as a whole, are honored to be a part of this | |
| important hearing on the Government Performance and Results Act | |
| and its implementation. | |
| I have a prepared statement. With your permission, I would | |
| like to summarize it briefly, and, if that's acceptable to you, | |
| request that that statement be put in the record. | |
| Mr. Burton. Without objection. | |
| Mr. Hinchman. GAO has, over the past year or so, Mr. | |
| Chairman, done a great deal of work examining management issues | |
| throughout the Federal Government, much of it for this | |
| committee. This work includes our executive guide on | |
| implementing the Government Performance and Results Act. It | |
| also includes the work we now have underway, to report to you | |
| by June 1 on the status of GPRA implementation. | |
| Three important conclusions come out of this work. And I | |
| want to summarize them for you briefly. First, we need better | |
| management in the Federal Government. Our work has consistently | |
| shown that Federal agencies have significant management | |
| problems that undermine their ability to function efficiently | |
| and effectively. Missions are unclear. Planning is inadequate. | |
| There is too little goal-setting and performance measurement. | |
| And too little of what there is is not results-oriented. | |
| Financial management systems do not work. Information | |
| technology is badly managed, as well. | |
| The public will not accept, and we cannot afford, these | |
| poor management practices, particularly in these days of budget | |
| constraint. Part of the solution to the Federal Government's | |
| fiscal problems must be more efficient and effective management | |
| of its programs and activities, and I think there is growing | |
| and broad consensus both in the government and among the | |
| students of its institutions that this is so. | |
| Second, Congress has put in place a sound statutory | |
| framework for addressing these management problems. Much of | |
| that work has been done under the leadership of this committee. | |
| This framework includes the Chief Financial Officers Act, the | |
| Paperwork Reduction Act of 1995, the Clinger-Cohen Act; and its | |
| cornerstone, its centerpiece, is the Government Performance and | |
| Results Act. | |
| At the request of this committee, we studied management | |
| reform in State governments, in foreign governments, in other | |
| public sector institutions, for lessons that can assist in the | |
| successful implementation of the Results Act. The results of | |
| this work are in our executive guide, and they confirm the | |
| soundness that the course that the Congress has established. | |
| Effective management in all of these institutions defines | |
| clear missions and outcomes, measures performance in achieving | |
| outcomes to gauge progress, and uses performance information to | |
| make changes that will improve results. Our work shows that | |
| this is the process that has worked for those successful public | |
| sector institutions that have reformed their management, and it | |
| is precisely the process that the Results Act mandates. | |
| Third, and finally, Congress has an important role to play | |
| in the implementation of the Results Act. For every agency, one | |
| of the first steps in the implementation of the Results Act is | |
| consultation with Congress about its mission and strategic | |
| plan. | |
| These consultations provide the opportunity for Congress to | |
| work with the executive branch to ensure that missions are | |
| focused, that goals are results oriented, and that they have | |
| been clearly established. In our work we have found that | |
| planning efforts that produced focused missions and results | |
| oriented goals virtually always drive improved efficiency and | |
| effectiveness. | |
| We have also urged in the past that congressional | |
| committees of jurisdiction hold regular oversight hearings of | |
| major departments and agencies. Our work for this committee | |
| underscores the importance of sustained leadership in assuring | |
| successful implementation of results oriented management in the | |
| public sector. | |
| These hearings can be used to reinforce Congress's | |
| commitment to improve management in the Federal sector and | |
| ensure that agencies continue to pursue the reforms mandated by | |
| the Results Act. As I said a moment ago, Mr. Chairman, these | |
| are the three correlessants of the large body of work that we | |
| have done for this committee. They support the direction in | |
| which Congress has set the government in the Results Act. And | |
| the test now before us is to assure that it is effectively | |
| implemented. With that, let me conclude, Mr. Chairman, and take | |
| any questions that you or other members of the committee may | |
| have. | |
| [The prepared statement of Mr. Hinchman follows:] | |
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| Mr. Burton. Well, thank you, Mr. Hinchman, for that very | |
| concise summary of your views. Let me just ask a couple of | |
| questions. Then I'll yield to my colleague, Mr. Horn, and then | |
| to Mrs. Maloney. | |
| Can you give us an example of how the Results Act can be | |
| helpful in addressing the problem of overlapping Federal | |
| programs--for instance, job training? | |
| Mr. Hinchman. Yes. I think that there are many examples-- | |
| one to which I would return is food safety. The General | |
| Accounting Office did a review and we established that there | |
| are 35 laws affecting food safety in this country, administered | |
| by 12 agencies, and that there is a lack of coordination among | |
| those agencies and overlapping jurisdiction in those laws. | |
| The Results Act provides a framework in which agencies can | |
| focus on the results of their efforts, and by focusing on | |
| results, to identify these areas of overlap and inconsistency, | |
| because they have to focus on the impact that these laws have | |
| on the safety of the food supply. The strategic planning | |
| process provides a framework in which they can begin to | |
| coordinate their efforts and bring greater rationality to the | |
| administration of those food laws. | |
| And I think we are seeing the consequences of that in the | |
| proposals which are now before the Congress to bring greater | |
| rationality to the administration of those food safety laws. | |
| Mr. Burton. Let me ask you, Mr. Hinchman, if I can impose | |
| upon you and Mr. Mihm. The majority leader has arrived, and he | |
| is under severe time constraints. | |
| Mr. Hinchman. Of course. | |
| Mr. Burton. And so if I could get back to questioning you? | |
| Mr. Hinchman. It would be a privilege to yield to him. | |
| Mr. Burton. OK. Thank you. We'd like to now welcome the | |
| good-looking, dynamic leader of the Republican party, Mr. | |
| Armey. I don't know if that's a tan or whether I embarrassed | |
| you, Mr. Leader. | |
| Mr. Armey. Right. | |
| Mr. Burton. But he's a person who's been interested in this | |
| area for a long time. He's been very concerned about reforming | |
| government to make it more effective, more business-like, and | |
| obviously, he's somebody that we all admire in the Republican | |
| party, and I think a lot of our Democrats, as well. So Mr. | |
| Armey, we would love to hear from you this morning. | |
| STATEMENT OF HON. RICHARD ARMEY, HOUSE MAJORITY LEADER | |
| Mr. Armey. Well, thank you, Mr. Chairman. I appreciate your | |
| accommodating me in my new role as chief disrupter of committee | |
| hearings. And I want to thank our colleagues in the GAO for | |
| their graciousness with allowing me to pop in as I do. It is, | |
| of course, an exciting thing for me to see these hearings on | |
| what I call the Results Act. | |
| And Mr. Chairman, I would ask that my longer statement be | |
| made a part of the record. Mr. Chairman, I would ask unanimous | |
| consent that my---- | |
| Mr. Burton. Without objection. Thank you, sir. | |
| Mr. Armey. All right. That was a wise move, if you don't | |
| mind my saying. [Laughter.] | |
| Mr. Chairman, the Results Act is a law sponsored by | |
| Republicans and Democrats alike and was signed into law by | |
| President Clinton in August 1993. It is the right tool to give | |
| us a more honest glimpse of how our Federal Government works. | |
| This law will focus on all existing Federal programs, and, for | |
| the first time mandated by statute, measure government | |
| performance and report on results. | |
| It is not an ideological law. It represents an opportunity | |
| for both Democrats and Republicans, the Congress and the | |
| executive branch, to work together to improve the way | |
| Washington works. Whether you want a smaller, more limited | |
| government, or whether you want a larger, more activist | |
| government, we can all agree--nobody wants government to waste | |
| money through inefficiencies, ineffectiveness, fraud, or bad | |
| management. | |
| I expect the 105th Congress to be viewed as the | |
| implementation Congress. With 1997 a critical implementation | |
| year for this new law, our success or failure with the Results | |
| Act could play a large part in defining this Congress. The | |
| Results Act gives us a common sense tool to analyze and solve | |
| problems between the Congress and the executive branch--a way | |
| to help us report to our shareholders and taxpayers on their | |
| inventory and the effectiveness of their expenditures in | |
| government. | |
| In 1996, the Federal Government spent $1.56 trillion. | |
| Eighty-five million families paid taxes in 1996. Washington is, | |
| therefore, spending $18,355 per tax family in our Federal | |
| Government. It is time to take stock of this spending. And I | |
| might add, Mr. Chairman, I just finished my own taxes last | |
| night, and I'm $10,000 over that number and I wonder if I can | |
| get a refund. [Laughter.] | |
| But it is good, at this time when we're all aware of how | |
| much we are giving to the government in taxes, that we put | |
| focus on this. And by that way, I relate this to my own life. | |
| If I pay good money to add insulation to my home, I'm going to | |
| be sure to check the electric bill to see if I've saved any | |
| money. | |
| The Results Act brings this common sense to the government. | |
| It is the ultimate common sense tool to help us ask whether our | |
| taxpayer-funded programs are working. We all want safer | |
| streets, cleaner air, and better schools for our children. | |
| Often, however, we disagree on how to get there. In any given | |
| legislative cycle, we, in the Congress, pass laws after | |
| negotiation and debate. We think problems are solved when we | |
| pass a law. | |
| In reality, the solution has only begun. We only win when, | |
| in fact, our streets are clean, safer, our air is, in fact, | |
| cleaner, our children are, in fact, well-educated. We must | |
| become more active participants in the implementation of the | |
| programs we enact. As the Congress and the Clinton | |
| administration prepare to make difficult decisions to balance | |
| the budget for our children and our Nation's future, we need | |
| credible, objective information about programs and whether or | |
| not they are really working. | |
| My testimony summarizes several areas where Federal | |
| jurisdiction overlaps and is calling out for better | |
| congressional oversight, such as education, Federal food | |
| safety, drug treatment, rural water treatment and job training. | |
| Let's focus on our own lives for a moment. | |
| If we found that services we were paying were not resulting | |
| in what we wanted, we'd take action. You and I don't rely on | |
| blind faith and continue paying in such instances. Take, for | |
| example, a child's medical care. When you take your child to | |
| the doctor, you take extra care that the doctor is qualified | |
| and capable. You monitor each stage of your child's treatment. | |
| This is how we must approach Federal programs, scrutinizing | |
| their implementation at every stage and making sure we get the | |
| desired results. If an education program was created to ensure | |
| that every third grader can read, improving literacy rate | |
| should be one measure of the program's effectiveness. The | |
| Results Act can be such a common sense approach to help | |
| Congress and the executive branch review our existing Federal | |
| Government with a focus on achieving the best results for the | |
| money we are contributing. | |
| The Results Act was passed out of frustration by the 103d | |
| Congress and signed into law by a Democrat President. This | |
| frustration was born out of our not knowing the government's | |
| ability to really affect critical issues in our world today: | |
| saving lives, preventing crime, and getting vital help to the | |
| American people. | |
| Indeed, during this consideration of the Results Act, the | |
| Senate Governmental Affairs Committee pointed to a recent poll | |
| which showed that the Americans believe that 48 cents our of | |
| every tax dollar is wasted. The committee noted that this could | |
| explain the apparent inconsistency between the public's desire | |
| for a wide range of government services on the one hand, and | |
| its disdain for the government and higher taxes on the other. | |
| The committee viewed the Results Act as a way to make clear | |
| what taxpayers are getting for their money. The Results Act | |
| should foster an atmosphere in Federal service where employees | |
| better understand what they do and the results their agency are | |
| trying to achieve. This law was enacted to ensure that every | |
| employee's work would be value added to public service. | |
| I commend you, Mr. Chairman, for holding this hearing | |
| today, and for continuing the momentum that your predecessor, | |
| Bill Clinger, started on this important law. I commend our | |
| colleague, and your subcommittee chairman, Steve Horn, for | |
| continuing to devote his attention to something that will yield | |
| long term results and better government for taxpayers. | |
| I commend the GAO and others, who have encouraged the | |
| Congress to seriously--to take seriously the enactment of this | |
| law, as well as the OMB for working seriously with Congress to | |
| enact this law. And I should point out, it was a topic of | |
| conversation between myself and Frank Raines when he made a | |
| courtesy call to me in January. I also commend the Vice | |
| President for the reforms he's pursuing that are similarly | |
| motivated. | |
| So what is to be done? We need the vital information on | |
| actual performance that the Results Act can provide. For the | |
| success of this new tool, each congressional committee and each | |
| elected Representative must devote more attention to each and | |
| every agency's major plans and objectives. For the Results Act | |
| to succeed, we all must show a new willingness to re-examine | |
| pet projects with an ear toward objective, credible information | |
| about the results of these programs. | |
| Good intentions are not enough; we must pay close attention | |
| to the warning signs of operational disaster or excessive | |
| confusion in a department or agency charged by us to perform | |
| specific tasks. Specifically, Congress can use the Results Act | |
| in a variety of formal and informal settings, both immediately | |
| and in the long-term. Starting now, and moving through August, | |
| committees should be working with their executive branch | |
| departments to clarify what we want from programs, how that | |
| will be accomplished and how we expect to measure progress. | |
| Agencies are required by the law to consult with Congress | |
| as they prepare their 5-year strategic plans due in late | |
| September. Once results-oriented and measurable program goals | |
| are adopted, it is equally important that committees followup, | |
| through oversight hearings, GAO reviews and other means, to | |
| assess whether these goals are being met. Such program by | |
| program assessment should provide a road map to determine how | |
| limited Federal tax dollars can be applied most effectively in | |
| the future. | |
| In conclusion, the Results Act provides this Congress, the | |
| public and the President a management tool that has been widely | |
| used in making private business more effective. The American | |
| people and our children's children deserve a government that is | |
| accountable for results, a government that is a wise steward of | |
| their hard-earned money, and a government that directs | |
| resources to key priority areas, while ensuring the maximum | |
| impact for each and every Federal dollar spent. With your help, | |
| we might just give our children such a better government. And | |
| incidentally, we may just belie Armey's axiom that nobody | |
| spends somebody else's money as wisely as they spend their own. | |
| And with those comments, Mr. Chairman, I want to thank you | |
| for the opportunity to be here. And I guess I'm at your | |
| disposal, like the plumber. | |
| [The prepared statement of Hon. Richard Armey follows:] | |
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| Mr. Burton. Well, thank you. We're always pleased to hear | |
| your remarks, and, in particular, Armey's axioms, because we | |
| don't hear them anyplace else. [Laughter.] | |
| But they're always very wise and well thought out. Did I | |
| understand you to say that in the Senate Oversight Committee | |
| hearing, someone estimated that 48 cents out of every tax | |
| dollar is wasted? | |
| Mr. Armey. I think there was a poll that showed the | |
| American people believe that 48 percent out of every tax dollar | |
| is wasted, cited in the committee by one of the Senators. | |
| Mr. Burton. So the American people feel very strongly that | |
| we're wasting a ton of money up here? | |
| Mr. Armey. Well---- | |
| Mr. Burton. Let me just ask you, I think our committee has | |
| become aware of the Results Act and the need to push very hard | |
| for more business-like management in government. But a number | |
| of other committees have oversight responsibilities. And I was | |
| wondering how the leadership on our side and, hopefully, the | |
| other side plans to stimulate them, raise their antennae, if | |
| you will, so that they will be a participant in trying to make | |
| sure that we literally force some of these agencies to accept | |
| business-like practices? | |
| Mr. Armey. Well, I appreciate your inquiry. Obviously, as | |
| you know, the government is a very, very big organization, and | |
| we can most effectively, I believe, do this oversight if we | |
| divide that labor among the competing committees by definition | |
| of their jurisdiction. | |
| GAO, once again, has been extremely helpful here. They are | |
| preparing, on a staff by staff basis--the committee staffs--for | |
| the process and procedures they should undertake. And I can | |
| just tell you that it is a high priority of this leadership. | |
| We will, in fact, do everything we can to encourage every | |
| committee. I would think that each committee--it seems almost a | |
| process of natural selection, that committees end up with | |
| people that have an acute interest in the jurisdictional areas | |
| of the committee, so that the committees, themselves, would | |
| find their own interest. We work hard to report a bill out of | |
| committee, and we take a great deal of satisfaction when we see | |
| that signed into law. | |
| And we do that because we have serious intentions for what | |
| good can be done in the lives of the American people. For us in | |
| our separate committees to have the opportunity to go back and | |
| revisit the implementation of that law, to see that our | |
| intentions were, in fact, met, I should think would be a | |
| welcome opportunity for every committee, and I'm going to | |
| encourage them to utilize that opportunity to the fullest | |
| capacity. | |
| Mr. Burton. I thank you, Mr. Leader. I think that | |
| statements from leadership that they utilize their committees | |
| to stimulate the various agencies will be helpful. We'll do our | |
| part, and if we can get the others to help it would be great. | |
| Mr. Horn. | |
| Mr. Horn. Thank you, Mr. Chairman and Mr. Leader. I want to | |
| commend you, not only for your historic Base Closure Act, which | |
| was a good way to get results out of an executive branch that | |
| had never closed anything, but also thank you for that fact | |
| that you included the Debt Collection Act, which I authored and | |
| Mrs. Maloney was co-author, into the omnibus appropriations | |
| bill. Very frankly, that would not have become law without you | |
| making a decision and getting it on a train that was leaving | |
| the station. | |
| And following up on what the chairman opened up on, we know | |
| Congress is a fragmented institution. We know there are very | |
| jealous jurisdictional lines that many have. Now, as one Member | |
| of Congress, to get this effort moving, I would be delighted to | |
| see on one of the walls in your offices, a matrix in which | |
| you've got authorizing committees, appropriation subcommittees, | |
| area to be changed. And that the majority leader's office | |
| coordinate that effort. And very frankly, if you don't, it | |
| won't happen. It will get lost on the cutting room floors of | |
| several committees you and I can think of. | |
| So I know you hate to take on any power. You want to | |
| devolve everything out of Washington, but may I suggest you | |
| save a wall and coordinate this operation. | |
| Mr. Armey. Well, let me, first of all, on the--we are | |
| developing a matrix, and I have--I'm not sure I want to hang it | |
| on my wall, but I would certainly make it available. But you | |
| are absolutely right. I would see this not as an exercise of | |
| power by the majority leader, but as an exercise of service. | |
| And I would be more than happy to undertake that. | |
| I wonder, Mr. Chairman, if I could just take a moment. Mr. | |
| Horn raised the question of base closing, and I just saw | |
| something last week, that this gives me an opportunity to cite | |
| one of my colleagues. Base closing was about bang for your | |
| buck, the effective use of dollars. I set up efficiency | |
| criteria, defense preparedness criteria by which judgments | |
| would be made. And I should mention that, as I reflected back | |
| on that, the chairman of the relevant subcommittee of armed | |
| services was one Mr. Dellums. | |
| Mr. Dellums had, at that time, many bases in his district | |
| that he could have--he could have put many obstacles in the way | |
| of that legislation, but he saw it for what it was--an honest | |
| effort to have a fair appraisal of the true effectiveness of | |
| deployment of resources in the Nation's defense--and he was one | |
| of the first people to hold hearings. He didn't vote for it, | |
| and I understand that. But I always felt that this was a | |
| commendable effort made very early that is perfectly consistent | |
| with what we are doing here. | |
| I saw a report the other day--and I have not talked to Ron | |
| Dellums about this--but it turns out, pursuant to base closing, | |
| every base in his district has been closed. And I think we | |
| ought to pay a little regard to our call. He must have known | |
| that risk, but he said, ``this is a necessary thing to do in | |
| the questions of efficiencies and effectiveness in government. | |
| It's a fair and honorable process.'' And he did not stand in | |
| the way of it. | |
| But if we would all be willing to be that objective and | |
| that committed to an objective that is more important and more | |
| dear than ourselves and our own destinies in our own districts, | |
| I think we could get a great deal of effectiveness. So if I may | |
| tip my hat to Mr. Dellums in this. As a matter of fact, I | |
| think, Mr. Burton, you were on that subcommittee, at the time, | |
| if I'm not mistaken. | |
| Mr. Burton. I believe I was. | |
| Mr. Horn. If I might comment on that. It was also the | |
| ranking Republican had a base closed in Charleston. It was | |
| rather ironic. Both of the key people on that committee had | |
| major facilities closed. | |
| I might add, as a humble freshman in that exercise, after | |
| you had passed the law, we now have every base in Long Beach, | |
| CA closed. We were once headquarters of the Pacific fleet. They | |
| moved to Hawaii, and you saw what happened to them. But we are | |
| now free to look with a very objective eye to the Pentagon. | |
| Mr. Armey. I appreciate that. And Mr. Horn, if you don't | |
| mind, I get nervous about my standing with my colleagues if | |
| these discussions of base closings go on for too long. So-- | |
| [laughter.] | |
| Mr. Burton. Are you finished, Mr. Horn? Mrs. Maloney. | |
| Mrs. Maloney. Thank you, Mr. Chairman. Mr. Majority Leader, | |
| the Results Act says, ``When developing a strategic plan, the | |
| agency shall consult with the Congress.'' | |
| And Mr. Armey, can you tell us what consulting with | |
| Congress means to the Republican leadership and what do you see | |
| as the role of the minority in the process? And also, the | |
| Results Act, if it is going to work, do you think it's a fair | |
| statement that we need a true consensus of the agencies' plans | |
| and Congress's intent from both sides of the aisle? | |
| Mr. Armey. Yes. I think these are very important questions. | |
| I think underlying your point is a very important point I'd | |
| like to speak to right now. It is absolutely imperative, if | |
| this is to work, for all Members of Congress, majority and | |
| minority, to be involved. I am discussing with Mr. Gephardt a | |
| liaison role from his staff to this process as I have | |
| established for my staff. | |
| We would expect that consult be taken as a rigorous | |
| discussion between the agency and the committee, and the | |
| committee as a whole, regarding what are the goals defined in | |
| the agency's report and the extent to which they comply with | |
| and agree with the intent of Congress at the time the law was | |
| passed, or any amendments made thereto. | |
| In the end, each of these programs is created by an act of | |
| Congress. Both the majority and the minority participate in | |
| that process. We all have a stake in what is actually done in | |
| the implementation, and we ought to work together. I would | |
| encourage you to work with Mr. Burton and encourage you to come | |
| discuss this with me. I do believe we must be inclusive in this | |
| process, in particular, and I am devoted to that effort. | |
| Mrs. Maloney. Thank you. Do you think that the | |
| implementation of the Results Act in Congress may strengthen | |
| the case of those who advocate a 2-year budget cycle, focusing | |
| on appropriations 1 year and oversight the next? | |
| Mr. Armey. No. I really hadn't thought about that. I may, | |
| now that you've prompted me, I'll go give some thought to that. | |
| I don't know what discussions might have been made regarding | |
| that point at the time it was enacted. And it's possible that | |
| could happen. I don't know. | |
| But I do think that the focus should be--I think we should | |
| be very focused on this in terms of the bang for the buck | |
| measurement that we get, the consistency of defining the | |
| activities of an agency with respect to a law relative to the | |
| intent of Congress when the law was passed. | |
| And my own view would be that if the case is going to be | |
| made for 2-year budgeting, it will have to be made on a far | |
| broader basis than that. | |
| Mrs. Maloney. I would like to join the comments of my | |
| colleague, Mr. Horn, in complimenting you on your leadership on | |
| the Base Closing Commission Act. This was a problem that | |
| Congress confronted for years. We could never agree. You came | |
| up with a unique and original approach, and we solved the | |
| problem. | |
| I truly believe that if you never do another thing in your | |
| life, you will have made a tremendous contribution to public | |
| policy enactment in this country. And to really pay you a very | |
| large compliment, I was so impressed with that bill and the | |
| accomplishments of it, that I copied it. I took your bill, and | |
| I copied your bill on another very important issue before this | |
| Congress that we confront, which is campaign finance reform. | |
| And we have a tremendous division between the Republican | |
| party and the Democratic party on how to control the role of | |
| money and spending of money in campaigns. And we can't seem to | |
| agree. I've only been here--this is my third term, and Mr. Horn | |
| and I have probably both been on around 15 different task | |
| forces on campaign finance reform. | |
| So I copied your bill. And I would like to know whether you | |
| would consider having an approach of your bill on campaign | |
| finance this year if the Republican--because even though we're | |
| bipartisan--but if we cannot agree on a campaign finance | |
| proposal, would you support your bill creating a commission, if | |
| a Republican campaign finance plan fails, a Democratic campaign | |
| finance plan fails, would you then support a commission to move | |
| this process forward? | |
| For years we could not close bases in this country. We all | |
| agreed. Bases had to be closed. And you came up with an idea to | |
| take what everybody agreed on and move it. We face the same | |
| problem now. Whether it's the President or Mr. Gingrich or Mr. | |
| Gephardt, everyone says they are for campaign finance. We | |
| cannot agree. Would you support moving the Armey commission | |
| idea forward for campaign finance, so we could get it off of | |
| the discussion table and onto the floor for a serious vote, to | |
| try to move forward in this critical area of our country? | |
| Mr. Armey. Well, let me just respond by first pointing out | |
| that the base closing commission is one of the great ironies in | |
| my life, because I ordinarily do not believe in Congress | |
| referring its work to commissions. And I like to console myself | |
| by reminding people that the Base Closing Commission was | |
| created to keep Congress from continuing to meddle in other | |
| people's business. | |
| Now, insofar as Congress has its own responsibilities, I | |
| think they should do this without a commission. I believe that | |
| we can, if we will work together, through a congenial | |
| legislative process, I think we can, in this Congress, between | |
| ourselves and the Senate, on both sides of the aisle, and the | |
| White House, come up with campaign finance reform. | |
| And I would prefer to see us do our own work. Now, what | |
| I've also learned is don't rule anything out. But the first | |
| thing I want to do is--before I go to a commission--is I want | |
| to have clearly irrefutable evidence that it is, indeed, in | |
| fact, impossible for us to do our job ourselves. | |
| Mrs. Maloney. May I add that the true genius of your last | |
| bill on base closing was that it was not just a commission that | |
| came back with a report, your bill forced a vote. Your bill was | |
| not just a commission. It forced a conclusion or a step toward | |
| a conclusion of a particular problem. | |
| And if we cannot reach a conclusion, I would like to join | |
| you in moving forward with a commission approach, so, at least, | |
| we can get a product that can pass on the floor and move the | |
| project further in an area where everyone agrees something | |
| needs to be done. | |
| Mr. Armey. Well, let's--if you don't mind--let's stay in | |
| touch on that while I--and I hope you will understand--I feel | |
| my obligation is to, first, encourage the Congress, in every | |
| way, to take care of this important job on its own. | |
| Mrs. Maloney. May I underscore that I would go to a | |
| commission only after the Republicans can't pass it, the | |
| Democrats can't. Let's go forward with a commission. | |
| Mr. Burton. Yes. The gentlelady's time has expired. I | |
| understand that Mr. Shays of Connecticut has decided to pass, | |
| so we'll go to Mr. Mica of Florida. | |
| Mr. Shays. I have other questions I could ask you, but-- | |
| [laughter.] | |
| Mr. Burton. Mr. Mica. | |
| Mr. Mica. Mr. Chairman, just one quick question, Mr. Armey, | |
| I heard your testimony and read this written testimony, and-- | |
| you know--you cite part of the problem: education. We have 760 | |
| Federal education programs and 39 different agencies, food | |
| safety programs administered by 12 different agencies, rural | |
| water--8 agencies--job training--15 different agencies--I tried | |
| to consolidate our international trade efforts, which are | |
| disorganized and disjointed among 19 Federal agencies. | |
| My legislation was referred to 11 committees of | |
| jurisdiction. It's almost impossible to change the bureaucracy. | |
| You've got two problems. One, which I just outlined, all the | |
| committees and their vast jurisdiction. Second, the | |
| bureaucracies have now become effective lobbying forces for the | |
| status quo and view the members as only passing stars in the | |
| constellation, something to be ignored. | |
| What about a bureaucracy closure commission, where we take | |
| your same example, which has been cited now in reference to do | |
| something with campaign reform, but for dealing with the | |
| problem we have with closing down some of the bureaucracy and | |
| the duplication? | |
| Mr. Armey. Well, again, let me remind you that this is | |
| within the authority and the responsibility of the Congress. I | |
| believe that what we may learn from the effective | |
| implementation of the Results Act will help us to gather the | |
| information by which we can make the justifiable case for | |
| consolidation of efforts, where we see so many duplications. | |
| But you know, again--I mean--this ridiculous position of | |
| having, apparently, one as sort of a place in the sun for a | |
| commission. | |
| And turning around and saying I'm not all that big on | |
| commissions. I think we should do that job. That is our job. | |
| And I think we are capable of doing that job. | |
| Mr. Mica. Without a bureaucracy closure commission? | |
| Mr. Armey. Without it. | |
| Mr. Mica. Thank you, Mr. Chairman. | |
| Mr. Burton. Mr. Sanders. | |
| Mr. Sanders. Mr. Armey, I'm very impressed by the | |
| discussion today. Mrs. Maloney wants to emulate your efforts | |
| for campaign finance reform. Mr. Mica wants to emulate your | |
| efforts for bureaucracy reform. Do you want to write a new | |
| Constitution for the United States while you're here? | |
| [Laughter.] | |
| I mean, it seems to me, everyone is very impressed. | |
| But I would just say I think that regardless of one's | |
| political persuasion and disagreement about the role of | |
| government in civil life, I don't think any sensible person | |
| feels good about government waste, and we can all acknowledge | |
| that there is bureaucracy, inefficiency, and waste, and we want | |
| to, all of us, make the government more efficient. | |
| But maybe picking up on Mr. Mica's question, next year when | |
| Congress is presented with a governmentwide performance plan | |
| for fiscal year 1999, how do you anticipate that plan will be | |
| used in Congress? | |
| In other words, where do we go with it? Will it, for | |
| example, be referred automatically to all committees with | |
| jurisdiction over agency and program authorizations? How do you | |
| feel that the plan will be used? | |
| Mr. Armey. Well, first of all, let me just say this--and I | |
| mentioned this in my testimony--this is not an ideological | |
| discussion. And I think that one of the reasons base closing | |
| got enacted was it was clearly understood to be non- | |
| ideological. | |
| So we're talking about efficiency. The first thing we must | |
| do is to undertake a period of discovery. And it's almost as if | |
| we're taking an inventory of the government, what is there, | |
| gaining information. Now, as we gather that information, I | |
| would think we would distill from that, in our separate | |
| committees of jurisdiction, amendments to the law, a revision | |
| of the law, very likely some program consolidations or | |
| closures. | |
| One of the things I might say, I was laughing this morning. | |
| I had some experience with this when I was with the university. | |
| Mr. Horn, you may have encountered this, too. I remember as a | |
| department chairman receiving this elaborate set of | |
| instructions from the dean about how I was to define my goals | |
| and come up with empirical bases for measuring achievement of | |
| those goals and so forth. | |
| It's not easy, and it's not going to be something that is | |
| going to be heartily welcomed by everybody that's all of a | |
| sudden steamed at this new effort. So we'll have to encourage | |
| people to do a thorough job, and that's where the consultation | |
| comes in. | |
| We will have to be encouraging to them, because they are | |
| going to feel a bit overwhelmed. In many cases, people will | |
| feel overwhelmed by it. So we'll have to sort of lend a guiding | |
| hand. | |
| Mr. Sanders. But what I'm hearing you say is that you see | |
| this going through the normal legislative process? | |
| Mr. Armey. Yes. I have to say, Mr. Sanders, I am a big fan | |
| of regular order. | |
| Mr. Sanders. Mm-hmm. | |
| Mr. Armey. I'm an economist by trade, and I will tell you | |
| pursuant, of course, to Adam Smith, that all economic progress | |
| comes from division of labor, and division of labor works best | |
| when people mind their own business. So that for everything | |
| that we see, there would be a legitimate jurisdiction and a | |
| committee of jurisdiction. | |
| And we should then have that profession and that expertise | |
| and that interest that has resulted in people joining these | |
| committees, brought to bear on these discoveries so that they | |
| could be measured up and evaluated in a very sober and | |
| business-like fashion. | |
| Mr. Sanders. OK. Thank you very much. | |
| Mr. Burton. We'll now recognize your colleague from Texas, | |
| Mr. Sessions. | |
| Mr. Sessions. Thank you, Mr. Chairman. Mr. Armey, it's | |
| great to see you here. As a freshman of this committee, I must | |
| confess through the last few years, I didn't know that I would | |
| be sitting on this side of the bar and you on that side. It's | |
| good to see you. | |
| Yesterday, we had a press conference where there were fewer | |
| people there than here today, and so I'd like to take this | |
| opportunity to let you know about my thoughts on this | |
| Government Performance and Results Act. Because I think that | |
| throughout the media and, perhaps, in bureaucracy, there is a | |
| sense of fear of this act. | |
| And I had an opportunity, yesterday, to really say that I | |
| thought it was essential that bureaucrats and the management of | |
| the Federal Government look at this as really a cleansing | |
| opportunity, an opportunity to have dialog from not just at the | |
| upper end of management, but down to the lower ends, to where | |
| they could talk about not only the things that are measurable | |
| and within their control, but also an opportunity to look | |
| strategically at how they are going to guide their departments | |
| in the era of lowering and lessening budgets. | |
| What I'd like to hear from you is whether this serious | |
| discussion that's going to begin and whether it's near term, | |
| whether we're going to send the correct signal--which I think | |
| is correct--of this is an opportunity to begin a serious dialog | |
| with the managers of government, with the expectation that they | |
| will present these strategic views and that we will be able to | |
| work hand in hand. | |
| I think that's what it is, but I'm interested in hearing | |
| what you have to say about that, sir. | |
| [The prepared statement of Hon. Pete Sessions follows:] | |
| [GRAPHIC] [TIFF OMITTED] T9381.031 | |
| Mr. Armey. Well, let me just say, first of all, I | |
| understand that fear. I related earlier as a department | |
| chairman receiving these complex papers from my dean. And I | |
| tell you, my first reaction is, what is the dean up to? Deans | |
| are not very trustworthy people. [Laughter.] | |
| Every chairman knows that. So there is a tendency to be | |
| defensive. And now we have the GAO working, I think, very | |
| actively here. The OMB is enthusiastic. I mentioned my | |
| discussions with Frank Raines. But we ought to--I always | |
| believe that we ought to take a service model, not a power | |
| model. And we ought to make it clear to folks that we're not | |
| here to hold a hammer over your head, but to work in | |
| partnership with you toward that end of fulfilling what we most | |
| often find to be our mutual shared objectives. | |
| I always kind of laugh. You know, one of our favorite | |
| whipping boys in American political discourse is the | |
| bureaucrat. And I can say ``bureaucrat'' with as much disdain | |
| in my voice as any, but when you get right down to it, these | |
| are decent, hard-working men and women that are trying to | |
| accomplish something. And often, they are drawn to this agency | |
| because of their concern for this area of what von Mieses | |
| called human action, just as we were drawn to this committee | |
| because we had that concern. | |
| And if we undertake our relationship with these folks as | |
| one that is encouraging and not threatening and so forth, we | |
| can put at ease a lot of those concerns. Now, I must say, after | |
| 20 years of being a professor, I never got to the point where I | |
| accepted that deans were people that were operating in my own | |
| best interest. | |
| So it's a tough job. I'm sure deans were frustrated, too, | |
| with my doubt and skepticism along the way. But I think we need | |
| to understand that we do not come off hammering. Now, when we | |
| find people who are reluctant to move forward and, therefore-- | |
| perhaps, even, we will encounter some that are recalcitrant | |
| about it, I think we have to be assertive. | |
| But I think there's a far, far difference in the | |
| effectiveness of your demeanor when you understand to be | |
| assertive with somebody, as opposed to being angry at someone. | |
| And most people, I think, do understand that most agencies, I | |
| believe, of the Federal Government owe their existence to an | |
| act of Congress, and I'm sure they understand that they can get | |
| caught up in consolidation, and recalcitrance might encourage | |
| that. | |
| So I think we just need to go forward on a business-like | |
| basis with a good deal of respect and appreciation for each | |
| other, and I think we can do a good job. | |
| Mr. Sessions. Thank you. Well, it makes me feel good to | |
| know that as our leader, you're expecting the best from someone | |
| we have no control over but someone that we do have oversight | |
| functions with and that we can work hand in hand. | |
| Mr. Chairman, just really the bottom line to our press | |
| conference yesterday was that I was setting the expectation and | |
| the hopeful expectation that what these strategic plans will | |
| result in is something that is measurable, something that is | |
| realistic, and something that represents the true nature of the | |
| business or the work that these agencies are involved in. | |
| And I believe if they will come hand in hand and work with | |
| us--but it's up to them to make sure that their plan, their | |
| strategic plan and their direction is given to us, then we'll | |
| be able to work very comfortably together. | |
| I thank the majority leader for taking his time today, and | |
| I agree with everything you said, sir. Thank you. | |
| Mr. Burton. Thank you, Mr. Sessions. I guess Ms. Norton | |
| doesn't have any questions? Is that correct? Mr. Barr. | |
| Mr. Barr. Thank you, Mr. Chairman. Mr. Armey, the timetable | |
| for implementation of GPRA and GPRA, itself, I think, is really | |
| an important beginning, but it's really fairly modest in terms | |
| of the long-term goal that we have before us. As Mr. Mica | |
| pointed, just the proliferation of agencies that are | |
| overlapping in their jurisdiction and so forth. | |
| Is it your view--it is mine, but I'd be interested on the | |
| record, Mr. Armey, if it's your view that the time table set | |
| out for implementation of GPRA ought to be adhered to really is | |
| the minimum requirement that we ought to have, and that this | |
| Congress ought to resist efforts, which are starting already in | |
| the executive branch, to soften it and postpone some of the | |
| requirements? | |
| Mr. Armey. Well, yes, it is. First of all, the time table | |
| is set out in the law. And--I hate to harken always back to my | |
| years as a professor---- | |
| Mr. Barr. I think you take great delight in doing it, as a | |
| matter of fact. [Laughter.] | |
| Mr. Armey. I don't remember a semester when I didn't have a | |
| host of students who found 100 reasons why they couldn't get | |
| their term paper in on time. And you just have to learn that's | |
| the deadline. I was particularly impressed with the one young | |
| man that had three dead grandmothers in the same semester. | |
| [Laughter.] | |
| That didn't upset me so much as their dying again the next | |
| semester. [Laughter.] | |
| Mr. Barr. That's a very dysfunctional family, apparently. | |
| Mr. Armey. But again, I think a firm insistence that, you | |
| know, deadlines are there and they must be met. And again, we | |
| will have a process of discovery. You know, one of my great | |
| anticipations about the implementation of this law is, what | |
| will we discover. What will we find out? What can we learn? | |
| That will, undoubtedly, generate the basis by which we can | |
| get together on both sides of the committee room and write laws | |
| to improve and make more effective the public--could I say-- | |
| apparatus, for accomplishing the goals of the Congress and the | |
| President. | |
| Mr. Barr. I appreciate that and I appreciate your stating | |
| on the record how important that you think it is to adhere to | |
| the time table and the requirements that are currently in | |
| there, and that we ought to resist efforts to soften them or | |
| postpone them. | |
| Thank you, Mr. Armey. | |
| Mr. Armey. Thank you. | |
| Mr. Burton. Mr. Majority Leader, we want to thank you for | |
| taking time out of your very busy schedule to be with us. Your | |
| remarks were very cogent. We appreciate it, and thank you for | |
| being with us. | |
| Mr. Armey. Well, let me thank you. And again, if I can | |
| thank the gentlemen behind me from GAO and OMB for their | |
| graciousness in letting me go. Gentlemen, I hope I didn't say | |
| anything that was too amusing. [Laughter.] | |
| I did the best I could. | |
| Mr. Burton. Well, those Armey axioms are pretty | |
| interesting. Thanks a lot. Could we have Mr. Hinchman and Mr. | |
| Mihm up here, and, also, could we have your opening statement, | |
| Mr. Koskinen, now? The reason for that, if it's possible--it | |
| would help expedite the hearing and make sure that everybody on | |
| the panel gets a chance to question both of you, | |
| simultaneously, if necessary, so we can speed things along. | |
| So right now, we'll recognize you, Mr. Koskinen, for your | |
| opening remarks, and then we'll go to questions. Oh, pardon me. | |
| Before we do that. | |
| [Witness sworn.] | |
| Mr. Burton. Please have a seat. | |
| STATEMENT OF JOHN KOSKINEN, DEPUTY DIRECTOR FOR MANAGEMENT, | |
| OFFICE OF MANAGEMENT AND BUDGET | |
| Mr. Koskinen. Thank you, Mr. Chairman. I seem to spend most | |
| of my time testifying on panels with GAO and, in fact, these | |
| gentlemen. | |
| So this works out just fine. I'm pleased to appear before | |
| this committee to discuss the importance of the Government | |
| Performance and Results Act and to give you an assessment of | |
| our progress in meeting its requirements. I will be brief to | |
| allow time for questions and ask that my written statement be | |
| included in the record. | |
| Mr. Burton. Without objection. | |
| Mr. Koskinen. Thank you. GPRA became law 3\1/2\ years ago | |
| and it will soon take effect governmentwide. This was | |
| bipartisan legislation that the administration strongly | |
| supported. This committee played an important role in passing | |
| this act, and we look forward to continue working with you and | |
| others in the Congress as we carry out this law in the months | |
| ahead. | |
| On behalf of the administration, Mr. Chairman, let me thank | |
| you for holding this hearing, which signifies the importance we | |
| all attach to this very significant legislation. Let me also | |
| express our appreciation for the excellent work GAO has done in | |
| this area over the past several years. We have found it to be | |
| of great assistance, and have enjoyed our working relationship | |
| with them. | |
| At its simplest, GPRA can be reduced to a single question: | |
| What are we getting for the money we are spending? The answer | |
| to this question is important to all of us in government and to | |
| the American public as well. Regaining public confidence | |
| requires that the government not only work better, but that it | |
| be seen as working better. | |
| Let me summarize briefly those aspects of GPRA | |
| implementation that are our most immediate focus. The basic | |
| foundation for what agencies do under GPRA is their strategic | |
| plans. Agencies are required to send their strategic plans to | |
| Congress and OMB by this September 30th. When developing its | |
| strategic plan, an agency is to consult with Congress and | |
| consider the views of stake holders, customers, and other | |
| interested parties. | |
| Since last year, OMB has been encouraging agencies to begin | |
| their congressional consultations. OMB issued guidance over 18 | |
| months ago on the preparation and submission of strategic | |
| plans. In the summer of 1996, as a followup, OMB conducted a | |
| comprehensive review of the agencies' strategic planning | |
| efforts and the status of their plans. The reviews' objectives | |
| was to gauge how the agencies were doing and identify any | |
| concerns with the plans themselves or the process being | |
| followed. | |
| Generally, the agency plans reflected a serious effort and | |
| allowed us to conclude that agencies should be able to produce | |
| useful and informative strategic plans by this fall. Their | |
| review also revealed several challenges, including the need to | |
| ensure clear linkage between the general goals and objectives | |
| of these strategic plans and the annual performance goals to be | |
| included in the annual performance plans. We also expect to see | |
| increasing inter-agency discussions on performance goals and | |
| measures for cross-cutting programs, and increased involvement | |
| by the senior leadership of the departments in the completion | |
| of the strategic plans. | |
| The first of the agency annual performance plans, as | |
| opposed to strategic plans, for fiscal year 1999 will be sent | |
| to OMB this September with the agency's budget request. These | |
| annual plans will contain the specific performance goals that | |
| the agency intends to achieve in the fiscal year. A subsequent | |
| iteration of the annual performance plan is sent to Congress | |
| concurrently with the release of the President's budget next | |
| year at this time. The agencies and OMB gained valuable | |
| experience in preparing annual performance plans through the | |
| pilot project phase of GPRA. | |
| GPRA also requires that a governmentwide performance plan | |
| be annually prepared and be made part of the President's | |
| budget, as noted. The first plan will be sent in February 1998, | |
| and will cover fiscal year 1999. We would welcome your views on | |
| those futures that this committee believes would make this | |
| governmentwide plan informative and useful to Congress. | |
| As I noted, we expect agencies to provide useful and | |
| informative strategic and annual performance plans within the | |
| timeline specified by the act. However, as Mr. Armey noted, | |
| preparing a good GPRA plan is not an easy task. No one should | |
| expect the first plans to be perfect. We should view these | |
| plans as the beginning of a process of improvement and | |
| refinement that will evolve over several years. Even as these | |
| performance plans and measures become more refined, we should | |
| always bear in mind that using performance measures in the | |
| budgeting process will never be an exact science or even a | |
| science at all. | |
| Comparing results across program lines will always require | |
| political judgments about relative priorities of, for example, | |
| programs for highways and education. And we should not lose | |
| sight of the fact that performance information will often be | |
| used to adjust the way the programs are managed, rather than to | |
| change the resources provided. Accurate, timely performance | |
| information is important in all these situations, and that is | |
| why the administration is committed to the successful | |
| implementation of GPRA. | |
| As I've said on other occasions, if we are successful over | |
| time, GPRA should disappear. If GPRA works as envisioned, | |
| government managers will absorb it into day-to-day agency | |
| administration and program management. That's why I suggest | |
| that the true measure of the success of GPRA will be the extent | |
| to which the concepts of management and good business practices | |
| set out in this law become the accepted way that the government | |
| works, without reference to any particular statutory framework | |
| or requirements. | |
| This concludes my brief oral statement, Mr. Chairman. I'd | |
| be pleased to take any questions you may have and join in this | |
| panel. Thank you. | |
| [The prepared statement of Mr. Koskinen follows:] | |
| [GRAPHIC] [TIFF OMITTED] T9381.032 | |
| [GRAPHIC] [TIFF OMITTED] T9381.033 | |
| [GRAPHIC] [TIFF OMITTED] T9381.034 | |
| [GRAPHIC] [TIFF OMITTED] T9381.035 | |
| [GRAPHIC] [TIFF OMITTED] T9381.036 | |
| [GRAPHIC] [TIFF OMITTED] T9381.037 | |
| Mr. Horn [presiding]. Thank you very much for your | |
| testimony. Mr. Hinchman, did you have some other remarks you | |
| want to make in general on this? And then we'll throw it open | |
| to questions. | |
| Mr. Hinchman. Thank you for that offer, Mr. Chairman. I | |
| think that the three central conclusions from our work that I | |
| described are the important message that we have. I think that | |
| they are consistent with what Mr. Armey said and with what my | |
| friend Mr. Koskinen said, as well. So I have nothing more to | |
| add to that. | |
| Mr. Horn. OK. Mr. Shays. Do you have a question? Ms. | |
| Norton. Do you have a question, at all? Mr. Sununu. Do you have | |
| a question? You do? OK. Well, let me pursue some of the things, | |
| here, just in general. | |
| One of the problems you face when you're developing any | |
| strategic plan are the units of measurement, as well as not | |
| just relation to the budget, but how do you know we're being | |
| successful? How would you generalize, both from the Comptroller | |
| General standpoint and the Office of Management and Budget | |
| standpoint, where we are on achieving certain reasonable units | |
| of measurement? | |
| You're familiar, I think, both of you, with the Oregon | |
| experience, when they went out and talked to the citizens, said | |
| what programs do you like, how will you know if we got there | |
| and achieve those goals, and so forth? What's the--give me a | |
| good generalization here as to where you think we are in the | |
| Federal Government on this. | |
| Mr. Hinchman. We have been monitoring both the pilot | |
| projects which OMB is conducting and the implementation in the | |
| 24 major agencies that comprise 95 percent of the budget. I | |
| think I would make one point. Progress is further in those | |
| agencies which are engaged in direct delivery of services. For | |
| example, the Social Security Administration, which can measure | |
| the effectiveness of its 800 telephone service and the | |
| timeliness of its check mailing. | |
| Progress is slower in those agencies which work through | |
| third parties, like State and local government, in which the | |
| precise goal of the Federal involvement is less clear, at least | |
| less specifically defined, and in which--I think we have to | |
| say--the agency officials are more concerned about committing | |
| themselves to outcome goals over which they have less control. | |
| On the other hand, I have to say that I think we will get-- | |
| as Mr. Koskinen said--we will get both strategic and annual | |
| performance plans from those 24 agencies for fiscal year 1999. | |
| And while some will be better than others, basically the | |
| framework for outcome measurement is going to be there. | |
| Mr. Koskinen. I would agree with that perspective. I would | |
| add that our experience over the last three as we've worked | |
| with the agencies, is that focusing on missions and goals is | |
| complicated, difficult and challenging. But your question goes | |
| right to the heart of it. Trying to figure out what are our | |
| appropriate performance measures is really the intellectually | |
| challenging and stimulating task. | |
| This is true partially because of the wide range of | |
| activities in which the government engages. And besides the | |
| point Mr. Hinchman, we say that when we get to areas like basic | |
| research, and when we get to areas of operations like policy | |
| operations, even OMB, for example, trying to figure out how to | |
| measure successful performance gets to be a very complicated | |
| process. This is why, as I said in my testimony, I think what | |
| we have to expect is that these first plans won't be the last | |
| plans. And they should not be the last plans. | |
| We will find with some performance measures that--we'll | |
| find over time that they don't appear to be appropriate. They | |
| measure the wrong outcomes. We'll find with other performance | |
| measures that the data is either very difficult to obtain or | |
| too expensive to obtain. And we will find with other | |
| performance measures that we get a better understanding of the | |
| utility of those measures over time. | |
| I think your reference to the Oregon benchmark project is | |
| very appropriate. There they had the same experience. Their | |
| measures have gotten better over--with the passage of time. And | |
| I would hope that we would understand that the provision of the | |
| strategic plans in the fall of 1997 and the provision of the | |
| first performance plans in the winter of 1998 will be the start | |
| of a dialog and not the end of it, and that we do need a | |
| partnership, not only in a bipartisan nature in the Congress, | |
| but a partnership between the Congress and the agencies as we | |
| continue to review what are the appropriate, most effective | |
| performance measures. | |
| Mr. Horn. Let me ask one more generality on this, then I'm | |
| going to get down to specific agencies. What have you found | |
| were the ``performance measures'' that really haven't worked | |
| out? Can we generalize from what you've seen in changes when | |
| you've looked at the way some agencies have used ceratin | |
| measurements and just decided, hey, this isn't going to work? | |
| Any of those cases you could describe for the committee? | |
| Mr. Hinchman. The only point that I would make as | |
| generality is the importance of result oriented performance | |
| standards, that there is a temptation to look at outputs or | |
| ever process measures and to shy away from commitment to | |
| measuring actual impact which programs have on the lives of | |
| Americans. And that that's a temptation which has to be | |
| resisted. I think that we will get better at that over time. | |
| That is certainly the experience of GAO. We have been | |
| trying to measure our performance. We currently have a mix of | |
| both outcome and output measures. We hope to evolve toward | |
| completely--complete use of outcome measures, but it's going to | |
| take us some years to do that, I think. | |
| Mr. Koskinen. Our review of the pilot showed that the | |
| biggest problem at the front end as we're dealing with this is, | |
| in fact, the data collection. There may be an agreement that | |
| the measure looks appropriate, but the question is can you | |
| accurately collect timely data. As I said, going back to | |
| something to even something like research, a lot of impacts and | |
| outcomes are longitudinal, so you may be spending the money now | |
| and you won't see the results of that expenditure over a longer | |
| period of time. | |
| As we've told the agencies, that doesn't mean you shouldn't | |
| start measuring now, because if it takes 3 to 5 years to see | |
| the results, 3 to 5 years from now, if we haven't started, we | |
| won't know what the results were. But that's one of the | |
| issues--is in terms of programs with a longitudinal impact. | |
| Another is a point Mr. Hinchman made earlier, and that is how | |
| to obtain data when, in fact, the services are being provided | |
| by third parties, and we're making grants and there are | |
| actually intermediaries who are engaged in the activity. And | |
| what are appropriate measures--and--that they can effectively | |
| collect. | |
| Mr. Horn. In business, one of the measures would be, | |
| obviously, client satisfaction, the attitude that the customer | |
| can do no wrong. And businesses prosper that way. Now, with | |
| government, to what extent have we tried actual surveys of | |
| client satisfaction, the taxpayer, in brief, or anybody we | |
| serve. | |
| Mr. Koskinen. As they say in the trade, I'm glad you asked | |
| that question. A major initiative of the Vice President's | |
| National Performance Review has been directed in that area, | |
| which is focusing on developing customer service standards and | |
| then surveying customers to find out how those standards are | |
| being met, as well as collecting data. So there are not | |
| literally hundreds of standards that have been designed and | |
| developed across the government. And many of them depend upon | |
| government surveys. | |
| Now, one of the interesting ironies is that when you want | |
| to collect survey data, you have to be very careful about | |
| Privacy Act and Paperwork Reduction Act requirements that we do | |
| not want from the Federal Government, to burden the public with | |
| a wide range of data calls and data requests. So that--we are | |
| right now in the process of trying to develop the right | |
| balance. | |
| But I think you're exactly right. A lot of what we do | |
| interfaces directly with the government. Obviously, Social | |
| Security Administration, IRS, Veterans Administration, in the | |
| Customs Service, in INS. And across the board, part of the | |
| effectiveness of that agency has to be the perception and the | |
| satisfaction of the customers of those agencies. | |
| Mr. Horn. Has OMB rejected some of the proposed client | |
| satisfaction criteria? | |
| Mr. Koskinen. At this point, we have not. But as I say, at | |
| this point, the statute provides that we're really focused now | |
| on trying to get the strategic plans done and begin to focus on | |
| the development of the measures. The mechanics of how we | |
| collect that data will then be in the performance plan | |
| discussions. And we are concerned about that in holding | |
| discussions about it. | |
| Mr. Horn. So you're saying it's premature right now to | |
| consider this? When is it not? | |
| Mr. Koskinen. No. Actually, there are surveys that have | |
| been done. And in fact, if you look at annual reports being put | |
| out by agencies, you will see what those results are. The | |
| Social Security Administration has one of the most effective | |
| performance measurement devices. | |
| Mr. Horn. Mm-hmm. | |
| Mr. Koskinen. It puts out an accountability report that | |
| measures all of its range of activities in terms of standards | |
| and goals. | |
| Mr. Horn. Now, is that an in-house or is that contracted? | |
| Mr. Koskinen. My understanding is that--well, I do not know | |
| the answer to that question. | |
| Mr. Horn. Yes. I think we ought to look at should we | |
| contract this out to objective survey people or do we trust a | |
| particular agency and is it simply throwing things in the box | |
| as you leave the field office as to whether you were satisfied | |
| with the people at the counter, sort of like a hotel does. | |
| [Laughter.] | |
| And I'm just curious to what degree we're looking at the | |
| credibility of the data and how we go about it. | |
| Mr. Hinchman. Let me share one success story from SSA that | |
| does rely on external data. | |
| Mr. Horn. Sure. | |
| Mr. Hinchman. I had mentioned earlier that SSA runs a very | |
| large 800 number information system. They get over 60 million | |
| phone calls a year. And when they became more customer focused, | |
| they decided they needed to improve that service. They made a | |
| large investment in that, and then had the quality of that | |
| service tested by an outside firm, which measures, essentially, | |
| the quality of 800 service. | |
| Mr. Horn. Right. | |
| Mr. Hinchman. And there was a study done by that firm, | |
| involved eight respected private sector companies and SSA, and | |
| SSA won. | |
| Mr. Horn. Now, was that merely looking at how rapidly that | |
| phone was answered? | |
| Mr. Hinchman. No. | |
| Mr. Horn. Or was that talking about the end result? | |
| Mr. Hinchman. It was about calling people who had used the | |
| number and asking them about the quality of the service they | |
| received, how quickly the phone was answered, how polite the | |
| people who spoke to them were, how knowledgeable they were, how | |
| quickly their problems were resolved. | |
| Mr. Horn. Yes. Good. | |
| Mr. Koskinen. And in fact, and across the range of those | |
| quality indicators, the 800 number at Social Security did not | |
| answer the fastest. | |
| Mr. Horn. Mm-hmm. | |
| Mr. Hinchman. But nonetheless, the overall satisfaction and | |
| quality of the information made it the most effective 800 | |
| number in that comparison. | |
| Mr. Horn. Yes. I think that's probably true. I've checked | |
| myself every once in a while on Social Security. But an agency | |
| we have real problems with, as you know in management--and I | |
| must say the President has a choice now when he nominates | |
| people. This agency, he needs not a good tax accountant, not a | |
| wonderful tax lawyer. What he needs is a manager. And that's | |
| the IRS. This is obviously a basket case agency. | |
| And we've had numerous congressional hearings on this. | |
| They're going through hearings in Ways and Means. Hopefully, | |
| they will be included in the debt collection act that we passed | |
| here last year. And they have not yet agreed to that. But I'm | |
| told by the chairman, Ms. Johnson of Connecticut, that she will | |
| generally follow what was done here. And that's long overdue. | |
| Now, what worries me is when the thousands of citizens I | |
| have heard from on this subject all over America, is that this | |
| is an agency they are frustrated by, in the sense they can't | |
| get through to somebody to solve the problem. And there needs | |
| to be some sort of telephone tree that ends up, maybe, with an | |
| agent somewhere that can answer a question. And you know, the | |
| airlines have worked on this, lots of different groups have | |
| worked on it. | |
| It isn't impossible. Social Security has already done some | |
| of it, and we need to take a real good look at that. Because if | |
| we were ranking agencies in customer satisfaction, that would | |
| be one right at the bottom. And I just wonder what you are | |
| doing about it. | |
| Mr. Koskinen. Well, I think we might disagree with whether | |
| it's a basket case or not. It fairly effectively collects a | |
| trillion-and-a-half dollars a year in finances. But in terms of | |
| being---- | |
| Mr. Horn. But it very ineffectively has $100 million | |
| written off. That bothered me. That's what got me started on | |
| the Debt Collection Act. | |
| Mr. Koskinen. As you know, we worked with you very closely | |
| on that act and appreciate your support of it. What has | |
| happened is that the issues of management of the IRS are | |
| receiving the highest level of attention. The Secretary of the | |
| Treasury has set up a modernization management board, chaired | |
| by the deputy secretary, Mr. Summers, that is working on a | |
| regular basis really as a board of directors with the | |
| management of the IRS focused directly on those questions, on | |
| its information technology systems. | |
| As you know, we basically--that board made a decision to | |
| stop a program for document processing which was going to cost | |
| a $1,200,000,000 billion, and it wasn't clear that it was going | |
| to, in fact, work. And over $1 billion was not spent as a | |
| result of that decision. There is a focus on the 800 numbers, | |
| there's a focus on electronic filing, making it easier for | |
| people to file their returns. | |
| And one of the great successes they've had is, in fact, | |
| increasing the speed with which they provide refunds. But | |
| you're right. One of the questions taxpayers legitimately have | |
| is they'd like to be able to get advice promptly and | |
| effectively. And we are focused on that. | |
| And I think you're also correct that we need to focus on | |
| the management internally in the IRS. We've been very | |
| successful and very fortunate to recruit a new chief | |
| information officer from the State of New York, Art Gross, who, | |
| I think, is doing a phenomenal job. And we have high | |
| expectations, but also high demands of the need for improvement | |
| in that agency. | |
| Mr. Horn. Before I yield to the gentlewoman from Maryland, | |
| let me make sure the record shows I said $100 billion, not | |
| million. I think I mushed that a little. | |
| But now, I yield to the gentlewoman from Maryland, Mrs. | |
| Morella. | |
| Mrs. Morella. Thank you, Mr. Chairman. We know that you | |
| always operate in the magnitude of billions. [Laughter.] | |
| Gentlemen, particularly Mr. Hinchman and Mr. Koskinen, I | |
| wanted to ask you about the Government Performance and Results | |
| Act--usually requires agencies to consult with Congress in | |
| preparing their strategic plans. From my experience, agencies | |
| always check in with OMB first before they move forward beyond | |
| that. | |
| And so this happens with testimony before Congress. We find | |
| out. And certainly, with the current budget process. So my | |
| question to you is, whether agencies must clear through OMB | |
| every single document, idea, goal, or mission that is required | |
| by the Government Performance and Results Act? | |
| Mr. Koskinen. No. That's not required. | |
| Mrs. Morella. It's not? | |
| Mr. Koskinen. Some people would like to think of us as all- | |
| powerful and all-encompassing, but the agencies actually have a | |
| lot of dialog with the Congress that does not clear through us. | |
| We clear testimony, but not, generally, materials provided. We | |
| have, as a I noted in my testimony over a 1\1/2\ years ago, | |
| sent out guidance to the agencies which we reaffirmed last | |
| fall, encouraging them--reminding them of the statutory | |
| requirement that they consult with Congress as their plans are | |
| developed, and encouraging them to begin--engage in that | |
| consultation. | |
| So quite the contrary in terms of resisting that, we think | |
| that the statute not only requires it, but that it's an | |
| important part of the development of the strategic plan. The | |
| statute, I think, wisely contemplates that the agency should | |
| consult with Congress. The agency should consult with their | |
| stake holders, whether that be State and local governments or | |
| the public, in the development of their final plans. | |
| And we are encouraging them to do that. We have spent, as a | |
| I noted in my prepared testimony, a significant amount of time | |
| over the last 3 years working with them, reviewing their | |
| processes, trying to provide them my help, assistance and | |
| guidance, drawing to their attention a lot of the good work | |
| that GAO has done in terms of the development of strategic | |
| plans. | |
| So on occasion, we hear that someone has said, well, gee, | |
| OMB won't let us do that. And I'd be delighted if anybody would | |
| refer any difficulties they're having getting consultation with | |
| their agencies. You can call me directly, because our--we're at | |
| the other end of that spectrum. We're encouraging that | |
| consultation. | |
| We think the time now is right, that it needs to be done | |
| this spring and this summer, so that when those plans come in, | |
| as the statute notes, to the extent that the agencies have | |
| consulted and they have not reflected in the plans, views of | |
| anyone they consulted, their cover letters are supposed to | |
| highlight that for both us and for you, so that they--when they | |
| publish these plans, which will be submitted not only to the | |
| Congress, but available to the public, it will be clear where | |
| the agency's plan is going, with the administration's support, | |
| and what views are not--have been made that have not been | |
| reflected, significant views, obviously, in that plan. | |
| So I think it's an important process, and we support it | |
| significantly. | |
| Mrs. Morella. And they don't need to OK it with you? That's | |
| not mandatory? | |
| Mr. Koskinen. No. At this point, they don't have a plan to | |
| OK. | |
| Mrs. Morella. When they do. | |
| Mr. Koskinen. What they need to be discussing with you is | |
| what are their proposed goals and objectives. We have--there is | |
| one case, actually, in the press, if they start to produce | |
| long-term projections about the impacts of what's going to | |
| happen to their performance before they've actually reviewed | |
| that in the budget process, then we actually do not allow that | |
| to happen, only because the reason for the OMB review of budget | |
| numbers and numbers, themselves, is to make sure that when you | |
| get those numbers, they come with the imprimatur and support of | |
| the administration. | |
| That--but that's a level of detail that we're not involved | |
| in at this point. At this point, the agency should be | |
| discussing with you what their views are and your views are of | |
| their goals, their missions, their objectives, and, as Mr. Horn | |
| stated, what are their performance measures going to look like | |
| in terms of categories, not the details or what the numbers are | |
| actually going to be. | |
| Mrs. Morella. They don't need the clearance. Great. How | |
| about, Mr. Hinchman, would you like to get back on this? | |
| Mr. Hinchman. We are doing a review for Mr. Kasich of the | |
| consultation process required by the act. As you, I think, | |
| know, relatively few consultations have taken place so far, | |
| perhaps half a dozen or so, I think, most of them initiated by | |
| Congress and its staff, not by the agencies. As Mr. Koskinen | |
| has indicated, that pace will pick up rapidly over the coming | |
| months. We'll begin to get a better idea of how it's going to | |
| go as we get into a larger volume of activity. | |
| I would add one other note. I think that we have to | |
| recognize that the Office of Management and Budget has a | |
| legitimate concern for ensuring that the President's policies | |
| are reflected in all the communications that occur between | |
| execute agencies and the Congress, and that that concern is not | |
| going to go away. | |
| What I think is important is to also recognize that GPRA is | |
| basically about improving the management of the government. And | |
| a lot of what the government does is about the management of | |
| trillions of dollars of assets and billions of dollars in | |
| expenditures every year, and that we all have a shared | |
| interests beyond the policy issues over which we disagree about | |
| making that management process more effective. | |
| And I would hope that these consultations can provide for | |
| frequent open dialog about how we can improve that management | |
| process and what the goals and outcomes of that management | |
| undertaking ought to be. | |
| Mrs. Morella. Could I ask one more question, and it's | |
| simply that when agencies form their strategic plan and their | |
| mission, how do we ensure that the appropriate group is working | |
| on the process? I mean, by that I mean, is there any kind of a | |
| mechanism that would include a cross-section of employees, | |
| managers, budget experts, policy experts, you know, stake | |
| holders and others that might be appropriate? | |
| Mr. Koskinen. In our guidance to the agencies and in our | |
| reviews with the agencies, we have stressed the importance of | |
| that point. One of my concerns is that if we're not careful in | |
| the implementation of this act, we'll create what I call a GPRA | |
| bureaucracy, and that is, in an agency we'll have a group of | |
| people off on the side, in a planning office or someplace, who | |
| fill in the blanks and provide whatever documents the statute | |
| seems to require, without drawing upon the expertise and the | |
| perspectives of everyone in the organization. | |
| Mr. Hinchman is exactly right, that this statute is not | |
| meant as an abstract exercise in producing neat binders with | |
| blue covers. The purpose of this statute is to improve the | |
| effectiveness of government operations. And one of our pitches | |
| to the agencies has been, what they should focus on is what | |
| data and information do they need to effectively manage their | |
| programs, and to the extent that they can work with us to | |
| define that data, we will guarantee them that that will be | |
| acceptable performance data for the management of those | |
| programs and reporting. | |
| Because, again, as I say, it will be counterproductive if | |
| we have strategic plans to collect artificial information that | |
| no one is actually using in the day-to-day operations of the | |
| agencies, because one of the key utilizations of this | |
| information is not just to make resource allocations, the most | |
| immediate impact of the information is to adjust or change or | |
| modulate the way the program is organized or managed. | |
| If we never allocated a budget dollar differently because | |
| of GPRA performance, it would not mean that the exercise was | |
| for nought. If we do it well, all of that performance | |
| information will be reflected in changes in the way we actually | |
| manage or operate those programs. So it's critical that we | |
| focus on this. And that can only be done effectively, as you | |
| note in your question, if the people focusing on this include | |
| the senior leadership in the agencies as well as the people on | |
| the front lines. | |
| Our responses to the agencies last summer, after our | |
| reviews went to the cabinet secretaries, and noted wherever we | |
| thought it was important, that those senior political | |
| appointees of the agency have to be intimately involved in this | |
| process, just as much as the front line workers. | |
| Mrs. Morella. So the directions are that they--the | |
| assumption is that they will do so? | |
| Mr. Koskinen. Yes. | |
| Mrs. Morella. And not make---- | |
| Mr. Koskinen. And we've--we've asked that question of them | |
| and encouraged them to broaden the base of their planning | |
| effort. | |
| Mrs. Morella. Thank you, Mr. Chairman. | |
| [The prepared statement of Hon. Constance Morella follows:] | |
| [GRAPHIC] [TIFF OMITTED] T9381.038 | |
| [GRAPHIC] [TIFF OMITTED] T9381.039 | |
| [GRAPHIC] [TIFF OMITTED] T9381.040 | |
| Mr. Hinchman. If I could just add one note to that, Mr. | |
| Chairman. In our work with successful public sector reform | |
| efforts, one of the best practices we've identified--and it's | |
| reflected in our executive guide--is involving stake holders. | |
| And there are both internal and external stake holders. And | |
| they all need to be part of the planning process. | |
| Mr. Horn. Before yielding to Mr. Sessions, let me round out | |
| what Mrs. Morella has correctly begun. I think your answer is a | |
| very good one in terms of what the data--what those data ought | |
| to be down the line. And I guess my query is, does OMB plan to | |
| have the agencies, when they come in for future budgets, show | |
| this performance data as part of the budget review process in | |
| OMB, and is it understood that secretaries will sign off on | |
| this? I agree with everything you've said, because I've been | |
| through this, 35 years ago and 25 years ago. | |
| The University of Toronto was the first to have university- | |
| wide planning. I was at the second, in terms of California | |
| State University at Long Beach. And we started from the bottom | |
| up, just exactly as you're talking about. You've got to really | |
| get people involved. | |
| I was amused by my colleague, Mr. Armey's, department | |
| chair. That's what most people do. Say, you have them file a | |
| report at the end of the night. The people who are there | |
| rendering the service are never involved. It's just somebody | |
| writing it out, and it's pieces of paper moving around. And | |
| your comments lead me to believe you're very alert to that | |
| situation and you want involvement. And you want something that | |
| works. | |
| And that's what we're talking about. | |
| Mr. Koskinen. Right. | |
| Mr. Horn. Now, are you going to include it in the budget | |
| process? | |
| Mr. Koskinen. As they say in the trade, you bet. Our hope | |
| is, ultimately, that we would evolve an accountability report, | |
| as we call it. And we've had pilot program experimentation with | |
| that, in which we would pull all of the results of agency | |
| activities and reviews together in one document. And our hope | |
| would be that an agency, ultimately, in the budget process, | |
| would come to OMB and, ultimately, to the Congress, saying, | |
| these are the results of our activities thus far and our | |
| accountability report, and these are our resource requests. And | |
| if we get these resources, these are what our performance plan | |
| show we will be able to receive with those. | |
| And a year later, they would come in with an accountability | |
| report, saying, these are the resources you gave us, these are | |
| the results we got, these are the resources we'd like in the | |
| next cycle. | |
| Mr. Horn. Mm-hmm. | |
| Mr. Koskinen. It will take us some time to get from here to | |
| there. But we started in the fall of 1994 with the 1996 budget | |
| process, asking for as much performance information as the | |
| agencies had in their justifications to us. This last fall, in | |
| the 1998 budget process, we told agencies it would be a very | |
| effective time to start a pilot program for seeing how much | |
| performance information they had. We ran a spring review in | |
| 1995, saying for your major key programs, what measures would | |
| you use to judge their effectiveness? | |
| So we've engaged, over the last 2 years, 2\1/2\ years, in | |
| an on-going dialog, trying to bring to bear the focus of the | |
| agencies, not only on the results, but, in fact, as you say, | |
| that these should be involved in the explanations as to what | |
| they're going to be accomplishing with the additional resources | |
| they're asking. | |
| Mr. Horn. Now, does the gentleman from Texas have any | |
| questions he'd like to ask? | |
| Mr. Sessions. Yes. I would. Thank you. | |
| Mr. Horn. Yes. | |
| Mr. Sessions. I would direct to either three of you, is | |
| there any indication that you have when you hear back from | |
| these agencies that there's some reluctance or some unknowing | |
| of about what these strategic directions might be, that you | |
| could direct them to their IGs, Inspector Generals, and/or to | |
| this report that this committee came out with last year, as a | |
| good indication about realistic approaches that need to be made | |
| within their agencies, at least as a starting point? | |
| Or do you find that they do understand this as strategic | |
| direction and that they've got a good handle on it? So it's | |
| just a general question and comment about feedback from these | |
| agencies. | |
| Mr. Koskinen. You've been doing well, Jim. | |
| Mr. Hinchman. Chris, do we have any feedback from the | |
| agencies on that issue? Do you know of any? I'm not aware of | |
| any. | |
| Mr. Mihm. Mr. Sessions, we haven't heard specifically of | |
| agencies referencing the committee report or thinking of going | |
| to their Inspectors General for decisions or questions about | |
| strategic direction. To the broader issue that you're raising, | |
| though, about a lack of strategic direction, that's one of the | |
| major challenges to the implementation of GPRA. It's one of the | |
| opportunities that GPRA affords, is that we've found an awful | |
| lot of agencies where the basic approach of Federal program | |
| management has been an adaptive approach over time, where we've | |
| had new responsibilities overlaid on existing missions, such | |
| that now some agencies have really lost their way. | |
| And in Mr. Hinchman's prepared statement, he talks about a | |
| couple of those. And so, there is a real need as agencies go | |
| through the strategic planning process, to start first with | |
| what is our purpose, what business are we in? And for some | |
| agencies, that's going to be quite a struggle. | |
| Mr. Koskinen. We have not had any feedback that would | |
| indicate a difficulty. We have increasingly encouraged | |
| agencies, though--and will again in a review and an assessment | |
| we're doing this spring--to take a look at their major, what we | |
| call, management challenges. And those challenges come in a lot | |
| of different formats and have been drawn to their attention in | |
| a lot of different ways. And encourage them to take a look at | |
| what are their performance measures going to be for solving or | |
| dealing with those management challenges. | |
| And to the extent that they are significant, they should | |
| be, we think, reflected in their overall strategic planning | |
| effort. But as Mr. Mihm noted, the strategic planning effort | |
| deals with, ultimately, the basic goals and missions and drive | |
| of the agencies. And a lot of the particular IG reports or | |
| other issues are significant, but not clearly sufficient to | |
| cover the wide level of activities going on. | |
| I would note, also, in response to your earlier discussion | |
| with the majority leader, that I very much appreciate your | |
| concern that agencies not come forth with fear and trepidation | |
| and concern that nothing good is going to come out of this for | |
| them. As Woody Hayes once said when he was coach at Ohio State, | |
| why did he like forward passes, ``two out of three things that | |
| happen to you are bad.'' | |
| Part of my concern has been that the agencies may, over | |
| time, feel that nothing, everything will be bad with measures, | |
| that it will only be used as a way of justifying fewer | |
| resources. I think to the extent that we can in a bipartisan | |
| way and in a cooperative way--a partnership between the | |
| administration and the Congress--get everybody to understand | |
| our goal here really is to be effective. | |
| We may argue, as noted earlier, about whether the | |
| government ought to be doing one thing or another, but we all | |
| ought to agree, once the government is in an activity, it ought | |
| to be doing it in the most productive way possible. And as I | |
| noted in my prepared testimony, we need to have people | |
| understand that if an agency is not performing well, the answer | |
| may not be fewer resources, the answer may be more resources. | |
| On the other hand, an agency that's continually moving | |
| along may turn out to be a lower priority over time, and we may | |
| decide that the performance isn't good enough and we won't get | |
| increased performance, there just is no way to turn it around | |
| with resources or management changes. | |
| But those dialogs need to be held, and I think, as I say, | |
| your focus on the positive aspects of it are important, because | |
| I think agencies need to understand that this is an important | |
| dialog and, at least, on occasion some good things will happen | |
| as a result of a dialog, as well as some hard questions being | |
| asked. | |
| Mr. Sessions. Good. Thank you. Let me just say this, that | |
| the work that you do is in the best interest of the taxpayer, | |
| should continue. And I think, Mr. Chairman, this committee | |
| should do all we can do to reinforce not only the work you're | |
| going to do, but to present a positive spin to all managers of | |
| the government, that they must comply, but it's up to them what | |
| they present. | |
| And then we will get into an oversight, if necessary, of | |
| the discussion of the priorities. Thank you, Mr. Chairman. | |
| Mr. Horn. Thank you. The gentlewoman from Maryland. | |
| Mrs. Morella. Thanks. Just as a followup, Mr. Koskinen, I | |
| was looking at an article here in the Washington Post, which | |
| quotes Franklin Raines and states that--OK. ``He encouraged | |
| agencies to consult with congressional committees but requested | |
| that all substantive documents related to strategic plans | |
| should be provided to OMB beforehand.'' | |
| Is that accurate? | |
| Mr. Koskinen. Well, they've all, actually, been provided to | |
| OMB. I mean, as Mr. Hinchman stated, these plans have been | |
| under review with us for the last 2 years as they've evolved. | |
| And what we've told the agencies is they need to consult with | |
| the Congress, they need to provide the most updated | |
| information. And to the extent that they are providing to you, | |
| we'd like to know what that information is. But at this point, | |
| as I say, they've already submitted the bulk of their material | |
| to us. So we have it under review. So it's not an obstacle. | |
| It's not as if the agencies have been off on their own and | |
| we've never seen it. We've seen the information and our | |
| encouragement to the agencies now is they need to discuss their | |
| basic goals and measures and where they're going with you. | |
| Mrs. Morella. So they've already--what you're saying is | |
| that since they've already presented some of this material to | |
| you, they can move forward? | |
| Mr. Koskinen. Yes. Right. | |
| Mrs. Morella. But they need to present it to you. I mean, | |
| it is a requirement. | |
| Mr. Koskinen. Yes. It's not an obstacle because they've | |
| already done it. But it is part of the normal process, that | |
| they would continue to deal with us. | |
| Mrs. Morella. It is part of the process that they report | |
| it. | |
| Mr. Koskinen. I would renew my offer. If there is ever an | |
| area where someone feels that an agency is not being | |
| forthcoming--and worthy explanation for that, I would be | |
| delighted to make sure that we resolve whatever issue there is | |
| promptly. | |
| Mrs. Morella. Mm-hmm. Mm-hmm. | |
| Mr. Koskinen. I'm not aware of any at this point. | |
| Mrs. Morella. OK. I see that same statement is quoted here | |
| in the memorandum for the heads of executive departments and | |
| agencies, ``All substantive documents related to strategic plan | |
| should be provided to OMB beforehand. And OMB comments ensuring | |
| consistency with national program and budget policies should be | |
| incorporated before the documents are given to Congress.'' | |
| That's correct, though? Right? | |
| Mr. Koskinen. That's correct. | |
| Mrs. Morella. Thanks. | |
| Mr. Koskinen. And in fact, I'd be happy to put into the | |
| record that letter which pursues--is pursuant to the guidance | |
| we gave a year earlier encouraging congressional consultation. | |
| As noted, our goal is primarily to make sure that when you get | |
| engaged in a dialog with the agencies, you're engaging with a | |
| dialog with the administration--with the administration's | |
| support, that there's--and that's our role in OMB, is not to | |
| think up new things, it's basically to make sure that when | |
| agencies make presentations to you on major matters like this, | |
| that you're not going to find out later on that that | |
| presentation is disowned because it doesn't reflect the | |
| understanding of the President's priorities or our view of | |
| where we're going to be going with it. | |
| But as I say, at this juncture, all of the agencies are | |
| sharing that material with us. We're giving them feedback. We | |
| expect to have another assessment starting in the next couple | |
| weeks with them of where they are. Our problem is less--our | |
| concern is less what they're doing with those plans. Our real | |
| concern is making sure that they have the consultation with you | |
| and that they complete acceptable and useful plans for | |
| submission to all of us by next September. | |
| [The information referred to follows:] | |
| [GRAPHIC] [TIFF OMITTED] T9381.041 | |
| [GRAPHIC] [TIFF OMITTED] T9381.042 | |
| Mrs. Morella. OK. Thank you. Thank you. | |
| Mr. Horn. As I understand, where we are on this question | |
| and answer, the consultation can be oral up here. | |
| Mr. Koskinen. Right. | |
| Mr. Horn. And they can talk to us and we can talk to them. | |
| But when the chips are down, what they put in writing is | |
| cleared through OMB. | |
| Mr. Koskinen. That's correct. If they are going to give you | |
| a plan, we should have seen it beforehand. | |
| Mr. Horn. Right. Yes. | |
| Mr. Koskinen. But--but there's nothing that we---- | |
| Mr. Horn. So I don't think any of us are deluded that OMB | |
| won't be involved. And I think if Members are concerned about | |
| what the agency suggests that was knocked out, we can ask them. | |
| Mr. Koskinen. You can ask them. | |
| Mr. Horn. And they have to tell us, just as we do, what did | |
| you ask them in money. | |
| Mr. Koskinen. Exactly. | |
| Mr. Horn. And then what did they do to you? | |
| Mr. Koskinen. And at that point, you'll have exactly the | |
| right information you need, which is what the agency suggested | |
| and, for whatever reason, we didn't want to put in, and then we | |
| can have a dialog about that. Our concern is that if we don't | |
| have that process, you'll get agency discussions and you'll | |
| move forward with them only to discover after the fact that | |
| that's been--turned out to be a problem and the administration | |
| is not supporting that position. | |
| But the chairman has it exactly right, that the agencies | |
| are encouraged to have those discussions with you, | |
| freewheeling. They should be talking with you. And we encourage | |
| them to engage you in a dialog in your perspectives of what | |
| those goals and missions and objectives ought to be, | |
| recognizing that the final plans will be agency plans as part | |
| of the administration. But as I say, if you have ideas that are | |
| not reflected, the cover letter for those plans should reflect | |
| that for you. | |
| So they should say, we had congressional consultations and | |
| the Congress said we ought to have a mission statement that | |
| looked like that. We have a mission statement that varies | |
| somewhat, and now you can take a look at the differences. So | |
| the important point is to get all of that out so people | |
| understand exactly where everyone is. | |
| Mr. Horn. Let me go back, as the gentlewoman--let me go | |
| back to a couple of areas. Mr. Hinchman, you mentioned the | |
| report on ``consultation'' that you are preparing for Budget | |
| Chairman Kasich. If you would be good enough to send Mr. Burton | |
| and Mr. Waxman, myself and Mrs. Maloney copies of that, we'd be | |
| most grateful. | |
| Mr. Hinchman. Of course, Mr. Chairman. | |
| Mr. Horn. We'd like to keep up on what's going on here, and | |
| there's no use asking you twice. Just copy us. Now, let me ask | |
| you, Mr. Hinchman, on the basis of what the General Accounting | |
| Office has learned, do you plan to propose any changes to the | |
| legislation when you report on June 1, 1997? Do you have a | |
| number of changes that will be coming to---- | |
| Mr. Hinchman. I think that we do not expect to report new | |
| changes. I think our view is that the framework in the statute, | |
| as I said in my testimony, is sound and that we need to try to | |
| make it work. And that it's not time yet to begin thinking | |
| about changes in that structure. | |
| Mr. Horn. OK. Now, one of the concerns that we have is on | |
| the various pilots. Some of them relate to those agencies that | |
| are also on your high risk list, which we will begin discussing | |
| tomorrow. For example, the HUD Office of Chief Financial | |
| Officer. Apparently, the department cannot get an opinion on | |
| its audited financial statements and has serious and pervasive | |
| weaknesses in its internal controls that cause it to be on your | |
| 1997 high risk theories. And the EPA Superfund program. There's | |
| another one. | |
| Mr. Hinchman. Mm-hmm. | |
| Mr. Horn. What is your feeling on this in terms of being a | |
| pilot when we have so many problems? Is that good, bad? Does | |
| that just force them to focus more attention on it and solve | |
| the problem? And why haven't they? | |
| Mr. Hinchman. I think, in general, we would say that | |
| participating in the pilot program has been good for agencies, | |
| that those agencies that have been in the pilot program are a | |
| few steps ahead of others in achieving effective implementation | |
| of the requirements of the act. And I think we will see that | |
| when we see the 1999 plans. That is to say that those, in | |
| general, those pilot agencies, will do the better jobs of | |
| meeting the requirements of the act that time around. | |
| With respect to specific cases like HUD, I don't think that | |
| we can expect that participation in the pilot program is going | |
| to solve HUD's problems. HUD has made progress, however, and | |
| I'm hopeful, I like to think that its involvement in the pilot | |
| project has helped focus its thinking on the kind of steps | |
| which will lead to progress. Our high risk report will say that | |
| things are better at HUD than they were 2 years ago. | |
| But you are right. Things are not OK, and there is more | |
| work to be done there. | |
| Mr. Horn. Let me move to the Forest Service. It's also | |
| listed as a pilot for performance plan phase. I'm told its cost | |
| accounting is abysmal. | |
| Mr. Hinchman. Mm-hmm. | |
| Mr. Horn. It doesn't track the cost with associated | |
| revenues on a consistent, logical basis as good cost accounting | |
| practices dictate. | |
| Mr. Hinchman. Mm-hmm. | |
| Mr. Horn. It would seem that the pilot implementation would | |
| require better cost accounting. Have you seen any improvement | |
| in the Forest Service management lately? | |
| Mr. Hinchman. We currently have work underway concerning | |
| Forest Service management. I am not in a position, today, to | |
| say exactly what the outcome of that will be. There is no | |
| question, though, that the Forest Service does have financial | |
| management problems. It is not unique in that regard. I think | |
| that one of the reasons I talk about the Results Act as being | |
| part of a framework of statutes is because I think that solving | |
| our information technology and financial management problems is | |
| a critical part of solving our general management problems. | |
| And we're going to have to rely on those statutes working | |
| together to make the government a well run institution. | |
| Mr. Horn. Do you want to comment on any of these? | |
| Mr. Koskinen. I would just echo Mr. Hinchman's comment that | |
| I think wherever we've had agencies participating in pilots, | |
| it's been a benefit to them as well as to the statute. I think | |
| it has helped focus them, not only on improvements, but | |
| actually on how to measure those improvements, and that's one | |
| of our biggest challenges, is to not just keep coming back | |
| every year saying, well, things are a little better. | |
| We need to have actual measures. And I think the | |
| application of the statute and through the pilot program is a | |
| significant step in the right direction. | |
| Mr. Horn. As you know from the private sector, there have | |
| been experiments with looking at a particular corporate culture | |
| of a firm, a plant, especially when you've merged maybe three | |
| or four unique companies under one conglomerate. Has anybody | |
| looked at that from the point of the Federal Government, where | |
| you think in these pilots, now, that you have a good cross- | |
| section of the government? Do you feel that you have or are | |
| there other ones, perhaps, you should convince to be pilots? | |
| Mr. Koskinen. Well, the great genius of the act was to | |
| allow us to have the pilot program phase and have the agencies | |
| as well as us learn. Now what we're doing is turning the whole | |
| government into a pilot. In September of this year, everyone is | |
| supposed to show up with a strategic plan, has to show up with | |
| a strategic plan, and in February, next year, they will all | |
| show up with a performance plan. | |
| So that at this point, we're out of the pilot phase and | |
| we're into the actual full implementation phase. | |
| Mr. Horn. Mr. Hinchman, back to you. In terms of your | |
| testimony, you stated that the Department of Defense is unable | |
| to properly manage its cost resources, and that the critical | |
| cost data are absent for almost all of the department's non- | |
| cash assets such inventory, equipment, aircraft, missiles. | |
| Mr. Hinchman. Mm-hmm. | |
| Mr. Horn. I'm just curious how they're doing with | |
| implementing the pilot project. | |
| Mr. Hinchman. I think that financial management at the | |
| Department of Defense remains a very big challenge, and I don't | |
| think that we will see that problem fixed in the near term. And | |
| obviously, part of a good financial management system includes | |
| cost accounting systems. And I think we all share the goal of | |
| reaching a point at which financial management, including cost | |
| accounting within the government, meets private sector | |
| standards. DOD is not there today. | |
| Mr. Horn. We found in our hearing last year of what did you | |
| do with the $25 billion, and they said we didn't steal, or | |
| nobody stole, but we just can't find it all. Forty-nine | |
| accounting systems exist in the Department of Defense. Anything | |
| happening to consolidate that? And if you were suddenly made | |
| the Chief Financial Officer of Defense, what would you do? | |
| Mr. Hinchman. I would begin---- | |
| Mr. Horn. Besides go to Australia. [Laughter.] | |
| Mr. Koskinen. That's right. | |
| Mr. Horn. What would you do? | |
| Mr. Hinchman. I would begin a strategic planning process to | |
| determine what the goals of that system need to, and begin | |
| developing plans to move toward those goals year by year. I | |
| think it's going to be a long-term process. | |
| Mr. Koskinen. There is--I would note--that there is a | |
| strategic plan in this particular area, to over a reasonably | |
| definable period of time, migrate those systems to five basic | |
| financial accounting systems. It's not easy. It's been a | |
| project underway for some time, but they have begun to make | |
| significant progress. But I think Mr. Hinchman is right. This | |
| is one of the major challenges in the government, is to, in | |
| fact, work with the Department, which is very focused on this, | |
| in bringing its financial system up to date. | |
| Mr. Horn. Well, we know they won't be able to give us a | |
| balance sheet, I think. Both IRS and Defense, for 4 years now, | |
| everybody said they can't possibly meet the law on that. Do you | |
| feel that is still true? | |
| Mr. Hinchman. I believe that we will have financial | |
| statements from the Department of Defense when it's required | |
| under the CFO act. I do not know, at this point, what the | |
| opinion in the statements will be. | |
| Mr. Koskinen. Right. | |
| Mr. Horn. Any reaction on that? | |
| Mr. Koskinen. I think that's correct. We are--we have | |
| actually worked jointly--the Treasury Department, GAO and OMB-- | |
| in developing and preparing for the governmentwide financial | |
| statement required under the CFO Acts and Government Management | |
| and Reform Act, and, clearly, we all are working together with | |
| the areas you've discussed and some others, to make sure that | |
| we comply with the statute. | |
| So I think, at this point, we've arrayed all the resources | |
| in the government together in a very cooperative and very | |
| focused effort to see if we can improve these problems. | |
| Mr. Horn. Before I yield to Mr. Sessions, let me ask you | |
| one question while we're on this topic. IRS has had major | |
| problems implementing the new technology down there. | |
| Mr. Koskinen. Yes. | |
| Mr. Horn. We went through this with FAA 3 years ago. | |
| Mr. Koskinen. Uh-huh. | |
| Mr. Horn. Absolute basket case. And we have this throughout | |
| the government, now. What have we learned from these | |
| experiences, either from the OMB side or the Comptroller | |
| General side. | |
| Mr. Koskinen. Well, I won't give you my full half hour | |
| speech that I gave yesterday morning. | |
| Mr. Horn. Give me your executive summary. | |
| Mr. Koskinen. The executive summary is that thanks to the | |
| assistance of this committee and the Governmental Affairs | |
| Committee, we passed the Information Technology Management | |
| Reform Act, now known and referred to as the Clinger-Cohen | |
| Act---- | |
| Mr. Horn. Right. | |
| Mr. Koskinen. Which fundamentally changes the way the | |
| government plans for, acquires and manages information | |
| technology. Again, it was--we had the benefit of a lot of | |
| insight and experience and reviews by GAO, in which we drew on | |
| the promising practices or best practices of 10 of the best | |
| private sector companies who use information technology. We | |
| know have Chief Information Officers in every agency. They are | |
| focused on dealing with what we think were the fundamental | |
| weaknesses in the prior system. | |
| Mr. Horn. But what were those weaknesses? | |
| Mr. Koskinen. Fundamental weaknesses are, first of all, | |
| partially driven by the nature of the procurement system. We | |
| tended to design large complicated systems all on one | |
| procurement so that we would be buying systems and planning | |
| them over 8 to 10 to 12-year time horizons. The best private | |
| sector companies buy systems with deliverables no farther out | |
| in time than 12 to 18 months. | |
| A corollary to that means that if you are designing a large | |
| system, you need to, in fact, then buy it in modular or phases, | |
| with testing of each phase to make sure you're moving in the | |
| direction in which you want to go. Another major lessen of the | |
| private sector is that these are not technology questions--the | |
| problems--they are actually management questions. | |
| And the best companies, before anyone automates anything, | |
| ask the question of A, do we need to do this work at all?; B, | |
| if it needs to be done, is there someone else who can do it | |
| better? And probably most functionally and important in dealing | |
| with not only the government's problems, but the private | |
| sector's problems, if we need to do the work and no one else | |
| can do it better, have we restructured and re-engineered the | |
| way the work is done to be able to maximize the impact of | |
| information technology. | |
| A corollary to that is, have we re-engineered the work so | |
| that we can take advantage of off the shelf software and | |
| existing systems, rather than customizing a new system to meet | |
| what is often an idiosyncratic way of doing the work. | |
| Mr. Horn. Yes. Since we knew all that 25 years ago, does | |
| this mean the role of Assistant Secretary for management has | |
| failed in these departments? | |
| Mr. Koskinen. Well, I would tell you that A, people didn't | |
| know this 25 years ago. So I would challenge on that. | |
| Mr. Horn. But we did. On the systems that--look, the | |
| dumbest thing you can do is bring in a computer, which they | |
| will sell to you with all the wonderful things they can do with | |
| it, and not clean up your systems to start with, and ask, are | |
| you doing it, just as you said, and get rid of it. And then you | |
| automate that. The other dumb thing you do--and the FAA did | |
| that regular--is you don't get closure on everybody's great | |
| idea. And there's nobody managing it. It's everybody doing add- | |
| ons. McNamara got into that trouble in the early 1960's with | |
| building a plane that had to do everything, which didn't work. | |
| Mr. Koskinen. I would respectfully note that the government | |
| has no monopoly on these problems, that, in fact, there are | |
| vast numbers of failed systems right now in the private sector. | |
| A study last year showed that over half of the private sector | |
| systems being designed last year and implemented either didn't | |
| work or came in over budget and did not come in on time. | |
| So that these lessons which are straightforward and | |
| understandable are not technological lessons, have not | |
| necessarily been out there in everybody's mind for 25 years, | |
| and the government has not led the failure parade. There are, | |
| as I say, far more dollars that have been spent on failed | |
| systems in the private sector in the last few years than in the | |
| government. | |
| That doesn't mean that we don't need to learn the lessons. | |
| And that's where GAO's reviews were very helpful. They went out | |
| and didn't look at the private sector generally because if they | |
| had done that, they would have seen a lot of failed systems as | |
| well as successes. What they said was what are the best | |
| companies and what are their practices, and what can we learn | |
| from those. And I think the government, if we implement the | |
| Clinger-Cohen Act effectively, can become a state-of-the-art | |
| acquirer, manager and user of information technology. But we'll | |
| continue to need the support of this committee, as well as that | |
| of the agencies, if we're going to do that. | |
| Mr. Horn. Now, when you say effectively implement that act, | |
| you're talking about the CIO, I assume. | |
| Mr. Koskinen. I'm talking, actually, about the CIO being a | |
| catalyst for the agency coming to grips with these problems. | |
| Mr. Horn. Right. Now, are there situations where we have | |
| the CIO also holding other responsibilities, as we have in | |
| Treasury with the Assistant Secretary for management also being | |
| the Chief Financial Officer, something I think is just crazy, | |
| and yet we haven't done anything about it? | |
| Mr. Koskinen. There are those. If you'd like, we could hold | |
| a hearing on this. There's a long discussion going on about | |
| that. | |
| Mr. Horn. No. When you've got a problem and we give you the | |
| authorization to do something about it, it seems to me there's | |
| got to be focus. And why these problems continue is many of | |
| these people aren't really devoting full time to either the CIO | |
| or the CFO. It's like having the Inspector General be chewed | |
| away by some other agency responsibility. | |
| Now, since that's an adverse relationship in many cases is | |
| why we don't do that, I gather. But I must say it bothers me | |
| when we have that kind of overlap. | |
| Mr. Koskinen. Yes. Our premise and assumption has been that | |
| we should not have that overlap. There are three or four cases | |
| where we--on what we call an evaluation mode--have allowed the | |
| agencies to combine the CIO and the CFO. That's primarily where | |
| the CFO both has significant IT background and experience and | |
| where a significant part of the information technology problems | |
| in the agency come within the CFO's jurisdiction, so that | |
| bifurcation did not necessarily look like the most logical way | |
| to proceed. | |
| But in those cases we have told the agencies, we, with GAO, | |
| will be evaluating, at the end of their first year, the | |
| effectiveness of that operation. And virtually all of the other | |
| agencies where we're working, we have a CIO who is free | |
| standing. That, by itself, will not self execute. There are | |
| other issues that need to be addressed that we are working with | |
| the agencies on. | |
| And to make sure that the CIO is a catalyst for reform, a | |
| leader of effective implementation. But much like GPRA, | |
| effective implementation of information technology requires | |
| that the senior program managers and the senior managers of the | |
| agency participate in the basic decisions, that it not be left | |
| to what I call the tekies or the people who are knowledgeable | |
| about systems. They need to be involved, but the basic | |
| questions and the basic failings often times are not | |
| technological issues, they are actually program management | |
| issues. | |
| Mr. Horn. No. I agree with that. Mr. Hinchman, Mr. Mihm, do | |
| you have any reaction to that? | |
| Mr. Hinchman. No. I think that Mr. Koskinen is exactly | |
| right about that. And I think the most important point he | |
| makes, and one that we ought to all take some comfort in is | |
| that the Clinger-Cohen Act, in fact, reflects the lessons that | |
| we have learned both from experience within the government and | |
| in our study of the experiences of others who have run | |
| successful information technology programs. That act embodies | |
| what we know. | |
| Mr. Horn. You've done a fine job on that best practices | |
| series you have, and I think all of us have profited from it. | |
| Mr. Sessions. Gentleman, Mr. Sessions. | |
| Mr. Sessions. Thank you, Mr. Chairman. Mr. Koskinen, I | |
| appreciate you taking our questions and comments as the way | |
| they're intended, and I hope that they can continue to be | |
| positive, but I must confess you'll probably be able to go home | |
| today to your Director and say that you turned in an honest | |
| day's work for an honest day's pay, and that he would not want | |
| to switch places with you. | |
| I'd like to, if I could, to say a couple things. The | |
| chairman was going into to some of the questions that I have | |
| about the IRS. Obviously, many people have known. It's been | |
| widely publicized. Some $4 billion that was spent by the IRS to | |
| begin the development of a new computer program. I heard you | |
| say, probably many of the problems are with program management | |
| within getting these data systems up and working. | |
| My background includes that of being at Bell labs for | |
| several years where I was deeply involved in the intricate | |
| management of programming and those systems. Start with me, if | |
| you can, on some sort of a dialog on where the IRS is in this | |
| general process. Were they in the pilot program? Were they | |
| considered for that? What sort of help is OMB giving them to | |
| get them to direct themselves? Do they have any inward | |
| recollection that the perception is that they are not as | |
| effective and efficient? | |
| I'm not going to ask you to reach the final conclusion that | |
| really begs itself with, do we have a system that we can put on | |
| a sheet of paper to draw a flow chart to with our tax code? But | |
| let's keep this within the confines: Where's the IRS? How | |
| realistic are they? What is your working relationship with | |
| them? And where can we expect any near term advantages or | |
| something that would be considered positive out of this agency? | |
| Mr. Koskinen. I'm happy to respond. And I think that your | |
| point is well taken that this is an important dialog. With | |
| regard to the pay issue, I think if we hold three hearings for | |
| the price of one here, then I'm going to ask for a bonus as it | |
| goes. | |
| But let's deal with the IRS. It's an important question. | |
| First, I think the leadership at the IRS as well as the | |
| Treasury Department, as I said earlier, recognizes that there | |
| are serious issues to be addressed within the IRS. I think | |
| there is no sense of denial. Whatever may have happened in the | |
| past, there is a real attempt to come to grips with these | |
| issues. They are working very carefully with GAO--people on | |
| their systems. | |
| But more significantly, under the leadership of people in | |
| the Treasury, as well as in the IRS, triggered and headed by | |
| the Chief Information Officer, they are looking at their | |
| strategic plan. They are basically saying, what are our goals | |
| over the next 3 to 4 years, what system developments match | |
| those goals, and which system developments are a lower priority | |
| and, therefore, should not have our attention. | |
| Because one of the things they have discovered is that they | |
| have a number of systems that will achieve various goals, but | |
| it's clear there's no capacity there--and because of the huge | |
| undertaking--to do them all at once. And what they need is | |
| exactly what you're saying: Say, where are we going; what are | |
| our major problems; what are the major expectations that people | |
| have that we need the most improvements. Let's focus on those. | |
| Let's make sure that we have a coherent plan for getting from | |
| here to there. And in particular, let us take a hard look at | |
| one of the fundamental pesky questions, and that is, of the | |
| work that needs to be done, how much of it has to be done here, | |
| how much of it can be done somewhere else, how much of it is | |
| out there already in systems or in processes that we could take | |
| advantage of. | |
| And I think that's a big breakthrough for the Internal | |
| Revenue Service that, historically, has prided itself, | |
| appropriately, on doing all of the work internally, developing | |
| all of its systems internally. But as life gets more | |
| complicated and as the alternatives get to be more complex, | |
| that process hasn't stood them in good stead recently. And I | |
| think they recognize that. | |
| So I'm confident that they are addressing the problem, that | |
| they understand the magnitude of it and that they are coming up | |
| with constructive solutions. I mentioned that management-- | |
| modernization management board that the Secretary of the | |
| Treasury has set up. We have agreed--from OMB--to support that | |
| process. Steve Kelman, the Administrator of the Office of | |
| Federal Procurement Policy at OMB, and I serve as adjunct | |
| members of that committee. | |
| We are not in a position where we could exercise direct | |
| authority. We attend the meetings, though, and have | |
| participated with them, and have a better dialog now than we've | |
| ever had with the IRS and the Treasury about the problematic | |
| implications of what they're doing and the budgetary | |
| implications of what they're doing. As we've said, we're | |
| prepared to give them one stop shopping. That is, they bring | |
| these issues up in the modernization management board. If we | |
| have OMB perspectives, we will bring them to bear there and | |
| we'll engage in that dialog so they don't have to go through | |
| the process twice. | |
| But the bottom line, much like defense, is--and, as you | |
| know far better than most, with your background--these are very | |
| complicated, difficult problems. Were talking about literally | |
| hundreds of millions of transactions and relationships, and | |
| it's a phenomenal amount of data. And they have major obstacles | |
| to overcome. So I would be the last one to tell you that in the | |
| next year it will all be done. | |
| But I am very confident that in the next year, you will be | |
| able to see measurable progress, that we will develop plans | |
| there, where we will have benchmarks that basically have broken | |
| it down into modules and components that can be monitored, and, | |
| also, that lead more directly and clearly to the achievement of | |
| mission goals and strategic efforts. | |
| Mr. Sessions. So what you're saying is you believe that | |
| their work will result in a document--a blue print--that will | |
| be a guiding principle for them, measurable, realistic, and | |
| it's something that represents the true nature of the business? | |
| Mr. Koskinen. Yes. Over time I think that's exactly right. | |
| Mr. Sessions. Good. Mr. Chairman, thank you for the | |
| questions. Best of luck. I hope that spirit in which you know | |
| that we're involved in this process is one that will translate | |
| throughout the government. And I say this over and over again | |
| because I think that every piece of government, all the | |
| agencies, need to recognize that mission statement orientation | |
| will get them back to the point of what their core business is. | |
| And if the taxpayer needs it supported, then that will be done. | |
| Mr. Chairman, thank you for the question. | |
| Mr. Horn. Well, we thank you for your good questions. Also, | |
| there's only a few more to go and you can all get a decent | |
| meal. [Laughter.] | |
| You'll have put in your day's work before noon, you can | |
| tell the Director. | |
| I want to start with Mr. Hinchman on this. Beginning in | |
| fiscal year 1999, the performance plans required by the Results | |
| Act may include proposals to OMB to waive certain | |
| administrative requirements, including staffing levels, | |
| limitations on compensation or remuneration, and prohibitions | |
| or restrictions on funding transfers among budget | |
| classifications in return for specific individual or | |
| organization accountability to achieve a performance goal. | |
| The expected improvements in performance that would result | |
| are to be quantified as part of the request for the waiver. | |
| Now, the pilot projects for this stage, called pilot projects | |
| for managerial accountability and flexibility, were never | |
| implemented because the OMB did not improve any pilots. Did the | |
| GAO review these pilots? Why, in your opinion, did OMB not | |
| improve any pilots? And what impact does that have, in your | |
| opinion, on the potential success of the Results Act? Mr. | |
| Hinchman, it's all yours. We'll get to your colleague in a | |
| minute. | |
| Mr. Koskinen. In 30 words or less. | |
| Mr. Hinchman. Yes. | |
| Mr. Horn. That's right. | |
| Mr. Hinchman. I think that we do not yet know what the | |
| impact of the waiver provisions in the Results Act are going to | |
| be. I think we didn't find any what OMB felt were some | |
| appropriate opportunities to apply the waiver authority. There | |
| were some situations, I think, where agencies originally sought | |
| waivers and then later concluded that, in fact, authority to do | |
| what they wanted to do existed anyway, or legislation changed | |
| the underlying constraints against which they were working, and | |
| that, as a result, we just haven't had a good test of the | |
| waiver authority. | |
| I don't think that we're in a position to say that OMB has | |
| been unwilling to use that authority is circumstances where it | |
| seems to us to be obviously appropriate. I don't think that our | |
| work suggested OMB is opposed to the waiver authority. As I | |
| said, I think it's just that we haven't yet had an environment | |
| in which we can get a good test of it. And we're going to have | |
| to wait and see what happens. | |
| Mr. Koskinen. Yes. Let me just make clear, we are strong | |
| supporters of the concept of administrative and other | |
| flexibilities, regulatory flexibilities for people if they can | |
| tie it to our performance measures. To some extent, part of the | |
| problem in the act is the success of this committee and the | |
| Congress in generally relieving agencies of a lot of | |
| administrative requirements, a number of them in the | |
| procurement area. | |
| The major procurement reforms that this Congress and this | |
| committee have supported eliminated a lot of potential requests | |
| for waivers. The Office of Personnel Management threw out a lot | |
| of old time regulations and requirements on personnel that, | |
| again, would have been very good subjects for--in contemplation | |
| for waivers. | |
| So when we reached out to the agencies for proposals, we | |
| discovered that part of the reason, beyond that, that we didn't | |
| get very good candidates was, first of all, they wanted waivers | |
| from statutory requirements, which the statute does not allow. | |
| It really talks about administrative waivers. So a lot of their | |
| waivers were from statutory requirements. Or they wanted | |
| waivers from limitations on agencies outside the executive | |
| branch that we did not have the ability and the authority under | |
| the act to grant beyond that. | |
| Also, when we then dwindle down to the precious few, we did | |
| not have what we thought were very--we didn't have a large | |
| number, and the small number that we did have didn't have a | |
| very clear nexus between the relative limited waiver they | |
| wanted and any improvement in performance. And so, our judgment | |
| was that at this point in time, we would not gain anything by | |
| pursuing the relatively small number of applicants for very | |
| minor waivers. | |
| Mr. Horn. Who reviewed the pilots on managerial | |
| accountability and flexibility, and how much time did they | |
| spend with the agencies before deciding the pilot proposals | |
| were unacceptable? | |
| Mr. Koskinen. Those come through OMB. Ultimately, they--the | |
| whole process reports to me. The development of the proposals | |
| and the request for them were generated by inter-agency groups. | |
| So we had a range of people that we taxed for this. The actual | |
| development of this particular number was handled under, at | |
| that time, my supervision by one of our senior career people, | |
| who has, in fact, been the guru of GPRA. And he spent a | |
| significant amount of time trying to generate acceptable | |
| proposals, working with other agencies and OMB to make sure | |
| that we hadn't overlooked any possibilities that would---- | |
| Mr. Horn. So these proposals were circulated around the | |
| program areas of OMB? | |
| Mr. Koskinen. OMB. | |
| Mr. Horn. And coordinated. | |
| Mr. Koskinen. We went to the agencies in the program areas, | |
| saying what are their--here's a whole set of possibilities, | |
| which of these are you willing to waive, in terms of the | |
| agencies, and in terms of program managers, to try to, again, | |
| see what was there out there that agencies might find | |
| attractive. | |
| And we sent to the agencies, then, that list, saying here | |
| are a whole set--it wasn't very large by the time we got done-- | |
| but here are a range of waivers that you could apply for and | |
| participate in the pilot program for. And as I say, by the time | |
| we got done with it, we got a number of responses back, but a | |
| number of them, most of them were really out of bounds for the | |
| purposes of the statute. | |
| Mr. Horn. Was this a written reaction or did you sit around | |
| a table and go over it with them line by line and say, maybe we | |
| can make a deal on this? | |
| Mr. Koskinen. Yes. Most of it was by document. So we don't | |
| have--we don't have enough people to go to all of the agencies | |
| and have those conversations. But when we had applications, | |
| then we would talk with the agency about that. But---- | |
| Mr. Horn. So they submitted it. OMB pursued it, asked their | |
| program pro what they thought, maybe some other agencies, maybe | |
| OPM, whatever? | |
| Mr. Koskinen. Right. And then our final judgment---- | |
| Mr. Horn. Then you gave it back in paper, but nobody really | |
| sat down and had a dialog on those? | |
| Mr. Koskinen. About the ones we made? Yes. When we got down | |
| with it all and looked at the final applications we had from | |
| the agencies, our judgment was that it was not worth pursuing | |
| those at this time. | |
| Mr. Horn. Now, did the agencies make any reaction to that | |
| judgment in terms of suggesting improvements or suggesting | |
| changes on their part or was that just the killer? | |
| Mr. Koskinen. I'm not aware of any further conversations | |
| with the agencies. | |
| Mr. Horn. OK. Are you going to encourage any | |
| experimentation with managerial flexibility and accountability | |
| before fiscal year 1999? Or is this it? | |
| Mr. Koskinen. As you know, one of our major initiatives, | |
| only partially growing out of this experience, but out of a | |
| number of other experiences, is to propose a significant number | |
| of performance-based organizations, as we call them, in which | |
| we have pulled together statutory waivers in procurement and | |
| personnel areas. And we, in effect, think that those will serve | |
| very clearly as pilot programs, as it were, for what improved | |
| performance can you get if you eliminate some of the statutory | |
| limitations in procurement and personnel. | |
| And in fact, the proposals that we're developing and the | |
| template require that any of the performance-based | |
| organizations, to obtain those flexibilities, have to enter | |
| into a very clear performance agreement between the head of the | |
| organization and this cabinet secretary, measured on an annual | |
| basis. And the new chief operating officer for the performance- | |
| based organization is there under a term contract and can be | |
| dismissed if performance is not adequate. | |
| So that, as I say, we did not design with the Vice | |
| President and the National Performance Review the concept of | |
| performance-based organizations in response to our differences | |
| here, but we think that we will get more fulsome experimental | |
| results out of these performance-based organizations than | |
| looking at an individual, independent waiver and saying, what | |
| performance improvement do we get from that. | |
| Mr. Horn. Let me ask you now. In terms of encouraging | |
| agencies to propose pilots in this managerial accountability, | |
| flexibility area, what do you plan to include in your report | |
| required under Section 9704C of the act? It's apparently due in | |
| May of this year. | |
| Mr. Koskinen. In May of this year we will give you the | |
| background and experience. GAO has a draft report out, as well, | |
| on their own, and we will share that with you in May as | |
| required. | |
| Mr. Horn. Yes. We'd like to ask formally that OMB provide | |
| the staff on both sides of the aisle here and committee with | |
| copies of all the proposals submitted to OMB for managerial | |
| flexibility and accountability in the pilot phase including any | |
| notes or reasons the proposals were not accepted. We just need | |
| to get a feel for this particular aspect of the process. | |
| So if you and majority and minority staff could work out | |
| what we need in that area, we'd appreciate the chance to review | |
| that on both sides. Because I think there's an interest in | |
| getting focus on managerial flexibility. | |
| Mr. Koskinen. I would commend to you, again--not to over | |
| sell the point---- | |
| Mr. Horn. OK. | |
| Mr. Koskinen. Your review and support of the performance- | |
| based organization concept, which, as I say, is really focused | |
| on managerial flexibility in a much broader way than we've been | |
| able to deal with under the statute, or will be able to deal | |
| with under the statute. | |
| Mr. Horn. Let me ask you one last question and then Mrs. | |
| Maloney can have the final word on the subject. In terms of | |
| consultation, which we've talked about, with the authorizing | |
| committees and the agencies, do you have any feelings in terms | |
| of OMB consultation with this committee or others? | |
| Will that process be orchestrated to assure that the | |
| agencies do talk to their congressional counterparts and not | |
| just make it a staff thing, but sit down with Members in, say, | |
| agriculture, if you're in agriculture--this kind of thing--or | |
| you sit down with Government Reform and Oversight and | |
| Governmental Affairs officials. | |
| Mr. Koskinen. We are doing our own strategic planning | |
| exercise, which has been instructive, I think, for all the | |
| staff at OMB. In fact, later this month, as I noted in my | |
| prepared testimony, we're having an agency-wide stand down day | |
| to, in fact, develop the next iteration of our plan. And we | |
| will be here consulting with you as the other agencies are. | |
| We are encouraging the agencies. We obviously can lead them | |
| to water. We cannot necessarily make them drink. But I think, | |
| we need also response from the hill. I think it's very | |
| important, as you noted--this committee did in a conversation | |
| with the majority leader--that the other committees, | |
| themselves, be forthcoming in expressing their interest and | |
| concern in this area, that the, in some cases, as we start to | |
| evolve, it will be just as important for the congressional | |
| committees to be interested and responsive as it is for the | |
| agencies to be willing to consult. | |
| We can manage our end of the process by continuing to | |
| require that. We need some support from the hill across the | |
| spectrum of committee activities and authorizers and | |
| appropriators, for them to both become knowledgeable about the | |
| act and then participate in that dialog. | |
| Mr. Horn. Very good. Mr. Hinchman, do you have any comment | |
| on these last few minutes of discussion? | |
| Mr. Hinchman. No, sir. | |
| Mr. Horn. The distinguished gentlewoman from New York. | |
| Mrs. Maloney. Following up on your last comment on your own | |
| strategic plan, you're required to consult with this committee | |
| on that plan, and when may we expect to receive your | |
| consultation and how do you propose to conduct it? | |
| Mr. Koskinen. We will be up here before summer, well in | |
| advance of our attempt to then finalize our plan. As I say, at | |
| this point, we have an outline. We've had a strategic planning | |
| process that started last summer. The budget process puts us in | |
| the limbo from the first of October until about now, which is | |
| why we're renewing it. I would expect that we would be here-- | |
| our plans are to have consultation with you and other stake | |
| holders certainly before the end of May. And we would hope to | |
| do it as early as April. | |
| Mrs. Maloney. OK. The Department of Defense is the largest | |
| Federal agency and has components which are themselves larger | |
| than some agencies. To date, DOD has not provided guidance to | |
| the various services on how to link goals and performance | |
| measures, and GAO has found that many subordinate units are | |
| unsure of how to implement the results law and are waiting for | |
| guidance. And I'd just like you to comment on it. Do you know | |
| when DOD plans to issue this guidance and if it doesn't, how | |
| DOD plans to assure that the services and other units support | |
| the overall DOD plans and goals? | |
| Mr. Koskinen. I don't know the answer to that now. As I | |
| noted, we are about to begin yet another assessment, agency by | |
| agency, of where they are in their strategic planning process. | |
| We had a detailed set of conversations with the Defense | |
| Department last summer, and we will pursue that further this | |
| spring. And one of the questions we will be pursuing is what is | |
| their internal process, who is involved in it, and when will | |
| they begin to have products. | |
| Mrs. Maloney. Thank you very much. | |
| Mr. Koskinen. Thank you. | |
| Mr. Horn. Well, if there are no further questions, then we | |
| thank all three of you for coming up and sharing your thoughts | |
| with us on this very important subject. A lot of these seem to | |
| be very simple laws, in a way, long overdue, but, without | |
| question, they will make a difference in the executive | |
| establishment and hopefully in the congressional establishment. | |
| Because it's going to take two working together to solve a | |
| lot of these problems. And that's why the consultation is so | |
| important between executive branch legislative committees. And | |
| that's why Mr. Armey's role, in particular, in having the war | |
| room to make sure a few things get done around here in the | |
| limited amount of time that we have as elected Members. | |
| And we thank you for your thoughts on that. We welcome any | |
| ideas you have. But we're not talking about amending laws, | |
| we're talking about implementing the law. | |
| Mr. Koskinen. Right. | |
| Mr. Horn. So without any further questions, this hearing is | |
| adjourned. | |
| [Whereupon, at 12:20 p.m., the committee was adjourned.] | |
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