Performance Budgeting: Opportunities and Challenges
Published: 2002-09-19T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: This testimony discusses efforts to link resources to results--also known as "performance budgeting." During the past decade, Congress and several administrations have put in place a structure for increasing the focus on and accountability for government performance.
section_title: What GAO Found
paragraphs: Federal agencies have been working to carry out the Government Performance Act, which requires the development of periodic strategic and annual performance plans and reports. Absent structural change in a number of major entitlement programs, budgetary flexibility will continue to decline and eventually disappear--while demands for new federal resources to address such emerging challenges as homeland security and other issues become more compelling and pressing. Given the country's longer-range fiscal imbalance, there is also a need to broaden the measures and focus of the federal budget process to accommodate these goals. The nation's fiscal challenges escalate rapidly just beyond the 10-year budget projection period. As a result, new metrics and mechanisms are needed to better highlight the longer-term implications of existing programs and proposed new fiscal commitments. Furthermore, in order to address emerging challenges, it is necessary to address both retirement and health programs encumbering the nation's fiscal future, in addition to reexamining the base of existing programs--both discretionary programs and other entitlements--to free up resources to address new needs in a rapidly changing society. Such an examination should be cross-cutting and comprehensive in nature--all relevant policy tools and federal programs, including tax preferences, should be "on the table" in addressing such policy areas as low-income housing or health care financing and delivery. Although such a comprehensive reassessment will take time and may have to be addressed in phases, it is critically important that it occur. An extensive public education effort will be required to fully inform the American people about a long-term outlook under current policy portfolio as well as the alternative choices that are available.

section_title: Letter
paragraphs: I am pleased to be here today to discuss efforts to link resources to  results—what many have referred to as “performance budgeting.” Over the  past decade the Congress and several administrations have put in place a  structure for increasing the focus on and accountability for government  performance. Federal agencies have been working to carry out the  Government Performance and Results Act (GRPA), which requires the  development of periodic strategic and annual performance plans and  reports. This is part of a broader movement towards greater accountability  in government and greater responsibility for results—both at the  institutional and eventually at the individual level.
GPRA requires linkages of performance plans to budgets, recognizing that  one of the ways in which the full acceptance and potential of performance  management can be promoted is if this information becomes relevant for  the allocation of resources. The current administration has made linking  resources to results one of the top five priorities in the President’s  Management Agenda. In this regard, the Office of Management and  Budget’s (OMB) latest initiative, the Program Assessment Rating Tool  (PART), has been designed to use performance information more explicitly  in the federal budget formulation process by summarizing performance and  evaluation information. The administration plans to apply this new tool to  20 percent of the programs to be included in the upcoming fiscal year 2004  federal budget.
In my testimony today I make several points:  First, the long-term fiscal challenge facing our nation should serve to  frame our discussion. Absent structural change in a number of major  entitlement programs, budgetary flexibility will continue to decline and  eventually disappear—while demands for new federal resources to  address such emerging challenges as homeland security and other  issues become more compelling and pressing.
Given our longer-range fiscal imbalance, there is also a need to broaden  the measures and focus of the federal budget process to accommodate  these goals. The nation’s fiscal challenges escalate rapidly just beyond  the 10-year budget projection period. As a result, new metrics and  mechanisms are needed to better highlight the longer-term implications  of existing programs and proposed new fiscal commitments.
Furthermore, in order to address emerging challenges it is necessary to  address both retirement and health programs encumbering the nation’s  fiscal future in addition to reexamining the base of existing programs— both discretionary programs and other entitlements—to free up  resources to address new needs in a rapidly changing society. Such an  examination should be cross-cutting and comprehensive in nature—all  relevant policy tools and federal programs, including tax preferences,  should be “on the table” in addressing such policy areas as low-income  housing or health care financing and delivery. While such a  comprehensive reassessment will take time and may have to be  addressed in phases, it is critically important that it occur.
We are mindful that this kind of review will require a proper national  debate about how to make government relevant for the emerging  challenges and needs of the 21st Century. Nothing less than an extensive  public education effort will be required to fully inform the American  people about the long-term outlook under the current policy portfolio as  well as the alternative choices that are available.
Credible outcome-based performance information is absolutely critical to  foster the kind of debate that is needed. Linking performance information  to budgeting carries great potential to improve the budget debate by  changing the kinds of questions and information available to decision  makers. However, performance information will not provide mechanistic  answers for budget decisions; nor can performance data eliminate the need  for considered judgment and political choice. If budget decisions are to be  based in part on performance data, the integrity, credibility, and quality of  these data and related analyses become more important. Moreover, in  seeking to link resources to results, it will be necessary to improve the  government’s capacity to account for and measure the total costs of federal  programs and activities.
GPRA expanded the supply of performance information generated by  federal agencies. OMB’s PART proposes to build on GPRA by improving the  demand for results-oriented information in the budget. It has the potential  to promote a more explicit discussion and debate between OMB, the  agencies, and the Congress about the performance of selected programs.  Presumably, the PART will serve as a screen and will identify expectation  gaps, questions, and areas where further inquiry and analysis would be  most useful.
Improved budgetary debates are always welcome, but caution is in order at  this stage about expectations from this process—the accuracy and quality  of evaluation information necessary to make the judgments called for in  rating programs is highly uneven across the federal government. Moreover,  many programs have multiple goals where a single score or performance  assessment can mislead decision makers. Even where a sound basis exists  to make performance assessments, performance results do not have  automatic budgetary consequences. Poor evaluation results may lead to  budget cuts or even program eliminations in some cases, but it may also  prompt higher levels of investment in people or technologies and  redoubled management improvements in other cases if there is general  agreement that the activity involved is important to the nation.
In the long run, sustaining a credible performance-based focus in budgeting  will require significant improvements in evaluation capacities and  information across federal agencies as well as the third parties that  implement federal programs. Going forward, the focus of reexaminations  should shift to broader national goals and outcomes, with assessments  targeted on the range of programs and governmental tools supporting those  outcomes.
Finally, and most critically, the Congress must be involved in this debate,  and the resulting decisions and follow-up oversight activities.  Congressional buy-in is critical to sustain any major management initiative,  but even more so for performance budgeting given the Congress’ central  role in setting national priorities and allocating the resources to achieve  them. Going forward, we would encourage the Congress to develop a  performance assessment process to target its oversight efforts.
subsections: section_title: Long-term Demographic Trends Drive the Fiscal Future and Frame Current Debates
paragraphs: Any discussion about the role of the federal government, about the design  and performance of federal activities, and about the near-term federal fiscal  outlook takes place in the context of two dominating facts: a demographic  tidal wave is on the horizon, and it combined with rising health care costs  threatens to overwhelm the nation’s fiscal future. The aging of baby  boomers—and increased life expectancy—is a major driver of spending for  Social Security, Medicare, and Medicaid. Absent structural reforms in these  programs, budgetary flexibility will continue to shrink and eventually  disappear. Our long-range budget simulations make it clear that the status  quo is not sustainable. The numbers just do not add up. The fiscal gap is too  great for any realistic expectation that the country can grow its way out of  the problem. The failure to reexamine the retirement and health care  programs driving the long term will put the nation on an unsustainable  fiscal course, absent major changes in tax and/or spending policies. In  addition, the failure to reprioritize other claims in the budget will make it  increasingly difficult to finance the rest of government, let alone respond to  compelling new priorities and needs.
As figure 1 below shows, overall budgetary flexibility has been shrinking  for some time. In the last 2 decades, mandatory spending—excluding net  interest—has jumped by nearly 10 percentage points to consume more than  half of the federal budget. *OMB current services estimate.
Our long-term budget simulations continue to show that to move into the  future with no changes in retirement and health programs is to envision a  very different role for the federal government—a government that does  little more than mail checks to the elderly and pay interest on the debt.  Figure 2 below shows the picture if the tax reductions enacted last year are  not permitted to sunset and discretionary spending keeps pace with the  economy. By midcentury federal revenues may only be adequate to pay  Social Security and interest on the federal debt. (See fig. 2.) Importantly, we  would still have a significant long-range fiscal gap even if the tax reductions  do sunset as provided for under current law, although the gap would be  smaller. While the long-term picture has not been pretty for a number of  years, it is worsening and the long-term crunch is getting closer. Further,  the shift from surplus to deficit means the nation will move into the future  in a weaker fiscal position than was previously the case.
Metrics and mechanisms need to be developed to facilitate consideration of  the long-term implications of existing and proposed policies or programs.  We are currently doing work on how to describe the range and  measurement of fiscal exposures—from explicit liabilities such as  environmental cleanup requirements and federal pensions to the more  implicit obligations presented by life-cycle costs of capital acquisition or  disaster assistance.
Although they dwarf all other programs in long-term trends, Social  Security, Medicare, and Medicaid are not the only programs in the budget  where looking beyond the 10-year budget window presents a very different  cost picture. For example, federal insurance may appear costless in its first  year, but when an insured event occurs, the budgetary impact can be  significant.
section_title: Improving Sustainability and Relevance of Government for the 21st Century
paragraphs: Social Security and health programs dominate our fiscal future but they are  not the only reason to examine what government does and how it does it.  Difficult as it may seem to deal with the long-term challenges presented by  known demographic trends, policymakers must not only address these  entitlement programs but also reexamine other budgetary priorities in light  of the changing needs of this nation in the 21st century. Given the size of the  long-term gap it will be necessary to work on several fronts at once.
There is also a need to reexamine existing programs, policies, and  activities. It is all too easy to accept “the base” as given and to subject only  new proposals to scrutiny and analysis. As we have discussed previously,  many federal programs, policies, and activities—their goals, their  structures, and their processes—were designed decades ago to respond to  earlier challenges. In previous testimony, I noted that the norm should be  to reconsider the relevance or “fit” of any federal program, policy, or  activity in today’s world and for the future. Such a review might identify  programs that have proven to be outdated or persistently ineffective, or  alternatively could prompt appropriate updating and modernizing activities  through such actions as improving program targeting and efficiency,  consolidation, or reengineering of processes and operations. This includes  looking at a program’s relationship to other programs.
Budgeting has been the primary process used to resolve the large number  of often-conflicting objectives that citizens seek to achieve through  government action. It provides an annual forum for a debate about  competing claims and new priorities. However, such a debate will be  needlessly constrained if only new proposals and activities are on the table.  A fundamental review of existing programs, policies, and operations can  create much-needed fiscal flexibility to address emerging needs by  ferreting out programs that have proven to be outdated, poorly targeted,  inefficient in their design and management, or superceded by other  programs. It is always easier to subject proposals for new activities or  programs to greater scrutiny than existing ones. It is easy to treat existing  activities as “given” and force new proposals to compete only with each  other. Such an approach would move the nation further from, rather than  nearer to, budgetary surpluses.
In looking forward it is important to reflect on how much things have  changed. We have a fiduciary and stewardship responsibility to today’s and  tomorrow’s taxpayers to do so. For perspective, students who started  college this past fall were 9-years old when the Soviet Union broke apart  and have no memory of the Cold War; they have always known  microcomputers and AIDS. We must strive to maintain a government that is  effective and relevant to a changing society—a government that is as free  as possible of outmoded commitments and operations that can  inappropriately encumber the future.
Debate about what government should do in the 21st century and how it  should do business is fundamental to achieving this objective. In rethinking  federal missions and strategies, it is important to examine not just spending  programs alone but the wide range of other tools the federal government  uses to address national objectives. These tools include direct loans and  loan guarantees, tax preferences (shown in the budget as tax  expenditures), and regulations. Sometimes these tools work at cross- purposes. The outcomes achieved by these various tools are in a very real  sense highly interdependent and are predicated on the response by a wide  range of other actors—including other levels of government and private  employers whose involvement has become more critical to the  implementation and achievement of federal policy objectives. These tools  differ in transparency—spending programs are more visible than tax  preferences. The choice and design of these tools are critical in  determining whether and how these third parties will address federal  objectives. Any review of the base of existing policy should address this  broader picture of federal involvement. For example, in fiscal year 2000,  the federal health care and Medicare budget functions included $37 billion  in discretionary budget authority, $319 billion in entitlement outlays, $5  million in loan guarantees, and $91 billion in tax expenditures. (See fig. 3.)
section_title: Public Education Is Critical
paragraphs: Good information—which is more than just budget numbers—helps to  inform debate. This information, however, should be understandable not  only by government officials but also by the public.
Homeland security is a good example of both the need for public education  and the challenges presented by changing priorities. Zero security risk is  not an attainable goal; proposals to reduce risk must be evaluated on  numerous dimensions—their dollar cost and their impact on other goals  and values. Decisions on the level of resources, the allocation of those  resources, and on how to balance security against other societal goals and  values are necessary. However, absent public information in  understandable form, related decisions may not be accepted. There will  always be disagreements on these issues, but public education and reliable  information move the debate to a more informed plane.
Before the events of last September no one could have reasonably  anticipated the array of new and challenging demands on federal programs  and claims on future budgets for homeland security concerns. These  compelling new budgetary claims illustrate the necessity of periodically  reexamining the base through a disciplined, performance-based process.  As you debate resources for homeland security—both how much and how  to allocate them—you will be making risk assessments; the initiatives  funded should be designed to achieve the most effective protection at a  reasonable and affordable cost. As you consider the portfolio of homeland  security programs for the future, the homeland security challenge may also  provide a window of opportunity to rethink approaches to long-standing  problems and concerns. For example, we have previously noted the poor  coordination and inefficient use of resources that occur as a result of  overlapping and duplicative food safety programs, but it is the potential  threat from bioterrorism that gives new meaning and urgency to this issue  and the interrelationship of related federal programs.
Finally, the challenges of financing the new homeland security needs may  provide the necessary impetus for a healthy reprioritization of federal  programs and goals. The current crisis might, for instance, warrant  reconsideration of the federal role in assisting state and local law  enforcement. Given the challenges associated with fighting terrorism, is it  still appropriate to involve the federal government in what have  traditionally been state and local law enforcement responsibilities?
section_title: The Role of Performance Budgeting
paragraphs: While this kind of oversight and reexamination is never easy, it is facilitated  by the availability of credible performance information focusing on the  outcomes achieved with budgetary resources. Performance-based  budgeting can help enhance the government’s capacity to assess competing  claims in the budget by arming budgetary decision makers with better  information on the results of both individual programs as well as entire  portfolios of tools and programs addressing common performance  outcomes. Although not the answer to vexing resource trade-offs involving  political choice, performance budgeting does promise to modify and  inform the agenda of questions by shifting the focus of debates from inputs  to outcomes and results.
Over the last decade, the Congress enacted a statutory framework to  improve the performance and accountability of the executive branch and to  enhance both executive branch and congressional decision making.  Through continued attention by the Congress and the executive branch,  some of the intended benefits of this framework are now beginning to  emerge.
GPRA expanded the supply of results-oriented performance information  generated by federal agencies. In the 10 years since GRPA was enacted,  agencies have improved the focus of their planning and the quality of their  performance information. However, developing credible information on  outcomes achieved through federal programs remains a work in progress,  as agencies struggle, for example, to define their contribution to outcomes,  which in many cases are influenced only partially by federal funds. Linking  performance to budgeting raises the stakes associated with the measures  and performance goals developed by agencies. For performance data to  more fully inform resource allocations, decision makers must feel  comfortable with the appropriateness and accuracy of the outcome  information and measures presented—i.e., that they are comprehensive  and valid indicators of a program’s outcomes. Otherwise, decisions might  be guided by misleading or incomplete information, which ultimately will  discourage the use of this information in resource allocations. GPRA was  premised on a cycle where measures and goals were established and  validated during a developmental period before they were subjected to the  crucible of the budget process. In working to strengthen the linkages  between resources and results, efforts across the federal establishment  must be redoubled to ensure that the measures used are grounded in a firm  analytic and empirical base. A way should be found to provide independent  assurance about both the choice of measures and the quality of the data  used.
In attempting to link resources to results, it also will be important to  measure the full costs of the resources associated with performance goals  using a consistent definition of costs between and among programs. In  looking ahead, the integration of reliable cost accounting data into budget  debates needs to become a key part of the performance budgeting agenda.
Although clearly much more remains to be done, together, the GPRA and  Chief Financial Officers (CFO) Act initiatives have laid the foundation for  performance budgeting by establishing infrastructures in the agencies to  improve the supply of information on performance and costs. Sustained  leadership attention will be required to build on this foundation. In  addition, however, improving the supply of information is in and of itself  insufficient to sustain performance management and achieve real  improvements in management and program results. Rather, the improved  supply needs to be accompanied by a demand for that information by  decision makers and managers alike.
Integrating management issues with budgeting is absolutely critical for  progress in government performance and management. Recent history tells  us that management reforms of the past—Planning-Programming- Budgeting-System, Management by Objectives, and Zero-Base-Budgeting— failed partly because they did not prove to be relevant to budget decision  makers in the executive branch or the Congress. Such integration is  obviously important to ensuring that management initiatives obtain the  resource commitments and sustained commitment by agencies needed to  be successful. Moreover, the budget process is the only annual process in  the federal government where programs and activities come up for regular  review and reexamination. Thus there is a compelling need to ensure that  trade-offs are informed by reliable information on results and costs.  Ultimately, performance budgeting seeks to improve decision making by  increasing the understanding of the links between requested resources and  expected performance outcomes.
Although performance budgeting can reasonably be expected to change the  nature of resource debates, it is equally important to understand what it  cannot do. Previous management reforms have been doomed by inflated  and unrealistic expectations, so it is useful to be clear about current goals.  Performance budgeting can help shift the focus of budgetary debates and  oversight activities by changing the agenda of questions asked in these  processes. Performance information can help policymakers address a  number of questions such as whether programs are: contributing to their  stated goals, well-coordinated with related initiatives at the federal level or  elsewhere, and targeted to those most in need of services or benefits. It can  also provide information on what outcomes are being achieved, whether  resource investments have benefits that exceed their costs, and whether  program managers have the requisite capacities to achieve promised  results.
However, performance budgeting should not be expected to provide the  answers to resource allocation questions in some automatic or formula- driven process. Since budgeting is the allocation of resources, it involves  setting priorities—making choices among competing claims. In its broadest  sense the budget debate is the place where competing claims and claimants  come together to decide how much of the government’s scarce resources  will be allocated across many compelling national purposes. Performance  information is an important factor—but only one factor and it cannot  substitute for difficult political choices. There will always be a debate  about the appropriate role for the federal government and the need for  various federal programs and policies—and performance information  cannot settle that debate. It can, however, help move the debate to a more  informed plane—one in which the focus is on competing claims and  priorities. In fact, it raises the stakes by shifting the focus to what really  matters—lives saved, children fed, successful transitions to self- sufficiency, individuals lifted out of poverty.
In this context, performance questions do not have a single budgetary  answer. Performance problems may well prompt budget cuts or program  eliminations, but they may also inspire enhanced investments and reforms  in program design and management if the program is deemed to be of  sufficiently high priority to the nation. Conversely, even a program that is  found to be exceeding its performance expectations can be a candidate for  budgetary cuts if it is a lower priority than other competing claims in the  process. The determination of priorities is a function of competing values  and interests that may be informed by performance information but also  reflects such factors as equity, unmet needs, and the appropriate role of the  federal government in addressing these needs.
How would “success” in performance budgeting be defined? Simply  increasing the supply of performance information is not enough. If the  information is not used—i.e., if there is insufficient demand—the quality of  the information will deteriorate and the process either will become rote or  will wither away. However, for the reasons noted, the success of  performance budgeting cannot be measured merely by the number of  programs “killed” or a measurement of funding changes against  performance “grades.” Rather, success must be measured in terms of the  quality of the discussion, the transparency of the information, the  meaningfulness of that information to key stakeholders, and how it is used  in the decision-making process. If members of the Congress and the  executive branch have better information about the link between resources  and results, they can make the trade-offs and choices cognizant of the  many and often competing claims on the federal fisc.
subsections: section_title: OMB’s Program Assessment Rating Tool
paragraphs: While budget reviews have always involved discussions of program  performance, such discussions have not always been conducted in a  common language or with transparency. This year, however, OMB has  introduced a formal assessment tool into the deliberations. The PART—the  Program Assessment Rating Tool—is the central element in the  performance budgeting piece of the President’s Management Agenda.
The PART will be applied during the fiscal year 2004 budget cycle to  “programs” selected by OMB with input from and discussion with  agencies. The PART includes general questions in each of four broad topics  to which all programs are subjected: (1) program purpose and design,  (2) strategic planning, (3) program management, and (4) program results  (i.e., whether a program is meeting its long-term and annual goals). In  addition to the general questions that apply to all, programs are subjected  to more specific questions depending on which of seven mechanisms or  approaches are used for delivery. OMB arrives at a profile for each program  by reviewing information from budget submissions, agency strategic and  annual performance plans, program evaluations, and other sources. OMB  also makes an overall assessment whether the program is “effective” or  “ineffective.”
While the PART’s program-by-program approach fits with OMB’s agency- by-agency budget reviews, it is not well-suited to addressing cross-cutting  issues or to looking at broad program areas in which several programs  address a common goal. Although the evaluation of programs in isolation  may be revealing, it is often critical to understand how each program fits  with a broader portfolio of tools and strategies to accomplish federal  missions and performance goals. Such an analysis is necessary to capture  whether a program complements and supports other related programs,  whether it is duplicative and redundant, or whether it actually works at  cross-purposes with other initiatives. In such areas as low-income housing  or health care, the outcomes achieved by federal policy are the result of the  interplay of a complex array of tools including those on the spending side  of the budget as well as the tax code and regulations.
The PART does promise to build on GPRA by using the performance  information generated through the planning and reporting process to more  directly feed into budgetary decisions. Potentially, the PART can  complement GPRA’s focus on increasing the supply of credible  performance information by promoting the demand for this information in  the budget formulation process. The recognition of the different types of  performance issues associated with different governmental tools is  important and reflects the key role that tools play in shaping accountability  and results.
As with performance budgeting in general, no assessment tool can  magically resolve debates or answer questions. Rather, it is likely to be a  useful screen to help identify programs for further evaluation. Its greatest  contribution may turn out to be its use to focus discussions between OMB  and the agencies about a given agency’s progress towards planned  performance; about what progress has been made toward achieving  specific goals and objectives of a given program or programs; and about  what tools and strategies might be used to bring about improvements.  Where the information provided is adequate, it has the potential to inform  budget decisions with respect to particular programs. It is possible that a  program may be a candidate for cuts or elimination—or for increases.  However, these overall judgments will not define the process. For example,  the PART section on program management may illuminate ways in which  program operations could be improved. And the section on program design  may identify design changes that could increase effectiveness, such as  better targeting of existing funds. Using PART is likely to prompt a more  robust discussion on program priorities and achievements between OMB,  the agencies, and potentially with the Congress.
The PART also may increase the attention paid to evaluation and  performance information among federal agencies and third parties  involved with implementing federal initiatives. As the information  improves, it may become more useful to the Congress, especially to budget,  appropriations, and authorizing committees. To the extent that the  assessment is an important factor in resource allocations, agencies are  likely to increase the attention given to evaluation and the gathering and  reporting of performance information. The fact that a program’s PART  score suffers from the absence of information may provide added impetus  for agencies to enhance their evaluation and information-gathering  capabilities. As with other management reforms, it will be important that  initiatives such as PART be sustained over time if they are to be taken  seriously by both agencies and the Congress.
At the same time, the PART contains inherent limitations. These will not be  in-depth evaluations, and evidence suggests that information for many  programs will be incomplete. While no assessment tool can provide  definitive answers to the question “should we continue this activity,” at the  initial stage PART is likely to raise questions—that is, point to the need for  further inquiry and analysis—rather than provide definitive answers. The  profiles of a program across each section of the instrument are likely to be  more informative than the total scores across the entire instrument.  Caution should be taken in relying on “bottom line” judgments or ratings  for programs with multiple performance goals and mixed performance  records.
Further, the achievement of federal/national policy goals often depends on  the actions not only of the federal government but also of other levels of  government and/or nongovernmental actors. GPRA required the President  to prepare and submit to the Congress a governmentwide performance  plan to highlight broader cross-cutting missions. Unfortunately, this was  not done in the President’s fiscal year 2003 budget; we hope that the  President’s upcoming fiscal year 2004 budget does include such a plan.
Over time the usefulness of PART will depend on what follows the initial  screens: how the results are pursued; whether the scope is broadened to  cover more tools; whether a cross-cutting approach is employed; and  improvements in evaluative, performance, and cost information on key  programs. Ultimately, success will be measured by how the results of the  more extensive analyses affect the resource allocation process and budget  decisions over time.
section_title: Performance Information Requirements and Evaluation Capacity
paragraphs: The basis for the effective application of the rating tool is the foundation of  performance and evaluation information on federal programs. The gaps  and weaknesses identified by the PART review exercise may help pinpoint  aspects of the federal evaluation infrastructure that need to be  strengthened.
By highlighting available information on program performance, OMB’s  rating tool should promote discussions of both what is known and what is  not known about a program’s performance. Under GPRA, agencies  expanded their store of data on program achievements and associated  benefits for the American people. While this is necessary, it is not sufficient  to answer all key questions about program effectiveness. Many programs  are designed to be one part of a broader effort, working alongside other  federal, state, local, nonprofit, and private initiatives to promote particular  outcomes. Although information on the outcomes associated with a  particular program may be collected, it is often difficult to isolate a  particular program’s contribution to those outcomes. Moreover, some  desired outcomes take years to achieve; tracking progress on an annual  basis may be difficult. Additionally, where federal program responsibility  has devolved to the states, federal agencies’ ability to influence program  outcomes diminishes. At the same time, dependence on states and others  for data with which to evaluate programs grows. The PART may be used to  facilitate this kind of cross-cutting perspective. After programs have been  filtered through the PART process, programs could be grouped into related  categories for further evaluation in a more holistic fashion. Further  understanding of these performance issues requires an in-depth evaluation  of the factors contributing to the program results. Targeted evaluation  studies can also be specifically designed to detect important program side  effects or to assess the comparative advantages of current programs to  alternative strategies for achieving a program’s goals.
Unfortunately, there is reason to be concerned about the capacity of federal  agencies to produce evaluations of their programs’ effectiveness. Many  program evaluation offices are small, have other responsibilities, and  produce only a few effectiveness studies annually. Even where the value of  evaluations is recognized, they may not be considered a funding priority.  Agencies struggled in the first years of performance reporting to provide  measures of the outcomes of their program activities. Many have failed to  address known weaknesses in the quality of their performance data. Our  work has shown that systematic program evaluations—and units  responsible for producing them—have  been concentrated in a few  agencies. Although many federal programs attempt to influence complex  systems or events outside the immediate control of government, few  studies deployed the rigorous research methods required to attribute  changes in underlying outcomes to program activities.
Increased evaluation capacity may require more resources, but over the  longer term, failing to discover and correct performance problems can be  much more costly. Therefore, the question of investment in improved  evaluation capacity is one that must be considered in budget deliberations  both within the executive branch and in the Congress.
More broadly, Mr. Chairman and Madam Chair, such investments need to  be viewed as part of a broader initiative to improve the accountability and  management capacity of federal agencies and programs. The federal  government needs to undergo a transformation to meet the performance  expectations of the American public. Such an effort requires fundamental  shifts in current human capital policies, organizational structures,  governmental tools, and performance and financial accountability  approaches.
section_title: Congressional Oversight Is Necessary to Achieve Results
paragraphs: Fifty years of past efforts to link resources with results has shown that any  successful effort must involve the Congress as a partner. In fact, the  administration acknowledged that performance and accountability are  shared responsibilities that must involve the Congress. It will only be  through the continued attention of the Congress, the administration, and  federal agencies that progress can be sustained and, more importantly,  accelerated. The Congress has, in effect, served as the institutional  champion for many previous performance management initiatives, such as  GPRA and the CFO Act, by providing a consistent focus for oversight and  reinforcement of important policies. Ultimately, the success of the PART  initiative will be reflected in whether and how the Congress uses the results  of these reviews in the congressional budget, appropriations, authorization,  and oversight processes. As a key user, the Congress also needs to be  considered a partner in shaping the PART review process at the outset.
More generally, effective congressional oversight can help improve federal  performance by examining the program structures agencies use to deliver  products and services to ensure that the best, most cost-effective mix of  strategies is in place to meet agency and national goals. As part of this  oversight, the Congress should consider the associated policy,  management, and policy implications of cross-cutting programs.
Given this environment, the Congress should also consider the need for  mechanisms that allow it to more systematically focus its oversight on  problems with the most serious and systemic weaknesses and risks. At  present, the Congress has no direct mechanism to provide a congressional  perspective on governmentwide performance issues. The Congress has no  established mechanism to articulate performance goals for the broad  missions of government, to assess alternative strategies that offer the most  promise for achieving these goals, or to define an oversight agenda targeted  on the most pressing cross-cutting performance and management issues.  The Congress might consider whether a more structured oversight  mechanism is needed to permit a coordinated congressional perspective on  governmentwide performance matters. Such a process might also facilitate  congressional input into the OMB PART initiative. For example, although  the selection of programs and areas for review is ultimately the President’s  decision, such choices might be informed and shaped by congressional  views and perspectives on performance issues.
One possible approach would involve developing a congressional  performance resolution identifying the key oversight and performance  goals that the Congress wishes to set for its own committees and for the  government as a whole. Such a resolution could be developed by modifying  the current congressional budget resolution, which is already organized by  budget function. Initially, this may involve collecting the “views and  estimates” of authorization and appropriations committees on priority  performance issues for programs under their jurisdiction and working with  such cross-cutting committees as the House Committee on Governmental  Reform and the House Committee on Rules. Obviously, a “congressional  performance resolution” linked to the budget resolution is only one  approach to achieve the objective of enhancing congressional oversight,  but regardless of the approach taken, the Congress should assess whether  its current structures and processes are adequate to take full advantage of  the benefits arising from the reform agenda under way in the executive  branch. Ultimately, what is important is not the specific approach or  process, but rather the intended result of helping the Congress better  promote improved fiscal, management, and program performance through  broad and comprehensive oversight and deliberation.