A critical component of high-performing organizations, as envisioned by the Results Act, is the dynamic and complementary process of setting a strategic direction, defining annual goals and measures, and reporting on performance. As required by the Results Act, agencies are to prepare annual performance plans that establish the connections between the long- term goals outlined in their strategic plans and the day-to-day activities of managers and staff. To be useful, annual performance plans should answer three core questions: To what extent does the agency have a clear picture of intended performance? Does the agency have the right mix of strategies and resources needed to achieve its goals? Will the agency’s performance information be credible? At the request of Congress and to assist agencies in their efforts to produce useful performance plans, we issued guides on assessing annual plans. We subsequently reviewed the fiscal year 1999 performance plans for the CFO Act agencies. We also issued reports on fiscal year 1999 plans that identified practices that can improve the usefulness of plans and approaches used to connect budget requests with anticipated results. A majority of agencies’ fiscal year 2000 plans give general pictures of intended performance across the agencies, with the plans of the Department of Labor, Department of Transportation (DOT), the General Services Administration (GSA), and the Social Security Administration (SSA) providing the clearest overall pictures. To assess the degree to which an agency’s plan provides a clear picture of intended performance across the agency, we examined whether it includes (1) sets of performance goals and measures that address program results; (2) baseline and trend data for past performance; (3) performance goals or strategies to resolve mission-critical management problems; and (4) identification of crosscutting programs (i.e., those programs that contribute to the same or similar results), complementary performance goals and common or complementary performance measures to show how differing program strategies are mutually reinforcing, and planned coordination strategies. Figure 3 shows the results of our assessment of the 24 agencies. We categorized each agency’s plan based on the degree to which it collectively addressed the four practices presented above. All of the fiscal year 2000 plans we reviewed contain at least some goals and measures that address program results. In our assessment of the fiscal year 1999 plans, we identified the lack of comprehensive sets of goals that focused on results as one of the central weaknesses that limited the usefulness of the plans for congressional and other decisionmakers. While this improvement is still not evident across all agencies, some plans incorporate sets of performance goals and measures that depict the complexity of the results federal agencies seek to achieve. For example, to help achieve improved public health and safety on the highway, DOT has performance goals and measures to reduce the rates of alcohol-related and large truck-related fatalities and injuries and to increase seat belt use, in addition to its goals related to highway fatality and injury rates. The DOT plan also provides helpful information that explains the importance of each goal, the relationship of annual goals to DOT strategic goals, and the relationship of the performance measures to annual goals. Similarly, the Department of Education’s plan contains a set of goals and measures related to a vital issue of growing national concern—that schools should be strong, safe, disciplined, and drug-free. Specifically, Education has performance goals and measures to reduce the prevalence of alcohol and drugs in schools, decrease criminal and violent incidents committed by students, and increase the percentage of teachers who are trained to deal with discipline problems in the classrooms. The plan includes explanatory information for each goal and measure. For instance, Education explains that it changed its target level for the percentage of students using marijuana at school because of better than expected reductions in 1998. However, we still found cases where program results were not clearly defined. For example, the Small Business Administration’s (SBA) performance plan’s goals and measures continue to generally focus on outputs rather than results. To assess progress in its goal to “increase opportunities for small business success,” SBA relies on measures such as an increase in the number of loans made by SBA, the number of clients served, the number of bonds issued, and the amount of dollars invested in small businesses. This is important information, but the plan does not show how these measures are related to increasing opportunities for small businesses to be successful—the key result SBA hopes to achieve. Sets of performance goals and measures also should provide balanced perspectives on performance that cover the variety of results agencies are expected to achieve. Federal programs are designed and implemented in dynamic environments where mission requirements may be in conflict, such as ensuring enforcement while promoting related services, or priorities may be different, such as those to improve service quality while limiting program cost. Consequently, mission requirements and priorities must be weighed against each other to avoid distorting program performance. The Department of Veterans Affairs’ (VA) Veterans Health Administration (VHA) provides an illustration of an agency that is using a range of goals to reflect the variety of results it seeks to achieve. VHA recognizes that, as it seeks to improve the health status of veterans, it must provide care efficiently. VHA’s primary healthcare strategy has three performance goals to be achieved by fiscal year 2002, referred to as the 30-20-10 strategy. With fiscal year 1997 as the baseline, VHA has separate goals that focus on (1) reducing the cost per patient by 30 percent, (2) increasing the number of patients served by 20 percent, and (3) increasing to 10 percent the portion of the medical care budget derived from alternative revenue sources. VHA’s ability to fund the costs associated with serving 20 percent more patients than in the past will depend in large part on VHA’s success in meeting its goals to decrease the cost per patient and increase revenues from alternative sources. In reviewing the fiscal year 1999 plans, we said that setting multiyear and intermediate goals is particularly useful when it may take years before results are achieved and in isolating an agency’s discrete contribution to a specific result. In examining the fiscal year 2000 plans, we found that some agencies have started to incorporate these practices into their performance plans. For example, the Office of Personnel Management’s (OPM) plan includes multiyear goals that provide valuable perspective on its plans over several years. In particular, the plan has an objective for fiscal year 2002 to simplify and automate the current General Schedule position classification system by reducing the number of position classification standards from more than 400 to fewer than 100. The plan shows that OPM projects that it will reduce the number of classification standards to 320 by the end of fiscal year 1999 and further reduce the number to 216 by the end of fiscal year 2000. Reducing the number of classification standards is seen by OPM as important because it will provide federal agencies with added flexibility to better acquire and deploy their human capital. The Department of Commerce’s National Oceanic and Atmospheric Administration (NOAA) also includes projected target levels of performance for multiyear goals in its plan. As part of its strategic goal to sustain healthy coasts, NOAA set a target for fiscal year 2002 to increase to 75 the percentage of the U.S. coastline where threats to the habitat have been assessed and ranked. NOAA set a target level of 20 percent in fiscal year 2000 from a baseline of 0 percent in fiscal year 1998. In contrast, the Department of the Treasury’s Internal Revenue Service (IRS) provides an example of where multiyear goals could be included in the plan but are not. The plan states that the IRS Restructuring and Reform Act of 1998 requires that 80 percent of all tax and information returns that IRS processes be electronically filed by year 2007. IRS’ plan would be more useful if it discussed this mandate along with target levels to show how it plans to achieve this goal over the next 7 years. Congress will likely expect to receive information relating to IRS’ progress in the area, particularly since IRS has requested funding for this goal. Treasury officials said that they recognize the shortcomings in IRS’ performance measures. As part of its restructuring, IRS is undertaking improvements by developing new performance measures. A few agencies have recognized that using intermediate goals and measures, such as outputs or intermediate outcomes, can show interim progress toward intended results. For example, the Department of Justice’s Drug Enforcement Administration (DEA) has a goal to disrupt and dismantle drug syndicates, but its plan acknowledges that counting the number of cases, arrests, or seizures does not adequately measure the true impact of enforcement efforts. Therefore, addition to those measures, DEA is developing other gauges, such as the ratio of the number of targeted organizations disrupted as a result of DEA involvement in foreign investigations to the total number of targeted organizations. Its plan states that DEA will collect data for this goal in fiscal year 1999. Similarly, SSA recognizes in its plan that one change needed for its disability program is that disabled beneficiaries must become self- sufficient to the greatest extent possible. As a first step toward its strategic objective to “shape the disability program in a manner that increases self- sufficiency,” SSA includes an intermediate goal to increase by 10 percent in fiscal year 2000 the number of Disability Insurance beneficiaries transitioning into trial work periods over time. SSA states that it will develop other goals and measures after an analysis of historical data is completed. All of the fiscal year 2000 plans we reviewed include baseline and trend data for at least some of their goals and measures. With baseline and trend data, the performance plans provide a context for drawing conclusions about whether performance goals are reasonable and appropriate. Decisionmakers can use such information to gauge how a program’s anticipated performance level compares with improvements or declines in past performance. For example, the DOT plan includes graphs for nearly all goals and measures that show baseline and trend data as well as the targets for fiscal year 1999 and 2000. The graphs clearly indicate trends and provide a basis for comparing actual program results with the established performance goals.