Congress enacted GPRA in part to inform congressional decision making by providing objective information on the relative effectiveness and efficiency of federal programs and spending. In addition to requiring executive agencies to develop strategic and annual performance plans, and measure and report on progress toward goals, GPRA also emphasized efficiency. According to the statute, GPRA was intended, among other things, to address problems of waste and inefficiency in federal programs, and to improve congressional decision making by providing objective information on the relative efficiency and effectiveness of federal programs and spending. OMB plays an important role in the management of the federal government’s performance, and specifically GPRA implementation. Part of OMB’s overall mission is to ensure that agency plans and reports are consistent with the President’s budget and administration policies. OMB is responsible for receiving and reviewing agencies’ strategic plans, annual performance plans, and annual performance reports. To improve the quality and consistency of these documents, OMB issues annual guidance to agencies for their preparation, including guidelines on format, required elements, and submission deadlines. In addition, GPRA requires OMB to prepare the overall governmentwide performance plan, based on agencies’ annual performance plan submissions. The PMA and PART of the prior administration also included an emphasis on improving government efficiency, with requirements for agencies to develop program-level efficiency measures and show annual improvements in efficiency. In August 2001, the Bush Administration launched the PMA with the stated purpose of ensuring that resources entrusted to the federal government were well managed and wisely used. OMB developed criteria called “standards of success” to measure progress in five management initiatives under the PMA, as well as a scorecard to track agency progress under each initiative. Criteria to receive and maintain the highest rating score (green status) for the performance improvement initiative included that an agency’s annual budget and performance documents include at least one efficiency measure for each program and that program performance and efficiency improvements be identified each year. PART, which was launched in 2002 as a component of the PMA, included assessment of the extent to which programs were tracking progress toward and achieving efficiency improvements. PART consisted of a set of questions developed to assess various types of federal executive branch programs, and addressed four aspects of a program: purpose and design, strategic planning, program management, and program results/accountability. While there were references to efficiency in several different sections of the 2007 and 2008 PART guidance, two PART questions focused specifically on development of program-level efficiency measures with annual targets for improvement: “Does the program have procedures (e.g., competitive sourcing/cost comparisons, information technology (IT) improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?” In order to receive a “yes” response for this question, a program was to have regular procedures in place to achieve efficiencies and cost effectiveness, and had to have at least one efficiency measure with baseline and targets. Evidence could include efficiency measures, competitive sourcing plans, IT improvement plans designed to produce tangible productivity and efficiency gains, or IT business cases that documented how particular projects improved efficiency. “Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?” In order to receive a “yes” response for this question, a program had to demonstrate improved efficiency or cost effectiveness over the prior year, including meeting its efficiency target(s) in the question above. About 90 percent of all programs that received a PART assessment, including those in our selected review, developed at least one performance measure as an efficiency measure. However, we found that about half of the approved measures either did not contain typical elements of an efficiency measure, or were unclear. As table 1 below indicates, we analyzed a sample of the efficiency measures that were developed for PART, and, to the extent possible, placed them into one of the three categories shown in the table. (In some cases, the available information on the measure was insufficient for us to place it into one of the three categories, so we labeled these measures as “unclear.”) As figures 1 and 2 below illustrate, our analysis of the 36 efficiency measures from our selected programs and a random sample of the remaining efficiency measures indicates that about half of the efficiency measures contained typical elements by including both an input and an output or outcome. As illustrated in figure 1, for the 21 selected programs (listed in appendix II), we determined that 58 percent of the efficiency measures included both elements and 42 percent did not. In its guidance to programs, OMB stated that, although both output and outcome-oriented efficiency measures were acceptable, outcome efficiency measures were preferred. Because we obtained more in-depth information on the selected programs’ measures, we further analyzed whether those that included both elements were output- or outcome-oriented and found most to be output- oriented. Figure 2 summarizes estimates for the remaining 1,355 efficiency measures, based on a random sample of 100 of those measures. We estimate that 48 percent of the measures included both elements, 26 percent did not, and the remaining 26 percent were unclear. Of those that did not contain both elements, the missing element was most often an input. In general, as indicated in table 1, the absence of these typical elements can result in measures that do not truly capture efficiency. Nevertheless, some of the information captured in these measures could still be of value to program officials for helping improve efficiency. For example, one measure from our selected programs—average time to correct/mitigate higher priority operations and maintenance deficiencies at certain facilities in the Bureau of Reclamation—did not contain an input element. However, program officials told us this was an important measure because it helped them prioritize which ongoing preventive maintenance projects they should repair first by categorizing repairs needed according to the likely costs of delaying the repairs. For example a category 1 deficiency should normally be repaired immediately (within to 6 months) to avoid escalating the cost of repair; a category 2 deficiency should be repaired in a few years. In contrast, a category 3 deficiency is normally repaired only if there is time and funding remaining after repairing category 1 and 2 deficiencies. In another example, the National School Lunch Program (NSLP) used a measure which was labeled an efficiency measure, but which did not hav the typical ratio of inputs to outputs or outcomes. Instead, the measure focused on reducing the error rate in making program payments. Progra officials characterized the measure as a process measure, rather than an output or outcome-based efficiency measure. An official said that out of s $7 billion in total program payments, errors worth $2 billion occur in term of under and over payments, for a net cost to the program of $1 billion. An official said that if they were able to reduce overall overpayments due to various types of error, it could save millions of dollars. Officials said this measure has been important in helping them take corrective actions to reduce the number of payments made in error. Among the selected programs, for the efficiency measures that contained an input, the type of information used to express the input varied in terms of both availability for use and completeness. Most of the efficiency measures we reviewed captured inputs in terms of cost, but a few us amount of staff resources or time spent to produce an output or outcome as a proxy for cost. For example, the Department of Labor Energy Employees Occupational Illness Compensation program’s efficiency measure was the average number of decisions per full-time equivalent (FTE), which we determined used information on work hours as estima by FTEs as the input. While FTE information is often readily available ted and can be a useful proxy for cost, it does not necessarily reflect total cost because, for example, it would neither distinguish between higher and lower cost FTEs, nor would it include other costs, such as contractors, training, equipment, or facilities. In addition, dollar cost information can vary in how completely it captures the cost of producing outputs or outcomes. “Cost” generally can be thought of as the value of resources that have been, or must be, used or sacrificed to attain a particular objective, which, in the case of an efficiency measure, would be a unit of output or outcome. “Full cost” is generally viewed as including both direct costs (costs that can be specifically identified with a cost object, such as an output) and indirect costs (costs of resources that are jointly or commonly used to produce two or more types of outputs but are not specifically identifiable with any of the outputs). Managerial cost accounting (MCA) information can provide a more complete picture of the cost involved in producing program outputs or outcomes by recognizing resources when they are used and determining the full cost of producing government goods and services, including both direct and indirect costs. According to the Statement of Federal Financial Accounting Standards No. 4 (SFFAS 4), Managerial Cost Accounting Concepts and Standards for the Federal Government, which sets forth the fundamental elements for MCA in government agencies, costs may be measured, analyzed, and reported in many ways and can vary depending upon the circumstances and purpose for which the measurement is to be used. Our analysis of the cost information used by the selected programs showed that most of the measures used budgetary information, such as appropriations or obligations, for the cost element. Of the 18 efficiency measures from our selected programs that had both typical elements, and had cost as the input, 14 measures (78 percent) used a form of budgetary information. We have previously reported that using budgetary information, such as appropriations or obligations, may not completely capture the full cost of producing program outputs or outcomes because of differing time frames and account structures. With regard to timing, appropriations provide agencies legal authority to obligate funds for a given fiscal year or beyond. Consequently, agency outlays (payments against obligations for goods and services received) representing the resources used to produce a program’s outputs or outcomes in a given year may flow from obligations made in a prior year’s appropriation.