5: Budget and Performance
Budget and Performance Integration Other Information:
THE PROBLEM • Improvements in the management of human capital, competitive sourcing, improved financial performance, and expanding
electronic government will matter little if they are not linked to better results. • Everyone agrees that scarce federal resources
should be allocated to programs and managers that deliver results. Yet in practice, this is seldom done because agencies rarely
offer convincing accounts of the results their allocations will purchase. There is little reward, in budgets or in compensation,
for running programs efficiently. And once money is allocated to a program, there is no requirement to revisit the question
of whether the results obtained are solving problems the American people care about. • In 1993, Congress enacted the Government
Performance and Results Act (GPRA) to get the federal government to focus federal programs on performance. After eight years
of experience, progress toward the use of performance information for program management has been discouraging. According
to a General Accounting Office (GAO) survey of federal managers, agencies may, in fact, be losing ground in their efforts
to building organizational cultures that support a focus on results. • Agency performance measures tend to be ill defined
and not properly integrated into agency budget submissions and the management and operation of agencies. Performance measures
are insufficiently used to monitor and reward staff, or to hold program managers accountable. Managers responsible for producing
public services often do not have control over the resources they use or flexibility to use them efficiently; authority is
not aligned with accountability. In the GAO survey cited above, in 22 agencies more than half the managers reported they were
held accountable for the results of their programs. But only in one agency did more than half the managers report that they
had the decision making authority to help the agency accomplish its goals to the same extent. • Managers do not have timely
and complete information with which to monitor and improve their results. Information is collected and filed away for use
"somewhere else." • The structure of the federal budget makes it impossible to identify the full cost associated with individual
programs. Because the budget does not identify full cost, competition for services has been forced to substitute a separate
process governed by complex, artificial rules for cost measurement—and this, in turn, has acted as a barrier to competition
and a source of constant confusion. • The American people should be able to see how government programs are performing and
compare performance and cost across programs. The lack of a consistent information and reporting framework for performance,
budgeting, and accounting obscures this necessary transparency. THE EXPECTED NEAR-TERM RESULTS • Starting in 2003, the President’s
Budget will shift budgetary resources among programs devoted to similar goals to emphasize those that are more effective.
• In the 2003 Budget, the Administration will set performance targets for selected programs along with funding levels. • In
the 2003 Budget, agencies and programs will budget for the full costs of retirement and health care programs that are currently
budgeted centrally. • The 2003 Budget will present to the American people the objectives the Administration seeks to achieve
in the coming year and provide better information on the linkage between objectives and the matching cost. THE EXPECTED LONG-TERM
RESULTS • Better performance, based on an assessment of the expected outcomes relative to what is actually being achieved,
including results expected from the President’s electronic government initiative. • Better control over resources used and
accountability for results by program managers. This is consistent with the President’s strategic management of the human
capital initiative, which increases staff and responsibility at the "front line" of service delivery and links rewards to
performance. • Better service as a result of more competition based on full costing of resources used by working capital funds
and other support service providers, and a simpler competitive process consistent with the President’s competitive sourcing
initiative. • Standard, integrated budgeting, performance, and accounting information systems at the program level that would
provide timely feedback for management and could be uploaded and consolidated at the agency and government levels. This would
facilitate the goals of the President’s initiative to improve financial performance. • Eventual integration of existing segregated
and burdensome paperwork requirements for measuring the government’s performance and competitive practices with budget reporting.
Objective(s):
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