OECD
Conference:
Sequencing and
Pacing of
Performance
Budgeting Reforms
Dustin Brown
Deputy Assistant Director for
Management
Office of Management and Budget,
Executive Office of the President, US
James Inder
Director, Financial Support and
Training Office, Bureau of
Resource Management, US State
Department, United States.
1
Overview
1. Program budget classifications
– How are program objectives decided?
2. Presenting performance information in
budget.
– Government-Wide Efforts
– Agency-Specific Efforts
– Program Assessment Rating Tool
3. Organizational Steps to Improve
Performance Budgeting
4. Future Opportunities
2
Program Objectives Defined By:
• Legislative Branch - Congress
– Authorization Statute (periodic)
– Appropriations Committee (annual)
• Executive Branch – the Administration
– Office of Management and Budget
– Agencies
• Grantees and Program Partners
• Other Stakeholders, Public
3
Programs, Organizations and
Budget Structures
• Typically budgets are program centric
• Agencies, Congress and OMB are used to it.
• Creating budgets by Strategic Goal, LongTerm Objectives or Problems will require a
cultural and policy shift
• Horizontal problems with solutions by vertical
programs would need this shift
4
Agency Performance Planning
and Reporting
(Government Performance Results Act, 1993)
• Strategic Plans
– General goals and objectives, including outcome- related goals and objectives,
for the major agency functions for a period of not less than five years
– A description of how the goals and objectives are to be achieved
• Annual Performance Plans
– Establish performance indicators to be used in measuring or assessing the
relevant outputs, service levels, and outcomes of each program activity
– Should be consistent with the agency's strategic plan
– Performance Budgets result from integration of budget information and agency
annual performance plans.
• Annual Performance Reports
– Review the success of achieving the performance goals of the fiscal year
– Evaluate the performance plan for the current fiscal year relative to the
performance achieved toward the performance goals in the fiscal year covered
by the report .
5
Performance Budget Structure
•
•
•
•
•
•
Agency Strategic Goals (with budget trends)
Strategic Outcome Goals
Program Outcome Goals
Program Output Goals
Program Efficiency Measures
Program Marginal Cost Estimates
6
Budget and Performance Integration
• Agencies’ budget justifications are required to
include full cost of achieving program performance
• Performance’s costs are interpreted as budgetary
resources
• Changing to real costs would require a cultural
change
• Program’s costs can be tracked trough cost
accounting or activity base costing
• Budgetary resources can be linked to
expenditures via financial statements
7
Budget and Performance
Integration
• Agencies have developed models for determining
program’s marginal cost
• Current emphasis is in the use of marginal/unit cost as part
of program’s target setting
• Through the use of marginal, unit and full cost, budget and
performance become better integrated
• Program assessments are used to inform agency, OMB,
and Congressional decisions on resource allocations.
• Programs’ performance is only one of the factors for
making budget decisions
• Government-wide budget contains little performance
information
8
9
10
Program Assessments
• Evaluate programs in a systematic, consistent, and transparent manner.
• Focus on program improvements that can include specific actions related
to management, legislative or regulatory improvements, and funding.
• Over the past six years, agencies and OMB have completed 1,017
program assessments including 234 reassessments.
• In 2002, the government could not show what results were being
achieved by their programs and spending.
• After six years of completing program assessments, the federal
government now has 6,516 performance measures including 1,367
efficiency measures.
• This is the first time in history that we have assembled government
performance measures in one database and reported them transparently
on www.ExpectMore.gov.
11
12
Program Assessments
100%
6%
11%
15%
15%
26%
29%
17%
18%
19%
30%
31%
32%
24%
26%
80%
15%
20%
60%
26%
28%
5%
28%
50%
29%
29%
5%
40%
38%
4%
29%
20%
0
2002 (234)
2003 (407)
2004 (607)
4%
24%
2005 (793)
Eff ective
Mode rate ly Effective
Ineff ective
Results Not Dem onstrated
3%
22%
2006 (977)
3%
19%
2007 (1011)
3%
17%
2008 (1017)
Ade quate
13
How to Increase Usefulness of
Performance Plans and Reports?
• The right information for the right audience
• Three tiers of performance information:
– Strategic Plans, Annual Performance
Plans/Report (300-400 pages)
– Citizen’s Report (25 pages)
– Snapshot (2 pages)
14
Dept. of Energy Citizen’s Report
Summary
15
Dept. of State Citizen’s Report
Summary
16
Mock-Up of Two-Page Snapshot
17
Mock-Up of Two-Page Snapshot
18
Presidential Executive Order 13450
Improving Government Program Performance
November 13, 2007
• The EO makes it the official policy of the
Federal Government to spend taxpayer dollars
more effectively and efficiently each year.
• Established Performance Improvement
Officers (PIOs) in each agency
• Established Performance Improvement
Council (PIC)
19
Performance Improvement Officers
•
Continually Improve Program Goals
•
Help Develop Program Improvement Plans
•
Regularly Assess Program Performance
•
Help Hold Managers Accountable for Results
•
Effectively Communicate Agency Plans and
Reports
•
Increase Transparency
20
Five Opportunities
1.
Active performance management
–
Linking outcomes with operations (i.e. outcomes with outputs
and strategies)
–
Linking cost (not just budget) to performance, including
marginal cost analysis.
2.
Linking organization and individual performance
3.
Focus on rigorous program impact evaluations
4.
Developing crosscutting analysis
–
5.
See Community Development Ex. In Background
Greater transparency and accountability
21
Background
22
Illustrate Performance Budgeting:
President’s Emergency Plan for AIDS Relief
(PEPFAR)
23
Congress – Authorizing Statute
24
Congress - Appropriations Committee
25
Department of State Budget FY 09
26
Agency Congressional Justification
27
Snapshot of Sample Grantee Report
28
Performance and Accountability Report
29
Inside the Citizen’s Report
30
PART Summary
31
PART Assessment Details
32
Program Improvement Actions
33
Program Performance Measures
34
Program Performance Measures
35
Program Performance Measures
36
Program Performance Measures
37
USAspending.gov
38
Other Stakeholders
• ONE Campaign tracks U.S. commitments
on global AIDS.
39
Alternative Structure
Arrange by Problems/Outcomes, not
Agencies/Programs
Example from Community and Economic
Development
40
1. Define the Problem
1) High Poverty Rural areas
 64 non-metropolitan counties have registered
poverty rates higher than 30 percent for each
Census from 1960 to 2000.
2) High Poverty Urban Areas (vs. Metro Avg.)
 2,886 high poverty neighborhoods in US cities with
8.4 million people living in them:
•
•
•
•
Homeownership rates are 33 percent lower.
Male employment rates are 19 percent lower.
Share without a high school degree is 24 percent higher.
Share of families headed by single females is 25 percent
higher.
41
2. Identify Federal Programs Addressing
Problem
•
USDA
–
–
–
–
–
–
•
Commerce
–
•
Brownfield Assessment/Cleanup ($121)
HHS
–
•
Econ Devt Admin ($320M)
CSBG ($495M)
HUD
–
–
–
–
–
–
–
–
–
–
–
CDBG ($4,330M)
EZs ($15M)
CD Loans ($7M)
Brownfields ($7M)
Rural Housing and ED ($25M)
National CD Initiative ($30M)
Indian CD Block Grant ($72M)
HOME Investment ($2,084M)
Native American Housing BG ($647M)
Self-Help Homeownership ($65M)
FHA Asset Control Program
Interior
–
•
•
Appalachian Regional Commission ($66M)
Denali Commission ($6M)
Delta Regional Authority ($2M)
Small Business Administration
–
–
•
Land and Water Conservation Fund ($94M)
Regional Economic Development Agencies
–
–
–
504 Loans ($4,500M in loans)
New Market Venture Capital ($3M in loans)
Treasury
–
–
EPA
–
•
Community Facilities Direct Loan ($300M
loans)
Community Facilities Guaranteed Loan
($210M loan)
Community Facilities Grants ($17M)
Rural Business Enterprise Grants ($40M)
Intermediary Relending Program ($16M)
Rural EZs/ECs ($13M)
•
CDFI ($43M)
Bank Enterprise Award ($5M)
•
Neighborhood Reinvestment Corp ($115M)
•
Tax Incentives (5-year revenue loss)
–
–
–
–
–
New Markets Tax Credit ($3,500 M)
EZ/Renewal Communities ($6,800 M)
Brownfield Tax Expensing ($1,000 M)
Work Opportunity Tax Credit ($270M)
Welfare to Work Tax Credit ($90M)
TOTAL: 12 agencies; 35 programs
$16 billion (approps+loans+tax)
Note: funding data is from 2005.
42
2.a. List of Federal “Designations”
Addressing Problem
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Renewal Community
Empowerment Zones
Enterprise Community
HUD Neighborhood Revitalization Strategy Area
EDA Distressed Area
Appalachian Regional Commission
Delta Regional Authority
Denali Commission Areas (Alaska)
CDFI Investment Area
New Market Tax Credit Low-Income Community
BEA Distressed Community
Brownfield Tax Incentive Zone
SBA HUBZones
FHA Revitalization Areas
Rural Community Facility Areas
HUD Underserved Areas
43
3. What is the purpose of the programs?
Tools/
Categories
Housing & Infrastructure
Economic Development
Grants
Community Development Block Grant
(CDBG)
Economic Development Administration
(EDA)
Community Services Block Grant (CSBG)
HUD Rural Housing and Economic
Development (RHED)
HUD Empowerment Zones (EZ) Grants
USDA Enterprise Community/EZ Grants
HHS Rural Community Facilities
HOME Investment Partnerships
Neighborhood Reinvestment Corp. (NRC)
EPA Brownfield Cleanup
HUD Self-Help Homeownership
HUD Native American Housing Block
Grants
HUD Indian CDBG
Regional Commissions
EDA
CDBG
CSBG
HUD EZ grants
Rural Business Enterprise
Grants
Rural EZ/EC
HUD Brownfields
HHS Community and
Economic Development (CED)
HUD RHED
USDA Economic Impact
Grants
Regional Commissions
SBA HUB Zone (procurement
preference)
HUD Indian CDBG
Loans
USDA Community Facilities (inc. grants)
USDA Intermediary Re-lending
HUD Section 108 loans
SBA 504 loans
HUD Section 108 loans
Tax
Incentives
New Markets Tax Credit (NMTC)
Brownfields Remediation
Single-Family Homeownership (proposed in
2006)
NMTC
EZ/EC/RC (wage credits and
other incentives)
Opportunity Zones (proposed in
2006)
Technical Assistance/
Capacity Building
HUD NCDI
CDBG
CDFI
HUD RHED
Rural Business
Opportunity Grants
USDA Economic
Impact Grants
Bank Enterprise
Award (BEA)
CDFI Native
Initiatives
CDBG set-asides
NRC
Regional Commissions
Individual/ Family
Assistance
CSBG
CDBG
HHS CED
HUD EZ Grants
CDFI
CDFI Native
BEA
44
4. Where are the program strengths and
weaknesses?
Program
Purpose & Strategic Prog.
Design
Planning Mgmt Results Total
All Federal Programs
85%
70%
79%
47%
63%
Community &
Economic Development
Programs
69%
63%
82%
30%
52%
45
5. How do these programs measure
success?
GOAL
Performance
System/
Program
High Level Tracking
Indicators
Program Outcome
Measures
Program Outputs
Examples of Community Development Metrics
Improve quality of
life in a distressed
area to make the
target community
self-sustaining
CDBG
None
None (recently
developed)
Number of households assisted
with housing assistance
Number of jobs created or
retained
EDA
none
Private sector
dollars leveraged
Number of jobs
created or retained in
distressed
communities.
Percentage of investments to
areas of highest distress
USDA
Community
Facility
none
none
Millions of rural residents served
by community facilities financed
by RHS
Number of public safety,
educational, and health care
facilities financed
SBA 504
Certified Devt.
Loan Program
none
none
Estimated number of jobs
created or retained
Number of 504 loans guaranteed
46
Sample Agency Performance Management Best Practices
• Select limited number (20-30) of senior management measures for use in
quarterly meetings (See Interior & EPA).
• Include field offices in some quarterly meetings (See HUD, EPA, SBA).
• PIOs ensure PMA Initiative Leads and other leaders (CHCOs, CAOs,
CFOs, E-Gov,) meet regularly to focus on program improvement and
ensure common standards across Department (See HUD, Labor, EPA).
• Align PART and APP goals (See DOE).
• Has a continuing effort to benchmark itself against other government and
non-government entities on performance management processes (See
NASA, SSA, DOE).
• Establish centralized evaluation unit (if one does not exist) and
evaluation agenda (See State, USAID).
• Program goals are basis for senior manager appraisal goals (See EPA
and OPM).
• Post regular updates of quarterly meetings including performance and
improvement actions online and has links to performance results on its
homepage (See OPM, EPA, DOE).
47