Tying budgets to results gains renewed emphasis

Worsening economic conditions have thrust the performance-based budgeting requirements of the Government Performance and Results Act once again into the spotlight.'Agencies are having their budgets scrubbed,' said John Mercer, the former counsel to the Senate Governmental Affairs Committee who is often referred to as the father of GPRA.Mercer said the difficulty with GPRA compliance has been that agencies often don't know a program's full cost, how to integrate annual performance plans with budget justifications or even how to make a program support performance metrics.Although agency managers have turned to the Office of Management and Budget for guidance in meeting the 1993 law's requirements, OMB has offered little advice. Instead, the General Accounting Office has become the enforcer of GPRA's mandates.'Much of the effort on behalf of OMB, agencies and Congress since 1993 has been getting agencies to put in place infrastructures to produce annual performance reports and strategic plans,' said Chris Mihm, director for strategic issues at GAO.The idea is to get agencies thinking about how to apply technology to collect data about programs and costs, he said. Although most budget directors know how to create accurate, performance-based proposals, none of them has yet succeeded in producing a performance-based budget.GAO found in its reviews that agencies have taken the technological steps to gather financial data, making substantial investments in financial systems and cost accounting modules.Such systems 'will help agencies and OMB more accurately calculate the efficiency of government programs and services,' Mihm said.But the IT infrastructure is only part of the battle, he said, because agencies 'still need to think about goals.'Dennis Taitano, budget director for the Agriculture Department's Farm Service Agency, said some agencies, including his, do not know exactly what a performance-based budget is, how much funding programs need and exactly what outcomes they are supposed to achieve.'Every agency has established a strategic plan that has a vision of the critical things to accomplish,' Taitano said. But drawing up a performance-based budget is something quite different, he said.Each agency is 'like a deer looking into headlights,' Taitano said.In a July 2001 comparison of the Housing and Urban Development Department's annual performance reports for 2000 and 2001, GAO disclosed that HUD did not reach all the goals that would help it achieve its key outcomes, although it made some progress.HUD's efforts were intended to result in more home ownership, affordable and safe rental housing, an infusion of economic vitality to the community, and less fraud and waste in HUD programs. The department could not, however, relate the proposed costs accurately to the outcomes.The Senate Governmental Affairs Committee has ordered dozens of GAO reports on adherence to GPRA. Most of the reports have concluded that agencies are not achieving the goals they had forecast when they asked for program money. Nor are agencies considering 'strategic human capital management or IT issues,' GAO has said.Because performance-based budgeting ties the cost of a program to its outcome, 'those agencies that can show a strong linkage between dollars and results will probably be in better standing,' Mercer said. But few agencies have taken GPRA seriously until now, he said.Taitano said he has always taken the concepts laid out in GPRA seriously'even before the law's enactment. In a previous job at the Navy in the 1980s, he sent OMB five-year strategies and annual performance plans.But most agency budget directors rarely get feedback from OMB about such documents, he said, and congressional committees seem never to use them for budget allocations. So agencies have become discouraged about performance-based budgeting, Taitano said.A House Appropriations Committee staff member said agencies have a valid concern about how their performance plans are used.'I can see where [agencies are] coming from,' the staff member said. 'There is a tremendous amount of frustration, and they are given conflicting guidance.'Appropriations committees do not put much stock in agencies' performance-based budgeting efforts, he said, but 'I'm glad [agencies] are going through the exercise. They need to be grappling with it.'As mandated by the law, OMB began collecting performance data from agencies five years after GPRA was enacted. The administration's oversight arm has said the government should now be ready, technologically and otherwise, to start accounting for every dollar requested for programs.As for IT expenses in linking costs and outcomes, 'a lot of program managers are going to be reluctant to cut programs' to invest in hardware and software for performance-based budgeting, Taitano said.Nikki Tinsley, the Environmental Protection Agency's inspector general, said agencies operating under meager budgets cannot spare money for financial systems upgrades.'I don't see any program managers being able to shift funds,' Tinsley said. 'I don't think that's going to happen at EPA.'