The Honorable Clay Johnson III
Deputy Director for Management
Office of Management and Budget
on Government Efficiency
Committee on Government Reform
U.S. House of Representatives
We can make
the Federal Government results-oriented. We know it won't be easy. We are
accustomed to focusing on the amount of money we're spending as a validation
for how much the Federal Government is committed to an objective. But the
better measure of our commitment is not how much we're spending, or even
how hard we're working. The better measure is what results we achieve on
behalf of the American people. Together we can increase the focus on results
and make the Federal Government a results-oriented organization. And all
can benefit from this change: citizens, taxpayers, Federal employees, and
We can assess
the performance of every Federal program, and if a program is not working
as intended, we can work together to decide what to do about it. We have
begun to do this, to evaluate program performance with the agencies and
Congress. The Administration has just published its assessment of 40 percent
of the government's programs, and will soon complete more assessments so
that by this time next year, we will have evaluated the performance of 60
percent of the government's programs. In three more years, we plan to have
assessed the programs that account for almost all of the Federal Budget.
Based on these assessments, we are making and implementing recommendations
regarding the management, structure, and funding of programs to best produce
the intended results. I discuss this in greater detail below.
We can review
and evaluate the cost of each program and activity, and if the cost is not
considered to be satisfactory, we can work to reduce it to more acceptable
levels. We have begun this process.
We are working
to ensure that agencies have accurate and timely financial information with
which to make better cost and performance decisions. Today, most major agencies
are getting clean audit opinions and making the audited information available
in less time. With a clean audit opinion, agencies can ensure they are responsibly
accounting for the people's money. If it takes an agency five months to
issue an audited financial statement, however, it is unlikely that the agency
has timely and accurate financial information available to them on a regular
basis. Eight agencies already issued audited financial reports by mid-November,
as part of the overall effort to have agencies produce audited financial
statements by November 15th this year.
We are working
to eliminate erroneous payments, those payments or services that are diverted
from intended recipients. Agencies are taking important steps to measure
payments made in an incorrect amount and/or to an ineligible recipient.
Information we have about erroneous payments tells us that programs that
make almost $1 trillion in payments annually make erroneous payments that
exceed $35 billion annually. With the enactment of the Improper Payments
Information Act, agencies now develop and implement erroneous payment plans
that will eventually lead to the review of every dollar the government spends.
We are determined, with Congress' help, to provide agencies with the tools
they need to accomplish that goal.
We are working
to ensure agencies are getting the greatest value for the taxpayer by establishing
the infrastructure necessary to conduct public-private competitions, a process
known as competitive sourcing. Agencies can identify the positions that
are suitable for competition, and can conduct competitions. They are finding
the most effective and efficient ways for their employees to perform commercial
activities and comparing this to private sector solutions to determine which
sector can provide the most effective, cost-efficient results.
We are working
to manage our $60 billion annual investment in IT in a more fiscally responsible
fashion. Agencies are doing a better job telling us what we are getting
in the way of results from our IT dollars. We are improving information
security and preventing more and more duplicative IT investments. For example,
because of e-Travel, the new web-based, consolidated Federal travel management
system, the government expects to spend nearly $300 million less over the
next 10 years on travel-related activities.
We can assess
how government assets are being managed, maintained and deployed, and we
have begun this process. Of course, the government's most important "asset"
is its workforce. Agencies are working to ensure that leadership and critical
skill needs are being met, that every employee knows how they can most effectively
contribute to the accomplishment of the agency's mission, and that management
is focused on helping their employees be most effective and successful.
we are working to better manage the government's hundreds of billions of
dollars in real property assets. While much of the Federally-owned real
and personal property assets are used to support agency missions, it is
not clear how many of these properties are actually being used in an efficient
manner. Much of the government's real property no longer serves the needs
for which it was originally intended. As a result, there is a great deal
of underused and unneeded real property within the Federal Government. We
recently launched a new initiative that will take us on the important path
to more effective and efficient stewardship of Federal real property assets.
We can assess the service levels we provide our "customers,"
our citizens, taxpayers, state and local governments, and businesses, and
if the service levels are not considered to be satisfactory, we can work
to make them acceptable. We have begun this process. Agencies are investing
more than $250 million in E-Gov projects this year, many of which are specifically
designed to provide more customer-oriented service to the American taxpayer.
Thanks to the Free File program, most Americans can now file their taxes
over the Internet for free. And Grants.gov makes it easier for potential
recipients to obtain information about Federal grants by creating a single,
online site for all Federal grants.
create a results-oriented government, one that assesses its performance,
controls costs, and manages assets and service levels to better serve the
taxpayers and citizens. The President's Management Agenda, with its Executive
Branch Management Scorecard, helps us do this. We are holding agencies accountable
for becoming results-oriented. Agencies are better managed and achieving
greater results than they were two-plus years ago. They are managing their
finances and investments more professionally and efficiently. They are providing
better service to the American people. They are better directing and helping
the civilian workforce be more effective and successful.
which is used to assess both agencies' overall status in achieving the
long-term PMA goals, as well as their quarterly efforts in working toward
those goals, is included with my testimony and shows that agencies have
made real progress towards becoming results-oriented organizations.
have significantly improved their performance in about half of the 130
scores that are assigned in the five areas that are the focus of the
PMA, up from just 15 percent two years ago. (Twenty-six agencies are
given quarterly scores of red, yellow, or green in each of five government
areas in need of management improvement, for a total of 130 scores.)
improved in just 14 areas in 2002, but improved in 28 areas in 2003.
Agencies achieved six additional green scores in 2003, up from just
two in 2002.
What began as
the President's Management Agenda is now becoming the agencies' management
agenda. The Budget and Performance Integration Initiative, which we are
here to talk about today, is a perfect example. Many agencies are now using
meaningful program performance information in their budget and management
decision making. In particular, a third of the government's major agencies
meet regularly to use performance information to make program management
decisions. Agencies are using the information gleaned from program assessments
to identify program strengths and weaknesses and take appropriate action.
Their assessments have improved program results.
now assessed the performance of approximately 400 Federal programs, representing
more than one trillion dollars in Federal spending. As I mentioned, in 2004,
agencies will complete assessments for an additional 20 percent of government
spending. We are working with agencies now to choose the programs we will
assess based on a host of factors, including the overall budget impact of
a program or whether the program will be up for reauthorization. In addition,
we are planning to examine multiple programs across government with similar
missions so we can share best practices among like programs. These assessments
are causing us to ask consistently whether programs are working and, if
not, how we can make them work. For instance:
year, the Administration on Aging, which provides services that benefit
the elderly so they can remain in their homes and communities, could
not measure its impact. This year, the program was able to show it was
moderately effective after demonstrating that its services enable the
elderly to remain in their homes and communities and setting goals for
increasing the number of people served per each million dollars spent.
With level funding, the program plans to increase by 6 percent in 2004
and 8 percent in 2005 the number of people served per million dollars
- The Broadcasting
Board of Governors' efforts to broadcast to Near East Asia and South
Asia could not demonstrate that they were achieving results last year.
But following the recommendations in last year's Program Assessment
Rating Tool (PART), the program this year set goals for weekly audience,
program quality, signal strength, and cost-per-listener. The program
dramatically increased its reach to Arab-speaking countries to an estimated
10.5 million listeners each week, up from just 3.9 million in 2002 and
reduced the cost-per-listener from $1.22 in 2002 to just 88 cents in
show that 152 of the more than 400 rated programs cannot demonstrate whether
they are achieving results. To first demonstrate and then improve results,
agencies are working to adopt clear measures of performance for those programs
and/or implement recommendations to improve program performance. For instance,
as a result of a PART recommendation, the Davis-Bacon Wage Determination
Program, which determines prevailing wage rates for construction-related
occupations throughout the United States, has now identified quantifiable
measures of its performance. In addition, the program is implementing a
multi-year effort to reform the wage determination process and is undergoing
an independent review of its own performance. We will continually assess
program performance to ensure that remedies like this are put in place and
are working to improve results.
One of the most
visible factors affecting a program's performance is funding. But I believe
far too much attention is devoted to how much we are spending rather than
how much we are getting for what we spend. Over time, funding should be
targeted to programs that can prove they achieve measurable results. I've
included a table with my testimony that shows not only all of the PART ratings,
but the funding recommended for each assessed program in the President's
2005 Budget. As you will see, a PART rating does not today, nor should it
ever, result in an automatic funding decision. Indeed, a rating of "Ineffective"
or "Results Not Demonstrated" may suggest that greater funding
is necessary to overcome identified shortcomings, while a program rated
"Effective" may be in line for a proposed funding decrease because
we have higher priorities. For example:
the Youth Activities program was rated ''Ineffective,'' the program's
proposed funding remains relatively stable. The program provides formula
grants to States and local areas to provide training to low-income and
other disadvantaged youth to help them secure employment, but does not
have the authority to target funds to the areas of greatest need. To
allow it to be more effective, the Administration proposes to give States
and the Secretary of Labor increased authority to reallocate resources
to areas of need.
the Department of Energy's Distributed Energy Resources Program's ''Moderately
Effective'' rating, the Administration proposes a small reduction in
funding for the program. The program funds research for improved energy
efficiency of and reduced emissions from on-site energy production.
The decrease in funding is attributable not to the program's rating,
but to relative priorities among Department of Energy programs.
The PART is
a vehicle for improving program performance. It builds on the strong foundation
laid by the Government Performance and Results Act (GPRA). Without the strategic
and performance planning agencies conducted under this important law, there
would be no basis on which to judge an agency's performance management practices
or the goals by which it measures success. The PART reinforces the law's
important requirements to set outcome-oriented goals and measure progress
against those goals.
We will continue
to improve agency and Executive Branch implementation of GPRA by insisting
GPRA plans and reports meet the requirements of this important law and the
high standards set by the PART. Codification of the requirement to conduct
assessments of program performance would be a welcome complement to the
statutory management framework laid by GPRA.
As more and
more program assessments are conducted, the vast majority of budget and
management decisions will be significantly influenced by information about
how programs are performing. Agencies will be better able to describe to
Congress and the taxpayer what his or her funding is purchasing and will
be managing so that each year improvements in efficiency and service delivery
can be documented. This is our goal, yours and ours: a results-oriented
government. We can achieve it.