Financial Management and the President's Management Agenda

Article excerpt

On January 20 in the year that officially began the new millennium, America inaugurated its first President with an MBA. Within several weeks, President George W. Bush quickly unveiled his Blueprint for a New Beginning-an ambitious and unprecedented agenda for improving federal government management.This document was followed six months later by the President's Management Agenda1, which outlines specific goals and strategies to address the nation's most pressing management issues. In his agenda, President Bush outlined five governmentwide and nine agency-specific areas that need attention to better serve the American people. One of the five governmentwide targets is to improve financial performance by ensuring that federal financial management systems produce accurate, timely and useful information to support operating, budget and policy decisions and by managing and reducing the extent of erroneous payments in federal programs.

In light of September 11 and the enormous resource demands placed upon a nation at war, now more than ever it is critical that we maximize every tax dollar. This administration also believes that Americans should be able to compare performance and cost across programs.To improve our financial performance, we must be able to answer two basic questions for every federal activity: what did it cost and what benefit did we receive? Sadly, in almost all cases we cannot provide the answers.

The President's Management Agenda

President Bush's vision for government reform is guided by three principles. Government should be:

Citizen-centered, not bureaucracy-centered;

Results-oriented; and

Market-based, actively promoting rather than stifling innovation through competition.

The President has called for an active but limited government that focuses on priorities and executes them well. And rather than pursue an array of management initiatives, the administration has elected to identify the government's most glaring problems-and solve them. The President's Management Agenda is a starting point for real, sustainable management reform. (See Figure 1.)

The first governmentwide initiative, Strategic Management of Human Capital, focuses on attracting highly talented and imaginative people to the federal government to improve the service provided to our citizens. Competitive Sourcing exposes parts of government to competition so that they may better provide what customers want while controlling costs. Studies have shown that public-private competition improves business processes and reduces costs generally by 20 percent or more. As mentioned above, Improved Financial Performance focuses on improving how government manages its money-reducing, for instance, the billions in erroneous payments the government makes every year. Expanded E-Government harnesses the power of the Internet to make government more productive and accessible to our citizens. Finally, Budget and Performance Integration begins the process of linking resource decisions with results and providing information needed to hold government accountable.

Executive Branch Management Scorecard Will Measure Success

To ensure accountability for performance and results, the administration is using an Executive Branch Management Scorecard.2 The scorecard tracks how well departments and agencies are executing the President's management initiatives and where they stand at a given point in time against overall standards for success.

The scorecard employs a simple "traffic light" grading system common today in well-run businesses. Scores are based on standards for success3 defined by the President's Management Council after consultation with experts in government and academe, including individual fellows from the National Academy of Public Administration. Under each of the five sets of standards, an agency is "green" if it meets all of the standards for success, "yellow" if it has achieved some but not all of the criteria and "red" if it has even one of a number of fatal flaws. …