Academic journal article The Public Manager

Budget and Performance Integration: First Steps in the Fifth Initiative of the President's Management Agenda. (Mini-Forum: Performance Management)

Academic journal article The Public Manager

Budget and Performance Integration: First Steps in the Fifth Initiative of the President's Management Agenda. (Mini-Forum: Performance Management)

Article excerpt

Managers share their early performance budgeting experience, with case study illustrations of integrated processes at the federal and local level.

Of the five governmentwide initiatives in the President's Management Agenda (PMA), performance management is most clearly associated with the Government Performance and Results Act of 1993 (GPRA). The nine-year-old law, which mandated strategic plans and annual performance plans and reports for dozens of federal agencies, was phased in during the 1990s and only completed the first plan/report cycle two years ago. Yet because it never received much attention that mattered, many observers concluded that GPRA was just a thought experiment and paper exercise.

Until last summer, such a view appeared rational, but the PMA reinforced principles central to GPRA (citizen-centered, results-oriented government) and indicated quite clearly that the Bush administration was seizing the reins on the plodding GPRA. Many people were distracted by the new management scorecard (traffic light system for rating agency progress on implementing the agenda), and seem to have missed the important fact that the PMA is not an end but a means "to deliver results that matter to the American people."

The Changing Budget Process

The Performance Conference's budget and performance integration track was a real eye-opener for anyone who may have doubted the president's intentions or resolve with regard to GPRA. Several high-ranking Office of Management and Budget (0MB) representatives independently confirmed the results focus of this initiative and of the entire agenda. They described structural changes in the budget format that will make financial and performance information more usable. The budget process is changing, too; a new methodology was introduced that is already being used to assess program performance for budgeting purposes.

Taking Aim

Phil Dame, deputy assistant director of budget analysis and systems at OMB, put the entire PMA into perspective with his comments on the first day of the conference. While none of the initiatives break new ground, he said, they are focused, receiving more attention and linked with one another. Still, it is a daunting task; he said that full implementation is "probably a two- term project."

The true test of their success will be whether program performance actually improves. At this early stage, though, many are asking what government will look like when the transformation is complete. To this end, Dame offered a before and after illustration. A few years ago, President Clinton asked: What would change if we increased the funding of program X? No one could answer this simple question! None of the critical pieces of mation existed (the program's outcomes and costs and the relationship between them).

Some progress has been made since then, but the ability to link costs and results is still ad hoc, and program managers are often surprised at performance and financial data being used by their colleagues in the planning and budgeting offices. 0MB is making changes in the budget format that will make these connections routine. Of course, the information needs to be accurate and useful, as well, so 0MB is developing common measures that will facilitate comparison of like activities for budgeting purposes. 0MB has submitted legislation (based on the 0MB Circular A-76, "Performance of Commercial Activities," system) that will permit full cost allocation to individual programs.

Preparing to Budget and Manage for Results

Justine Rodriguez, OMB's deputy associate director for economic policy and architect of the budget reforms, explained that this initiative will be the "sustaining force" for the entire PMA. Per the vision of 0MB director Mitch Daniels, this system is an information and incentive system for the US government that is intended to "institutionalize a rational way of thinking about effectiveness" that is applied throughout the budget cycle. …

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