Joint Hearing of the House Committee on Rules Subcommittee on Legislative and Budget Process and the House Committee on Government Reform Subcommittee on Government Efficiency, Financial Management and Intergovernmental Relations
Hearing on "Linking Program Funding to Performance Results"
TIME: 2:00 PM
ROOM:2154 Rayburn House Office Building
WITNESSES
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The Honorable Mitchell E. Daniels Jr., Director of the Office of Management and Budget
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The Honorable David M. Walker, Comptroller General of the United States
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Mr. Mortimer L. Downey, Principal Consultant, PB Consult, Inc.
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Ms. Patricia McGinnis, President and CEO, the Council for Excellence in Government
PURPOSE OF HEARING
Traditionally, policy-makers in both the executive and legislative branches have devoted enormous time and effort each year to determining how to spend Federal dollars. However, they have given comparatively scant attention to determining what these expenditures achieve in terms of real benefits for the American people. The limited performance measures that were used tended to focus on activities or outputs (e.g., the number of job training grants awarded and people trained) rather than results (e.g. , the number of trainees who actually obtained and retained jobs).
The Government Performance and Results Act of 1993 (Public Law 103-62) was intended to shift the focus of Federal decision-making to performance results. The Act requires Federal agencies to develop long-term strategic plans and annual performance plans that establish results-oriented goals and measures for their programs and activities. The Act also requires the agencies to submit annual performance reports to assess progress against those goals and measures.
Thus far, however, the Act has had little impact. This is primarily because executive branch and congressional policy-makers have not used the performance information developed under the Act in the annual appropriations process. Until the link between performance results and appropriations is established, the Act will remain largely a paperwork exercise and the effectiveness of funding decisions will remain largely untested.
In order to establish this linkage and achieve the intent of the Act, President Bush designated “Budget and Performance Integration” as one of the five government-wide initiatives in the President’s Management Agenda that he issued early this year. In furtherance of this initiative, the Office of Management and Budget has developed the “Program Assessment Rating Tool” (known as “PART”). During the fiscal year 2004 budget cycle, the PART will be used to evaluate the performance of approximately 20 percent of all Federal programs. The PART evaluations will be published in the President’s 2004 budget, and the bases for the evaluations will be made public.
The programs selected for PART evaluations in fiscal year 2004 have a total annual cost of about $480 billion, or more than 24 percent of all Federal spending. They represent a wide range of mandatory and discretionary programs consisting of the following categories: Competitive grant programs; Block/formula grant programs; Regulatory programs; Capital asset and service acquisition programs; Credit programs; Research and development programs; and Direct Federal spending programs.
The attached memorandum dated July 16, 2002, from OMB Director Mitch Daniels to department and agency heads provides additional background on the evolution of the PART and how it will work. It includes a list of the programs that will be evaluated through PART for fiscal year 2004. One key point from the Director’s memorandum is that a poor score under the PART will not necessarily lead to reduced program funding. Rather, the PART is designed to operate as a diagnostic tool that can be used to identify performance issues and their causes. At the same time, presumably some consequences will flow from poor performance evaluations. If the PART process is to work, programs with documented performance problems cannot continue to be funded on a business-as-usual basis.
The PART process and the broader presidential initiative to integrate budget and performance represent an important effort to put "teeth” in the Government Performance and Results Act. If they succeed, the Federal Government may finally be on the road to results-oriented, performance-based policy-making.
The subcommittees will discuss: The developement, transparency and objectivity of the PARTS process; The use of PART evaluations in the budget process; the relationship between PART and the Government Performance and Results Act; and the application of the PART process to make budget and performance integration a reality.
