OMB may add asset management to reform agenda

By Timothy B. Clark

July 24, 2002

The President's Management Agenda, now focused on five topics, may be expanded this fall to include a sixth-asset management-according to Office of Management and Budget Director Mitch Daniels.

"The federal government is sitting on an incredible array" of assets, including real estate, property and financial assets, Daniels said at an event Wednesday sponsored by the PricewaterhouseCoopers Endowment for the Business of Government. He suggested that the focus of an asset management category would be to decide whether the assets should remain in government or be transferred to the private sector, where "better quality" management might be obtained "at a better price."

The administration's management agenda, as it is called, now covers financial management, human resources, e-government, competitive sourcing and linking budget to performance. OMB has developed a red light, yellow light and green light grading system to track the progress of departments and agencies in these areas. To date, most agencies have been awarded red lights, but many agencies are said to be making reasonable progress.

Of the five categories, Daniels said the most progress was in the e-government category, where GSA's FirstGov Web site is winning awards and other governmentwide sites now help citizens navigate federal benefits and grants programs and comment on proposed regulations.

Daniels said he was disappointed by the competitive sourcing efforts of agencies, saying that progress has been "spotty." He also said the initiative had engendered "reactionary" moves in Congress that could force a retreat from the administration's goal of putting work done in government up for competition with private firms. Daniels said the administration was working to overhaul outsourcing guidelines under OMB Circular A-76, and would produce a "radically simplified" system by next year.

Daniels said he was determined to press ahead with his initiative to rate the performance of federal programs, with the objective of reducing funding for weak performers and adding funds for high performers. But he acknowledged that questions remain as to whether "we can make budget decisions on this basis…or persuade other actors in the process to pay attention."

This year's budget rated about 130 programs as either "ineffective" or "effective." That exercise was done for its "shock value," said Daniels, "to indicate that we mean business" about evaluating programs' performance.

The evaluation system developed by OMB and other agencies to rate programs is being refined, and will be used to assess 20 percent of agencies' programs in the next budget cycle. Daniels hopes to rate all federal programs within five years.

Daniels said that in evaluating programs, OMB decided not to try to answer the question of whether they were appropriate for the federal government. "That question gets to a philosophical level, and we didn't want to discolor" judgments as to programmatic effectiveness, he said. In response to questions from participants about the capabilities of OMB and the agencies to conduct the evaluations, Daniels indicated that OMB personnel aren't fully equipped for the task and seemed to acknowledge that agencies might need more resources to make up for the decline in evaluation capabilities over the past decade.

"OMB is not a deep repository of management expertise," Daniels said. Next month, OMB will lose the senior general management expert on its small management staff when Jonathan Breul leaves government for the private sector. Acknowledging that President Bush's "Freedom to Manage" legislation is getting a poor reception in Congress, Daniels said the administration might attempt to implement some of its reforms in the areas of personnel and property management on an agency-by-agency basis.


By Timothy B. Clark

July 24, 2002

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