The Bush administration has mandated that agencies use performance-based budgeting on selected programs in the fiscal 2003 budget cycle, according to the 2002 budget unveiled Monday. Agencies will be required to submit performance-based budgets for selected programs in the fiscal 2003 budget process, the first time agencies have been forced to tie their spending decisions to performance goals. The budget does not say what programs will be chosen for performance-based budgeting. Program managers will be held accountable for meeting performance targets, the budget states. Experts hailed the administration's proposal but cautioned that the success of the budgeting method will depend on involvement from Congress and the Office of Management and Budget. "I think it is a very positive sign," said Donald Kettl, a scholar with the University of Wisconsin's LaFollette Institute of Public Affairs. "This is really the first effort to directly couple the amount of money going in [to agencies] with the results going out." Still, performance budgeting could delay the traditional budget process, according to Kettl and Dall Forsythe, senior fellow at the Rockefeller Institute, a think tank affiliated with the State University of New York at Albany. "When resource allocation revolves solely around financial data, appropriators can make choices without involving substantive issues. With performance budgeting, substantive committees put their hands up and say, 'we should be part of the [budgeting] decision too,' " said Forsythe. Linking performance with funding will likely spur conflict among stakeholders who disagree with agency performance goals, said Kettl. Performance budgeting could also become a "paperwork exercise" if Congress fails to use performance data to guide budgetary decisions, he added. "If Congress doesn't pay attention to [performance information], it dramatically reduces its opportunity to have an impact," said Kettl. The 1993 Government Performance and Results Act (GPRA) calls for pilot projects in performance budgeting, but few agencies have volunteered to participate. Most agencies link budget requests to expenses (such as salaries, travel and equipment) instead of performance goals. The fiscal 2003 budget will include more performance information and the fiscal 2004 budget will integrate performance and budget data, according to next year's budget. The budget provides further details on a range of the President's government reform initiatives. The administration has doubled its initial proposal for an e-government fund that would finance interagency e-government initiatives. The budget proposes a first installment of $20 million for the fund, which will grow to $100 million over three years. The Office of Management and Budget would distribute allocations from the fund. The administration will also seek new legislation to improve accountability within the civil service system. The document proposes to change federal budgeting methods to give program managers budgetary authority for support services and capital assets. Legislation to give managers more tools to restructure the federal workforce is also in the works, according to the budget. But managers already have a variety of tools for structuring the federal workforce, noted a staffer with the House Government Reform Committee. "As [Comptroller General] David Walker has said, 90 percent of what agencies need to do can be done administratively," said the staffer. "There may not be a need for legislation." OMB spokesman Chris Ullman would not elaborate on what measures the administration is considering for restructuring the federal workforce. As part of a broader effort to make government citizen-centered, the budget also pledges to restructure federal management by cutting away layers in the upper levels of government and moving higher-level managers to front-line service delivery positions. Although the document provides no specific numbers on job cuts, OMB directed agencies to include specific "de-layering" goals in their fiscal 2002 performance plans, which were due to Congress Monday.
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