OBSERVATIONS ON THE DEPARTMENT OF THE TREASURY'S STRATEGIC PLAN
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Appendix XIV
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On July 31, 1997, we issued a report on the Department of the Treasury's draft strategic plan (The Results Act: Observations on the Department of the Treasury's July 1997 Draft Strategic Plan, GAO/GGD-97-162R). Treasury's formally issued strategic plan was submitted to OMB and Congress on September 30, 1997. As requested, we have reviewed the September 30 strategic plan and compared it with the observations in our July 31 report. On October 15, 1997, we briefed your staffs on our further observations on the strategic plan. The key points from our July report and October briefing are summarized herein.
SUMMARY OF KEY OBSERVATIONS FROM OUR JULY REPORT
Treasury's July draft strategic plan was incomplete and did not meet all of the requirements of the Results Act. Of the six elements required by the Act, the Treasury draft plan included four. Of these four elements, two--the mission statement and key factors external to the agency that could significantly affect achievement of the strategic goals and objectives--generally met the Act's requirements, but, as we stated, these could have been strengthened. The information contained in the plan on the two other elements--goals and objectives and the strategies to achieve them--was often too general and vague to be used effectively by Treasury management, Congress, and other stakeholders. We said these two elements could be improved if they were more specific, results oriented, and linked to the plans of Treasury's bureaus and major program offices. Two elements--the relationship between long-term goals and objectives and annual performance goals, and a description of how program evaluations were used to establish or revise strategic plans--were missing from the draft plan we reviewed.
The draft strategic plan did not adequately address crosscutting issues and made no mention of whether Treasury had coordinated with other federal departments and agencies that shared related functions. In addition, although a major part of the mission statement was focused on management, the draft plan did not adequately address some of the critical management problems facing Treasury that could affect its ability to achieve its strategic goals and objectives. Finally, we said that Treasury's capacity to provide reliable information on the achievement of strategic and program performance was questionable.
IMPROVEMENTS MADE IN TREASURY'S STRATEGIC PLAN
Treasury's formally issued strategic plan incorporates many improvements that make it more responsive to the requirements of the Results Act. Specifically, Treasury's strategic plan now includes all six required elements, including two that were missing from the draft plan. Also, Treasury revised the four elements that were in its draft plan so that they better meet the requirements of the Results Act. In addition, the plan better addresses Treasury's critical management problems and includes more information on how the Department plans to coordinate with other agencies on crosscutting issues.
Treasury's plan is now presented as an overview with more detailed information provided in the plans of its 17 bureaus and major program offices. Taken together, the 18 plans comprise Treasury's strategic plan.\1 Treasury's goals and objectives are now linked with those of its bureaus and major program offices. Consequently, the plan provides a clearer discussion of which bureaus and program offices have responsibility for carrying out the goals and objectives. Treasury's plan also states that details on resources needed to implement strategies are to be included in bureau and program office strategic plans as well as the Department's budget submission. Because the plan also links the goals and objectives in the overview plan to the annual performance goals and measures in the strategic plans of the bureaus and program offices, it provides information on one of the elements required by the Results Act that was missing from the draft plan.
Treasury has also made several other improvements to its plan. A section was added describing how program evaluations were used to develop the plan. This section also cites examples of planned evaluations that Treasury is to use as input for future plans. The plan includes more information aimed at addressing the critical management problems the Department faces. For example, an objective has been added to the plan to address the Year 2000 computer problems. Also, throughout its plan, Treasury addresses crosscutting issues by pointing out where coordination is required with other agencies.
TREASURY'S STRATEGIC PLAN CAN BE FURTHER IMPROVED
Several elements of Treasury's strategic plan could be further improved to better meet the purposes of the Results Act. Specifically, the linkage between Treasury's goals and objectives and those of its bureaus and major program offices could be made more complete. Also, Treasury's plan could be improved if more complete and detailed information on strategies for achieving goals and objectives were included in the plans of its bureaus and program offices. Treasury's plan could also be improved if performance goals were provided for each objective and if some of these goals were more results oriented. Treasury could also improve its plan by more explicitly addressing its critical management problems. Finally, Treasury's plan could better address issues relating to its capacity to provide the types of reliable data needed to measure performance and assess progress in meeting its goals and objectives.
Treasury's plan could be improved if the linkage between Treasury's goals and objectives and those of its bureaus and program offices were more complete. Specifically, we found several gaps in the linkage between Treasury's plan and the plans of its bureaus and components. For example, Treasury has an objective to "ensure strong financial management of Treasury accounts." However, only six bureaus or program offices have corresponding objectives. For this objective, Treasury's plan does not include a related objective for the Financial Management Service, which is responsible for managing the government's finances, and IRS, the government's primary revenue collector.
Treasury's plan could also be improved if more complete and detailed information on strategies for achieving goals and objectives were included in the plans of its bureaus and program offices. Treasury's plan contains general information on some strategies that are needed to achieve its goals and objectives. It also states that more detailed information regarding resource needs is to be included in its budget submission and the plans of its bureaus and program offices. However, we found several instances where a Treasury objective was linked to a bureau objective, but the bureau plan contained no corresponding strategy. For example, Treasury has three law enforcement objectives--to reduce counterfeiting, money laundering, and drug smuggling--where IRS has a role. However, IRS' plan contains no specific strategy related to these three objectives. Also, where strategies were found in the bureau plans, they could be improved if more detailed information, such as technological and resource needs, were included. For example, IRS lists several strategies, including expanding nationwide access to taxpayer information on-line and updating taxpayer information daily, to achieve its objective to "improve customer service." However, IRS' plan does not discuss the resources needed to carry out these strategies.
Treasury's plan could also be improved if performance goals were provided for each objective. We found several instances where performance goals were missing from bureau plans. For example, Treasury's plan has an objective to "improve capacity to recruit, develop, and retain high-caliber employees." The plan lists six bureaus and program offices that have related objectives, but only one, the U.S. Mint, has a related performance goal.
Likewise, Treasury could enhance its plan by making its performance measures more results oriented. For example, Customs' strategic plan includes a strategy to prevent drug smuggling whose performance measures (the number of arrests, seizures, and convictions, for example) are output oriented. The plan could be improved if more results-oriented measures, focusing on lowered drug smuggling rates, were developed in support of Customs' strategy to prevent drug smuggling.
Treasury officials stated that they will attempt to develop results-oriented measures whenever possible, but that performance data may be difficult to collect in some cases, and output measures may be the best data available, at least for the near term. Furthermore, they felt that a balance of output-oriented and results-oriented measures may be desirable since the purpose of performance measures is to determine an agency's effect on results. Nonetheless, Treasury's plan could be further improved if results-oriented measures were developed to complement output measures wherever possible.
As we observed in our review of Treasury's draft strategic plan, the current plan could also be improved if it explicitly addressed all critical management problems. Although the plan states that it addresses all our high-risk areas and other critical management issues, its discussion of Treasury's critical management problems is not always explicit. For example, IRS' accounts receivable--a high-risk area--is not addressed specifically in Treasury's or IRS' plan. Both plans contain goals related to increasing compliance with the tax laws and improving customer service, which indirectly could address IRS' accounts receivable. However, as we previously reported, Treasury's strategic plan could be more useful to Congress and other stakeholders if it more clearly presented how Treasury will address its critical management problems and how this will facilitate the Department's achievement of its strategic goals and objectives.
Similar to our comment on Treasury's draft strategic plan, the current plan could further be improved if it more clearly addressed the Department's capacity to measure its progress toward achieving its goals. The current overview does contain a very brief discussion of the Department's efforts to improve performance measurement systems and data, and specific performance measures are contained within the plans of the bureaus and program offices. However, the Treasury plan does not address the difficulties of developing measures and collecting reliable data for some important areas of performance. For example, IRS and the Bureau of Alcohol, Tobacco and Firearms both use taxpayer burden as a performance indicator, but neither agency has adequate measures or data for tracking taxpayer burden. We recognize that developing measures of some areas of Treasury's performance, such as taxpayer burden, will be very challenging, but the Treasury plan does not discuss how the Department plans to deal with these challenges.
AGENCY COMMENTS
On October 30, 1997, we obtained oral comments from Treasury officials, including the Director of the Office of Strategic Planning, on a draft of our analysis of Treasury's strategic plan. The officials generally agreed with our observations but suggested several changes to clarify areas where Treasury has improved its plan. They said that it was important to emphasize that their July 1997 draft strategic plan was a "working document" issued as required for consultation purposes with Congress and other stakeholders. As a result of the consultation process, they said that the plan was revised to address the concerns of Congress and other stakeholders, including GAO and OMB. Also, while the officials agreed that the current plan could be further improved in several areas, they said that the plan meets the Results Act's requirements in that it contains all six required elements.
The officials also reiterated that the Department should be recognized for its Results Act implementation efforts. In particular, the officials told us that Treasury has reformatted its budget to serve as the performance plan required by the Results Act for the past 2 fiscal years. Also, last year, the Department issued its performance report for fiscal year 1996 as part of its budget submission--ahead of the Act's requirements. They said that Treasury intends to better align its performance plan with the goals and objectives in its strategic plan and to submit the plan as part of its fiscal year 1999 budget request, scheduled to be released in February 1998.
Finally, Treasury officials stated that two of the areas where we said they could improve their plan--establishing results-oriented performance measures and collecting reliable data for performance measures--appear to pose challenges for government agencies in general. Nonetheless, Treasury plans to make improvements in both areas, but officials said that input from Congress and other stakeholders will be beneficial as they attempt to develop performance measures that are results oriented and for which reliable data exist.
ISSUE AREA CONTACT
Jim White, Associate Director, Tax Policy and Administration Issues; General Government Division, (202) 512-9110.
-------------------- \1 We reviewed the strategic plans of the Internal Revenue Service (IRS); the U.S. Customs Service; the Bureau of Alcohol, Tobacco and Firearms; the Office of Thrift Supervision; and the Office of the Comptroller of the Currency to assess whether they reflected each of Treasury's goals and objectives that should apply. We also assessed the quality and detail of information on strategies and performance goals provided in these plans.
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