Largest agencies fare poorly on performance report rankings

The Defense and Homeland Security departments, two of the largest federal agencies, did a relatively poor job of relaying clear, comprehensive and meaningful information in their annual performance reports last year, according to George Mason University researchers.

This is disappointing, but not particularly surprising, said Comptroller General David Walker on Capitol Hill on Wednesday. He joined university officials as they unveiled the annual rankings of how well 24 major agencies communicated their missions to the public and policy-makers in fiscal 2003 performance reports.

Defense, along with the Health and Human Services Department, received the second-lowest scores from analysts at the Mercatus Center, a Fairfax, Va.-based policy institute at George Mason University. Homeland Security fared worst, but the department had not completed its report at the time Mercatus researchers compiled their rankings. Meanwhile, the Agriculture and State departments moved up several places, and Transportation joined Labor at the top, with the Veterans Affairs Department right behind.

The Pentagon encourages stellar military performance, but has a long history of neglecting business matters, Walker said. "There's a lot of waste there," he said. Defense could benefit from appointing a chief management official to preside over transformation efforts, he added.

Defense officials are just as qualified as their counterparts at other agencies, Walker said. But they spend the majority of their time grappling with policy issues. "It's not the people," he said. "It's the priorities, the processes [and] the systems."

Since 1999, Mercatus has rated agencies' annual performance reports on a scale of 1 to 20 in three areas: clarity and accessibility; demonstration of progress and results, and leadership in fixing management problems. The ratings reflect the quality of reports, not actual performance.

Clear, accurate and accessible annual reports may not ultimately translate to more effective management, but are an important first step, Mercatus analysts said. "The insights and ideas generated by this analytical process should improve the agency's ability to serve the public," researchers explained in the study containing the ratings.

Overall, performance reports improved in fiscal 2003, said Jerry Ellig, a senior research fellow at Mercatus. The average agency scored 34 out of 60 for fiscal 2003, a 13 percent increase over the previous year.

Agencies did a better job of stating outcome-oriented goals and discussing major management challenges, Ellig said. But in future reports, officials must improve at explaining failures, articulating plans for improving performance, and assessing the cost effectiveness of programs, he noted.

The Agriculture and State departments moved up substantially in the rankings, Walker noted. These two agencies tied for fourth place in fiscal 2003. Neither agency rated above tenth place the previous year.

The Agriculture Department report is "easy to navigate [and] candid in highlighting goals missed," the Mercatus report concluded. USDA's report contains graphs and tables showing the level of resources the agency devoted to achieving various goals, and includes a section showing how the agency serves the public. The State Department's report also "provides an excellent model in explaining why the department exists and how its actions benefit Americans," Mercatus researchers said.

The Transportation Department joined the Labor Department at the top of the rankings in fiscal 2003. Both agencies received 48 out of 60 possible points. Veterans Affairs earned a close third place, with a score of 47.

In the face of tight budgets, effective performance reports will help agencies make a strong case for funding, Walker said. The General Accounting Office has encouraged lawmakers to re-evaluate baseline spending in search of waste, he explained. "The status quo is unsustainable and unacceptable," he said.

Walker urged agencies to use their performance reports, coupled with strategic plans, to suggest targeted spending cuts. This would help prevent Congress from making across-the-board cuts to important programs, he said.