Progress reports on performance goals will change the way agencies do business.
A new law requires the Office of Management and Budget to determine annually whether programs meet goals set out in agencies’ annual performance plans. To do this, OMB has created a new review process.
A provision of the 2010 Government Performance and Results Modernization Act that kicks in this year requires OMB to determine whether programs meet the goals outlined in agency performance plans. If not, then OMB has to prepare a report to Congress on unmet goals.
To meet this requirement program by program would be virtually impossible, given the scale of government. Instead, OMB will assess “buckets” of programs, using agencies’ strategic objectives—a subset of their strategic plans—as the unit of analysis. Agency plans will be released with the president’s fiscal 2015 budget proposal in early March. OMB estimates there are about 400 strategic objectives across government.
So how will this new process work? OMB issued guidance in 2013, and last week, OMB staff participated in a governmentwide forum sponsored by the National Academy of Public Administration to describe and discuss the process.
What Is a Strategic Review?
The annual strategic review is “designed to inform strategic and budgetary decision-making, improve longer-term program outcomes and identify opportunities for performance improvement,” OMB’s policy says. In some cases the new requirement will bring significant change to agency operations and planners are encouraged to develop a maturity model to chart out future improvements. OMB also recommends that agencies integrate these reviews into existing processes, such as budget development.
Christopher Mihm, an observer at the NAPA forum from the Government Accountability Office, says that if used effectively, strategic reviews can be a “leadership device that helps answer what’s the connection between what we are trying to do and what goes on day to day.”
Agencies are advised to design their own strategic review processes and consult with OMB no later than Feb. 17 on mechanics such as timing, roles, responsibilities and sources of evidence.
The baseline strategic review cycle will begin after the publication of agency strategic plans for fiscal 2014 through fiscal 2018 in early March.
Agencies should make relative assessments of progress for each of their strategic objectives, using “multiple perspectives and sources of evidence, both qualitative and quantitative,” OMB says. The guidance also says “leaders must use their judgment when determining relative levels of progress.” Nevertheless, agencies must place 10 percent to 20 percent of their strategic objectives into each of two categories—those that demonstrate “noteworthy progress” and those that have “significant challenges.”
After their initial assessments, agencies must provide OMB a summary of findings for each strategic objective reviewed by May 16. The format is flexible, but agencies will be expected to “identify areas of significant progress and challenges for each strategic objective.”
Several agencies have already begun to design and pilot their strategic review processes. The Housing and Urban Development Department, for example, conducts 20 topic reviews—12 are policy-oriented (such as reducing homelessness) and eight are management-oriented (such as reducing improper payments).
The summary of findings will not be publicly released, but rather will be used as input into the budget process and the agency annual report process. OMB will provide feedback to agencies on their findings in June, and progress updates for each strategic objective are due back to OMB in September along with draft budgets and annual performance plans for fiscal 2016.
“The progress update will be published as part of the FY 2014 Annual Performance Report in February 2015,” OMB’s guidance says. Agencies must include in this report the strategic objectives classified as “noteworthy” or “challenged.”
The creation of new governmentwide processes is daunting. GAO’s Mihm observes that the strategic review cycle will pose a number of challenges. To be effective, agencies must:
- Ensure they have created results-oriented strategic objectives.
- Assess the full range of policy tools as a part of the discussion in the strategic reviews, including grants, loans, contracts, tax expenditures and regulations—areas that agencies typically have not assessed before or are under the purview of other agencies.
- Create a governance structure that ensures the programs that contribute to a strategic objective are effectively coordinated to achieve the objective.
- Understand the quality of the data being used and whether is good enough to inform decisions.
- Ensure the results from the strategic reviews are actionable by decision-makers.
While those implementing the new strategic review process will face these and other challenges, the phased approach laid out by OMB, along with the learning network it is putting in place, should allow the flexibility needed to learn and adjust over time.