The Lowdown on Agency Strategic Reviews
Results show progress, but morale and customer service challenges remain.
The director of the Office of Management and Budget, Shaun Donovan, put agencies on notice last week that the administration is doubling down on the implementation of its priorities and tracking progress more closely.
This memo indirectly adds some urgency to the relatively new annual strategic reviews which are underway in agencies across the government.
The 2010 amendments to the Government Performance and Results Act created a series of cycles for four-year strategic plans, annual plans, the designation of two-year agency priority goals and four-year cross-agency priority goals. The law also requires the Office of Management and Budget to annually assess agencies’ progress.
To do this, OMB created an annual strategic review process whereby agencies would self-examine their progress of programs in the context of the strategic objectives—the building blocks of their four-year strategic plans—and share those results with OMB. The first complete cycle of agency-level strategic reviews was conducted last spring and summer, and results were reported along with the president’s fiscal 2016 budget in February.
What’s Been the Result?
The president’s budget provided a high-level assessment of the agency strategic reviews. In addition, agency-by-agency results were made available on Performance.gov, but it was not easily analyzed because it requires clicking on hundreds of links in order to compile a coherent picture. More recently, however, OMB shared a spreadsheet with a finer level of detail in one place.
What does it tell us? First, that 23 of the 24 major agencies were involved in the review process (the Nuclear Regulatory Commission was excluded). Of those reporting, five agencies did not provide results of a strategic review (the Defense, Energy, State and Transportation departments and the U.S. Agency for International Development). According to OMB, these agencies had developed their strategic plans on a different cycle and did not yet have results to assess. These agencies account for 42 of the 364 strategic objectives whose progress was assessed for fiscal 2014.
Of the remaining 322 strategic objectives that agencies self-assessed, 14 percent (45) were judged to be making “noteworthy progress” and 12 percent (39) were assessed as “areas for focused improvement.” So what does this look like?
Making Noteworthy Progress
Five agencies accounted for about half of the objectives deemed as making “noteworthy progress.” OMB guidance says agencies were to judge areas as making noteworthy progress “as a result of new innovations in strategy, program design, or operations that have led to notable improvements in outcomes or cost reductions.” For example:
- Agriculture Department. Strategic objective: Improve access to nutritious food. The Food and Nutrition Service devoted efforts to reduce food insecurity and hunger among schoolchildren during the summer through a series of initiatives. This resulted in 187 million meals served last summer, an increase of 14 percent since 2009.
- Housing and Urban Development Department. Strategic objective: Restore the financial health of the Federal Housing Administration, while supporting the housing market recovery and access to mortgage financing. The FHA restored its capital reserve ratio two years sooner than anticipated, with its insurance fund gaining $15 billion over the last year.
- Interior Department. Strategic objective: Expand water conservation capabilities. In fiscal 2014, the Bureau of Reclamation approved 125,448 acre feet of water conservation capacity, exceeding its goal by more than 50 percent.
- Labor Department. Strategic objective: Secure safe and healthy workplaces, particularly in high-risk industries. Fatal mining injuries decreased by 25 percent between 2010 and 2013 (the latest data available). The Occupational Safety and Health Administration has proposed rules to require electronic submission of workplace injury and illness data, speeding the availability to detect patterns and risks sooner and with more accuracy.
- Veterans Affairs Department. Strategic objective: Improve veteran wellness and economic security. The number of homeless veterans has decreased by 33 percent since 2010, and the Veterans Employment Center assisted transitioning service members, 134,000 who were hired.
Areas for Focused Improvement
The instances of “areas for focused improvement” were more widely scattered across agencies. Some may have been judged as needing improvement in areas where they faced challenges in program execution. Interestingly, the predominant theme for improvement was around human capital issues. Seven of the 18 agencies reporting on their progress in fiscal 2014 tagged this as an area for improvement. For example:
- Agriculture. Strategic objective: Develop a customer-centric, inclusive, and high-performing workforce. USDA made some progress in improving its workforce engagement but with nearly one-third of its skilled workforce eligible to retire — including food safety inspectors, scientists, veterinarians, and firefighters — its ability to effectively deliver on its diverse mission is at risk.
- Education Department. Strategic objective: Productivity and performance management. Challenges include a review of its telework efforts, the integration and security of its IT systems, effectively using its office space, and changing the workforce culture. Progress is being made in in aligning performance management practices with departmental strategic goals and priorities.
- National Science Foundation. Strategic objective: Build an increasingly diverse, engaged and high-performing workforce. NSF is moving its offices and hopes to retain at least 70 percent of its staff through the transition.
- Small Business Administration. Strategic objective: Invest in SBA’s employees. Hiring constraints and sequestration decreased employee satisfaction to 65 percent. SBA does not have the flexibility to change skill sets needed for its evolving work. It does not have funds for training or leadership development.
- Veterans Affairs. Strategic objective: Make VA a place people want to serve. In fiscal 2014, VA hired veterans in less than 29 calendar days on average through noncompetitive appointments. Vets comprise one-third of VA’s workforce. It is actively establishing employee engagement initiatives.
In addition to workforce issues, some agencies highlighted other challenges. The Commerce Department, for example, felt that transforming data capacity to keep up with the big data revolution requires a shift in its governance approach and unprecedented collaboration among agencies and the private sector. Census began testing a new model for organizing its data assets, jointly with the National Institute for Standards and Technology. Commerce says it plans to expand the National Oceanic and Atmospheric Administration’s big data partnership this year.
Interestingly, the various issues raised in GAO’s High-Risk List—other than human capital—were not visibly prominent in agencies’ self-assessments of focus areas for improvement.
What Does This Year Hold?
Based on lessons learned in the first cycle of agency strategic reviews, OMB says the fiscal 2015 cycle will be fine-tuned to:
- Integrate these strategic review sessions with other related capacity-supporting reviews such as the Obama administration’s IT PortfolioStat reviews, agency benchmarking data reviews. This integrated review session would be led by agency chief operating officers, rather than performance improvement officers, who typically led the fiscal 2014 round of reviews. This revised process will be dubbed “FedStat.”
- Include OMB staff and start the sessions in May, with the idea that these would be two-hour meetings highlighting two or three key mission-support or mission-focused areas in each department or major agency.
By conducting these reviews in the spring, OMB expects its annual guidance to agencies on priorities will be developed earlier in the budget process. In addition, OMB notes: “As the strategic reviews mature, OMB anticipates that they will play an expanded role in informing budget development and operational decisions” and increase the use of evidence in decision-making.