GPRA and PerformanceBased Budgeting

1
GPRA and Performance-Based Budgeting

• Dr. Paul L. Posner,
• Managing Director, Federal Budget Analysis
• March 12, 2002

2
A Historical Perspective

• GPRA is a continuation of 50 years of efforts to
  link resources with results
• The First Hoover Commission (1947) and the Budget
  and Accountings Procedures Act (BAPA) of 1950
• Planning-Programming-Budgeting (PPBS) System,
  1965-71
• Management by Objectives (MBO), 1973-74
• Zero-Base Budgeting (ZBB), 1977-81

3
A Historical Perspective

• 1900.1930s 19401950s 1960..
• Budget and Accounting Budget and
  Accounting GPRA 1993
• Act of 1921 Procedures Act of 1950
• Focus Dollars Transactions Programs
• People Activities Outputs
• Accounts Functions Outcomes
• Impact
• Emphasis Resources Work Purpose

4
GPRA What it Is and What its Not

• GPRA melds the best features, and avoids the
  worst, of its predecessors
• Required connections to budget
• presentations reflect the influence of
  BAPA.
• Emphasis on cross-agency comparisons
• and performance measurement. harkens back to
  PPBS.
• Focused on outcomes, but allowing a
• range of performance measures emphasizes the
  premise of MBO.
• Absence of mechanistic approaches
• and formulaic quantification avoids major
  problems of PPBS and ZBB.
• Explicitly defined roles for executive
• and legislative branches. removes
  executive initiative tag of PPBS and ZBB.
• Defined a phased and iterative
• implementation approach not the
  ready/fire/aim method of PPBS and ZBB

5
GPRA Can Help Address Management Challenges

• The performance information produced by GPRAs
  planning and reporting infrastructure can serve
  as a framework to address key challenges facing
  the federal government. Among these challenges
  are
• Instilling a results orientation,
• Ensuring that daily operations contribute to
  results,
• Coordinating crosscutting programs,
• Building the capacity to gather and use
  performance information, and, importantly,
• Understanding the performance consequences of
  budget decisions.

6
Performance Budgeting Challenges

• Performance Budgeting presents its own set of
  challenges
• Defining expectations clearly
• Encouraging use by actors with different needs
• Addressing structural alignment between plans,
  budgets and total costs
• Developing credible outcomes, measures and
  information
• Focusing on crosscutting performance issues

7
Models of Performance Budgeting

• Whether we deem performance budgeting a success
  or failure under GPRA largely depends on our
  expectations.
• There are several models for what performance
  budgeting might look like, including
• Mechanical funding levels directly tied to
  performance.
• Managerial consensus on broadly defined goals
  little oversight.
• Incentives marginal programmatic changes
  reward/punish performance.
• Agenda changes the decision-making process not
  necessarily the decisions themselves.

8
Using Performance Information Throughout the
Budget Process

• Use of performance information manifests itself
  differently throughout the budget process
• Budget preparation (agency and central budget
  office)
• Allocate funds strategically
• Build budget justification
• Identify program overlap
• Budget approval (chief executive and legislative)
• Make performance-informed decisions
• Compare analysis across programs with similar
  goals
• Make performance expectations clear during budget
  allocation
• Budget Execution
• Track allocated funds based on priorities/performa
  nce goals
• Allow spending discretion for agreed-upon
  priorities
• Audit/Evaluation
• Focus on performance questions in addition to
  financial compliance

9
Structural Challenges

• GPRA requires performance plans to cover each
  program activity, however
• Differing orientations of budget
  accounts/activities and performance plans
  complicate this linkage, and
• Budgets and plans often do not clearly identify
  full costs associated with specific performance
  goals

10
Types of Accounts
11
Types of Accounts, Cont.
12
Types of Accounts, Cont.
13
GPRA Recent Trends

• Most agencies have made progress linking plans
  and budgets over the past four years.
• Of the 32 agencies we reviewed, most were able to
  define a link between their performance plans and
  the program activities in their budgets.
• More importantly, nearly 75 percent of the
  agencies for fiscal year 2002, compared to 40
  percent in fiscal year 1999, were able to link
  directly expected performance with requested
  program activity funding levelsthe first step in
  defining the performance consequences of budget
  decisions.

14
Agency Progress in Linking Performance and Budgets
Agencies Show Progress in Linking Plans and
Budgets, Fiscal Years 1999-2002
Source GAO analysis. Note For fiscal years
1999-2001 our universe was 35 agency plans for
fiscal year 2002, 32 agency plans.
15
Linking Performance and Budgets, Cont.

• However, there was substantial variation in the
  manner and therefore the resulting informative
  value in which these linkages were being
  achieved.
• Most agencies associated higher or more general
  levels of their performance plans (general goals
  and strategic objectives) with lower or more
  specific levels of their budget structures
  (program activities).

16
HUDs Plan-Budget Linkages FY 2000
Year 2000 Performance Plan
Note Dollars in millions, Source GAO analysis
of HUD Performance Plans
17
HUDs Plan-Budget Linkages FY 2001
Year 2001 Performance Plan
Note Dollars in millions, Source GAO analysis
of HUD Performance Plans
18
HUDs FY 2002 Plan-Budget Linkages FY 2002
 
19
EPAs Plan-Budget Linkage FY 2002
20
The Critical Path for Performance Budgeting

• Structural integration important but success
  predicated on improving supply and demand
  functions
• Supply side agenda includes
• Developing logic models and agreement among third
  parties
• Achieving consensus on measures
• Reliable data and evaluation studies
• More transparent cost data aligned with choices

21
GPRA as an Agent for Change

• Demand side agenda calls for persistent and
  dedicated leadership from agencies, OMB, and
  Congress.
• Agencies goals and performance data are used to
  run their daily operations
• OMB budget decisions and oversight of execution
  are informed by performance data, and
• Congressional oversight, authorization,
  appropriations use performance information in
  deliberations
• Be careful what you wish for.

22
The Government-wide Performance Agenda

• Wanted A Government-wide Performance Plan
• Major performance challenges cut across agency
  and governmental boundaries
• Most major outcomes defined by a variety of
  governmental tools and third parties

23
Assessing Performance A Holistic Approach
Regulatory Costs are the mid-point of a range
estimate for annualized costs Direct Loans are
measured by loan disbursements, and guaranteed
loans are the face value of the loan guarantee
24
Estimated Workforce Devoted to Federal Purposes
is Substantially Non-Federal
Percent of Federal Employees by Type, 1996
Grant Created 14
State and Local Mandate 27
Federal Civilian 11
Uniformed Military 9
Contract Created 34
U.S. Postal 5
Source Paul C. Light, The True Size of
Government.