Performance Budgeting:

Initial Experiences Under the Results Act in Linking Plans With Budgets

AIMD/GGD-99-67: Published: Apr 12, 1999. Publicly Released: May 14, 1999.

Additional Materials:

Contact:

Paul L. Posner
(202) 512-9573
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Pursuant to a congressional request, GAO reviewed selected fiscal year (FY) 1999 federal agency performance plans, focusing on: (1) agencies' approaches to linking performance goals and budgetary resources; (2) characteristics that might be associated with different approaches to linking performance goals and budgetary resources; and (3) implications for future efforts to clarify the relationship between budgetary resources and results.

GAO noted that: (1) in their first Government Performance and Results Act of 1993 performance plans, agencies experimented with a variety of approaches to connect budget requests with anticipated results; (2) although most agencies reviewed (30 of 35) defined some type of relationship between the program activities of their proposed budgets and the performance goals of their plans, far fewer (14 or 40 percent of the plans reviewed) translated these relationships into budgetary terms--that is, most plans did not explain how funding would be allocated to achieve performance goals; (3) such allocations are a critical first step in defining the performance consequences of budgetary decisions; (4) GAO found that agencies with budget and planning structures of widely varying complexity made these allocations, but some common approaches were used; (5) agencies were significantly more likely to have allocated funding to program activities if they: (a) showed simple, clear relationships between program activities and performance goals (as illustrated by eight agencies in GAO's review); (b) fully integrated performance plans into congressional budget justifications (as illustrated by five agencies); or (c) had changed their program activity structures to reflect their goal structures (as illustrated by three agencies); (6) agencies' first-year experiences show progress in bringing planning and budgeting structures and presentations closer together, but much remains to be done if performance information is to be more useful for budget decisionmaking; (7) continued efforts are needed to: (a) clarify and strengthen links between planning and budgeting structures and presentations; and (b) address persistent challenges in performance planning and measurement and cost accounting; and (8) the progress that has been made, the challenges that persist--including the indefinite delay in the performance budgeting pilots called for by the act--and Congress' interest in having credible, results-oriented information underscore the importance of developing an agenda to ensure continued improvement in showing the performance consequences of budgetary decisions.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: On June 6, 2000, OMB issued Bulletin No. 00-04, "Integrating the Performance Plan and Budget," which requires CFO Act agencies and others (e.g., FCC, RRB, TVA, etc.) to prepare written reports by June 30 "assessing agency progress to date on certain aspects of the integration of performance planning with the budget, and outlining current plans for further improvement." As part of the FY2002 Transition Budget process, OMB expected this reporting process to help the agencies to focus on a better understanding of the relationships between budgetary resources and performance results.

    Recommendation: In light of the indefinite delay of the performance budgeting pilots required by the Results Act and the experiences of agencies during the FY 1999 performance planning and budgeting cycle, the Director, Office of Management and Budget (OMB), should assess the approaches agencies use to link performance goals and program activities in the FY 2000 performance plans.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  2. Status: Closed - Implemented

    Comments: The reporting process defined by OMB Bulletin 00-04 should address the first two elements in this recommendation. OMB addressed the remaining two elements--the types of performance budgeting pilots that would be practical and useful and when and how pilots would occur--when it selected the performance budgeting pilots during the fiscal year 2001 budget process.

    Recommendation: OMB's analysis, building on GAO's review of FY 1999 performance plans, should develop a better understanding of promising approaches and remaining challenges with respect to the concept of performance budgeting within the federal government. OMB's analysis should address, for example: (1) the extent of agencies' progress in associating funding with specific or sets of performance goals; (2) how linkages between budgetary resources and results can be made more useful to Congress and to OMB; (3) what types of pilot projects might be practical and beneficial; and (4) when and how those pilot projects would take place.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  3. Status: Closed - Implemented

    Comments: OMB's recent actions indicate it is developing an agenda to clarify and enhance the relationship between resources and results. OMB's July 1999 guidance to agencies on preparing fiscal year 2001 budget estimates listed several questions on plan-budget links that OMB intended to discuss with agencies during the budget development process. The acting Deputy Director for Management testified in July 1999 that OMB would reverse its May 1997 decision to indefinitely delay the Results Act's performance budgeting pilots and begin those pilots during the fiscal year 2001 budget formulation process; in December, 1999, the pilots were announced. Finally, on June 6, 2000, OMB issued Bulletin 00-04, which follows up on and extends the guidance issued in July 1999 and which should provide a better understanding of current planned actions by the agencies to improve the relationship between budget estimates and expected performance. All of these actions are consistent with the recommendation; however, OMB has not yet specified how it will use the information developed from the June 2000 reporting process to work with the Congress in this area.

    Recommendation: On the basis of this analysis, OMB should work with agencies and Congress to develop a constructive and practical agenda to further clarify the relationship between budgetary resources and results, beginning with specific guidance for the preparation of agencies' FY 2001 plans.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  4. Status: Closed - Implemented

    Comments: OMB announced in December 1999 five performance budgeting pilots: DOD Military Recruiting, HHS/Food and Drug Administration, HUD/Hope VI program, State Department overseas diplomatic facilities security, and SSA continuing disability reviews. OMB intends to use these pilots to comment on the relationship between budgetary resources and results in its required report to Congress on the feasibility and advisability of a performance budget, due March 2001. It is also reasonable to expect that information and perspectives gained from the June 2000 reporting process defined by OMB Bulletin 00-04 will also be a component of the March 2001 report to the Congress.

    Recommendation: OMB's analysis and the resulting agenda should become the foundation for OMB's report to Congress in March 2001, as currently required by the Results Act, on the feasibility and advisability of including a performance budget as part of the President's budget and on any other needed changes to the requirements of the act.

    Agency Affected: Executive Office of the President: Office of Management and Budget

 

Explore the full database of GAO's Open Recommendations »

Jul 21, 2016

Jun 23, 2016

May 12, 2016

Apr 14, 2016

Mar 4, 2016

Oct 30, 2015

Sep 9, 2015

Aug 17, 2015

Jul 9, 2015

Apr 27, 2015

Looking for more? Browse all our products here