President's Management Agenda:

Review of OMB's Improved Financial Performance Scorecard Process

GAO-07-95: Published: Nov 16, 2006. Publicly Released: Nov 16, 2006.

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The President's Management Agenda (PMA) focuses attention on ensuring resources entrusted to the federal government are well managed and used wisely. The Office of Management and Budget (OMB) developed standards to measure success and a PMA scorecard that gives a "green", "yellow" or "red score" by agency. Green indicates success, yellow indicates mixed results, and red indicates unsatisfactory results. For the Improved Financial Performance Initiative, GAO was asked to (1) study and evaluate OMB's process and criteria for awarding a green score for current status and progress and (2) provide examples of how agency managers use financial data to better manage on a day-to-day basis. To fulfill these objectives, GAO interviewed OMB and agency officials and examined OMB and agency documentation relevant to OMB's scoring process.

OMB has established a reasonable process for assessing and scoring agencies' current status and progress (two separate scores) under the Improved Financial Performance Initiative of the PMA. OMB's established scoring criteria address the fundamental aspects of sound financial management and are geared toward achievement of the goals envisioned in the Chief Financial Officers (CFO) Act. Seven of the nine current status scoring criteria (yellow criteria) are objective and verifiable using publicly available information. The remaining two green criteria are more subjective and require OMB to make judgments about whether agencies (1) currently produce accurate and timely financial information that is used by management to inform decision making and drive results in key areas of operations and (2) have acceptable plans (referred to as a Green Plans) to continuously expand the routine use of financial data in decision making in additional areas of operations. GAO found OMB's staff were actively engaged in the scoring process and met regularly with agency officials to discuss progress in meeting scoring criteria and to provide input into agencies' efforts to expand the use of financial data in their day-to-day management of key agency operations. GAO also found opportunities for OMB to enhance the process by better documenting its assessments of the more subjective green scoring criteria and by systematically tracking the receipt and approval of key documents used in the process. Agency officials generally supported the scorecard process and stated that it has helped to focus top management's attention on financial management issues. The six agencies GAO visited (those with green scores as of September 30, 2004, as requested) provided examples on how they use financial data as well as performance data to make management decisions related to controlling costs, budgeting, allocation of resources, and management of contracts and grants. Agency officials told GAO that some of the examples or activities demonstrated to GAO were also previously demonstrated to OMB to show that the agency was using financial data to help inform management decision-making. OMB officials said they considered these and other examples in rendering the green scores. However, the documentation issues discussed above prevented GAO from specifically determining which examples were used by OMB in making these scoring decisions. The Improved Financial Performance Initiative scorecard process has clearly been a catalyst to improve financial management and to encourage agency managers to use financial data to enhance decision making as envisioned under the CFO Act. Better documenting the key decisions would help strengthen what is already a useful management tool by helping ensure consistency and continuity in the process and would enhance the value of the process to external users.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To help ensure consistency and continuity in the Improved Financial Performance Initiative scoring process over time and as the staff changes, the Director of OMB should direct the Office of Federal Financial Management to establish a process to more systematically document the basis for all key decisions and judgments made in determining agency green scores.

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

    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To help ensure consistency and continuity in the Improved Financial Performance Initiative scoring process over time and as the staff changes, the Director of OMB should direct the Office of Federal Financial Management to establish a process to document the receipt and review and approval of Green Plans, including updates used in the scoring process.

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

    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

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