Managing the Government:

Revised Approach Could Improve OMB's Effectiveness

GGD-89-65: Published: May 4, 1989. Publicly Released: May 4, 1989.

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GAO assessed the Office of Management and Budget's (OMB) recent and long-term performance in providing leadership and promoting improvements in executive branch management.

GAO found that: (1) the OMB governmentwide management improvement effort, known as Reform 88, has achieved success in some areas, but a lack of sustained direction, poor implementation strategies, and limited integration with the budget process have hindered progress in many other areas; (2) OMB concentration on short-term consequences has resulted in long-term problems; (3) OMB made some improvements in debt and credit management, but complex problems remain and nontax delinquencies rose from $15 billion in fiscal year (FY) 1982 to $32 billion in FY 1988; (4) legislation and OMB efforts have improved the government's financial management systems, but contracting and procurement reform have been unsuccessful; (5) OMB failure to integrate its management and budget operations has limited its ability to provide management leadership; (6) the OMB A-76 program has encountered significant agency resistance, and many agencies did not know whether A-76 was a contracting program or a program to improve efficiency; (7) 75 percent of government procurement executives and 87 percent of industry officials surveyed believed that the Office of Federal Procurement Policy (OFPP) provided inadequate leadership; and (8) although management improvement progress is most likely when the President and Congress agree on broad reform objectives, OMB has generally opposed management legislation proposed by Congress and has had limited success in generating congressional support for its proposals.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: Congress has continued to hold regular oversight hearings of OMB management efforts. As OMB continues to report on its management efforts as part of the budget, Congress has seen no need to legislate an annual management report.

    Matter: Congress should engage OMB in a dialogue on approaches to its management responsibilities with a view toward building consensus on actions needed to ensure that results are achieved in resolving critical management problems. To facilitate discussion, Congress should consider statutorily requiring that OMB continue its practice of preparing an annual report on the state of federal management and submitting it with the President's budget. Such a report can be of value in hearings on OMB management leadership agenda and the resources it would require.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: There are no longer any reporting requirements for productivity improvement except the data that accompanies each agency's budget submission to OMB.

    Recommendation: The Director, OMB, should phase out the multiple agency reporting requirements for productivity improvement information and concentrate the monitoring of the agencies' initiatives through the use of productivity information in the budget review process.

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

  2. Status: Closed - Not Implemented

    Comments: With the transfer of productivity staff to OPM, this recommendation is no longer applicable.

    Recommendation: The Director, OMB, should better link productivity improvement with the budget process by having the management staff's productivity specialists provide increased assistance to examiners.

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

  3. Status: Closed - Implemented

    Comments: OMB is working with each agency to identify specific program activities which are the more likely candidates for contracting out, and then monitoring for results.

    Recommendation: In devising a more flexible strategy for implementing the A-76 program, OMB should initially focus on a few key agencies in addition to the Department of Defense that are more likely candidates for contracting activities and work to build expertise within those agencies for managing and doing the necessary analytical work.

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

  4. Status: Closed - Implemented

    Comments: OMB A-76 responsibility was removed from OFPP and assigned to the Assistant Director for General Management.

    Recommendation: In devising a more flexible strategy for implementing the A-76 program, OMB should work through the budget process to set broad goals for agencies to achieve greater efficiencies. Agencies should be allowed latitude to decide what mix of processes, including contracting out, they want to use to achieve efficiency goals. To avoid any confusion by the agencies on whether A-76 is a contracting-out program or a program to achieve management efficiency, perhaps A-76 should be removed from OFPP. This step could place all programs designed to achieve management efficiencies in one organizational area of OMB.

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

  5. Status: Closed - Implemented

    Comments: OMB prioritization staff works with budget examiners on A-76 issues in agencies.

    Recommendation: In devising a more flexible strategy for implementing the A-76 program, OMB should have its A-76 technical staff work primarily with the budget divisions to help provide overall guidance and direction to the agencies and critique agency submissions and plans. This will better ensure an integrated OMB approach and maximize the use of limited staff resources that have been greatly diluted by trying to implement the program on a governmentwide basis.

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

  6. Status: Closed - Not Implemented

    Comments: Two laws have been enacted aimed at decreasing A-76 activity; an amendment to the National Defense Authorization Act for Fiscal Year 1988 and 1989 (P.L. 100-180, December 4, 1987), and the DOD Appropriations Act for 1991 (P.L. 101-511, November 5, 1990). Also, the administration is not in favor of contracting-out initiatives. Therefore, there is little incentive for OMB to develop a plan.

    Recommendation: In devising a more flexible strategy for implementing the A-76 program, OMB should present its plan, when developed, to the key congressional committees and begin to work early to ensure Congress' acceptance.

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

  7. Status: Closed - Implemented

    Comments: The Director issued a memorandum implementing a management by objectives system to focus executive branch attention on attaining key administration policy and management objectives. The system identifies such objectives, requires strategies and milestones for achieving the objectives, and includes OMB monitoring and oversight.

    Recommendation: The Director, OMB, should establish a systematic process, built into the annual budget cycle, for overseeing agency progress in implementing a select number of objectives for presidential policy implementation and improved program management. These issues should be agreed upon by the head of the agency and by the OMB Director, acting for the President. Progress should be reviewed periodically by the Director and the agency head.

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

  8. Status: Closed - Implemented

    Comments: OMB budget divisions have been instructed to work with management divisions in overseeing agency management improvement efforts.

    Recommendation: The Director, OMB, should charge the OMB budget divisions with explicit responsibility for overseeing agency implementation of selected management improvement efforts, evaluating the effectiveness of the management of individual agencies and programs, and ensuring that corrective action is taken to solve identified problems.

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

  9. Status: Closed - Implemented

    Comments: OMB has increased the number of positions allocated to the management side to a 60 percent increase.

    Recommendation: The Director, OMB, should take steps to either increase or supplement staff resources. Options to consider to meet the work-load demands include: (1) increasing permanent examiner staff; (2) increasing staffing in the special studies divisions or the technical management staff fully dedicated to supporting examiner management oversight; and (3) using reimbursable interagency details to supplement permanent examiner staff during peak budget review periods.

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

  10. Status: Closed - Implemented

    Comments: OMB leadership has undertaken a number of efforts designed to integrate the management and budget staffs and focus the budget staff on management issues. Improvements in this area receive continuing attention.

    Recommendation: The Director, OMB, should charge OMB management staff with: (1) working as a team with the budget divisions to identify agency management issues and assess progress; (2) working with the agencies to identify important crosscutting management issues and establish needed policies; and (3) conducting special projects addressing management issues of presidential interest.

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

  11. Status: Closed - Implemented

    Comments: OMB officials meet with deputy secretaries, either individually or in groups, when crosscutting issues of common interest are being addressed. Deputy secretaries were to be responsible for addressing internal control weaknesses. OMB has opted not to convene the deputy secretaries as a continuing formal group.

    Recommendation: The Director, OMB, should enlist the departmental deputy secretaries to identify and resolve crosscutting policy and program management problems.

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

  12. Status: Closed - Implemented

    Comments: PCMI continues to meet and pursue an agenda of management projects. Top OMB officials have held one-on-one meetings with each assistant secretary. Further, OMB stated that there are increasingly strong working relations between the CFO Council and PCMI.

    Recommendation: The Director, OMB, should enlist the Assistant Secretaries for Administration to address the administrative management issues of common concern.

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

  13. Status: Closed - Implemented

    Comments: PCMI continues to address management problems. In addition, the OMB Deputy and executive associate directors have met with each Inspector General one-on-one. The Inspectors General have been heavily involved in developing and monitoring agency mergers on high risk internal control areas.

    Recommendation: The Director, OMB, should enlist the Inspectors General to help identify emerging problems and evaluate the government's progress toward addressing its many management issues and to provide suggestions for improvement.

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

  14. Status: Closed - Implemented

    Comments: OMB officials have met frequently with members of Congress and committee staff, with special attention to such issues as pay reform, federal employee health benefits, procurement integrity, CFO legislation, OIRA reauthorization, and others.

    Recommendation: The Director, OMB, should engage in regular, early contact with Congress both to advance needed management legislation and to keep Congress informed about the status and priorities of the administration's efforts. The annual management report could be useful in this regard.

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

  15. Status: Closed - Implemented

    Comments: The MBO system was established by the President, who has also emphasized management integrity with his Cabinet. The President has met with the deputy secretaries to discuss management issues.

    Recommendation: The Director, OMB, should secure presidential support for undertaking, in conjunction with the agencies and Congress, an active management program aimed at improving the agencies' capacities to perform their programmatic missions effectively and efficiently. Specifically, OMB will require presidential support for its efforts to oversee, as part of the budget process, agency implementation of a limited number of key policy, program, and administrative management issues.

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

  16. Status: Closed - Implemented

    Comments: A Deputy Director for Management position was established by CFO legislation.

    Recommendation: The Director, OMB, should consider the need for establishing a second Deputy Director to enhance the time and attention the OMB top management team can give to strengthening its management leadership role and working with Cabinet heads and their top managers on critical policy implementation and program delivery issues.

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

  17. Status: Closed - Implemented

    Comments: OMB productivity staff is being transferred to OPM. Transfer of the OMB productivity staff to OPM effectively provides OPM with the staff capabilities and the existing program to provide governmentwide leadership.

    Recommendation: The Director, OMB, should work with the Director of the Office of Personnel Management (OPM) to reinstate the OPM leadership role and outreach efforts. OPM needs to provide agencies with training and to support agencies' efforts to develop measures of productivity, quality, and timeliness.

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

 

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