Pursuant to a congressional request, GAO reviewed the Federal Reserve System's (FRS) 1998-99 Biennial Performance Plan, focusing on: (1) assessing how well FRS' performance plan meets the requirements of the Government Performance and Results Act and related guidance; and (2) improving future performance plans.

GAO noted that: (1) FRS has made a good initial effort in preparing its first performance plan; (2) the plan contains all of the elements required by the Results Act and is directly linked to FRS' Results Act Planning Document's strategic goals; (3) the plan's goals also cover all of the functional areas described in FRS' budget, and the performance objectives for each goal define performance expectations in more detail; and (4) however, the plan could be more useful for congressional oversight if it: (a) expressed performance goals more objectively and quantifiably and fully measured performance goals; (b) simplified performance expectations for several performance goals and linked them directly to specific measures and targets that match the performance expectations; (c) developed additional outcome measures; (d) more directly linked strategic goals and annual performance goals; (e) more clearly explained plans for coordinating efforts with other financial regulatory agencies; (f) better explained how FRS' strategies and resources will help achieve its performance goals; and (g) provided more specific information on how FRS verifies and validates performance information and addresses the data limitations.