Legislative Requirements and Executive Branch Policy Guidance
Prepared by AIMD/IRM-Policy and Issues Group Dan Latta, Assistant Director
February 1997
Following are statutory and policy references related to the reengineering of agency processes:
CCA 40 USC 1423(4)
where comparable processes and organizations exist in the public or private sectors, the agency head is to quantitatively benchmark agency process performance against such processes in terms of cost, speed, productivity, and quality of outputs and outcomes.
CCA 40 USC 1413(b)(2)(C)
the Director of OMB is to issue clear and concise direction that, before making significant investments in information technology used to support agency missions, the agency head shall analyze the agency's mission and, based on this analysis, revise mission-related and administrative processes as appropriate. (Note: A provision in the Omnibus Consolidated Appropriations Act, 1997, provides that agency heads may have these analyses performed by the private sector. It further provides that the analyses shall be completed and reported to the agency head within 180 days or less (from when the analysis is initiated), unless the agency head determines that additional time is needed.)
CCA 40 USC 1423(5)
agency heads are to analyze the missions of the agency and, based on the analysis, revise the agency's mission-related and administrative processes (as appropriate) before making significant investments in IT used to support those missions.
OMB A-130 7o
the application of up-to-date information technology presents opportunities to promote fundamental changes in agency structures, work processes, and ways of interacting with the public that improve the effectiveness and efficiency of Federal agencies.
OMB A-130 8b(1)
agencies shall seek opportunities to improve the effectiveness and efficiency of government programs through work process redesign and the judicious application of information technology.
OMB A-130 App. IV 8b(1)
agencies should assess a continuing need for a mission function and, if there is a continuing need, agencies should reevaluate existing work processes prior to creating new or updating existing information systems.
OMB A-130 8b(3)(b)
agencies shall establish information system management oversight mechanisms that provide for periodic review of information systems to determine (i) how mission requirements might have changed; (ii) whether the information system continues to fulfill ongoing and anticipated mission requirements; and (iii) what level of maintenance is needed to ensure the information system meets mission requirements cost effectively.
OMB A-11 15.2 (3)
as part of their justification materials, agencies should submit narrative information updating their streamlining plans, including actions to change the structure and operation of the agency and the composition and skill mix of the workforce. (4) Agencies should identify restructuring or process reengineering activities resulting from proposed and current investments in IT that yield budgetary savings and indicate how these allow agencies to better utilize resources while improving program management and service delivery.
OMB A-11 43.2(b)
In developing requests for information systems, agencies should consider the following elements: business/mission analysis; work process redesign; planning and requirements development; and acquisition strategies. For work process redesign, agencies should determine that the process for performing the function is the most efficient and cost-effective way to perform it.
Back to Top________________________________________________________________
Note:
The following references (laws and OMB Circulars) were screened to identify the summary provisions included above:
• The Paperwork Reduction Act of 1995, as amended (P. L. 104-13; May 22, 1995--PRA)
• The Clinger-Cohen Act of 1996 (formerly named the Information Technology Management Reform Act of 1996) (P. L. 104-106, Division E; February 10, 1996--CCA)
• The Federal Acquisition Streamlining Act of 1994 (P. L. 103-355; October 13, 1994--FASA)
• The Government Performance and Results Act of 1993 (P. L. 103-62; August 3, 1993--GPRA).
• The Chief Financial Officers Act of 1990, as amended (P.L. 101-576, November 15, 1990--CFO Act)
• OMB Circular A-130, Management of Federal Information Resources, February 8, 1996 (OMB A-130)
• OMB Circular A-11, Preparation and Submission of Budget Estimates, June 13, 1996 (OMB A-11)
This document is available in Adobe Acrobat's PDF format. This link points to on step before it. The document is very large and the link will take a long time to use.• OMB Circular A-94, Guidelines and Discount Rates for Benefit-Cost Analysis of Federal Programs, October 29, 1992 (OMB A-94)
STATUTORY REQUIREMENTS and EXECUTIVE BRANCH GUIDANCE
Regarding
MEASURES OF PERFORMANCE
Following are statutory and policy references related to the measurement of performance of agency programs and activities:
CFO Act 31 USC 902(a)(3)
the agency Chief Financial Officer shall develop and maintain an integrated agency accounting and financial management system, including financial reporting and internal controls, which provides for (1) complete, reliable, consistent, and timely information which is prepared on a uniform basis and which is responsive to the financial information needs of agency management; (2) the development and reporting of cost information; (3) the integration of accounting and budgeting information; and (4) the systematic measurement of performance.
GPRA 5 USC 306
by 9/30/97, agency heads are to submit to OMB and the Congress a strategic plan for their program activities, including a comprehensive mission statement covering major agency functions and operations. The plan shall contain, among other things, (a) general goals and objectives, including outcome-related goals and objectives, for the major functions and operations of the agency and (b) a description of how the performance goals included in the agency's performance plan shall be related to the general goals and objectives in the strategic plan.
GPRA 31 USC 1115
beginning with FY 1999, agencies are to prepare annual performance plans covering each program activity set forth in the budget; the plans are to (a) establish performance goals in objective, quantifiable, and measurable form (unless an alternative form is approved by OMB) that define the level of performance to be achieved by a program activity and (b) establish performance indicators to be used in measuring relevant outputs, service levels, and outcomes of each program activity.
PRA 44 USC 3506(b)(3)(C)
agencies are to establish goals for IRM improving the productivity, efficiency, and effectiveness of agency operations and methods for measuring progress in achieving the goals.
CCA 40 USC 1423(3)
agency heads shall ensure that performance measurements are prescribed for IT used by or to be acquired for an agency and that the performance measurements measure how well the IT supports agency programs.
FASA 10 USC 2220
the Secretary of Defense shall approve or define the cost, performance, or schedule goals for major defense acquisition programs and for each phase of the acquisition cycle; whenever the Secretary determines that major defense acquisition programs are not achieving, on average, 90 percent of the cost, performance, and schedule goals established, the Secretary shall ensure that there is timely review of the program and identify suitable actions (including termination) to be taken with respect to the program.
FASA 41 USC 263
the head of each executive agency shall approve or define the cost, performance, and schedule goals for major agency acquisition programs (congressional policy is that each agency should achieve, on average, 90 percent of the cost and schedule goals established for major and non-major programs of the agency without reducing the performance or capabilities of the items being acquired); whenever necessary to do so to implement the congressional policy, agency heads are to determine whether there is a continuing need for the programs that are significantly behind schedule, over budget, or not in compliance with the performance or capability requirements and identify suitable actions, including termination, to be taken.
CCA 40 USC 1423(4)
where comparable processes and organizations exist in the public or private sectors, the agency head is to quantitatively benchmark agency process performance against such processes in terms of cost, speed, productivity, and quality of outputs and outcomes.
CCA 40 USC 1425(c)(2)
the agency CIO is to monitor the performance of IT programs of the agency, evaluate the performance of those programs on the basis of applicable performance measures, and advise the agency head regarding whether to continue, modify, or terminate the program or project.
PRA 44 USC 3514(a)(2)(D)
the OMB Director is to provide an annual report to the Congress on (among other things) the extent agencies have improved program performance and the accomplishment of agency missions through IRM.
CCA 40 USC 1412(c)
at the same time the President submits the budget to the Congress, the OMB Director is to submit a report to the Congress on the net program performance benefits achieved as a result of agencies' major capital investments in information systems and how the benefits relate to the achievement of agency goals.
CCA 40 USC 1423(2)
agency heads shall prepare an annual report, to be included with the agency's budget submission to the Congress, on the progress in achieving the goals for improving agency operations through IT.
GPRA 31 USC 1116
no later than 3/31/2000 and annually thereafter, agency heads are to prepare and submit to the President and the Congress program performance reports setting forth the performance indicators and comparing actual program performance against the performance goals.
FASA 10 USC 2220
the Secretary of Defense is to report to the Congress annually on whether major and non-major acquisition programs are achieving, on average, 90 percent of the cost, performance, and schedule goals established.
FASA 41 USC 263
the Administrator of the Office of Federal Procurement Policy shall annually report to the Congress on the progress made by executive agencies in achieving the congressional policy related to the cost, performance, and schedule goals.
CCA 40 USC 1427
the agency head shall identify in the agency's IRM plan (required by the PRA) major IT acquisition programs, or phase or increment of such program, that has significantly deviated from the cost, performance, or schedule goals established for the program.
CFO Act 31 USC 902(a)(7)
the agency Chief Financial Officer shall monitor the financial execution of the budget in relation to actual expenditures, and prepare and submit to the agency head timely performance reports.
CCA 40 USC 1412(c)
the OMB Director is to develop, as part of the budget process, a process for analyzing, tracking, and evaluating the risks and results of all major capital investments for information systems by the federal agencies; the process is to cover the life of each system and include explicit criteria for analyzing the projected and actual costs, benefits, and risks associated with the investments.
CCA 40 USC 1413(b)(1)
the OMB Director shall evaluate the IRM practices of executive agencies with respect to the performance and results of IT investments; (b)(4) - has the Director implementing reviews of executive agency activities through the budget process.
CCA 40 USC 1426
the agency head, in consultation with the CIO and Chief Financial Officer (or comparable official) is to establish policies and procedures that (1) ensure accounting, financial, and asset management systems and other information systems are designed, developed, maintained, and used effectively to provide financial or program performance data for the agency's financial statements; (2) ensure that financial and related program performance data are provided on a reliable, consistent, and timely basis to agency financial management systems; and (3) ensure that the financial statements support the assessment and revision of agency processes and performance measurement.
CCA 40 USC 1425(c)(3)
the agency CIO shall, as part of the annual GPRA performance evaluation process, (A) assess the requirements established for agency personnel regarding knowledge and skill in IRM and the adequacy of such requirements for facilitating the achievement of the IRM performance goals; (B) assess the extent to which executive level and management level personnel meet those requirements; and (C) develop strategies and plans for hiring, training, and professional development to rectify any deficiency in meeting those requirements.
OMB A-130 8b(1)(b)
agencies shall prepare, and update as necessary throughout the information system life cycle, a benefit-cost analysis for each information system (i) at a level of detail appropriate to the size of the investment; (ii) consistent with the methodology described in OMB Circular A-94; and (iii) that relies on systematic measures of mission performance, including the effectiveness of program delivery, efficiency of program administration, and reduction in burden, including information collection burden, imposed on the public.
OMB A-130 8b(1)(c)
agencies shall conduct benefit-cost analyses to support ongoing management oversight processes that maximize return on investment and minimize financial and operational risk for investments in major information systems on an agency-wide basis. A-130 App. IV 8b(1) - The analysis should not merely serve as budget justification material, but should be part of the ongoing agency management oversight process to ensure prudent allocation of scarce resources.
OMB A-130 8b(1)(d)
agencies shall conduct post-implementation reviews of information systems to validate estimated benefits and document effective management practices.
OMB A-11 10.7
Part 2 of the circular specifies guidance for preparing agency strategic plans in accordance with GPRA (due to OMB and the Congress not later than 9/30/97). The plans are a tool for agencies to set priorities and allocate resources consistent with the priorities. While the plan is not a budget request, it should present projected programs and activities at a performance level commensurate with the anticipated level of resources.
OMB A-11 12.3(g)
Agencies will ensure that their estimates reflect full consideration of the Administration's commitment to improve program performance, management integrity and controls, program delivery, and financial management. (1) Agencies will ensure that their estimates reflect the use of program performance indicators and performance goals in a manner specified by OMB representatives. (2) Agencies will ensure that their estimates reflect the Administration's commitment to IT planning that directly supports agency strategic missions. (3) Agencies will ensure that their estimates reflect plans to achieve a single, agency-wide, integrated financial management system and CFO plan initiatives.
OMB A-11 12.5(g)
Agencies should develop their estimates for acquisition of major systems, including IT systems, consistent with the requirements of FASA Title V and CCA (ITMRA). The estimates should define requirements and establish realistic cost, schedule, and performance goals for new acquisitions.
OMB A-11 12.10
(a) Describes GPRA requirements for strategic plans, annual plans setting performance goals, and reports on actual performance compared to the performance goals. (c) Agencies are encouraged to continue the work necessary to include more program performance indicators and performance goals in the budget decision making process and budget document. For the upcoming budget, agencies are expected to develop and use output- and outcome-based performance information for the budget decision making process and for budget justification materials of major programs. (d) In developing program performance indicators, agencies are encouraged to review the program performance information included in their most recent financial statements pursuant to the CFO Act In addition, program performance information developed as a result of ITMRA requirements may be useful.
OMB A-11 15.1
In the letter transmitting the agency's budget to OMB, the agency head is to summarize the budget highlights identifying (among other things) (a) the most important program performance indicators and performance goals and (b) major management initiatives used to monitor and evaluate program efficiency and effectiveness.
OMB A-11 15.2
In its justification, the agency should include performance indicators and performance goals, where appropriate, to explain major program issues and financial requirements. The indicators should be presented in terms of outputs or outcomes and performance goals should be provided for short-term as well as for long-term assessment of program performance.
OMB A-11 15.5
Agencies will ensure that their budget justifications provide results-oriented information on financial management operations and improvement initiatives in the context of the agency's mission and programs.
OMB A-11 15.6
Agencies will ensure that their budget justifications provide results-oriented information on information technology operations and improvement initiatives in the context of the agency's mission and programs.
OMB A-11 32.2(c)
For the FY 1999 budget agencies will be required to relate the performance goals and indicators included in their annual GPRA performance plan to the activities listed in the program and financing schedule. On a trial basis for the FY 1998 budget, agencies will be asked to indicate the GPRA program activities that relate to each program by activity line.
OMB A-11 34.1
Narrative statements on program and performance should discuss how the budget year request supports performance goals, outputs, and outcomes while addressing significant increases or decreases in performance or financing from the current to the budget year. (34.2 through 34.6 describe other requirements for such statements.)
OMB A-11 Part 2
Describes requirements for the preparation and submission of agency strategic plans to OMB prior to the plans being submitted to the Congress not later than 9/30/97 as required by GPRA. It also outlines the relationship between the strategic plans and annual performance plans.
OMB A-11 Part 3
Describes requirements for the agencies' planning, budgeting, and acquisition of fixed assets. It also presents unified guidance designed (1) to allow OMB to collect information from the agencies needed for OMB reports to the Congress under FASA Title V and CCA (ITMRA) and (2) to ensure that acquisition plans support the missions, long term goals and objectives, and annual performance plans developed pursuant to GPRA.
Under FASA Title V, OMB is to report on the cost, schedule, and performance goals for asset acquisitions and how well the agencies are meeting the goals. (The performance goals should clearly define the technical or other results the acquisition is expected to accomplish and, when possible, should be expressed in quantitative terms as reflected in contractual statements of work.) CCA (ITMRA) requires OMB to report on program performance benefits achieved as a result of investments in information systems and how the benefits relate to accomplishing the agency's goals.
Agencies are to prepare a "Fixed Asset Plan and Justification" for all major acquisitions of fixed assets beginning with FY 1999. Part III of the plan covers cost, schedule, and performance goals, including baseline goals, variances, proposed corrective actions, and proposed goal revisions.
OMB A-94
Provides general guidance to federal agencies for conducting benefit-cost and cost-effectiveness analyses and specific guidance on the discount rates to be used in evaluating federal programs. The general guidance should serve as a checklist of whether an agency has considered and properly dealt with all the elements for sound benefit-cost and cost effectiveness analyses.
________________________________________________________________________
Note:
The following references (laws and OMB Circulars) were screened to identify the summary provisions included above: