Transparency in Performance


Warning:  I just came back from the 9th Annual Mercatus Performance Report Scorecard event so I’m in high wonk mode. . . .


Neither political parties’ presumptive presidential candidates have said much about government management issues.  That’s probably appropriate, given the stage of the campaign.  After all, at this point voters care more about vision than program implementation.


However, both candidates have made strong commitments to promote greater transparency in government.  To date, the candidates’ commitments have focused on greater public visibility around government processes – who gets contracts, grants, and loans – and less about transparency in government performance; that is, do programs deliver their intended outcomes. 


So, here’s a government management issue dealing with program performance the next president will have to deal with shortly after taking office:  how best to increase the transparency of how well the government works.  While it’s not an earthshaking issue, it can be an important marker about how the president will approach “good government” issues.


First, some background.  Fifteen years ago, Congress required federal agencies to annually develop a plan of what they would do in the coming year and at the end of the year, report on what they had accomplished.  To encourage agencies to do a good job, the non-profit Mercatus Center, at George Mason University, decided to develop a set of criteria and score each agency’s annual performance report.  It has been doing this since the first reports were due, for fiscal year 1999.


By law, agencies have six months after the end of the fiscal year (September 30th) to issue their performance reports.  In addition, a separate law requires agencies to issue financial statements in the same time period.  So, to improve the value of both performance and financial information, the Bush Administration in 2001 set out to combine the two into a single report, the “Performance and Accountability Report,” and moved the deadline from six months after the end of the fiscal year to six weeks after the end of the fiscal year.  This caused agencies to scramble to collect and report such information earlier, but the intent was to make this information available for the president’s budget decisions for the upcoming budget, delivered to Congress in February of each year.


Over the years, though, Congress had not found the reports useful in making its budget decisions.  So in an effort to increase the usefulness of the performance report, the Office of Management and Budget in 2006 proposed piloting a twist:  the Annual Performance Reports would be separated from the financial statements and reported instead as part of an agency’s budget justification that goes to Congress in early February.  The idea was that this would both reduce agency reporting workloads and be more likely to be used by Congress in its budget decisions. 


This was done for the first time this past year.  Fiscal 2007 performance information for 9 pilot agencies was reported as part of the budget President Bush submitted to Congress in February 2008.  In lieu of a free-standing performance report, the pilot agencies prepared a “highlights” summary of their performance.  Even some agencies that were not pilots prepared a highlight summary because they found it to be a useful way to share their performance with key stakeholders and the public. 


So what?  Well, the latest Mercatus Center assessment of agency performance reports concluded that the quality of disclosure for agency performance information decreased – significantly – for the first time in years.  Only one-third of the performance tied to federal spending is adequately disclosed, according to their assessment:  “The information is harder to find and use.”  Only three of the 9 pilot reports were judged to be useable.


Still, Mercatus found that highlight summaries could be done right.  It points to the Department of Labor’s as the best, underscoring the value of a 25-page highlight over  the more typical several hundred page Performance and Accountability Report that most agencies produce.


So how does this involve the next president?  Well, the non-pilot agency performance reports will be issued shortly after the election (November 15th) and certified by the out-going department heads.  However, the pilot agency reports will be certified by the incoming department heads – as part of their new budget – shortly after taking office (around February 1st).  This could be uncomfortable for some new political leaders — they’ll have to certify the accomplishments of their predecessors.


At this point, OMB is revising its guidance for how the pilot agency reports will be formatted and when they will be due.  Its revised guidance will go out shortly to agencies.  In addition, it has been seeking comments on the pilots in order to provide advice to the incoming Administration.  Some agencies have been complaining about a “time warp” where the highlights are due before the supporting documentation for the highlights is available.  Other observers believe that budgets are “advocacy” documents and that agencies will have a greater incentive to downplay actual program performance and thereby reduce transparency.  As a result, these observers do not want the performance information reported as part of the budget process.  However, others see this as the most relevant place to report such information because they feel it means there is a greater chance that performance information will be used in making budget decisions.


So what does this mean to the promises for greater transparency?  It’s not clear.  But hopefully by early next year, the next president makes this part of his agenda.  What is your take?

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One Response to “Transparency in Performance”

  1. Norman M. Macdonald Says:

    I would suggest looking into 360 degree organization evaluation with all hands taking part. It is being used in a number of organizations in the private sector and was a goal of Al Gore’s reinventing government. I personally aware of some efforts in my old organization the Forest Service. It gives a stand alone evaluation of an organization as it is seen by those who operate it.

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