OMB finalizes performance baseline

New chief performance officer has more data than ever on agency execution

By Jason Miller
Executive Editor

Over the past eight years, the Bush administration has pressed its case for improving agency performance.

It rolled out the President’s Management Agenda focusing on five main areas, added other problem categories to the quarterly scorecard and created the Performance Assessment Rating Tool (PART) to evaluate every federal program.

As the administration comes to an end, the Office of Management and Budget rolled out its final PMA scorecard and two other reports as evidence of the performance measurement effort’s success.

“The latest scorecard indicates the federal government made significant improvement in many agency functions,” says Clay Johnson, OMB’s outgoing deputy director for management. “We are doing things in the federal government that we could not do 8-10 years ago. We are having hearings with Congress on topics that 8-10 years ago were not possible.”

Johnson says when OMB started grading agencies quarterly on human capital, commercial services management-which started out as competitive sourcing-financial performance, e-government and performance improvement in 2001, 98 percent of the agency grades were red, or unsatisfactory. With the final report card, 55 percent of agencies have achieved success, or green, and 10 percent still are red.

“Our goal was the make the federal government work better,” says Johnson during a press briefing Thursday in his office. “The next administration will inherit more transparency on what is working in the federal government and what is not.”

President-elect Barack Obama Wednesday named Nancy Killefer as Johnson’s successor and the chief performance officer.

Johnson says he contacted Killefer soon after the announcement to offer his advice and thoughts on performance management.

“It is a great idea to put the deputy director for management and chief performance officer together,” he says. “In general, the new administration is showing a great appreciation of OMB’s ability to make things happen. They just have to make sure she has the staff and resources to do the job.”

Johnson says Killefer has the tools necessary to push agencies to the next level of performance management. The support from Obama is key, he adds.

“When the President speaks, mountains move,” Johnson says. “If he makes it clear that this is a priority to his cabinet and OMB continues to work with agencies, Nancy will have all the authorities needed to continue this work.”

And the incoming administration will find that federal workers are focused on making the agencies successful.

OMB required agencies last summer to set “Proud to be” goals for 2009 and 2010 as a primer for the change in administration. President Bush also issued an executive order establishing the Performance Improvement Council.

Johnson says every agency has a performance improvement officer who reports quarterly to senior officials about the progress of its programs.

“We are still getting set up and some are doing well and others are just getting started,” he says. “I can’t wait to see where Obama takes this.”

Obama said Wednesday in introducing Killefer that his cabinet and other key staff members will meet with her regularly to discuss how they can run their agencies with greater efficiency, transparency and accountability.

And Killefer will receive more data about how well the government is doing than any deputy director for management before.

Along with the scorecard, OMB issued two other reports: one is an analysis of agency programs under PART and the other was on how well agencies are reducing improper payments.

An OMB official, who requested anonymity, says 98 percent of all federal programs have gone through the PART process and 88 percent have performance measures in place.

The official adds that 63 percent of the programs met their goals in 2008 and 57 percent of the program improved their performance over 2007.

“The report gives a sense of what the most important measures are for each agency,” says the official, who added that this year’s version of the report is only 25 pages instead of 300 to 400. “We put in the measures that agencies met and the ones they did not, and which programs saw their performance decrease.”

The official adds that the report mainly is for federal employees to understand how their agency is doing.

The 5th annual improper payments report details how agencies are addressing the highest risk programs, including Medicaid, Medicare fee-for-service and the S-Chip program.

Another OMB official, who also requested anonymity, says the high risk programs account for about $2 trillion in federal benefit spending.

OMB found that agencies made $72.1 billion in improper payments in 2008, which is equal to a 3.9 percent error rate.

The official says the error rate has dropped from 4.3 percent in 2004 despite the amount of improper payments increasing by more than $30 billion.

The reason for the increase in overall improper payments was the creation of error rate measurements for several large benefit programs, the official says.

“We knew they were high risk, but it took time to get the measurements in place,” the official says. “If you take those programs out, the error rate is 2.8 percent.”

The new programs include the Temporary Assistance for Needy Families (TANF) and Medicare Part C-both of which have an error rate over 9 percent.

“We think agencies have a road map of where the priorities need to be to improve improper payments,” the official says. “Federal agencies have showed a track record of once errors are identified, they can drive the errors down.”

Another area that OMB looked at for the first time is improper payments to contractors.

The official says this type of improper payments is considered low risk. But OMB reports that agencies collected more than $132 million out of $173 million in erroneous payments from vendors in 2008.

“We are looking at all forms of errors,” the official says. “This includes the wrong person, the wrong amount or the wrong purpose.”


On the Web:

OMB – PMA Scorecard for 2008 (pdf)

OMB – 2008 agency PART report (pdf)

OMB – Improper Payments Report (pdf)

FederalNewsRadio – The fiscal belt-tightener

FederalNewsRadio –PMA: More improvement on the way

FederalNewsRadio – OMB still wants agencies to be proud in 2009, 2010

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