1. …for better decision making and accountability to citizens!
Introducing FSA’s Budget and Performance Management System (BPMS) with a New Strategic Plan
…for better decision making and accountability to citizens!
April 14, 2005
Karen Malkin, Director
Strategic Performance
and Evaluation Staff
Dennis Taitano, Director
Budget Division

2. What is the Farm Service Agency?
Farm Service Agency (FSA) is a major agency of the U.S. Department of Agriculture.
FSA was created in 1994 by incorporating the commodity and conservation programs of the former Agricultural Stabilization and Conservation Service (ASCS) and the lending programs of the Farmers Home Administration (FmHA).
Cleveland, 1940
Farm Service Agency was created when the UDSA reorganized and the former Ag Stabilization & Conservation Service was merged with the farm credit programs of FmHA. FmHA’s housing programs are now administered by USDA’s Rural Development agency.
Many of the programs and services of FSA and the agency’s relationship with America’s farmers and ranchers date back to the early 1930s.
USDA and FSA are committed to serving America’s agricultural community.
The Agency’s name has changed over the years, however, its relationship with farmers and ranchers dates back to the 1930s. Serving farmers and ranchers is a major component of USDA’s mission.

3. FSA Business Lines
FSA delivers a wide variety of programs to over 2.2 million registered agricultural producers.
Farm commodity programs
Farm credit -- ownership, operating and emergency loans
Conservation and environmental programs
Emergency and disaster assistance
Domestic and international food assistance
International export credit programs
FSA administers a wide range of programs from traditional commodity price support and market stabilization programs, to loans for new and beginning farmers and others who have found it difficult to obtain commercial credit, to emergency and disaster assistance, to programs aimed at helping farmers and other landowners to conserve natural resources and protect the environment.
17 Billion loan portfolio
FSA also works in partnership with the US Agency for International Development and the Foreign Agricultural Service to expand market opportunities and provide humanitarian food assistance domestically and worldwide.

4. FSA Programs FSA Programs are legislated by: Farm Bill
Annual Appropriations
Disaster and Emergency Acts
FSA’s programs are legislated by Congress through a variety of means, including the Farm Bill (this legislation is revisted every five years), annual appropriations, and often through supplemental appropriations targeted at the delivery of emergency and disaster assistance to producers.

5. Program Delivery
Agricultural producers apply for benefits and service from their local USDA Service Center.
FSA has over 2,400 Service Centers nationwide, including local offices in Puerto Rico and Guam.
FSA has 51 State Offices, including Puerto Rico.
FSA’s program delivery structure is decentralized and quite unique in government. FSA has over 2400 county offices nationwide, local offices in Puerto Rico and Guam, and 51 State Offices.
Farmers and ranchers can apply for entitlement programs, disaster benefits, conservation programs, and loans at their local office…and now FSA is making an effort to make applications available online, as well.

6. Decentralization & Local Governance
FSA workforce = 17,000 Federal and non-Federal employees
State and local county-elected committees oversee the delivery of FSA programs.
Committee system and local governance sets FSA apart.
FSA workforce = 17,000 Federal and non-Federal employees in Headquarters, State Offices, and the local USDA Service Centers
State and local county-elected committees, comprised of farmers in the local area, oversee the delivery of FSA programs and services to the local farming community.
It is FSA’s unique participatory committee system and local governance that sets FSA apart from other Federal agencies.

7. Why is FSA Seeking to Transform?
Link program results to budget requests.
Dismantle existing “stove pipes.”
Streamline business processes.
Improve accountability.
Align resources effectively.
Improve employee engagement.
Improve customer service & satisfaction.
It’s good business!
“Better Performance Makes Sense!”
As I mentioned, despite its name change, the Agency has been around since the 1930s, but for many reasons, we have been working diligently to improve the Agency and to become more result-oriented and more focused on performance. We also want to measure customer satisfaction and continue to demonstrate program results while streamlining our business processes. We also need to modernize our systems and migrate to a Web-based platform as much as possible.
FSA is a fairly hierarchical organization and in past Strategic Plans, the performance measures were very “stove piped” and did not cross traditional program lines. In our new Strategic Plan, we worked to address this issue.

8. Organizational Issues Facing Agencies Striving to Transform
FROM
Delivering and Monitoring Outputs
Hierarchical
Micro-management
Working in Stovepipes
Protecting Turf
Hoarding Knowledge
Avoiding Risk
Adversarial Labor/Management Relations
Avoiding New Technology TO
Delivering and Monitoring Results
Horizontal (i.e., flatter)
Employee Empowerment
Working in Matrixed Teams
Forming Partnerships
Sharing Knowledge
Managing Risk
Constructive Labor/Management Relations
Embracing and Leveraging New Technology
Key Organizational Issues at FSA:
The Agency is:
Focused on outputs
Working in “stove pipes” – little collaboration across program area lines
We have:
“Turf” issues – and a very hierarchical organizational structure
Outdated IT systems – We have a major contract with IBM to modernize our program delivery systems and our financial systems
A need for increased outreach – There is a perceived disparity in customer service and program delivery to minority agricultural producers, beginning farmers and ranchers, and women
Customer service and employee relations issues
A need to assess effectiveness of our partnerships
A great need to streamline our business process, and a
Need to coordinate contracts and projects – no organizational “change leader” currently at FSA!

9. What is BPMS?
BPMS is management tool to facilitate FSA's transformation to more performance-based, results-focused agency.
Links and integrates FSA's budget, cost, and performance management information.
Begins with new Fiscal Years 2005 – Strategic Plan.
“What gets measured gets done AND funded!”
BPMS at FSA is our Budget and Performance Management System.
In the summer of 2003, working through the budget process, managers became aware that FSA needed an approach for Budget and Performance Integration (BPI) and began to design a “whole system approach to integrating FSA’s budget, performance management, and cost accounting information.

10. Strategic Plan Framework People – Processes - Systems
Key Elements
BPMS
Strategic Plan Framework
Systems & Technology
Reporting & Budgeting
Finance & Accounting
Program Management – Program Assessment Rating Tool (PART)
Other (e.g., Human Resources, Procurement)
Performance Management
Planning & Budgeting
Cost & Performance
Governance & Accountability
Human Capital Plan
Once we identified key organizational issues and began our Strategic Plan development journey, we used a logic model approach to develop a the Framework for our new Strategic Plan. Included in this Framework are the Agency’s Strategic Goals, Outcome-oriented Objectives, and our Performance Measures.
People – Processes - Systems

11. Budget and Performance Management System

12. BPMS Management Structure
FSA Administrator
Associate Administrator for Operations and Management
Associate Administrator for Programs
Director, Office of Business and Program Integration
Director, Strategic Performance and Evaluation Staff
BPMS Core Team
Strategic Performance & Evaluation Staff Director, Co-Chair
Budget Director, Co-Chair
Senior Managers:
Farm Programs
Farm Loan Programs
Commodity Operations
Field Operations
External Affairs
Civil Rights
Key Advisors
Information Technology Division
Economic and Policy Analysis Staff
Financial Management Division
Human Resources Division
State and County Offices
In order to accomplish this Agency-wide initiative, we assembled a Core Team of managers representing major functions within FSA. We also enlisted the help of Senior Managers as Advisors to this Core Team.

13. Engaging External Stakeholders
Six full-day external stakeholder meetings in Omaha, Sacramento, and Washington, D.C.
Input from 250 External Stakeholders:
Farmers and ranchers
Conservation and environmental groups
State and Federal agencies
Commodity groups and trade associations
Community-based and civil rights organizations
As we set out to develop FSA’s new Strategic Plan, we sought input from external and internal stakeholders.
We held Six full-day external stakeholder meetings in Omaha, Sacramento, and Washington, D.C.
SUBSTANTIAL Input from 450 Internal and External Stakeholders
At our various internal and external stakeholder sessions, we asked those who participated what FSA does well, what they saw as the mission of the agency, and in which areas did we need to improve.
Other actions taken:
Regular meetings with BPMS Core Team
Briefings with Senior Management
Input from and Consultations with USDA
Consultations with OMB

14. Photos Courtesy of USDA
FSA FY Strategic Plan
Photos Courtesy of USDA

15. Strategic Goal 3
Conserving Natural Resources and Enhancing the Environment
END
OUTCOMES
END OUTCOME 1
Quality Soil ____________________
INDICATOR
Reduced erosion rates.
END OUTCOME 2
Quality Water
_____________________
INDICATOR
Reduced ground and surface water contamination.
END OUTCOME 3
Quality Wildlife Habitat
_____________________
INDICATOR
Increased populations of targeted species.
END OUTCOME 4
Quality Air
_____________________
INDICATOR
Increased tons of carbon dioxide sequestered.
INTERMEDIATE
OUTCOMES
OBJECTIVE 3.1
Improving Conservation Practices
______________________________
PERFORMANCE MEASURES
M1 Maintain or increase % of acres in compliance with highly erodible land and wetland provisions.
M2 Increase % of conservation acres with invasive species controls.
OBJECTIVE 3.2
Targeting Lands to Maximize Conservation Benefits
_______________________________
PERFORMANCE MEASURES
M1 Increase acres managed under Continuous Conservation Reserve Program (CRP) sign-up.
M2 Increase general sign up acres in priority areas.
M3 Reduce average processing time of conservation offers through partnerships and technology:
- FSA time*
- partner time*.
OBJECTIVE 3.3
Mitigating Adverse Impacts
From Agricultural Production
_______________________________
PERFORMANCE MEASURES
M1 Increase CRP acres of riparian and grass buffers.
M2 Increase % of CCC sites where remediation is implemented.
M3 Increase CRP restored wetlands acres.
* Asterisk denotes efficiency measure.
PRODUCTS and SERVICES 26

16. Three Societal Strategic Goals – High Level
End Outcomes and Indicators
Three Societal Strategic Goals – High Level
FSA plays a role in achievement of these societal goals, but Agency is not solely responsible for end outcomes.
Strategic goals are relevant beyond FSA – USDA and many other agencies and private entities play roles.
What is it (BPI)?
Goal of the BPI Initiative: To best allocate limited federal resources to those programs that deliver results.

17. Interagency Responsibilities
Example Showing
Interagency Responsibilities
What is it (BPI)?
Goal of the BPI Initiative: To best allocate limited federal resources to those programs that deliver results. 28

18. End Outcomes and Indicators
Indicators with End Outcomes are measured every 3 years by reviewing relevant statistics to see trends.
Indicators are not reported with FSA’s Performance Budget.
Indicators are not directly linked to individual employee performance.

19. Objectives and Performance Measures
Short-Term Results to Accomplish – Intermediate Level
FSA can influence the achievement of these Objectives, which can ultimately lead to the accomplishment of end outcomes and strategic goals.
Measures with Objectives are reviewed annually or more frequently, when appropriate, by monitoring target levels.
Measures are reported with FSA’s Performance Budget.
Measures are directly linked to senior managers’ performance.
What is it (BPI)?
Goal of the BPI Initiative: To best allocate limited federal resources to those programs that deliver results.

20. Outputs and Employee Performance Measures
Products and services of the Agency.
Activities performed by employee that lead to outputs or products and services.
Measures set by employee’s manager specifically for employee.
Measures linked to employee’s performance.
Employee measure falls under Agency’s performance measure.
What is it (BPI)?
Goal of the BPI Initiative: To best allocate limited federal resources to those programs that deliver results.

21. Conserving Natural Resources and Enhancing the Environment
Example:
How Do Employees Link to the Strategic Plan?
Agency Strategic Goal 3:
Conserving Natural Resources and Enhancing the Environment
END
OUTCOMES
AGENCY END OUTCOME 1: Quality Soil
INDICATOR 1: Reduced erosion rates.
INTERMEDIATE
OUTCOMES
SENIOR MANAGER PLAN OBJECTIVE 1: Improving Conservation Practices
MEASURE 1: Maintain or increase % of acres in compliance with highly erodible land and wetland provisions.
PRODUCTS and SERVICES
EMPLOYEE PLAN OUTPUT: Spot-checks for Conservation Compliance

22. From Annual Performance to Strategic Plan
Business processes performed by the employee.
Example:
Processing racial and ethnic minorities direct loans.
Form AD-2000, Performance Plan Agreement and Appraisal.
Mission Results: Goal 1, Objective 1, Measure 3: By 9/30/05, Reduce average processing time for racial and ethnic minorities direct loans to 34 days from FY 04 baseline (3 year average) of 37 days - set for employee.
Mission Results: Goal 1, Objective 1, Measure 3: By 9/30/05, Direct Loans and Funds Mgmt. Branch will reduce average processing time for direct loans to 35 days from FY 04 baseline (3 year average) of 37 days - set for office.
Monitoring progress and achievement based on outputs, products, and services.
Program measures such as:
Decrease in average processing time for all direct loans to 36 days from FY 04 baseline of 38 days - Agency-wide.
Note: These measures would be included in an Operational Plan for major program areas.
An annual detailed plan for the acquisition and use of financial and other resources wherein expenditures are based primarily upon measurable performance.
Goal 1, Objective 1, Measure 3: By 9/30/05, Reduce average processing time for all direct and guaranteed loans to 39 days from FY 04 baseline (3 year average) of 40 days - Agency-wide.
Note: This measurement is for senior mgmt. accountability.
Strategic Plan
What results to accomplish by when (short-term).
Example:
Goal 1, Objective 1: Improving Access to Capital.
What results to accomplish by when (long-term).
Includes measures, which are directional indicators that will be assessed every 3 years.
End Outcomes for Goal 1:
Successful Farms and Ranches
A Market-Based Agriculture Sector
Thriving Agricultural Communities.
Societal results FSA wants to accomplish.
Goal 1: Supporting Productive Farms and Ranches.
Description of what FSA is capable of becoming.
Vision:
A customer-driven agency with diverse and multi-talented work force, dedicated to achieving an economically and environmentally sound future for American Agriculture.
Example of outcome:
Timely processing of farm loans enables beginning farmers to stay in business.
Reason for FSA’s existence.
Mission:
Equitably servicing all farmers, ranchers, and agriculture partners by delivering effective, efficient agricultural programs for all Americans.
EMPLOYEE ACTIVITIES
EMPLOYEE PLAN
MID-LEVEL
MANAGER PLAN
PROGRAM OR OPERATING MEASURES
FSA - PERFORMANCE BUDGET/ APP SES/GS 15,14 PLAN
FSA OBJECTIVES
FSA
END OUTCOMES
FSA
STRATEGIC GOALS
FSA
VISION
FSA
MISSION

23. Strategic Goal Linkage - FSA to USDA to FSA
OLD
FSA FY Strategic Plan
NEW
FSA FY Strategic Plan
Strategic Goal 1
Provide farm income support to eligible producers, cooperatives, and associations to help improve the economic stability and viability of the agricultural sector and to ensure the production of an adequate and reasonably priced supply of food and fiber.
Strategic Goal 3
Assist eligible individuals and families in becoming successful farmers and ranchers.
Strategic Goal 4
Improve the effectiveness and efficiency of commodity acquisition, procurement, storage, and distribution activities, and administer the U.S. Warehouse Act (USWA).
USDA FY Strategic Plan
Strategic Goal 1
Promoting Productive Farms and Ranches
Strategic Goal 2
Supporting Secure and Affordable Food and Fiber Supply
Strategic Goal 1
Enhance Economic Opportunities for
Agricultural Producers
Strategic Goal 2
Assist agricultural producers and landowners in achieving a high level of stewardship of soil, air, and wildlife resources on America’s farms and ranches while protecting the human and natural environment.
Strategic Goal 5
Protect and Enhance the
Nation’s Natural Resource Base and Environment
Strategic Goal 3
Conserving Natural Resources and Enhancing the Environment 9

24. FY 2006 President’s Budget Strategic Goal Linkage – FSA to USDA
USDA Strategic
Goal/Objective
FSA
Strategic Goal
FSA Strategy
Major Program Areas
that Contribute
FSA End Outcome
USDA Goal 1:
Enhance Economic
Opportunities for
Agricultural Producers
Objective Strategic 1.2:
Support International Economic Development and Trade Capacity Building
Agency Goal 2:
Supporting Secure and
Affordable Food and
Fiber Supply
Objective 2.2:
Providing Adequate, Secure Storage Capacity that Maintains Quality
Income Support Programs
Commodity Operations
End Outcome 2:
Secure Supply of Quality Food and Fiber
End Outcome 3:
Effective Food Aid
Objective 1.3:
Expand Alternative
Markets for
Agricultural Products
and Activities
Agency Goal 1:
Supporting
Productive Farms and
Ranches
Objective 1.4:
Expanding Market
Opportunities
End Outcome 1:
Successful Farms and
Thriving Agricultural
Communities

25. Strategic Goal Linkage – FSA to USDA, Continued
FY 2006 President’s Budget
Strategic Goal Linkage – FSA to USDA, Continued
USDA Strategic
Goal/Objective
FSA
Strategic Goal
FSA Strategies
Major Program Areas
that Contribute
FSA End Outcome
USDA Goal 1:
Enhance Economic
Opportunities for
Agricultural Producers
Objective 1.4:
Provide Risk Management
and Financial Tools to
Farmers and Ranchers
Agency Goal 1:
Supporting Productive
Farms and Ranches
Objective 1.1:
Improving Access to
Capital
Objective 1.2:
Mitigating Market Losses
Objective 1.3:
Mitigating Losses from
Natural Disasters
Farm Loan Programs
Income Support Programs
Disaster Assistance
Programs
Conservation Programs
Commodity Operations
End Outcome 1:
Successful Farms and
Ranches
End Outcome 2:
A Market-Based
Agricultural Sector
End Outcome 3:
Thriving Agricultural
Communities
Agency Goal 2:
Supporting Secure and Affordable Food and Fiber
Objective 2.1:
Supporting Domestic
Agriculture
Income Support
Affordable Food and
Fiber
Goal 5:
Protect and Enhance
the Nation’s Natural
Resource Base and
Environment
Objective 5.2:
Improve Management
of Private Lands
Agency Goal 3:
Conserving Natural
Resources and
Enhancing the
Objective 3.1:
Improving Conservation
Practices
Objective 3.2:
Targeting Lands to
Maximize
Conservation Benefits
Objective 3.3:
Mitigating Adverse
Impacts from
Agricultural Production
Conservation
Quality Soil
Quality Water
Quality Wildlife Habitat
End Outcome 4:
Quality Air

26. Performance Measure Crosswalk
SAMPLE
Performance Measure Crosswalk
FY 06 BPI
FY 05 BPI
Goal 1: Maintain or reduce loss rates for:
- Direct loans
- Guaranteed loans
Goal 1: Reduce average processing time
for:
- Guaranteed Loans
Goal 1: Increase % of:
- beginning farmers
- racial and ethnic minorities, and women farmers financed by FSA.
Goal 3: Direct loan loss rate (%).
Goal 3: Guaranteed loan loss rate (%).
Goal 3: Processing time for direct loans (%).
Goal 3: Processing time for guaranteed loans (%).
Goal 3: Loans to beginning and socially disadvantaged farmers (% of total lending).
Goal 3: Direct loan delinquency rate (%).
Goal 3: Borrowers graduated from direct loans to guaranteed loans (%).

27. Performance Measure Crosswalk
SAMPLE
Performance Measure Crosswalk
USDA FY02-07 Strategic Plan
FY06 BPI
BPMS Management Scorecard:
Reduce % of skills gaps in mission critical occupations.
Reduce average processing time to fill vacancies.
Increase % of employees that meet the homeland security training standards.
Reduce average time to certify and disburse payments.
Reduce % of erroneous payments.
Increase % of material weaknesses that are corrected on schedule.
Increase % of transactions completed through a web environment.
Increase % of program results and budget requirements that are linked to the FSA Strategic Plan and fully costed.
Management Initiative 1:
Improve human capital management.
Management Initiative 2:
Improve financial management.
Management Initiative 3:
Expand electronic government.
Management Initiative 4:
Establish budget and performance integration.

28. BPMS Milestones
Department and OMB Approval of Strategic Plan Framework
Incorporation of Framework into FY 2006 Performance Budget
Linkage of Employee Performance to FY Strategic Plan
Development of BPMS Intranet (internal) and Internet (public) Websites
Development of Interim Web-based Performance/Budget Reporting System
Release of Draft Strategic Plan for Public Comment
Vendor Demonstration of INTEGRATED Web-based Budget, Performance, and Cost Accounting Data System
Development & Implementation of INTEGRATED Web-based Performance Reporting System
Implementation of Strategic Plan
Measure Customer Satisfaction
Measure Effectiveness of Partnerships
Streamline Business Processes
Develop & Implement Tiered Employee Performance System
Leverage Resources through Partnerships
Talk about MITS (from DOI) as our interim solution

29. TRANSFORMATION Challenges
Institutes MAJOR cultural change – performance based.
Requires integrated change management and will facilitate an integrated process for realigning resources.
Requires continued commitment and support from all levels. X

30. Visit BPMS Internet Site at:
Questions? Comments?
Visit BPMS Internet Site at:
For answers to your questions or to send a question directly to the Agency, please visit :

31. Farm Service Agency