1. OECD Conference: Sequencing and Pacing of Performance Budgeting Reforms
Dustin Brown
Deputy Assistant Director for Management
Office of Management and Budget,
Executive Office of the President, US
James Inder
Director, Financial Support and Training Office, Bureau of Resource Management, US State Department, United States.

2. Overview Program budget classifications
How are program objectives decided?
Presenting performance information in budget.
Government-Wide Efforts
Agency-Specific Efforts
Program Assessment Rating Tool
Organizational Steps to Improve Performance Budgeting
Future Opportunities

3. Program Objectives Defined By:
Legislative Branch - Congress
Authorization Statute (periodic)
Appropriations Committee (annual)
Executive Branch – the Administration
Office of Management and Budget
Agencies
Grantees and Program Partners
Other Stakeholders, Public

4. Programs, Organizations and Budget Structures
Typically budgets are program centric
Agencies, Congress and OMB are used to it.
Creating budgets by Strategic Goal, Long-Term Objectives or Problems will require a cultural and policy shift
Horizontal problems with solutions by vertical programs would need this shift

5. Agency Performance Planning and Reporting (Government Performance Results Act, 1993)
Strategic Plans
General goals and objectives, including outcome- related goals and objectives, for the major agency functions for a period of not less than five years
A description of how the goals and objectives are to be achieved
Annual Performance Plans
Establish performance indicators to be used in measuring or assessing the relevant outputs, service levels, and outcomes of each program activity
Should be consistent with the agency's strategic plan
Performance Budgets result from integration of budget information and agency annual performance plans.
Annual Performance Reports
Review the success of achieving the performance goals of the fiscal year
Evaluate the performance plan for the current fiscal year relative to the performance achieved toward the performance goals in the fiscal year covered by the report .

6. Performance Budget Structure
Agency Strategic Goals (with budget trends)
Strategic Outcome Goals
Program Outcome Goals
Program Output Goals
Program Efficiency Measures
Program Marginal Cost Estimates

7. Budget and Performance Integration
Agencies’ budget justifications are required to include full cost of achieving program performance
Performance’s costs are interpreted as budgetary resources
Changing to real costs would require a cultural change
Program’s costs can be tracked trough cost accounting or activity base costing
Budgetary resources can be linked to expenditures via financial statements

8. Budget and Performance Integration
Agencies have developed models for determining program’s marginal cost
Current emphasis is in the use of marginal/unit cost as part of program’s target setting
Through the use of marginal, unit and full cost, budget and performance become better integrated
Program assessments are used to inform agency, OMB, and Congressional decisions on resource allocations.
Programs’ performance is only one of the factors for making budget decisions
Government-wide budget contains little performance information

11. Program Assessments
Evaluate programs in a systematic, consistent, and transparent manner.
Focus on program improvements that can include specific actions related to management, legislative or regulatory improvements, and funding.
Over the past six years, agencies and OMB have completed 1,017 program assessments including 234 reassessments.
In 2002, the government could not show what results were being achieved by their programs and spending.
After six years of completing program assessments, the federal government now has 6,516 performance measures including 1,367 efficiency measures.
This is the first time in history that we have assembled government performance measures in one database and reported them transparently on

13. Program Assessments

14. How to Increase Usefulness of Performance Plans and Reports?
The right information for the right audience
Three tiers of performance information:
Strategic Plans, Annual Performance Plans/Report ( pages)
Citizen’s Report (25 pages)
Snapshot (2 pages)

15. Dept. of Energy Citizen’s Report Summary

16. Dept. of State Citizen’s Report Summary

17. Mock-Up of Two-Page Snapshot

18. Mock-Up of Two-Page Snapshot

19. Presidential Executive Order 13450 Improving Government Program Performance November 13, 2007
The EO makes it the official policy of the Federal Government to spend taxpayer dollars more effectively and efficiently each year.
Established Performance Improvement Officers (PIOs) in each agency
Established Performance Improvement Council (PIC)

20. Performance Improvement Officers
Continually Improve Program Goals
Help Develop Program Improvement Plans
Regularly Assess Program Performance
Help Hold Managers Accountable for Results
Effectively Communicate Agency Plans and Reports
Increase Transparency

21. Five Opportunities Active performance management
Linking outcomes with operations (i.e. outcomes with outputs and strategies)
Linking cost (not just budget) to performance, including marginal cost analysis.
Linking organization and individual performance
Focus on rigorous program impact evaluations
Developing crosscutting analysis
See Community Development Ex. In Background
Greater transparency and accountability

22. Background

23. Illustrate Performance Budgeting: President’s Emergency Plan for AIDS Relief (PEPFAR)

24. Congress – Authorizing Statute

25. Congress - Appropriations Committee

26. Department of State Budget FY 09

27. Agency Congressional Justification

28. Snapshot of Sample Grantee Report

29. Performance and Accountability Report

30. Inside the Citizen’s Report

31. PART Summary

32. PART Assessment Details

33. Program Improvement Actions

34. Program Performance Measures

35. Program Performance Measures

36. Program Performance Measures

37. Program Performance Measures

38. USAspending.gov

39. Other Stakeholders
ONE Campaign tracks U.S. commitments on global AIDS.

40. Alternative Structure
Arrange by Problems/Outcomes, not Agencies/Programs
Example from Community and Economic Development

41. 1. Define the Problem High Poverty Rural areas
64 non-metropolitan counties have registered poverty rates higher than 30 percent for each Census from 1960 to 2000.
High Poverty Urban Areas (vs. Metro Avg.)
2,886 high poverty neighborhoods in US cities with 8.4 million people living in them:
Homeownership rates are 33 percent lower.
Male employment rates are 19 percent lower.
Share without a high school degree is 24 percent higher.
Share of families headed by single females is 25 percent higher.

42. 2. Identify Federal Programs Addressing Problem
USDA
Community Facilities Direct Loan ($300M loans)
Community Facilities Guaranteed Loan ($210M loan)
Community Facilities Grants ($17M)
Rural Business Enterprise Grants ($40M)
Intermediary Relending Program ($16M)
Rural EZs/ECs ($13M)
Commerce
Econ Devt Admin ($320M)
EPA
Brownfield Assessment/Cleanup ($121)
HHS
CSBG ($495M)
HUD
CDBG ($4,330M)
EZs ($15M)
CD Loans ($7M)
Brownfields ($7M)
Rural Housing and ED ($25M)
National CD Initiative ($30M)
Indian CD Block Grant ($72M)
HOME Investment ($2,084M)
Native American Housing BG ($647M)
Self-Help Homeownership ($65M)
FHA Asset Control Program
Interior
Land and Water Conservation Fund ($94M)
Regional Economic Development Agencies
Appalachian Regional Commission ($66M)
Denali Commission ($6M)
Delta Regional Authority ($2M)
Small Business Administration
504 Loans ($4,500M in loans)
New Market Venture Capital ($3M in loans)
Treasury
CDFI ($43M)
Bank Enterprise Award ($5M)
Neighborhood Reinvestment Corp ($115M)
Tax Incentives (5-year revenue loss)
New Markets Tax Credit ($3,500 M)
EZ/Renewal Communities ($6,800 M)
Brownfield Tax Expensing ($1,000 M)
Work Opportunity Tax Credit ($270M)
Welfare to Work Tax Credit ($90M)
TOTAL: 12 agencies; 35 programs
$16 billion (approps+loans+tax)
Note: funding data is from 2005.

43. 2.a. List of Federal “Designations” Addressing Problem
Renewal Community
Empowerment Zones
Enterprise Community
HUD Neighborhood Revitalization Strategy Area
EDA Distressed Area
Appalachian Regional Commission
Delta Regional Authority
Denali Commission Areas (Alaska)
CDFI Investment Area
New Market Tax Credit Low-Income Community
BEA Distressed Community
Brownfield Tax Incentive Zone
SBA HUBZones
FHA Revitalization Areas
Rural Community Facility Areas
HUD Underserved Areas

44. Housing & Infrastructure Individual/ Family Assistance
3. What is the purpose of the programs?
Tools/
Categories
Housing & Infrastructure
Economic Development
Technical Assistance/
Capacity Building
Individual/ Family Assistance
Grants
Community Development Block Grant (CDBG)
Economic Development Administration (EDA)
Community Services Block Grant (CSBG)
HUD Rural Housing and Economic Development (RHED)
HUD Empowerment Zones (EZ) Grants
USDA Enterprise Community/EZ Grants
HHS Rural Community Facilities
HOME Investment Partnerships
Neighborhood Reinvestment Corp. (NRC)
EPA Brownfield Cleanup
HUD Self-Help Homeownership
HUD Native American Housing Block Grants
HUD Indian CDBG
Regional Commissions
EDA
CDBG
CSBG
HUD EZ grants
Rural Business Enterprise Grants
Rural EZ/EC
HUD Brownfields
HHS Community and Economic Development (CED)
HUD RHED
USDA Economic Impact Grants
SBA HUB Zone (procurement preference)
HUD NCDI
CDFI
Rural Business Opportunity Grants
Bank Enterprise Award (BEA)
CDFI Native Initiatives
CDBG set-asides
NRC
HHS CED
HUD EZ Grants
CDFI Native
BEA
Loans
USDA Community Facilities (inc. grants)
USDA Intermediary Re-lending
HUD Section 108 loans
SBA 504 loans
Tax Incentives
New Markets Tax Credit (NMTC)
Brownfields Remediation
Single-Family Homeownership (proposed in 2006)
NMTC
EZ/EC/RC (wage credits and other incentives)
Opportunity Zones (proposed in 2006)

45. Program Purpose & Design Community & Economic Development Programs
4. Where are the program strengths and weaknesses?
Program Purpose & Design
Strategic Planning
Prog. Mgmt
Results
Total
All Federal Programs
85%
70%
79%
47%
63%
Community & Economic Development Programs
69%
82%
30%
52%

46. Examples of Community Development Metrics
5. How do these programs measure success?
GOAL
Performance System/
Program
High Level Tracking Indicators
Program Outcome Measures
Program Outputs
Examples of Community Development Metrics
Improve quality of life in a distressed area to make the target community self-sustaining
CDBG
None
None (recently developed)
Number of households assisted with housing assistance
Number of jobs created or retained
EDA
none
Private sector dollars leveraged
Number of jobs created or retained in distressed communities.
Percentage of investments to areas of highest distress
USDA Community Facility
Millions of rural residents served by community facilities financed by RHS
Number of public safety, educational, and health care facilities financed
SBA 504 Certified Devt. Loan Program
Estimated number of jobs created or retained
Number of 504 loans guaranteed

47. Sample Agency Performance Management Best Practices
Select limited number (20-30) of senior management measures for use in quarterly meetings (See Interior & EPA).
Include field offices in some quarterly meetings (See HUD, EPA, SBA).
PIOs ensure PMA Initiative Leads and other leaders (CHCOs, CAOs, CFOs, E-Gov,) meet regularly to focus on program improvement and ensure common standards across Department (See HUD, Labor, EPA).
Align PART and APP goals (See DOE).
Has a continuing effort to benchmark itself against other government and non-government entities on performance management processes (See NASA, SSA, DOE).
Establish centralized evaluation unit (if one does not exist) and evaluation agenda (See State, USAID).
Program goals are basis for senior manager appraisal goals (See EPA and OPM).
Post regular updates of quarterly meetings including performance and improvement actions online and has links to performance results on its homepage (See OPM, EPA, DOE).