Mr. Speaker, as Members of Congress, we are accountable not only to the constituents who elected us, but to all American taxpayers. We are responsible for making informed decisions, that incorporate a base of knowledge. The Mercatus Center…
Mr. Speaker, as Members of Congress, we are accountable not only to the constituents who elected us, but to all American taxpayers. We are responsible for making informed decisions, that incorporate a base of knowledge. The Mercatus Center at George Mason University provides a valuable, objective, independent evaluation to Members of Congress and taxpayers, by reviewing the annual performance reports of the 24 CFO Act agencies and ranking them according to three criteria: transparency, public benefit, and forwardlooking leadership. Mercatus evaluates the Annual Performance and Accountability Reports of each of these Agencies to determine how transparently an agency reports its successes and failures, how well an agency documents the tangible public benefits it claims to have produced, and whether an agency demonstrates leadership that uses annual performance information to devise strategies for improvement.
Their analysis and the report I submit to the Congressional Record, allows us as Members of Congress to have a common understanding about which agencies report to the public most clearly. Their analysis also allows agencies to learn from their colleagues how best to present useful data about the performance of their organizations. Armed with this report, and upon reviewing performance information provided by agencies, we can and must determine appropriate resource allocations, based not on the amount appropriated and spent last year, but on what benefit was earned from this expenditure. We owe it to the people who pay our salaries, to demonstrate the public benefit created with the money entrusted to us. And where the government is a poor steward of funds, we must intervene to improve the Federal Government's role in providing efficient and effective service to the American people.
I commend the Mercatus Center's report to my colleagues.
Executive Summary
Public disclosure is the mechanism used to report on
performance to those who are entitled to know. In this
Scorecard we assess how effective reports of the agencies of
the federal government are in disclosing pertinent
information to the American people. We review these reports
with the mindset of ordinary citizens, who are interested in
looking for the benefits that the agencies provide and the
effectiveness of the agencies' efforts. Thus, our research
efforts emphasize an assessment of an agency's transparency
of communications with the general public, identification and
assessment of the public benefits it provides, and its
leadership vision for the future.
In an era of increased demand for accountability,
disclosure and transparency, the government has a
responsibility to supply the American people with quality
disclosures on the public benefits it provides. Clear,
descriptive disclosure of the public benefits provided by
governmental agencies allows ordinary citizens to understand
the strategic goals and assess the agencies' performance
relative to those goals.
Annual performance and accountability reports are one
avenue for agencies to communicate with both citizens and
policymakers. The purpose of this Scorecard is to encourage
improvement in the quality of reporting on results achieved
by government agencies. We do this by evaluating and ranking
(1) how transparently an agency reports its successes and
failures; (2) how well an agency documents the tangible
public benefits it claims to have produced; and, (3) whether
an agency demonstrates leadership that uses annual
performance information to devise strategies for improvement.
Researchers at the Mercatus Center at George Mason
University conducted our fourth annual evaluation of the
reports produced by the 24 agencies covered under the Chief
Financial Officers Act, using similar criteria to evaluate
the fiscal year (FY) 2002 performance and accountability
reports. By assessing the quality of agencies' reports (but
not the quality of the results achieved), we wish to learn
which agencies are supplying the information that Congress
and the public need to make informed funding and policy
decisions. The importance of quality reporting has taken on
added significance in light of the President's Management
Agenda that highlights the intent to use agency performance
information to make budget decisions.
Best Reports: For FY 2002, the Department of Labor (Labor),
the Department of Transportation (Transportation), the Small
Business Administration (SBA), and the Department of Veterans
Affairs (Veterans) produced the highest rated reports. Three
of these agencies, Department of Labor, Department of
Transportation, and the Department of Veterans Affairs were
rated the top three agencies for FY 2001 as well. The SBA
joins their ranks this year.
Reports Most In Need Of Improvement: The Department of
Defense (Defense), U.S. Agency for International Development
(USAID), the Department of Health and Human Services (HHS),
and the Department of Energy (Energy) earned the lowest
rankings for FY 2002.
Most Improved Reports: Eleven agencies improved their
scores from FY 2001 to FY 2002. Of these, the Small Business
Administration, the Federal Emergency Management Agency, and
the Department of State showed the most improvement in their
rankings. The Small Business Administration moved from 16th
to 3rd in the rankings, the Federal Emergency Management
Agency jumped from 19th to 8th, and the Department of State
moved from 20th to 11th.
Most Common Strengths: (1) accessibility of reports, and
(2) clarity of reports.
Most Common Weaknesses: (1) weak or missing explanations of
failures to achieve strategic goals, and (2) lack of well-
articulated descriptions of changes in policies or procedures
to address weaknesses or failures.
Mixed results: The average score of the 24 reporting
agencies was 30, a 4.1 percent increase for FY 2002 reports
compared to FY 2001. The average scores for seven of the
twelve criteria improved this year, led by improvements of
26.9 percent for accessibility and 19.7 percent for better
explanations of the linkages between the agencies goals and
results to their costs. However, on average, agencies did not
make progress in several areas, particularly in providing
quality trend data (decline of 13.0 percent) and clearly
articulating their goals and objectives as outcomes (decline
of 9.9 percent).
Scorecard Rankings for FY 2002 (1) Labor; (2)
Transportation; (3) SBA, Veterans; (5) Commerce; (6) EPA,
Interior; (8) FEMA; (9) NRC, SSA; (11) State; (12)
Agriculture, Education, GSA, Justice, NASA, OPM; (18) HUD,
NSF, Treasury; (21) Energy, HHS; (23) USAID; and (24)
Defense.
Introduction
Following the passage of the Government Performance and
Results Act of 1993 (GPRA), federal agencies developed
strategic plans, performance plans, and performance reports
to explain what they are trying to accomplish, identify
performance measures, and report on their results. A new
reporting requirement for FY 2002 requires agencies to
prepare and submit a combined performance and accountability
report. The combined Performance and Accountability Report
includes the strategic plans, performance plans, and
performance reports previously included as well as a
financial section, which incorporates the audited financial
statements and report of the Office of Inspector General
(OIG) on serious management challenges.
President Bush's FY 2002 budget proposal called upon the
federal government to produce better results for citizens by
enhancing accountability for dollars collected and dollars
spent. The administration also began using information on
agency performance in the FY 2003 budget for a selected set
of programs, a practice that has been expanded for the FY
2004 budget. Performance-based budgeting means that money
will be allocated not just on the basis of perceived needs
and policy priorities, but also according to the federal
government's ability to address those needs and priorities
effectively. Program proponents will have to demonstrate that
the particular programs actually accomplish their stated
goals.
For performance-based budgeting to work, performance
information has to be transparent, accessible, and reliable.
GPRA and its amendments require federal agencies to produce
annual performance reports. The purpose of these reports is
to give Congress and the American people accurate and timely
information that will let them assess the extent to which
agencies are producing tangible public benefits. In line with
expectations under the legislation, agencies published their
first reports (for FY 1999) in spring 2000, the second series
in spring 2001 (covering FY 2000), the third series in spring
2002 (covering FY 2001), and the current series in spring
2003 (for FY 2002). Beginning with FY 2002 reports, agencies
are required to consolidate their performance reports with
financial reporting information in a combined Performance and
Accountability report. With society's increased emphasis on
accountability, transparency, and disclosure, it is incumbent
on the federal government and its agencies to meet the
highest standards in their external reporting efforts.
Effective accountability in public service requires that
agencies present a comprehensive, concise, accurate, and
reliable assessment of the benefits created for the public,
as well as the costs of producing those benefits. Equipped
with such information, the administration and Congress can
allocate federal resources in ways that continually advance
government's contribution to citizens' quality of life (The
Mercatus Center has developed a seven-step process, called
``Outcome-Based Scrutiny,'' that provides a framework for
comparing the results and costs of programs with similar
objectives and assessing the likely impact of reallocating
resources to the most effective programs. For a pilot study
applying Outcome-Based Scrutiny to federal vocational
training programs, see http://www.mercatus.org/ governmmentaccountability).
To help policymakers assess this year's reports and
agencies improve the quality of future reports, a Mercatus
Center research team evaluated the reports produced by the 24
agencies covered under the Chief Financial Officers' Act.
This marks the fourth year that researchers at the Mercatus
Center's Government Accountability Project have evaluated
agencies' reports. It is our goal that this annual assessment
will not only help to inform decision makers, but that it
will also inform the American people more generally. By
promoting the American spirit of competition and
accountability and applying it to government performance
reporting, it is also our hope that agencies can and will
improve the quality and cost-effectiveness of the services
they deliver.
Interpreting Our Findings
It is important to emphasize that our research team
evaluated only the quality of reporting, not the quality of
results. Therefore, it would be a mistake to conclude that
the agencies with the highest-scoring reports necessarily
produced the best results for the country. Ideally, an
agency's report reflects more about its managers'
capabilities than just their ability to write reports.
Instead, a high scoring report reflects an agency's ability
to translate what it does into understandable and meaningful
results that Americans can appreciate.
Similarly, it would also be inappropriate to draw policy
conclusions from our analysis. We offer no recommendations on
whether the federal government should or should not be
engaged in its current menu of activities.
So what do the findings in this study really mean? By
assessing the quality of agency reports, we are trying to
evaluate the agencies that are supplying the information that
Congress and the public need to make informed funding,
budgeting, and policy decisions. An additional word on
information quality is also in order. Our researchers
assessed the quality of each report's disclosure of data
verification and validation procedures. In the interest of
producing a timely study, we did not, however, verify the
performance information cited in each agency's report. Given
the importance of accurate data for sensible decisions, we
believe that verification and validation should be a high
priority for Inspectors General, Congress, the General
Accounting Office, and the Office of Management and Budget.
For the complete report, visit the Mercatus Center's
Government Accountability Project website at
www.governmnentaccountability.org.