New tool for rating federal programs almost ready, OMB says

A White House budgeting tool that could influence funding decisions for one-fifth of all federal programs is almost complete, a top Office of Management and Budget official said Tuesday.

OMB is set to unveil a preliminary version of its new method for rating the effectiveness of federal programs, said Marcus Peacock, OMB's associate program director for natural resources, at a conference sponsored by the National Academy of Public Administration in College Park, Md. The method, which OMB calls the Program Assessment Rating Tool, will be used on 20 percent of federal programs in the fiscal 2004 budget cycle.

OMB Director Mitch Daniels has said that programs that are deemed ineffective in the rating process could lose funding or face elimination.

The tool is a series of questions that budget examiners will ask to determine whether programs are working or not. Crafted by a 10-person "strike force" drawn from various OMB offices, the tool requires examiners to judge how programs achieve their goals, whether they are geared toward meaningful performance goals, and whether they are necessary in the first place. OMB customized the questions to fit seven different types of federal programs, including programs administered through regulation; competitive grants; block grants; loans; direct federal programs; research and development programs; and capital asset programs.

The President's Management Council, which is made of deputy secretaries from each Cabinet department, plans to discuss the new method Wednesday. OMB also hopes to get feedback on the tool from academics and members of the public, according to Peacock. Tweaking the rating tool will also be the first task of a new OMB Performance Measurement Advisory Council, which will hold its first meeting June 27.

"After June, we can use them [the council] to ask all sorts of questions about where we should head in the future and how this [rating] process can be refined," said Peacock.

Examiners will still have to consider factors besides the program ratings as they assemble the budget, but the ratings should inform funding decisions, he said. Eventually, the ratings should prompt agencies engaged in similar activities-such as wetlands protection or health care-to compete with one another to provide the best service to the public.

"Imagine a competition between federal managers trying to protect the most acres of wetlands for every dollar expended, or educate the most kids," he said. "That I consider a very powerful tool."

Peacock is also planning to brief members of Congress on the rating system. Traditionally, appropriators have shown little interest in using performance reviews to guide funding decisions, but Peacock believes this will change with the administration's fiscal 2004 budget submission. "Once they see that the information will be used to make decisions in the president's budget, that will get their attention," he said.