Nine agencies earn higher management grades

In the third quarter of fiscal 2003, nine federal agencies moved up a notch on the Office of Management and Budget's "traffic light" system for rating compliance with the president's five-part management agenda.

The Environmental Protection Agency and Social Security Administration upgraded from yellow to green in financial management, bringing the total number of green lights on the scorecard to four. Three agencies moved from red to yellow in competitive sourcing and four agencies made progress on human capital initiatives. But none of the 26 agencies rated earned improved marks in electronic government or linking budgets to performance.

On OMB's grading system, green indicates success, yellow means mixed results and red is unsatisfactory. Overall, the scorecard for the third quarter of fiscal 2003 contains four green lights, 39 yellow lights and 87 red lights. OMB earned red lights in all five management areas.

EPA and SSA both received unqualified opinions on their fiscal 2002 audits, contributing to their improved marks for financial management. But "most importantly, they have demonstrated that they use accurate and timely financial information to manage their organizations," OMB said in a statement accompanying the scorecard release Monday. For instance, EPA is able to more effectively manage its grants, thanks to better financial data, said Robert Shea, counselor to the controller at OMB's Office of Federal Financial Management.

The Defense Department, Education Department and Office of Personnel Management improved their efforts to put federal jobs up for competition with private firms, marking "historic progress" in this arena, said Angela Styles, administrator of OMB's Office of Federal Procurement Policy. Previously, all agencies received red lights in competitive sourcing. In particular, Education spent weeks assessing opportunities for running competitions and planning fair competitions, and can now be considered a model for other agencies, Styles said.

In the human capital arena, agencies have started systematically developing strategies for recruiting and retaining talented workforces, said Marta Perez, associate director for human capital leadership and merit systems accountability at OPM. They have also made progress on developing a "results-oriented" culture that rewards good job performance. The State and Transportation departments, Army Corps of Engineers and Small Business Administration shifted from red to yellow for their workforce planning initiatives, joining eight other agencies.

Though no agencies improved their scores in budget-performance integration, significant progress continues to take place in this area, said Marcus Peacock, associate director of natural resource programs at OMB. Agencies in charge of programs that earned poor scores from OMB evaluators are working to manage those programs better, he said. In general, OMB program assessments are making a larger impact on agencies' management strategies, he said.

Likewise, agencies have made progress on electronic government projects despite a lack of demonstrated improvements on the scorecard, said Norman Lorentz, chief technology officer of information technology and e-government at OMB. In particular, agencies have enhanced electronic security measures, he said.

OMB's first scorecard, released in February 2002, contained only one green light, 19 yellow lights and 110 red lights.

While the mix has improved slightly, a majority of the 130 grades on the scorecard are still red. The Bush administration plans to pressure agencies into moving out of red over the next year. In an April 17 memorandum, Clay Johnson, deputy director for management at OMB, outlined a set of specific targets he would like agencies to meet by July 1, 2004.

Most agencies are poised to meet these goals, Johnson said. "By next year, the average agency ... will be performing better than the best agency did two years ago, which is to me a huge statement," he said.

This summer marks a turning point, where agencies are ready to transition from planning management initiatives to implementing their plans, Johnson said. While there is no particular formula for earning a green light, agencies that have been successful so far have one common feature, according to Johnson-strong leaders who put a high priority on the president's management agenda.

OMB spends so much time focusing on other agencies' efforts to implement the management agenda that it has neglected its own management, Johnson said. The agency lacks a single leader in charge of internal initiatives, he explained. This is part of the reason OMB earned red lights on all five areas graded, Johnson said.