OMB to work on capturing potential savings from management agenda

As President Bush's targeted plan for improving the management of the federal government moves into its fourth year, attention will turn to harnessing its full potential and documenting the resulting savings, an Office of Management and Budget official said Monday.

The President's Management Agenda, a five-part strategy meant to encourage efficiency and optimal use of tax dollars, has already changed habits at federal agencies, OMB Deputy Director for Management Clay Johnson told reporters. The strategy, announced in one of Bush's August 2001 weekly radio addresses, asks agencies to concentrate on personnel reform, opening certain federal jobs to private sector competition, expanding the use of electronic government, improving financial management and linking program performance to budget decisions.

If agencies lived up to Bush's expectations in all five areas, the government could save taxpayers $30-35 billion a year, Johnson said. The administration's "next challenge is to make those real savings," he said.

To date, the administration has gathered examples of modest savings produced on a program by program basis. OMB three months ago released a report projecting that public-private job contests held in fiscal 2003 under the controversial competitive sourcing initiative will save $1.1 billion over three to five years.

But Johnson acknowledged that OMB lacks comprehensive figures showing savings that already have been generated by the five initiatives. The administration is shifting focus to "what we've really delivered, not what we've projected to be delivered," he said.

OMB also hopes to get Congress "more involved" in the PMA. Congressional appropriators have been slow to accept the agenda, and some committees are still reluctant.

But Johnson said he is optimistic that lawmakers eventually will gain more interest in the agenda. "It took years for agencies to understand," he said. "Our intention now is to spend more time with Congress."

These are appropriate priorities, said Carl DeMaio, president of the Performance Institute, an Arlington, Va.,-based think tank. OMB also should be sure that "these reforms are understood as the fundamental improvements they truly are," he said. "They should not be seen as political -- or worse, partisan."

Despite the challenges ahead, Johnson said he feels the management agenda is the most effective government reform effort undertaken by any recent administration, and will have the most substantial and lasting impact because it has changed managers' habits. The agenda's "focus on results is not new, but what is new is a greater expectation than ever before that managers, line employees, indeed entire agencies, will be held accountable for meeting the goals they set," OMB officials stated in a report summarizing the management agenda's accomplishments at its three-year anniversary.

Johnson said he briefed the president and his management council on the status of the reform effort on Monday morning. Bush was pleased with the progress highlighted and encouraged OMB to "keep it up," Johnson said.

As part of the three-year report, administration officials summarized progress on all five management initiatives.

Agencies have improved at analyzing personnel needs, maintaining workforces with the optimal skills mix, and evaluating employees' job performance, according to the report.

Of the 26 major agencies OMB regularly grades on management agenda progress, 92 percent, or all but two, have developed leadership succession plans and have pinpointed skills imbalances. All but six of the major agencies are addressing identified skills gaps.

More than 80 percent of the major agencies rated have also designed systems of rating members of the Senior Executive Service based on how well they help their agency meet its mission, and 17 of the 26 agencies now use performance rating systems that make "meaningful" distinctions among employees.

In competitive sourcing, OMB reiterated projections of savings for the next three to five years. "With experience, the return on investment will only get better," the report stated. Agencies are turning in financial statements "sooner after the end of the fiscal year than anyone would have thought possible a few years ago," the report said. Though a lack of adequate financial management technology is holding some agencies back, five have managed to get accurate financial information to managers in a timely fashion, and have earned the highest possible rating on the financial portion of OMB's quarterly score card that rates management accomplishments.

Government information technology systems are now more secure, thanks to the management agenda, the report said. To date, agencies have secured 70 percent of information technology systems, which is, according to OMB, a marked improvement from the 26 percent three years ago.

Agencies have also made strides in measuring the performance of federal programs, the report said. Of the 600 that OMB has assessed, 65 percent "defined and are tracking clear outcome goals to measure their results." Two thirds, OMB stated, are measuring efficiency to help manage costs.