Tame the Compliance Monster
Tame the Compliance Monster
- By Richard W. Walker
- Mar 27, 2002
GAO's David McClure says agencies should tie compliance goals to their overall missions and specific projects.
OFPP's Angela Styles says performance-based contracting 'has been around for more than 10 years, and we haven't made any progress as far as I can tell.'
'The initial scorecards [on the President's Management Agenda] are showing a lot of red ... That's not surprising because the bar was intentionally set high,' says GAO's David Walker.
Taming the compliance monster begins at the top, but it doesn't end there. Management must build momentum and sustain it at all levels of an agency.
'To a great extent, we're seeing an unprecedented level of commitment by top leadership to try to make [management reforms] happen,' comptroller general David Walker said.
But that commitment has to 'cascade down the organization to make sure that everybody at every level is focused on doing the right thing,' Walker said. 'And that has to do with changing [agency] culture in order to properly align everything. And most agencies aren't in very good shape on that.'
Observers have noted that President Bush, the first president with a master's degree in business, is putting pressure on political appointees to meet management goals. At the same time, there's a new emphasis on career executives to carry on reforms through changes in leadership.Red alert
The Office of Management and Budget's recently issued scorecards'which rated executive-branch agencies on their progress in meeting the President's Management Agenda'made it clear that agencies have a long way to go.
[IMGCAP(1)]About 85 percent of the scores were red, which indicated a manifest lack of progress in the five categories targeted by the Bush administration.
'The initial scorecards show a lot of red in a lot of areas,' Walker told the Joint Financial Management Improvement Program's annual conference in March. 'That's not surprising because the bar was intentionally set high. The objective is to try to achieve real, lasting and sustained improvement'to focus on substance, not form.'
Bush's management agenda centers on expansion and improvement in electronic government, financial performance, competitive sourcing, budget and performance integration, and human capital management.
The agenda largely embraces the mandates and goals for government reform set forth in a host of laws passed over the last decade, including the Government Performance and Results Act, the Clinger-Cohen Act, the Federal Acquisition Streamlining Act, the Paperwork Reduction Act, the Government Paperwork Elimination Act and the Government Information Security Reform Act.
But compliance doesn't stop there. Agencies also have to meet the demands of the Small Business Act on contracting, the FAIR Act on opening their doors to outsourcing, Section 508 on accessibility of their systems and the Transportation Appropriations Act of 2000 on telecommuting. To name just a few with an IT component.
Many of these statutes are interconnected, like a family tree.
For example, GISRA, passed in 2000, amended the Paperwork Reduction Act of 1995 and built on the Computer Security Act of 1987 and the Clinger-Cohen Act, which passed as the Information Technology Management Reform Act in 1996.
Also part of the tree are related implementation guidance documents such as OMB Circulars A-11, Part 3 (capital planning, including IT) and A-130 (management of information resources).Root of the tree
And at the root of GISRA are the overall program performance and measurement mandates promulgated in the Government Performance and Results Act of 1993.
For agencies, grappling with such statutory and regulatory beasts isn't simple. For one thing, the sheer size and complexity of large agencies makes compliance and accountability difficult.
'A huge issue for most large departments is working out the lines of authority and responsibilities, and where those lines are on what's a departmental issue and what's a bureau or agency issue,' said David McClure, the General Accounting Office's director of IT management. 'Once you've drawn those lines and made them clear, ensuring accountability becomes an issue.'
Certainly, oversight officials say, top leaders have a key role to play in heading up compliance efforts.
In addition to department and agency heads, that includes leaders of the government's central management agencies, such OMB, the Office of Personnel Management and the General Services Administration.On the same page
These agencies 'have the responsibility to keep everyone focused on the big picture by identifying the key issues across the government and ensuring that related efforts are complementary rather than duplicative,' Christopher Mihm, GAO's director of strategic issues, said in a recent report to the House Committee on Government Reform's Subcommittee on Government Efficiency, Financial Management and Intergovernmental Relations.
[IMGCAP(2)]In agencies, top management can set the pace and tone for reform. For example, Treasury Secretary Paul O'Neill has taken a deep interest in management and IT reform and knows the value of collaboration, said James Flyzik, Treasury CIO and vice chairman of the federal CIO Council.
'Having him talk to these issues at meetings of bureau heads and senior staff helps get the message out that these things are important,' Flyzik said.
But depending too heavily on top managers'especially political appointees'to spur compliance can create a formidable problem: They come and they go, leaving a vacuum in leadership.
Both GAO's Walker and Rep. Tom Davis (R-Va.), chairman of the House Government Reform Subcommittee on Technology and Procurement Policy, are concerned about the impact of a revolving door at agencies' highest levels.
'There's a big turnover in leadership in agencies,' Davis said. 'Although they do have a career staff underneath them, these guys come in and don't have the slightest idea of [how to meet mandates]. You will find some huge gaps'some agencies ignore [mandates] because they've never been a priority before and no one has told them that they should be.'
Davis plans to issue a report later this year on agency progress in meeting performance and budgeting goals.
Meanwhile, both OMB and GAO officials reject the idea of creating a chief compliance officer. They say it would just add a superfluous layer of decision-making and bureaucracy rather than providing continuity and stability to reform efforts.
GAO's Mihm told Congress that turnover among top agency officials means that senior career executives will have to take up the slack.
'Career executives can help provide the long-term focus needed to institutionalize reforms that political executives' often more limited tenure does not,' he said.
In fact, he said, OPM's amended regulations emphasize holding senior executives accountable for organizational performance goals and results, 'providing an opportunity to reinforce leadership and accountability for management improvement.'
As a result, the onus to build and sustain compliance efforts might start shifting to career executives.
An important part of sustaining those efforts is a common vision for meeting goals, said John Mercer, an Alexandria, Va., consultant to government agencies on performance management.
'You have to understand the big picture and how all these [mandates] fit together,' said Mercer, former counsel to the Senate Governmental Affairs Committee and the generally acknowledged architect of the Government Performance and Results Act.
The big picture starts with GPRA's strategic planning mandates, Walker said.
'A strategic plan [shows] what are you all about, what are you trying to achieve and how you measure success,' he said.
Executives then must place a high priority on communication and collaboration, officials say.Why we do what we do
Senior managers have to communicate the relationships among an agency's overall mission, its compliance goals and specific agency projects to program- and other middle-level managers.
'If that's not discussed internally within the agency, then it becomes purely a compliance exercise,' said GAO's McClure. 'If it all isn't woven together with strategic goals and performance improvement, then you won't have the commitment and buy-in that is a cornerstone to these things.'
The Treasury Department has created investment review boards to follow the requirements of the Clinger-Cohen Act and other statutory requirements, Flyzik said. The boards include inspector generals, legal counsel and representatives from all parts of the department.
'The key thing is to get all of the players at the table to make sure that each step of the way we're staying within the rules of the road,' he said.Walk this way
GPRA, whose primary tenets permeate all of the subsequent reform legislation, in a large sense provides the road map to compliance: Identifying performance goals, establishing plans to achieve them and measuring and reporting the results. Follow the GPRA framework and its management practices and you've set the stage for compliance with everything else.
[IMGCAP(3)]GPRA also for the first time required agencies to develop performance plans and link them to budget requests.
Through its management agenda, the Bush administration is ramping up GPRA by requiring agencies to fully integrate performance and results with budget decisions.
Here's the bottom line: Show results or your program is gone.
'The initiative to integrate budget and performance has an important purpose,' OMB director Mitch Daniels told agency heads in a memorandum last October on the 2003 budget request. 'Dollars will go to programs that work. Those programs that don't work will be reformed, constrained or face closure.'
OMB's Analytical Perspectives on the 2003 budget offers some advice to agency executives on meeting performance budgeting goals: Get program managers involved.
'Frequently [program managers] do not participate in developing performance measures for the plans required under GPRA,' officials said in the document. 'The government's program managers must participate in the development of broad objectives and annual performance goals and link those objectives and goals to an annual budget request.'
Overall, greater collaboration among all agency stakeholders is a first step in infusing planning and measurement into budgeting, officials said. No longer can agencies rely on the same staff to do budget planning year in and year out, they added.
The administration also has added performance-based services acquisition to agencies' list of goals. For fiscal year 2002, agencies must try to use performance-based techniques for at least 20 percent of awards of $25,000 or more.
Performance-based acquisition stresses outcomes and results rather than work processes in awarding services contracts.
The statutory framework for performance-based contracting has been around for a while, springing from GPRA, Clinger-Cohen and the Federal Acquisition Streamlining Act of 1994.
'My concern is that this issue has been around for more than 10 years, and we haven't made any progress as far as I can tell,' said Angela Styles, administrator of OMB's Office of Federal Procurement Policy.
Most agency officials see the 20 percent goal as a difficult one to meet because most agencies are still getting their feet wet.User's manual?
Styles conceded that many agency officials still don't understand how performance-based contracting works. In fact, there's even 'disagreement in my department basically about what it is,' she admitted.
Styles recently formed an interagency council to work out a comprehensive definition of performance-based contracting that might be incorporated into the Federal Acquisition Regulation. She expects the panel's work to be finished in a couple of months.
In the meantime, Styles said, agency managers should take their cue from Seven Steps to Performance-based Services Acquisition, a Web guide developed by a Commerce Department-led team of federal procurement executives and Acquisition Solutions Inc. of Chantilly, Va.
The Web address for it is oamweb.osec.doc.gov/pbsc/index.html
'It's a good first step,' Styles said. 'It's very easy to understand.'
Chip Mather, senior vice president of Acquisition Solutions, recommended that managers get the ball rolling on performance-based contracting by doing a pilot.
'You have to get together a small team of people who buy into this and let them run one acquisition through their activity as a prototype,' he said. 'You need to put that first example in place. Once you do that and people see the advantages, you won't be able to stop them from using it.'
One of the most starkly visible dates on the compliance calendar is October 2003, the deadline for agency compliance with the Government Paperwork Elimination Act. GPEA requires that agencies give the public the option, when possible, of submitting, maintaining and disclosing required data electronically.Light one candle
'We are discovering that this is a formidable challenge,' said GAO's Walker. Progress is at best mixed, he said.
Once again, there's the shadow of GPRA. 'Rather than a strategy, many [agency GPEA] plans show listings of activities that are not tightly linked to expected improvements in mission performance,' he said.
In a September 2001 report, GAO's McClure advised that OMB should require more information from agencies on their GPEA strategies, provide more continuous feedback on the completeness and quality of their plans and hold agencies accountable for achieving results by linking GPEA mandates to program-specific performance measures and outcomes.
McClure agreed that agencies have made progress in developing Web sites and putting forms online, activities that conform to the spirit of GPEA when it was passed.
But he added that the e-government expectations have broadened and become more complex in the intervening years.
'Where we're encountering challenges is moving into the transformational process of delivering services [online],' he said.
OMB's Mark Forman, associate director for IT and e-government, said moving to e-government is all about changing agency culture.
Ultimately, 'we're not going to Web-enable business as usual,' he said at a Joint Financial Management Improvement Program seminar last month. 'This is not about putting a Web site front end to legacy transactions. We have to adopt a different way of doing business.'
Forman said his mantra is 'simplify and unify. There is no successful e-business or e-government application that hasn't created a simpler way for people to do their work. At the end of the day this is largely about integration and how we work together as a team.'
Like all other compliance challenges facing agencies, GPEA implementation comes down to management, Forman said.
'We're not buying technology for technology's sake,' he said. 'The technology helps us fix legacy management problems. It's the management problems we're addressing,' he said.