Scope and Methodology

To address the objectives in this report, we selected two regional offices  (Region VI, Dallas, and Region IX, San Francisco) and three diverse  programs (Head Start, Child Support Enforcement, and the Community  Services Block Grant) that represent ACF’s self-described best examples of  how managers used performance information to inform the resource  allocation process. We also obtained staff and management views on the  challenges to further budget and performance integration. Budget Formulation and Performance Planning Are Closely Related but Are Not Completely Integrated

ACF’s GPRA planning process follows the budget process and must be  completed according to the budget timeline, but formulation does not  begin with a formal look-back at program performance to help shape the  upcoming year’s budget request and performance plan; thus, the processes  are not yet completely integrated. At the program level,  ACF officials told us that training and technical assistance (T/TA) and  salaries and expense funds are often allocated based on program  performance and needs. Linking Resources to Results Is an Evolving Process

While ACF has progressed in better aligning its resources with program  goals and desired results, almost all managers and staff we spoke with  recognized that strengthening the link between resources and results is a  work in progress, and that many challenges still need to be addressed  before ACF can more fully integrate budget and planning. ACF has begun to identify and implement  mitigation strategies to address these issues. Third-Party Issues Limit ACF’s Ability to Work towards National Performance Goals and to Collect, Verify, and Report Performance Information

ACF conducts much of its work through “third parties”—states, localities,  and other non-federal service providers—which often limits the extent to  which ACF directly influences program outcomes. Difficulty Isolating a Particular Program’s Effect on Outcomes Affects ACF’s Ability to Determine Program Effectiveness

Since ACF is part of a network of federal, state, local, and  nongovernmental efforts aimed at improving long-term social health and  social outcomes, attributing a particular outcome to any particular effort  can be a great challenge. Organizational Culture Change Seen as Needed to Strengthen Performance and Budget Integration Is a Slow Process

ACF and HHS officials repeatedly told us that the culture change necessary  to support and strengthen the linkages between resources and results takes  time but is beginning to take root. Managers and staff also report a clearer understanding of the difference  between outputs and outcomes, and the use of outcome measures is  becoming more common. Also, linking employees’ day-to-day activities to goals and priorities  through such instruments as outcome-based employee performance  contracts has brought encouraging results to the region. In turn, staff can help grantees  take advantage of these linkages in their own programs. The Department of Health and Human Services’ (HHS) Office of the  Assistant Secretary for Budget, Technology and Finance, and the Office  of the Assistant Secretary for Planning and Evaluation.
Why GAO Did This Study

Encouraging a clearer and closer link between budgeting, planning, and performance is essential to improving federal management and instilling a greater focus on results. Through work at various levels within the organization, this report on the Administration for Children and Families (ACF)--and its two companion studies on the Nuclear Regulatory Commission (GAO-03-258) and the Veterans Health Administration (GAO-03-10)--records (1) what managers considered successful efforts at creating linkages between planning and performance information to influence resource choices and (2) the challenges managers face in creating these linkages.

What GAO Found

The Administration for Children and Families' (ACF) budget and performance planning processes are clearly related but are not fully integrated. Budget and planning align more closely after ACF sends the budget request and performance plan to the Department of Health and Human Services for review. Finally, unlike budget formulation, budget execution largely occurs in the regional offices, where resource allocation is often driven by program performance. Officials in ACF's Head Start, Child Support Enforcement, and Community Services Block Grant programs described three general ways in which decisions at the programmatic level are influenced by performance: (1) training and technical assistance money is often allocated based on needs and grantee performance, (2) partnerships and collaboration help ACF work with grantees towards common goals and further the administration's agenda, and (3) organizing and allocating regional staff around agency goals allow employees to link their day-to-day activities to longer-term results and outcomes. While ACF must overcome some difficult barriers to further budget and performance integration, it has begun to identify and implement mitigation strategies for some of these issues. For example, ACF conducts much of its work through nonfederal service providers, which often limits the extent to which ACF can influence national performance goals and can seriously complicate data collection. To address this, ACF has successfully collaborated with providers to develop national performance goals and build data collection capacity. This has also raised awareness of the importance of collecting and reporting performance data uniformly. Since ACF programs are often only part of a network of long-term federal, state, and local efforts to address serious health and social concerns, attributing a particular outcome to a particular program can be difficult. ACF has addressed this issue by using program evaluations to help isolate the effects of a particular program, strengthening the link between outputs and outcomes, and identifying intermediate outputs and outcomes to help measure program performance. The organizational culture change necessary to support the linkages between resources and results takes time, but change is beginning to take root. Some managers and staff reported a noticeable difference in the use and understanding of outcomes versus outputs, and outcome-based performance agreements for managers and staff are becoming more common.