These agencies, in  effect, took the first step toward defining the performance consequences of  budget decisions. However, 14 agency plans, or 40 percent of those included in our review,  both identified the funding for program activities and explained how that  funding would be allocated to a discrete set of performance goals. Funding Was Allocated to Performance Under a Variety of Conditions But Using Some Common Approaches

Our review of selected fiscal year 1999 performance plans indicated that  agencies with budget and planning structures of widely varying complexity  were able to develop approaches toward achieving a fundamental purpose  of the Results Act—clarifying the relationship between resources and  results. For example, agencies that  (1) established simple relationships between program activities and  performance goals or (2) fully integrated budget justifications and  performance plans were significantly more likely to allocate program  activity funding to performance goals. In addition, each of the three  agencies that changed their budget structures to align them with their  planning structures made these allocations. Certainly, some agencies were able to develop informative  approaches to connect budgetary resources to results. integrating performance information with budget justifications. Linkages between plans and budgets must be supported by results-oriented  and credible performance data to be useful. Moreover, challenges in performance planning and measurement and  deficiencies in cost accounting systems continue to confront federal  agencies. The  progress that has been made and the challenges that persist underscore the  importance of developing a specific agenda to ensure continued progress in  better showing the performance consequences of budgetary decisions. Recommendation to OMB

In light of the indefinite delay of the performance budgeting pilots required  by the Results Act and the experiences of agencies during the fiscal year  1999 performance planning and budgeting cycle, we recommend that the  Director of OMB assess the approaches agencies use to link performance  goals and program activities in the fiscal year 2000 performance plans. To do  this, our objectives were to describe agencies’ approaches to linking performance goals and examine characteristics that might be associated with different  approaches to linkage, and identify implications for future efforts to clarify the relationship  between budgetary resources and results. We reviewed linkages between the program activities and performance goals presented in the plan.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed selected fiscal year (FY) 1999 federal agency performance plans, focusing on: (1) agencies' approaches to linking performance goals and budgetary resources; (2) characteristics that might be associated with different approaches to linking performance goals and budgetary resources; and (3) implications for future efforts to clarify the relationship between budgetary resources and results.

What GAO Found

GAO noted that: (1) in their first Government Performance and Results Act of 1993 performance plans, agencies experimented with a variety of approaches to connect budget requests with anticipated results; (2) although most agencies reviewed (30 of 35) defined some type of relationship between the program activities of their proposed budgets and the performance goals of their plans, far fewer (14 or 40 percent of the plans reviewed) translated these relationships into budgetary terms--that is, most plans did not explain how funding would be allocated to achieve performance goals; (3) such allocations are a critical first step in defining the performance consequences of budgetary decisions; (4) GAO found that agencies with budget and planning structures of widely varying complexity made these allocations, but some common approaches were used; (5) agencies were significantly more likely to have allocated funding to program activities if they: (a) showed simple, clear relationships between program activities and performance goals (as illustrated by eight agencies in GAO's review); (b) fully integrated performance plans into congressional budget justifications (as illustrated by five agencies); or (c) had changed their program activity structures to reflect their goal structures (as illustrated by three agencies); (6) agencies' first-year experiences show progress in bringing planning and budgeting structures and presentations closer together, but much remains to be done if performance information is to be more useful for budget decisionmaking; (7) continued efforts are needed to: (a) clarify and strengthen links between planning and budgeting structures and presentations; and (b) address persistent challenges in performance planning and measurement and cost accounting; and (8) the progress that has been made, the challenges that persist--including the indefinite delay in the performance budgeting pilots called for by the act--and Congress' interest in having credible, results-oriented information underscore the importance of developing an agenda to ensure continued improvement in showing the performance consequences of budgetary decisions.