NRC also charged the OCFO and  the former Executive Council with developing a new planning, budgeting,  and performance management process. This section describes how  components of the process were designed to operate, while the next  section (“Planning and Performance Information Influences Resource  Allocation Decisions in Various Ways”) explains how performance  information informs resource decisions in those offices that have  implemented PBPM and its techniques. Four Components of PBPM

			Component 1: Setting the Strategic Direction

In Component 1, NRC establishes agencywide strategic direction by  formulating the strategic plan and by issuing Commission guidance  throughout the year. In addition, the Commission provides  direction to its managers on programs and operations through various  written directives. Component 2: Determining Planned Accomplishments and Resources

In Component 2, managers in offices using PBPM employ a set of  interrelated tools to translate agency goals and strategies into individual  office work activities, performance targets, and resource needs. (A later section of  this report, “Challenges to Improving the NRC Budget and Planning  Process,” more fully discusses challenges to improving the assessment  component). NRC informs its resource allocation decisions by providing  strategic direction to operating units prior to budget formulation and by  monitoring actual performance against performance targets during budget  execution. PBPM also promotes agencywide coordination of budget  formulation and execution decisions by providing a common language and  common goals. Operating plans are also used to monitor performance and make necessary  adjustments. Our report on federal agency  efforts in linking performance plans with budgets found that NRC’s budget  presentation linked its program activities to performance goals, which  showed funding needed to achieve goals. Agency officials noted challenges in (1) creating  performance measures that balance competing goals and keep  performance measures current, (2) associating resource requests with  outcomes, (3) standardizing PBPM practices and techniques but still  allowing individual offices to tailor the process to their needs,   (4) developing the assessment component, and (5) committing significant  effort to maintaining PBPM. In addition, NRC must continue developing a  cost accounting system to support PBPM. First, the budget process focuses on performance targets  and budget decisions for the short term while achieving some outcomes  may take many years. GAO Comments

1. 2. 3. 4.
Why GAO Did This Study

Encouraging a clearer and closer link between budgeting and planning 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 Nuclear Regulatory Commission (NRC)--and its two companion studies on the Administration for Children and Families (GAO-03-09) and the Veterans Health Administration (GAO-03-10)--documents (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

Although in differing stages of implementation throughout NRC, NRC designed the Planning, Budgeting, and Performance Management Process (PBPM) to better integrate its strategic planning, budgeting, and performance management processes. PBPM links four individual components: (1) setting the agency's strategic direction, (2) determining activities and performance targets of component offices and related resources, (3) executing the budget and monitoring performance targets and taking corrective actions, if needed, to achieve those targets, and (4) assessing agency progress toward achieving its goals. GAO's report provides examples of how the PBPM framework can influence budget formulation and execution decisions. These examples show (1) how NRC informs its resource allocation decisions by providing strategic direction to operating units prior to budget formulation, (2) how operating units that have implemented these processes link strategic direction to budgets through tools that set priorities and assign resources to office activities to accomplish these priorities, and (3) how operating units monitor performance targets and make adjustments as necessary during budget execution. In addition, agency managers have told GAO that PBPM also promotes agencywide coordination of budget formulation and execution decisions by providing a common language and common goals. Integrating budget and planning processes and improving performance management in NRC is an ongoing effort that includes addressing a series of challenges. They are (1) creating performance measures that balance competing goals and keep performance measures current, (2) associating resource requests with outcomes, (3) standardizing PBPM practices and techniques but still allowing some flexibility among offices to tailor the process to their needs, (4) developing the assessment component, and (5) committing significant effort to maintain PBPM. In addition, NRC must continue developing a cost accounting system to support PBPM.