	Government Management: Observations on OMB’s Management Leadership Efforts

Mr. Chairman and Members of the Subcommittee: We are pleased to be here today to discuss our observations on the Office of Management and Budget’s (OMB) efforts to carry out its responsibilities to set policy and oversee the management of the executive branch. Finally, we will discuss the factors that appear to contribute to progress in sustaining improvements in federal management. The CFO Act mandated significant financial management reforms and established the Deputy Director for Management (DDM) position within OMB. In addition to serving as the government’s key official for financial management, the DDM is to coordinate and supervise a wide range of general management functions of OMB. OMB is responsible for providing guidance and oversight for various other laws and executive orders as well. Historically, There Have Been Questions About Whether to Integrate or Separate Management and Budget Functions

OMB’s perennial challenge is to carry out its central management leadership responsibilities in such a way that leverages opportunities of the budget process, while at the same time ensuring that management concerns receive appropriate attention in an environment driven by budget and policy decisions. Prior OMB reorganizations, reflecting these different points of view, have alternated between seeking to more directly integrate management into the budget review process and creating separate management offices. Previous congressional and OMB attempts to elevate the status of management by creating separate management units within OMB sought to ensure that an adequate level of effort was focused on management issues. The Effectiveness of OMB’s Management Leadership Has Been Uneven

In recent years, OMB has focused increased attention on management issues, but there is much more that needs to be done. We recommended that OMB ensure that agencies incorporate appropriate goals and strategies in their annual performance plans and describe their relevance to achieving the priority management objectives described in the governmentwide performance plan. Sustaining Improvements in Federal Management

Mr. Chairman, the record of OMB’s stewardship of management initiatives that we have highlighted today suggests that creating and sustaining attention to management improvement is a key to addressing the federal government’s longstanding problems. In the past, management issues often remained subordinated to budget concerns and timeframes, and the leverage the budget could offer to advance management efforts was not directly used to address management issues. Continued improvement in OMB’s plans would provide congressional decisionmakers with better information to use in determining the extent to which OMB is addressing its statutory management and budgetary responsibilities, as well as in assessing OMB’s contributions toward achieving desired results.
Why GAO Did This Study

Pursuant to a congressional request, GAO discussed its observations on the Office of Management and Budget's (OMB) efforts to carry out its responsibilities to set policy and oversee the management of the executive branch, focusing on: (1) OMB's wide-ranging management responsibilities and the question of whether to integrate or separate management and budget functions; (2) the effectiveness of OMB's management leadership; and (3) the factors that appear to contribute to progress in sustaining improvements in federal management.

What GAO Found

GAO noted that: (1) OMB is the lead agency for overseeing a statutory framework of financial, information resources, and performance planning and measurement reforms designed to instill a performance-based approach to federal management, decisionmaking, and accountability; (2) the Chief Financial Officers Act of 1990 mandated significant financial management reforms and established the Deputy Director for Management (DDM) position within OMB; (3) the DDM is to serve as the government's key official for financial management and coordinate and supervise a wide range of general management functions; (4) OMB is responsible for providing guidance and oversight for various other laws and executive orders as well; (5) OMB's perennial challenge is to carry out its central management leadership responsibilities in such a way that leverages opportunities of the budget process, while at the same time ensuring that management concerns receive appropriate attention in an environment driven by budget and policy decisions; (6) prior OMB reorganizations have alternated between seeking to more directly integrate management into the budget review process and creating separate management offices; (7) previous congressional and OMB attempts to elevate the status of management by creating separate management units within OMB sought to ensure that an adequate level of effort was focused on management issues; (8) OMB has focused increased attention on management issues, but there is much more that needs to be done; (9) OMB should ensure that agencies incorporate appropriate goals and strategies in their annual performance plans and describe their relevance to achieving the priority management objectives described in the governmentwide performance plan; (10) the record of OMB's stewardship of management initiatives suggests that creating and sustaining attention to management improvement is a key to addressing the federal government's longstanding problems; (11) in the past, management issues often remained subordinated to budget concerns and timeframes, and the leverage the budget could offer to advance management efforts was not directly used to address management issues; and (12) continued improvement in OMB's strategic plans would provide congressional decisionmakers with better information to use in determining the extent to which OMB is addressing its statutory management and budgetary responsibilities, as well as in assessing OMB's contributions toward achieving desired results.