Performance Budgeting

Agencies' performance plans for fiscal year 1999 generally covered the program activities in their budget, but most plans did not identify how the funding for those program activities would be allocated to performance goals. To help Congress better understand issues that may affect agencies' ability to relate budget resources and results, this report reviews selected performance plans for fiscal year 1999. GAO (1) describes agencies' approaches to linking performance goals and budgetary resources, (2) examines characteristics that might be associated with different approaches to linking performance goals and budgetary resources, and (3) identifies implications for future efforts to clarify the relationship between budgetary resources and results.

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.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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