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Finding The Unicorn: Where is Performance Based Budgeting?

I will do my utmost in this space to avoid hitting anyone over the head with the latest government news that they've already heard. However, the current Federal "Shutdown" is hard to avoid from a performance and management perspective, especially when perhaps the critical piece of the story has gone unsaid. Why have we drifted so far from linking goals and objectives to performance? I've taken to calling Performance-Based Budgeting "The Government Management Unicorn."

We talk about it often and think we could identify it, but no one has really ever seen it, at least on a Federal level. When I joined the Performance Institute nine years ago, the Office of Management and Budget (OMB) was actively discussing Performance-Based Budgeting (PBB) and developing a structure to implement it through the Program Assessment Rating Tool (PART). We worked with both OMB and agencies to understand how effective programs were, what the expected results looked like, and what effect the current levels of performance would have on future budget levels.

 

There have been a number of studies and reports that have shown some to little correlation between PART scores and budget allocation. One such study by GAO found a statistically significant relationship between the President's proposed budgetary increases and the PART ratings for all 234 programs assessed in fiscal year 2004. This included a positive and statistically significant effect on funding levels for 196 discretionary programs, suggesting that federal discretionary programs with better ratings were more likely to receive a higher level of the proposed budget. Of course, the same study concluded the PART scores did not factor into the President's Budget Submission and that Congress viewed PART information skeptically. However, the overall conclusion in a number of GAO and Academic studies was the same; the PART process forced managers to take a more serious view of performance and results, with likely impacts to their budgets at some point.

Looking forward from 2005 or 2006 it seemed that further refinement of these tools and a strong desire by OMB to bring budget and performance together were perfectly timed to reflect a growing sentiment to control spending and efficiently bring better results. Now, eight years later some of these developments seem like baby steps that went absolutely nowhere. While performance metrics, data analysis and better strategic planning are all part of regular conversation, the connection to budgeting has gone missing. In fact, a Federal official told me earlier this year that I should stop referring to "Performance Based Budgeting" at all, as political and fiscal realities had reduced it to a theory in a textbook.

Instead, we've moved on to "evidence based budgeting" as discussed in this OMB Management memo, an excellent idea, but really more of a small pilot at this point than a serious attempt at linking budgets to results. Why has this happened? And where is Performance-Based Budgeting still going strong? Do you have stories you can share on attempts to link budget to resources? I''d like to hear from you and will discuss this topic more in the weeks ahead.

Posted in Performance Pickup

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