integrating budget and performance (.ppt)

Department of Energy

I-MANAGE Program I-MANAGE Key Design Decisions

• Governing regulations, policies, and guidance

• Factors to consider• Proposed system

design• Proposed business /

policy decisions

Integrating Budget and Performance


I-MANAGE Program Integrating Budget and Performance

Requirement for a Strategic Plan• "Government Performance and Results Act of

1993“ enacted January 5, 1993.• Chapter 3 of title 5, United States Code, Sec. 306.

Strategic plans, paragraph (a): “No later than September 30, 1997, the head of each agency shall submit to the Director of the Office of Management and Budget and to the Congress a strategic plan for program activities.”

Governing Regulations, Policies, and Guidance



Requirement for a Strategic Plan "Such plan shall contain-1. A comprehensive mission statement covering the major functions

and operations of the agency;2. General goals and objectives, including outcome - related goals

and objectives, for the major functions and operations of the agency;

3. A description of how the goals and objectives are to be achieved, including a description of the operational processes, skills and technology, and the human, capital, information, and other resources required to meet those goals and objectives;

4. A description of how the performance goals included in the plan required by section 1115(a) of title 31 shall be related to the general goals and objectives in the strategic plan;

5. An identification of those key factors external to the agency and beyond its control that could significantly affect the achievement of the general goals and objectives; and

6. A description of the program evaluations used in establishing or revising general goals and objectives, with a schedule for future program evaluations.

Governing Regulations, Policies, and Guidance - GPRA



Requirement for a Strategic Plan"(b) The strategic plan shall cover a period of

not less than five years forward from the fiscal year in which it is submitted, and shall be updated and revised at least every three years.

"(c) The performance plan required by section 1115 of title 31 shall be consistent with the agency's strategic plan. A performance plan may not be submitted for a fiscal year not covered by a current strategic plan under this section.




• "Government Performance and Results Act of 1993“ enacted January 5, 1993.

• Chapter 11 of title 31, United States Code, Sec. 1115. Performance plans, paragraph (a): “In carrying out the provisions of section 1105(a)(29), the Director of the Office of Management and Budget shall require each agency to prepare an annual performance plan covering each program activity set forth in the budget of such agency.”




The annual performance plan shall:1. Establish goals to define the level of performance to be

achieved by a program activity;2. Express such goals in an objective, quantifiable, and

measurable form unless authorized to be in an alternative form under subsection (b);

3. Briefly describe the operational processes, skills and technology, and the human, capital, information, or other resources required to meet the performance goals;

4. Establish performance indicators to be used in measuring or assessing the relevant outputs, service levels, and outcomes of each program activity;

5. Provide a basis for comparing actual program results with the established performance goals; and

6. Describe the means to be used to verify and validate measured values.




Terms and Definitions Within GPRA:• ‘Outcome measure' means an assessment of the results of a

program activity compared to its intended purpose;• ‘Output measure' means the tabulation, calculation, or recording

of activity or effort and can be expressed in a quantitative or qualitative manner;

• ‘Performance goal' means a target level of performance expressed as a tangible, measurable objective, against which actual achievement can be compared, including a goal expressed as a quantitative standard, value, or rate;

• ‘Performance indicator' means a particular value or characteristic used to measure output or outcome;

• ‘Program activity' means a specific activity or project as listed in the program and financing schedules of the annual budget of the United States Government; and

• ‘Program evaluation' means an assessment, through objective measurement and systematic analysis, of the manner and extent to which Federal programs achieve intended objectives.




• OMB Circular No. A-11, Part 6: Preparation and Submission of Strategic Plans, Annual Performance Plans, and Annual Performance Reports

• “The strategic plans provide the framework for implementing all other parts of this Act (GPRA) and set out a course of action and accomplishment over the long term.

• Complementing the strategic plans are annual performance plans that set annual goals with measurable target levels of performance, and annual program performance reports that compare actual performance to the annual goals. Together, these should define a course to improve the performance of government programs and operations, and the basis for the Federal Government to manage for results.”




• Other guidance is found in:• The President’s Management Agenda

• OMB’s Program Assessment Rating Tool (PART)

• FASAB Statement of Federal Financial Accounting Standards Number 4 – “Managerial Cost Accounting Concepts and Standards for the Federal Government”.




• Current Performance Management Systems:• Joule is the system provided by the Office of Program Analysis and

Evaluation (PA&E), ME-20 for development, maintenance and administration of the Department’s Annual Performance Plans.

• Other programmatic or site specific systems are in use, including Environmental Management’s Integrated Planning, Accountability and Budget System (IPABS).

• The I-MANAGE Standard Budget System is not scheduled for deployment until sometime in early FY2006.

• This should be the target system for design purposes.• One package identified as a candidate for this system (RGII) has

integrated performance metrics built into the package.• The Oracle e-Business Suite does not provide a federalized

performance management module.

• The proposed design (systematic and organizational) for managerial cost accounting within the I-MANAGE Systems must be considered in the context of this design decision.

Factors to Consider



• Joule will continue as an interim solution.• Currently built upon a non ANSI compliant, proprietary

data structure with limited import / export capability. Eliminates tight integration as a possibility. In all probability, would not align with the Enterprise Architecture.

• The vendor has indicated that a new version of the application will be ported to Microsoft SQL Server, and Oracle.

Targeted for end of FY2003. Currently, in technical jargon, this is “virtual-ware”. Still, we will work with the Office of PA&E to evaluate

the product if/when it is released.

Proposed System Design

BudgetData

PerformanceData

AccountingData

RDBMS Architecture



• We will continue to work with Oracle to determine the status of a fully integrated, federalized performance management solution.

• We will continue to review the RGII package capabilities to determine the feasibility of this solution for the Department’s requirements.

• We will further analyze and review functionality in the IPABS system to determine its feasibility as an enterprise solution to address DOE requirements.

• In parallel with those activities, and depending on the outcome of today’s session, we will develop a “physical” data model that fully integrates with the Oracle Federal Financial Applications database structure.


BudgetData

PerformanceData

AccountingData

RDBMS Architecture


I-MANAGE Program

GeneralLedger

STARS Oracle Federal

Financials V11i

Purchasing

Accounts Payable

Accounts Receivable

FixedAssets

Fund code

Approp. Yr.

Allottee

Reptg Entity

U.S. SGL

Object Class

WBS Lvl 1

WBS Lvl 2

Oracle Accounting Flex-Field (AFF)

WBS Lvl X

Example of Performance Hierarchy

Department Goal

Strategic Objective

PSPG

Annual Performance Target

Roll up to

Roll up to

Roll up to

Several questions must be answered:•Where will performance metrics be stored?•How many levels are required?•Will the system provide for multiple “sets” of performance metrics?•What degree of flexibility will be available in designing and maintaining performance metrics?•How will the performance hierarchy be linked to the AFF?•What reporting will be necessary?•How will cross-cuts be handled? Congressional earmarks?

Integrating Budget and Performance





• Where will performance metrics be stored?• As described earlier, performance metrics will reside in Joule, the new

I-MANAGE Standard Budget System (e.g. RGII), or a new Performance Database tightly integrated with STARS and the new Standard Budget System.

• How many levels are required?• There are no practical physical limitations to the number of levels

available, however, policy will dictate the number of levels required within a given “set” of performance metrics.

• Will the system provide for multiple “sets” of performance metrics?

• Yes. The system will allow authorized end-users to establish different sets of performance metrics based on their individual needs.

• These will be logically segregated as appropriate. For example, for each fiscal year, there will exist a unique set of performance metrics for the Annual Performance Plan as prescribed by GPRA and OMB Circular A-11. These will exist as a logical set of metrics, accessible as a whole, segregated from other “sets” of performance metrics.




• What degree of flexibility will be available in designing and maintaining performance metrics?

• Obviously, this depends on the solution selected and deployed, but the general idea is to provide great flexibility to build performance hierarchies, tabular performance structures, and stand-alone performance structures.

• The system should provide the capability to cross-link and otherwise group performance metrics in multiple ways.

• The system should protect the user from creating invalid rollups.

• How will the performance hierarchy be linked to the Accounting Flex-field (AFF)?

• Through the indexing features available within the relational database technology.

• The system should provide the ability to link to any segment level within the AFF, or to logical structures within a given segment (e.g. summary roll-ups, parent/children rollups).




• What reporting will be necessary?• Yet to be determined, but with proper data modeling and

system design, the reporting possibilities will be extremely powerful.

• Detailed reporting specifications will be developed.

• How will cross-cuts be handled?• Through standard functionality available within the Oracle

Applications software, we will be able to handle some of the existing cross-cuts.

• In the position paper, we discuss some issues associated with policy changes that would potentially require policy changes.

• Congressional earmarks?• Through standard functionality within the Oracle software, to

the greatest extent possible



• We can provide an integrated systematic solution, but the entire process of performance based budgeting must be explored in detail as part of the Standard Budget System Implementation process.

• Understanding the concept of cost accounting, and what constitutes full costs will be discussed in tomorrow’s session, however, integration of performance, budget, and costs hinges on agreement as to what each of these variables is comprised of.

Proposed Business Process Changes